How to adapt and survive in a changeable business climate
The DBA’s John Scarrott talks candidly with a consultancy owner who set up in 1998 and has navigated shifting econonmic sands by recalibrating his business.
I recently had a conversation with the owner of a 10-person design business based outside of London. We talked about the vision they set for the business when it started in 1998, what is changing for them and how they’re managing the change. They kindly gave me permission to share it as a conversation. This is what we talked about.
Me: Great to speak with you, thanks for taking time to talk about your business.
Owner: No worries. Where would you like to start?
Me: Tell me about the business. What was the vision when you set up?
Owner: Pretty modest really, no grand designs to rule the world. To create good work. To be fully manned and make enough money to pay the wages. No grand targets but to run a business.
Me: Anything else?
Owner: To have control of our own destiny.
Me: What’s the current reality for you in terms of living this vision?
Owner: Since we started in 1998 we’ve grown each year and got more professional. But from 2006 we’ve noticed a change. Business has been getting tougher. It used to be the case that you had bread and butter business – straightforward stuff that paid the bills. And then there were also the more complex design projects.
Me: So how is business changing to be tougher?
Owner: The bread and butter end is shrinking. In fact it’s almost disappeared.
Me: Where’s it gone?
Owner: I’m not entirely sure… Our clients have access to technology so we think they’re doing some of what we used to do for themselves. And there is a glut of self employed web and graphic designers working from home doing this work. We’re left with the more complex work.
Me: Is that a problem?
Owner: I think our past model runs against us a bit. We’re needing to sell the more complex work to clients who maybe are not used to paying for it and don’t understand the value of it. Sometimes clients are happy to accept a lower standard or drive down the prices by shopping around.
Me: What else is changing?
Owner: We find clients trying to use us as their marketing department.
Me: Why is that a problem?
Owner: On some level it’s not. It’s a sign of the quality of our relationships. But we’re not really geared up to have these conversations from a time perspective or skills level.
Me: That’s tricky.
Owner: Our traditional client has been the owner of the business, the real driver of the organisation. They have a genuine stake in the business. We have close relationships with them and they’re asking us, “What do you think we ought to do?”
Me: Sounds like you’re being drawn into a different type of relationship with your clients.
Owner: That’s probably true. I come from a practical background and the business has been a production house rather than a strategy house. It seems as if that might need to change going forward. We’ve already started with a web product but I’m not quite sure that’s the solution to the puzzle.
Me: What are the missing pieces?
Owner: Maybe looking at how we bring in extra skills at the strategic level. We tried a full time person but it didn’t work. In overall terms it’s about figuring out how to make people value what we’re going to do. We’re a 10 strong team, not a back bedroom operation. We’re also not a faceless corporate. So we need to communicate this in a way that creates value.
Me: How do you feel about this?
Owner: Passionate but frustrated would sum it up. We hear all the right noises from our clients and then when it comes to persuading people to pay for our expertise it goes a bit quiet.
Me: What do you think of the vision you set? Is it still right?
Owner: Well the day-to-day work is subsidising the high design stuff which doesn’t feel sustainable. So what we’re doing is not supporting the vision.
Me: Anything else?
Owner: The vision has two things in it that jump out as still relevant to us today- doing good work and to have control over our destiny. The other elements will follow if we can understand what we need to do to get to these two.
Me: Thanks for sharing this with me.
Owner: My pleasure, enjoyed talking.
Read this next
This is a refreshingly honest and insightful conversation with someone who is obviously working hard to do a good job and keep their company going forward. My immediate instinct is to say “get professional help” in the form of a Non Exec Director (or something along those lines but possibly less formalised in title) to bring you the business insight, management expertise and support that you warrant. Nobody knows everything. Sometimes we all need the best help that we can afford.
I totally agree with everything said in this article. We also started in 1998 with a vision of offering traditional design for print alongside design for that new medium (in 1998), the internet. We had a good base of bread and butter work to keep us ticking over, which we supplemented and kept fresh with some good “portfolio” work that got us new business.
SInce (again) about 2006 the bread and butter work has REALLY shrunk. Clients are doing so much more themselves, or their budgets have been cut so much, that they just don’t do the low level work anymore.
So much so that in 2009 I went and did the CIM Professional Diploma in Marketing to try to move us more into that strategic market, but this hasn’t worked as our big clients want a design company still, not a marketing one, and our small clients aren’t willing to pay for strategy or “thinking time” —they just can’t see the benefit in planning and strategies.
Hi Madelaine. I agree with what you say. Often people have the answers, they need another person to help them find them. It’s something I encounter regularly in conversations with design businesses. Over the years we’ve put together and accredited a group of advisers that we connect members with who know their stuff and the design industry really well.
Lisa, thanks for your comments. The parallels between your story and the story told here are spooky. I’m sure that you’re not alone but hopefully it’s good to see that others are managing the same kind of conundrums.