About the author:

Lee Sucharda, Jr. & Lee III

Lee Sucharda, Jr. is Chairman and CEO of Design North. With its beginnings in 1962, Design North has evolved from a small operation into a sizeable strategic design firm based in Racine, Wisconsin. Operations have grown from a small studio into a technological wonder in an unexpected, rustic setting. It was Mr. Sucharda's strategic vision that accounts for the success of Design North. In 1999, his corporate responsibilities were passed to his son Lee Sucharda III. We thank Mr Sucharda for sharing his vast knowledge with us in this Design Business article.

Design North's corporate offices:
8007 Douglas Avenue
Racine, Wisconsin 53402
262-639-2080
www.designnorth.com
leeiii @designnorth.com

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Forty Years in the
Design Business:
A Survivor's Story

By Lee Sucharda, Jr.

In some respects 1962 seems like eons ago and yet, in others, it seems like only yesterday. From humble beginnings in 1962 Design North has evolved over the years from an art studio serving local and regional accounts to a strategic design firm specializing in branding for the retail environment. At the beginning when we only had a 2 or 3 people it was easier to adapt to business and economic conditions. We kept growing and moving the company forward, albeit slowly, through many exciting, challenging and difficult times. The present time being no exception.

Since the average age of all businesses is less than 27 years, I think that celebrating our 40th anniversary is a milestone in our industry. The 60's were a very exciting time to start a business. Marketing managers were replacing sales managers, consumers were screaming for new products, pastels and Wolf pencils were high-tech concepting tools and idealism ruled the day.

Today, our drawing boards and markers have been replaced by Mac G4s with 21" LCD flat screens and account strategists and designers that have to be strategic thinkers. Who would have thought technology and marketing would have progressed so fast in a profession that hadn't really changed in the previous 85 years?

A Little History

You have to remember that design firms as we know them today really didn't exist until the mid to late 60's. Most of the art studios were content to do projects for companies or to act as arms for ad agency art directors (not a good scenario for creative types). I saw the handwriting on the wall in 1967 and decided that solving marketing problems via strategic design had more opportunities than creating more layouts for our clients. Since most legitimate "designers" were in Europe the search for a design director took some time.

Ultimately, I hired the Director of Design from Raymond Lowy's New York office to head up our design group. This was a turning point and gave us the credentials we needed to talk to the right type of clients. It wasn't easy because our clients at first resisted the ego of our new design director and were reluctant to work with him.

As a matter of fact, we lost some clients because of our new strategic design services. We were telling them what they needed (as a consultant should do) instead of just doing what they asked us to do. The clients that we gave up at this time were ad agencies that wanted to use our hands but not our minds or companies that weren't comfortable in making us a partner in their marketing planning. The pricing for design services was not an issue.

Staffing to Stay on Top

The staff makeup of art studios during the mid sixties included artists, illustrators, photo retouchers, keyline pasteup artists, lettering specialists, etc. In order to make the change to a strategic firm solving marketing problems we had to change the mix of our staff. We added account executives with marketing backgrounds, copywriters, designers from schools with great design curriculums (this was difficult because not many schools were offering legitimate design degrees).

Looking back it would be hard to find any of the large studios from that era still operating today. Most of them thought that their business would always stay the same. The same could be said for typographers, keyline paste-up artists, Photostat houses and photo retouchers; the computer eliminated most of those jobs. Those that thought they didn't need to learn computer skills were out of jobs within a few years. If we hadn't changed and adopted a specialist focused business instead of a generalist perspective we would have been out of business years ago. Our business approach has changed over the years because business is dynamic, not static. We have to be at or above the professional level of our clients in our areas of specialty.

Keeping the Pace with Industy Innovations

In the mid eighties we were early adaptors to the computer. We hired a computer system manager in 1984 and produced our first totally electronic product catalog for the Oster Company in 1985. It wasn't good design from a designer's standpoint (Quark was very limited) but it got Oster and us into the technology arena. Shortly after that we became an Alpha and Beta test site for Apple computers and all the major design software developers. We assisted them in developing both hardware and software for the design profession. As technology advanced, we went along with it and by 1988 we created an in-house digital prepress operation. The concept was to handle all projects from electronic design through final files and final films.

This required a major financial investment for equipment on our part and the hiring of trade staff to operate the high-end systems, proofing and output devices. Our staff grew to 52 during this time and it really wasn't a good scenario for what had been traditionally a creative business. Managing a design firm is vastly different from managing a prepress and graphics business. Although the business was successful, we decided to sell the business in a management buyout in 1992 and got back to focusing on our core business of strategic design. Once again life was good! A great lesson learned here-stick to your knitting!

Today we have all the latest Mac OSX systems, multiple color printing devices, constant training in all the latest software upgrades, a web based digital workflow management system that allows our clients to proof, route and make changes to our designs, high speed direct lines, the latest laptops, cell phones and Palm devices for our account strategists and just about anything else you can think of that comes with a chip. Communication with a client today is typically a matter of minutes regardless of where you are. Advice, don't take the cell phone on the golf course, in the boat, to the kid's soccer game or to the symphony!

Investing in Technology

A few years ago I read somewhere that the average size design firm had $50k invested in technology. Well, if you have any staff at all you know that that doesn't go very far when you're buying color printers, the latest G4 with upgraded software and all the rest of the things I mentioned. You don't just buy technology and hope it lasts forever. Apple, Adobe, Microsoft, Canon and the others are changing every day just to keep you in their order bank. I can guarantee that if you finance equipment or software for 5 years it will be outdated in 3. Depreciation schedules don't work in our favor, in case you hadn't noticed. So you say you can sell the old stuff. Right! How about $300 for a Canon Color copier that you paid $38k for. Forget it, capital equipment investing is here to stay in our business.

In 1985 we decided to add a photography studio to our capabilities. Our clients require a lot of photography from location shots, to tabletop food setups, to large garden tractors, to corporate portraiture, to our own PR shots. Having this service is a big benefit to our clients and to us because our designers can walk across the parking lot to our photo studio and direct a shot instead of traveling for an hour to another studio.

For example, if a client needs a food shot for a packaging design in a hurry we can set it up, style it, shoot it with our high end digital camera, send a jpeg file to the designer for a placement in the design and forward it to the client for review in a matter of hours. This kind of turnaround was unheard of a few years ago. Our clients demand the very best in design and expect very fast turnarounds-getting to market fast or first in a category is critical in today's marketplace.

So although it may appear at times that we lost our focus on strategic design we really were experiencing a lot of things that were adding to our knowledge base. Our focus today is on creating strong branding, impactful packaging, trial inducing point-of-sale materials and persuasive trade and consumer communications. The company adopted retail branding as a specialty because this is an area where products live and die by the impressions they give shoppers in the store.

To complete this area of specialty we formed INNOBRAND. This is an affiliation of strategic alliances with some of the most well known and highly respected consultants in research, industrial design, point-of-sale and sales promotion. These relationships allow us to manage all the non-advertising aspects of a brand. The benefit to our clients is that they now only have to contact us and their agency to have a team that totally controls the brand's image.

Planning for the Future

Another major issue that affects design firms is a succession plan for the company. Too many owners get to the end of their careers and have to sell the company or liquidate to get their reward and believe me-that scenario isn't easy! Over the last few years there have really been a lot of acquisitions and buyouts of large, well known design firms that haven't worked out and the sellers had to buy their companies back from the acquiring firm. We initiated our succession plan in 1987 and implemented it in 1992. I was very fortunate to have a son, Lee III, who loved the business and had gotten his MBA. After graduating he went to work for an advertising agency for five years and gained a great deal of experience in the strategic side of the business.

He invited me to lunch in 1992 and said he was interested in talking with me about the possibility of joining the company (talk about a prayer being answered). He has been president for 3 years now and has instituted other plans for our key executives to keep our brain trust in tact. Hopefully, his son will feel the same way 20 years from now. We get along great and respect each other's strengths and weaknesses. Very few companies make it to the second generation of ownership and almost none get to the third generation. We will have to wait and see how that plays out.

I found the succession planning process to be one of the most important things our company ever did and didn't experience the problems I had expected from listening to others that went through the process. Unfortunately, too many design firm owners or partners delay, or omit, the succession planning process until it's too late. Finding the right firm to acquire your company or the appropriate staff persons that are interested in buying your company takes time and careful planning. The key to a smooth transition with a succession plan is to start early and do your homework.

Handing Over the Reins

When Lee III took over the presidency in 1999, I became the Chairman and CEO. This was a great move for both of us and puts our individual strengths into our current positions. He is responsible for financial control, department managers are direct reports to him, and he handles all new business presentations with the Account Strategists. My responsibilities shift between new business development, speaking engagements and workshops, and handling all the PR and promotional activities for the firm. I also sit in on all creative meetings when I am in the office and stay active in the creative process.

I suppose there is the perception that once you become chairman you can pretty much do what you want. Work two or three days a week or half days, play golf when you want, take endless vacations, etc. The truth is that I really am enjoying what I am doing now and am probably working as hard or harder than I did when I was the president. I want to give the company everything I possibly can before I step away. You see, regardless of who owns it, Design North is still my baby and I take tremendous pride in its successes and worry about those things that aren't perfect or could be better.

Growing on the Farm

In an effort to match our image to our new focus, we did a search for a new office two years ago and decided that we couldn't replicate the unique environment that we currently have. The corporate offices are located on a farmstead between Racine and Milwaukee that was originally built in 1889. We purchased the farm in 1965 and built three major additions through 1985. In 1985, the outbuildings of the original farm: the barn, granary and chicken coop were physically moved and attached to the farmhouse complex under a unique architectural plan. In total, seven buildings with over 14,000 square feet came together to form a truly unique creative environment for our staff.

Design North Corporate Offices

In 2001, we renovated the reception lobby, account strategists offices, accounting and purchasing offices, employee lunchroom and conference areas. The new construction accentuated the architectural qualities of the building, while improving workflow by changing departmental proximity and transforming the interior feel to one of a creative, high tech company. The changes also make the facility more employee friendly with the addition of a kitchen/lunchroom and a design strategy room, foster better communication via new technology and reassure clients that Design North is on the cutting edge of strategic design and the latest in developing technologies.

To coincide with the renovation and anniversary, we developed a new logo for Design North. This new brandmark carries forward the progressive essence of our company. The contemporary star graphic is symbolic of our NorthSTAR process of design development and the teal star point represents our focused direction.

The Secret to Survival

Our secret to surviving 40 years in business: Making our clients' business our business, presenting ideas not filling orders, listening to consumers, evaluating design in its competitive context, hiring the best, targeting new business and sticking with our specialist philosophy. Modine Manufacturing Company, one of our reasons for success, has been a client for 37 years. Other clients include ABB Automation, All-Glass Aquarium Company, Agrilink Foods/Birds Eye, Car-X, ConAgra Frozen Foods, Fox River Paper Company, H. J. Heinz Company, In-Sink-Erator, Johnsonville Foods, Johnson Wax Professional, Kaytee Products, Mercury Marine, Snap-on Inc., Turtle Wax and World Kitchen.

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

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• Growing Your Business: The Most Exciting Event in Your Life by Herbert M. Meyers
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• Level the Playing Field with Technology by Allison Cheston
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• A Crash Course in PR for Design Firms By Steven Morris

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Design Management Resources
Post Office Box 423
Thompson, Connecticut 06277 USA
Telephone 860-377-9696
E-mail: Linda@designmanagementresources.com
www.DesignManagementResources.com