For growing design consultancies, partnerships offer all the benefits of a network, without the loss of control, says Nigel Forsyth
For most creative business heads, the biggest incentive to get out of bed in the morning is winning projects and creating the best possible end product. That is how you grow your business and your reputation. It is also how the client gets most value and the industry gains the most credibility.
But, somewhere along the way, some cunning business brains looked at the margins we designers make, and the contacts we have, and concluded that it was a no-brainer to bring all the disparate creative disciplines together. It was bound to create more business through cross-selling and an improved bottom line.
So the model for the ‘communications group’ was born, and the reason to get out of bed became how to improve margins without giving the City a shock every quarter.
In my opinion, few, if any, of these developments have created a better standard of creative work. The jury is still out on whether the combined communications group is a more successful formula than the independent one for winning clients. I should know. We went down this route before we regained our independence.
What do clients make of it? Increasingly, there seems to be a stigma attached to being part of a big network. Perhaps it is a question of being too big to care, too expensive and too multi-layered. Or maybe it is a bit like shopping on-line? As soon as you have bought something, you are being approached to buy something else faintly related to your original purchase. But facetiousness aside, there are some things that the big networks have got right. Potentially, there is increased access to specialist resources and business referrals across different disciplines. When required, the group model can use its international spread to service global clients and there is the opportunity for staff to gain from greater career development.
So what is the problem? It’s tempting to say that it is size. How often have you heard it said that once a design consultancy employs more than 50 people, the creative quality suffers? But that doesn’t seem to be true of the quality of output in other sectors as the numbers increase.
Looking at other business models, how is it that lawyers, accountants and management consultants have managed to build successful organisations where connected, but different skills live together? They seem to cross-sell, make money and continue to grow. They also seem to achieve this without a loss of service standards.
Few design consultancies manage to create partnerships that go much beyond a handful of people. And yet they are measured in the hundreds in many commercial law and accountancy practices.
So what lessons can we learn from the partnership model? For a start, partners are their own bosses. There is no financial straightjacket that City short term-ism creates, leaving them free to invest in the long term, be it in people or time. As a consequence, they feel in control of their own destiny, which builds a strong ‘can-do’ culture. There is also a good career path that is easy to see in action, and has a straightforward reward scheme, either by discipline or overall performance.
It’s easy to combat the succession strategy problem, as there is a constant supply of new blood moving up the organisation. The business never seems to run out of steam. The brand can become famous, rather than the individuals behind it. How many design consultancy businesses have lasted longer than the names on the door?
So what is the way forward for the design industry? Why can’t we build a structure around the partnership model? There are many high quality design consultancy businesses that will never grow on their own to a sufficient scale to compete with the agency networks, or reach a sufficient size to be valuable.
If we adopted this approach, all the benefits afforded by the combined networks could be created, without the loss of control or creative standards. The things to which we rarely give the time they deserve, such as financial management, marketing, human resources and property management, could be run centrally. Joint buying power would create immediate benefits and profitability could only improve. Plus you’d have the chemistry of a range of top practitioners working together under one roof. Doesn’t this sound like an exciting proposition?
At 35 we’re putting our money where our mouth is. We’ve started exploring this model for the future, with a number of like-minded people. So watch this space.
Nigel Forsyth is a director of corporate branding and reporting specialist at 35 Communications
BENEFITS OF PARTNERING:
• Wider access to resources
• None of the stigma of belonging to a major network
• International reach, cross-selling, improved bottom line
• Staying your own boss
• Career development opportunities for staff