About the authors:

Jeffry Corbin is one of a growing number of design professionals who call themselves Information Architects. He established his firm, Corbin Design -- which provides print, interactive and environmental graphic design services to clients nationwide -- in Traverse City, Michigan, in 1976. Prior to that he had been a Vice President of the former Caudill Rowlett Scott (CRS), a large architectural/ engineering firm in Houston, Texas, and had worked for the office of Eliot Noyes.

Corbin is a member of the American Institute of Graphic Arts, the American Center for Design, and was a founding member of the Society for Environmental Graphic Design (SEGD), for which he has served as national chairman. He is also a member and past president of the Association of Professional Design Firms (APDF). He serves on the Advisory Council of Design Michigan, a non-profit state-wide program of Cranbrook Academy of Art and the Michigan Council for the Arts, dedicated to improving Michigan's places, products and communications through design.

Danae Loran Willson is the Association of Professional Design Firms's Executive Director. The APDF is dedicated to elevating the business practices of design consultancies. It produces numerous publications and sponsors seminars and conferences on business practices in design consultancies.

Willson is former chair of the New York Chapter of the IDSA and is currently a member of the IDSA Education Committee. She also served for 10 years as director of the Pratt Institute Design Center and was the executive producer of the award-winning national conference on Universal Design and Designing for Accessibility. In 1999 WIllson served as project director and industrial design expert on a World Bank-sponsored program analyzing the feasibility of establishing a national design center in Ghana. She also teaches industrial design as an adjunct professor to undergraduate and graduate students.

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Dealing with Change
and Uncertainty

By Jeffry Corbin and Danae Loran Willson

The following article first appeared in the May issue of DesignIntelligence, a publication of the Design Futures Council and again in the Owners' Forum section of the Summer/Fall '01 edition of the APDF newsletter DesignBiz. It is reprinted with permission.

In March 2001, twenty-five principals representing twelve graphic design/marketing/branding firms and six product development firms participated in an Owners' Forum sponsored by the APDF (Association of Professional Design Firms), an organization dedicated to the business of design. Facilitated by Diann Bissell, owner of ClearDirection, a research and strategic consulting firm in Seattle, WA, the group discussed a range of subjects during the day long forum.

As is the custom, at the outset of the meeting each participant offered perspective on their current business climate. Use of the words "change" and "uncertainty" was universal. While the group agreed they all knew how to run their businesses when times are good...or even when times are bad…when times are uncertain, such as they are presently, the owners found managing their firms much more challenging. Many firms reported dramatic downturns soon after the extended election; some reported improvements in early 2001. But everyone was cautious about the uncertainty the next three to five years would bring. This brought the group to its first topic:

Change

"Change. How do we successfully manage our business and staff in these changing economic times?" This question brought the following observations:

Back to Basics: Carefully monitoring and reporting the important factors of a firm's performance - chargeability, efficiency and profitability - on a regular basis, softens the blow to employees if things begin to turn downward. Regular communication of such information makes employees more responsible for the performance of the firm.

Leveraging: Leveraging existing clients for additional work, but not letting one client represent too large a portion of one's backlog, can help maintain profitability. Every employee should be laying the groundwork for and promoting new business for existing clients each time they visit and work with a client.

Conditional Benefits: Several firms make some benefits (fitness club memberships, 401k contribution levels, child care, etc.) conditional on the firm's financial performance. When it begins to turn down, certain of these benefits may be suspended until performance levels improve.

Re-education: When necessary, firms will re-educate key employees to perform different tasks in order to keep them on board.

Business Basics

The next topic "Business Basics: How to deal with tightening budgets, still rising rates, and taking your business to the next level?" raised these insights:

Perception: When you're in the "marketing mode" (developing clients), act bigger than you are. When you're in the "performance mode" (servicing clients), act smaller than you are.

Reality Check: Discuss budgets with clients prior to preparing the proposal; know when to "hold" and when to "fold" during the negotiation process. All clients are not good clients. Thus...

Client Training is important: Firms need to train your clients to be better clients. Consider that we may only be as profitable as our clients enable us to be.

Alliances: Look to alliance partners to enable your firm to break into emerging markets. In addition to the added expertise, such partnerships can offer the ability to deal with projects of larger scope while offering a geographic advantage. It is important, however, than one firm clearly serves as the point of control for the project.

Public Relations: Establish and maintain an ongoing program of public relations. Many firms now issue press releases on CDs complete with imagery for use by the press. On average, it takes two years for a PR program to yield significant results.

Raising Rates: Consider raising your rates every three months to keep them in line with your costs.

Reducing Fees: Don't agree to reduce your fees for a client without working with them to remove deliverables to compensate.

Strengthen the Foundation: Consulting firms have four things to offer clients. Work to make your firm's offerings the finest in each of these four categories:

Value: Consider what your firm's unique Value Proposition is and articulate it elegantly and succinctly.

Hourly Rates: Don't quote them. As we have moved from being "order takers" to "order makers," the concept of charging a fixed fee for value-added services has become paramount to profitability.

Organizational Structure

The third topic of the day: "Organizational Structure: When to change, how to change, and how to manage the culture" resulted in these thoughts:

When to Change: When growth drives it. When clients drive it. When projects drive it. When the exit strategy drives it. But, by all means, be open to change!

How to Change: One way is to grow by adding specialists, as opposed to giving existing employees new job descriptions. Diversity fosters creativity.

Who to Change: Develop a program for employee retention that enables the firm to keep its most valued employees. As the principals age, teach them to let go and empower valued employees to assure the firm's timeliness and longevity.

What Not to Change: If the firm's culture is valued and contributes to its success, change it carefully, and perhaps only with the help of outside assistance. If emerging internal changes to the culture seem too abrupt, resolve the related issues quickly and decisively.

Exit Strategies

The final topic "Exit Strategies: When to merge, when to sell, and how to hand off control" was highly debated, but three clear points emerged:

Transition: Delegating operational activities and authority to a second tier of management is a significant issue for professional design firms today.

Strategy: An effective transition plan demands the assistance of outside expertise. Be careful. There are not a lot of financial consultants who are that well versed in the sale, merging or transitioning of professional service firms. The process can be an educational one for everyone involved. The firm's principals must drive the creation of the transition plan to assure its success.

Incentive: To be effective, a Transition Plan must have sufficient incentive for the recipients to make it work (especially if they are employees). And loyalty alone does not necessarily qualify an employee as a future owner.

Having dwelled on the aura of uncertainty and reality of change, at the end of the day everyone agreed that the present is also a great time for renewed opportunity for professional firms that are well-positioned, well-informed and well-managed.

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We'll be adding new articles on an ongoing basis. Read past articles in our archive:

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• Do You Have What it Takes to Survive the Dot-Com Bomb? by Martha Francis
• Don't Knock Opportunity: Go Grasp It! A Good Press Success Story by Doug Fuller
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• Know Your Rights: Intellectual Property Basics by Jean Perwin
• The Path to the Podium: An Insider Shares Her Secrets for Scoring Prime Speaking Slots on the Competitive Conference Circuit by Lynn Wolff
• Growing Your Business: The Most Exciting Event in Your Life by Herbert M. Meyers
• Are Consultants in Your Future? by Emily Cohen
• Public Relations: The Soul of Your Firm by Elinor Selame

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