Blinking into a brighter world

The world’s a very strange place at the moment. As a consultancy we’re fortunate not to have suffered too much, but horror stories abound – and a frightening chat with a prospective client the other day has brought home to me how badly the recession’s beginning to bite in some places.

A large, household-name company is looking at moving on to a three-day week. Its head of marketing is now bombarded with increasingly desperate calls from design consultancies, offering not only to pitch for free, but in some cases even to work for free ‘until things pick up’. In fact, some days his entire time is taken up fielding calls and high-quality unsolicited proposals from fantastic groups – but the sad fact is he has no budget.

At the Design Business Association AGM a few months ago, the general feeling was that the downturn was something that was being talked about a lot, but hadn’t hit yet. Since then, the climate has deteriorated rapidly. It’s prompted me to start thinking about how long it might go on, and how deep it might get.

Sir Martin Sorrell at first predicted a sharp upswing towards the end of 2009, but now he’s talking about the next couple of years, and, sadly, I’m inclined to echo him, at least in the case of the UK economy. While the whole world is currently feeling the pain, I believe we in the UK face a set of circumstances that mean the recovery is going to take a long time to arrive – and will be slow and painful when it does get here.

For a long time, the UK was touted as the economic success story of Europe, but the foundations of that success were built on sand.

Much of our ‘growth’ has been fuelled by irresponsible consumer borrowing, off the back of an asset price bubble. Think plasma screen TVs being paid for by slapping a bit more on the mortgage.

A large part of our national income was derived from financial services, but now half that industry is being bailed out by the Government, while the other half sits paralysed. The Germans and Japanese might be suffering badly too, but I guarantee their manufacturing-based economies will be churning out cars and machine tools again a long time before the world regains its appetite for the ‘collateralised debt obligations’ and ‘structured investment vehicles’ that we ‘manufactured’ in the City.

We mortgaged our future a while ago. Every country is considering fiscal stimuli to drive its economy out of recession, investing in public works like US president Herbert Hoover did in the 1930s. This is a great idea – pumping money into Crossrail, a new Thames Estuary airport, or even a new generation of nuclear power plants would be of real long-term benefit to the UK and might help kick-start things. Unfortunately, we’ve already built the new schools and hospitals through private finance initiatives; all that’s left for us to do is pay for them several times over during the next quarter of a century.

Meanwhile, most of the growth in employment over the past ten years has, in any case, been driven by expansion of the public sector, rather than growth in the private sector, all too often into meaningless non-jobs. How likely is it that we’ll keep creating more posts for ‘anti-objectification advocacy officers’ when the Government has no money?

So, the drivers that fuelled the growth are gone, we now pay to bail out the banks that used to generated tax income, and can’t afford to spend our way out of trouble. It all sounds bad, but what does it mean for us in the design industry?

Amid all the gloom, I see a glimmer of light at the end of the tunnel for British design. The reputation of our financial services sector may have taken a hell of a beating, but the UK’s creative industries are still seen as the best in the world. Times might be tough, and many groups are in for a rough ride, but those of us that hang on through it will emerge into a world where British design has lost none of its cachet.

So, what should we do to hang on in there?

In new business terms, it’s a dog-eat-dog world. Having built a dialogue with prospects over time certainly helps, but starting to prospect from cold in this environment is going to be tough. So do everything you can to make yourself indispensable to existing clients – you can bet there’ll be ten other groups knocking at their door every day.

If you can target work overseas, do so – but make sure you can do it profitably. And be aware that the streets in places like Moscow and Dubai may no longer be paved with quite as much gold as they were not so long ago.

And then take a hard, objective look at your business, batten down the hatches and prepare to hang on. It’ll be a tough ride, but those that make it through will come out – blinking, perhaps, but stronger.

Joe Bakowski is managing director of Stocks Taylor Benson

Future proofing

• Make yourself invaluable to your current clients

• Don’t think that you’ll be able to sell your way out of the recession – especially if it’s through new business activity

• If you can, look for opportunities overseas

• Make a realistic appraisal of your business early, and act on it

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  • Glenn Platt November 30, -0001 at 12:00 am

    Blinking Cheek: feeding the limitless appetite for tat

    Joe’s ultimately optimistic piece concludes: ‘ It’ll be a tough ride, but those that make it through will come out – blinking, perhaps, but stronger.’

    That’s an admirable sentiment which misses one vital point completely. Design businesses exist to shed light and create beacons.

    It is our career responsibility aka vocation, not to wait to be asked – if we don’t build the lighthouses who will?

    In June 2007 while creating the framework for a pitch document for Mastercard I wrote a background piece called BANK$. In it I reminded the project team that the majority of the world’s cash – cash being Mastercard’s primary target as it wished to replace cash transactions with card transactions – was, in the absence of any reserves to back it up, imaginary – thus Mastercard’s target was effectively ‘nothing’.

    Economic historian Niall Ferguson’s agrees, “Money is not metal. It is trust inscribed: on silver, on paper, on a liquid crystal display. Anything can serve as money, from the cowrie shells of the Maldives to the huge stone discs used one(sic) the Pacific islands of Yap. And now, it seems, in this electronic age, nothing can serve as money too.”

    The current repetitive dripfeed through the media is ‘confidence’. On the one hand the cards played during the downturn have revealed the Bernie Madoffs of this world – surely there was a clue in the name, wasn’t it inevitable that he would ‘make-off’ with the money? On the other all the decks and other home improvements were attached to houses of cards.

    Thanks to the property boom it was possible to become a millionaire, given the appropriate property, just by sitting on the sofa and waiting. It appeared that the world did owe us a living. Thanks to cheap credit it was possible to trade in equity on homes for some of this Monopoly Money and buy things flowing down The Yellow Brick Road.

    In 2002 I wrote another piece warning that cheap chinese goods spelled the end of the Empire – the US would be rendered US as it outsourced production lured by seemingly limitless credit from China. The last nail in the coffins of great empires is not – as we hear oft-repeated parrot fashion ‘Decadence’ – it is abdication of responsibility for supply lines. Once control of your supply lines moves outside your direct control you’re screwed.

    Barack Obama and his new crew aren’t ignorant of this fact. The Bush administration had also woken up to this threat and were keen, hysterically keen, to protect their domestic supplies – of oil.

    Has this preoccupation with a fossil-fuelled lifestyle protected us from the cruel reality that no dinosaur ever survived by shagging another dinosaur.

    Everyday we see a look on the faces of people in the street – or rather we don’t.

    People’s faces are blank. Unable to reconcile their lives against any dreams or hopes they may have once had, they select neutral. If any demands made of them, they are met with frustration. They have no enthusiasm for any task.

    Is this surprising? Labour has become commoditised in a S.A.D. world, one ruled by Supply And Demand. Our individual value is assessed and assigned against a series of entirely artificial criteria applied remotely. People are disconnected, and no one monitors the demands made.

    The irony is that we have so much in the developed world, and yet, our expectations have never been so low. Barack Obama has received a rapturous ‘Rock Star’ welcome all across Europe and yet he admitted that he has nothing to say – he admitted that he has not uttered one original memorable soundbyte.

    CHANGE is not a mission statement. Change is inevitable. Evelyn Waugh wrote, ‘Change is the only evidence of life.’

    YES WE CAN, is the catch-phrase of a animated character ‘Bob the Builder’ who asks and answers every week, ‘Can we fix it? Yes we can!’

    This promise to fix it remains empty while we’re full of buyer’s remorse.

    Where were design industry’s ethics while shoddy cheap goods poured off ships which flowed from the East? It’s OK to spout ‘Supply and Demand’ but our seemingly limitless appetite for tat.

    It’s a blinking cheek to expect to sit back and wait for business to recover. Design businesses are supposed to be the catalyst for change. Where was the evidence of Britain’s incandescent creativity when the future looked bright? All of the design companies I spoke too seemed preoccupied with offering their clients a measurement-focussed mirror-image.

    Perhaps this is indicative of the information age that we’re preoccupied with the metrics – all a part of the Excel matrix.

    Given the exponential increase in computer power, and out improved ability to harness it, where then are our generation’s iconic objects? Where is the 21st century DB5?
    Name one ceiling from the last decade worthy of reverential awe now, let alone in a few centuries.
    The roof of the British Museum, like its geometric cousin the Gherkin, is precise rather than artistic. It proves we can ‘do the math.’
    The Taj Mahal remains the magnet for anyone of a romantic bent.

    So, the old military proverb goes ‘in the absence of control seize control’. Is the design industry going to take action, or will it simply be absorbed into the social malaise, waiting like everybody for somebody to do something about it – just so long as that somebody is someone else;-)

    Glenn Platt April 6, 2009

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