I am always a little surprised at how little the business of design is actually discussed in this discussion group. I’ve heard anecdotally (and have experienced first-hand) how companies seem to have really cut back in their use of external product development resources over the past six months or so. While our firm has picked up some larger projects in the interim, many projects set to resume last fall still haven’t.
Are designers and design principals fearful of discussing business practices for fear of tipping off competitors?
I was watching this thread and am sad but, not surprised no one has replied. The business practices forum here is potentially the most interesting to me, I know I have much to learn, but designers and design businesses are very protective of their “business practices” and when information is disclosed, it’s often sugar coated. I wonder if specific questions would yield better discussion, though Mark Dziersk was trying for a while and never really got much participation
mothy: Is your interest specifically prospecting, lead acquisition and customer retention? and is it from a corporate or consulting perspective?
I’m in corporate, so beyond project management, I don’t have much insight into the business side of design. Otherwise, I’d be mouthing off in here all the time.
I think all consultants and freelancers are in one of two camps: enough work or no work. Those in the “no work” camp have nothing to share, because they are failing. Those in the “enough work” camp want to keep their clients, so they lock everything down.
What’s kinda funny is that all these big firm designers like Moggridge and Tom Kelley write books, but don’t share any of their business acumen. Everything I learned about business is from Iacocca, Welch, Sloan… Why can’t design successes share the intellectual wealth once they’ve made it?
I actually don’t mind sharing. I’ve had to learn the hard way (and with sales coaching) how to sell services, which is markedly different than widgets. I work for a 10+ person product development consultancy currently, and previously worked for a 4+ person consultancy. Perhaps it becomes ultimately easier because you (normally) do have physical embodiments of your efforts (unlike the ethereal stuff like teaching people how to be more confident or how to Contra dance).
I would just like to talk about what works and what doesn’t work with other folks in this business. I’ve never been given existing accounts so I’ve always had to basically start from the ground floor: 99.9% of my business has been won through cold calling or cold emailing. And, ironically, the majority of the projects I’ve won weren’t even in my part of the country and didn’t even require an in-person visit to win.
An open forum would be a nice place to discuss the trials and tribulations of how people sell product development services. But I think you’re right: people don’t want to pull back the curtain for fear of losing business…but a lot of people are going out of business now anyway. Who was that major Advertising firm in NY that basically tells everyone how exactly they execute their advertising and marketing plans?
Anyone can read a book on brain surgery, but you still need talented people to execute.
I tend to find ourselves at diverging paths. One will take us to the point where consultancies start drying up. They’re pretty much the canary in the coal mine. When you start seeing the design firms struggle, you know about 6 mos out things are going to be rather sour.
The ones that can tough out a 6 mos or so period (not sure when that 6 mos starts though, or if it has yet…eeek) you’ll start seeing outsourcing happening in a significant way. Product still need to be produced and things need to get done. But with all the layoffs, etc. they need to outsource to get it done. It also allows for headcount to stay down and not inflate their overhead.
We live in a myopic business world that is focused on 3 mos ahead and is driven by nothing more than $$. So, once a quarter or two goes by and the people at the top realize that SOMETHING needs to be sold next quarter…things will change.
On an unrelated note, David Halberstam’s “The Reckoning” is a terrific (if broad) look at innovation in the face of monopoly (i.e. Nissan vs. Detroit). I’d never read a business / history book before and it was awesome. It was written in the mid-1980s but is just as current and applicable today as it was back then. And I wasn’t even born in the mid-1980s! Kidding (but I suspect many of our core77 viewers can claim that).
On the other side of the fence from a manufacturers standpoint. We often have to collaborate with other manufacturers in order to get the product finished especially if the finished product involves materials we don’t fabricate ourselves (like a metal bracket or other such gizmo).
Non-disclosure and non-compete forms aren’t unusual at all. Especially with designers that hold a unique patent.
We also have noticed for various reasons hot projects have stalled. We have tried to offer solutions like bridge tooling* to help justify & spread the prototype cost. We’ve done various other things to help our customers, but this isn’t an infomercial
Of course it might just be that the designers on this forum would rather chat about more interesting design details, rather than the more tedious details of running the biz
*Bridge tooling - prototypes made to production quality standards to cover needs from 10K - 100k+, which with some of the aluminum types today negates the production tool entirely.
Well, This is my first post, I am an industrial designer in Colombia and things here donÂ´t look to good. Investment in product research is limited to only big companies leaving only a bucket of options for recently graduated students. This is a country that is just begining to realize the importance of design, but many small companies do not have the budget to afford it. Its quite difficult here so many industrial designers have look jobs in furniture design and POP design (point of purchase) or different desing fields like webdesign or graphic design. Well, that is a general overview. It would be really interesting to know how bussines moves in other countries and if you are a designer living in similar conditions, how have you solved or tried to succeed?
To be honest, I think most designers/design firms are not very savvy businesspeople (including myself in this category, even though I started and have been running a small product development consultancy for the last 15 years). There seems to be 2 issues at play:
Most design firms are very small businesses, both in revenue, profits, number of employees, and growth. So like many small businesses, they have a simple/niche strategy that works, but it is not scalable and relies primarily on the interpersonal relationships of the principals.
Since design is a B-2-B industry, a lot of business comes from a relatively small client base. So, I would argue that luck has a large impact, and again, interpersonal relationships are the driving sales factor.
The thought of a design firms’ business practices or sales strategy (actually, almost any company’s) being secret or somehow proprietary is, to me, laughable. Like many things in life, it isn’t the theory but the action that is the “secret” to success. There are hundreds (if not thousands) of different sales programs and strategies out there, but not many good salespeople. Why? Because contacting people, engaging them, and understanding and offering a solution to their problems is hard work. The process is simple to understand, but few people can or want to do it on a day-to-day basis (myself included), and even fewer can excel at it.
I hired a sales consultant quite a few years ago, and while I argued at the time that selling design was different than selling, say, software, he didn’t buy it (bad pun). In his opinion “selling is selling”. Selling is a trust-based activity. It involves letting the potential client know you exist, earning their trust, learning about their problems, and offering a valuable solution to those problems. No more, no less. Doesn’t matter whether it is a product or a service. Sure, your tactics may change slightly, but the basic process is the same. And in many ways he is right. So design firms don’t have some secret magic business formula. They are just like any other professional service firm: success revolves around getting and keeping good clients.
I would also highly recommend that designers read David Maister’s blog at http://davidmaister.com/ as he a lot of interesting things to say about running a professional services firm (although more from a law firm perspective, and not much focus on sales per se).
I’ve mentioned this book elsewhere, but it’s relevant so here goes again. It’s focused on GD, but much of the info/anecdotes apply equally to ID consultancies. Great read with good advice and interviews with people like stefan sagmeister, neville brody, and others.