My Design Notes

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25 Mar 2012

Four strategies for improved client-designer relationships
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Most designers offer their services through short-term projects, which means that the client-designer relationship is often temporary. What are the other types of designer-client relationships and how are they best managed?

The relationship quadrants

Two aspects are important when characterizing client-designer relationships:

1) The scope of the service

2) The role of the designer in the client's process

The scope of the service can be either a project or an ongoing process. In both cases, the role of the designer can be either assistive or participative. In order to compare the two types of scope and the two alternative roles, we can visualize a matrix with four relationship types (see diagram, below).

Each type has different goals, opportunities, risks, and competitive strategies associated with it. Here is a short characterization of the four relationship types:

A) An assistive role in a project – The Project Supplier
- Driver: Client’s need to get a solution to a single, well defined problem.
- Duration: Short-term agreements.
- Designer's goal: To be awarded the supplier’s contract.
- Competitive factors: Price or service performance.
- Critical success factor: Price-quality ratio.
- Designer should know: Decision-makers and their criteria for providers; customers’ needs; ways to improve your own productivity
A project can be the start of a successful designer-client relationship. However, many clients feel that they have to tender each project, which makes this kind of relationship potentially transitory.

B) An assistive role in an ongoing process – The Outsourced Process Provider
- Driver: Client's determination to focus on core business.
- Duration: Long-term, ongoing service.
- Designer's goal: To allow the client to focus on their core business.
- Competitive factors: Provision of cost-effective services.
- Critical success factor: Integration into the client’s processes.
- Designer should know: The right service scope and the client’s own cost for providing the same service level.
It is naturally good business practice for a client to focus on their core business. Therefore, many companies want to outsource processes that they consider complementary. This provides a design company with the opportunity to build a long-lasting relationship with the client. Clients are very cost-conscious in outsourcing deals, so the designer must be able to provide a high-quality service cost-effectively.

C) A participative role in a project - The Consultant
- Driver: A strategically important issue that requires a solution.
- Duration: An ongoing relationship with recurrent projects.
- Designer’s goal: To create and maintain a trusted relationship.
- Competitive factors: Strategic thinking; understanding the client-s business.
- Critical success factor: Ability to improve the client’s competitive position.
- Designer should know: The client’s strategy.
The difference between a type-A relationship and a Type-C one is that, in the latter, the designer contributes more directly to the competitiveness of the client. The designer can be, for example, taking part in a new product or process design that improves the client's core business. A designer is a trusted advisor, even though the relationship is formed around projects.

D) A participative role in a process – The Strategic Partner
- Driver: New business value that can be derived from working together.
- Duration: Long-term relationships.
- Designer’s goal: Shared business goals with the client.
- Competitive factors: Ability to provide unique value to the client.
- Critical success factor: Partnership-management competence.
- Designer should know: Strategic fit with the clients is key; risks related to working together.
This relationship type is the most mature and the most demanding. It is similar to a joint venture, where the client and designer share a vision and a strategy. They also share the business risk to a certain extent. David Lewis certainly had a strategic relationship with Bang & Olufsen. The work of Lewis’s company played a crucial role in B&O's success.

Which relationships to pursue?

All of the four designer-client relationship types have their pros and cons. Some designers are perfectly happy taking on projects that have a limited life span. Some strive to build long-term relationships. Whichever your strategy, it’s advisable not to rely on one single relationship model. By developing a range of models, your company increases its chances of success in a business world where uncertainty has become the norm.
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11 Mar 2012

Service and business design go hand in hand
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Service designers rightly emphasize how service development should start from the customers, and their needs and motivations. Service is collaboration between the customer and the provider. It is, therefore, important to make sure that the provider has the will and means to deliver the service as planned. To accomplish this, service design should integrate with business design.

As a management consultant I've been involved in dozens of service-development projects. In some cases I've been able to help my client for years, starting from the first ideas, until the service is in its second or third development cycle. A couple of years ago I devised a framework for communicating the service-development life cycle. It is suitable for both B2B and B2C services, even though I've mainly used it in business-to-business cases.

The framework has two halves. The upper half denotes the customer's and the lower the company's viewpoint (see the illustration).

1. Needs and strategies

The first phase is related to understanding what the customers want to achieve. The purpose of a service is to make customers perform better in their everyday tasks. When you know the outcome that the customer wants — for example, less time used, fewer errors and less waste — you can start making strategic choices on the needs you want to satisfy. A service strategy also defines what means you want to use to achieve your goals.

A software company I know had identified the need to improve construction-site management. It started off with scheduling and production control. It found out that the best way to do that was to make a virtual model of the construction. That opened the doors to other applications later on.

2. Service concept and business model

After you have decided on your strategy, you can create a concept-level plan of the service. The concept defines what the benefits of using your service will be, and what the service does. In other words, you'll have to look at the service through your customers’ eyes and understand what kind of service helps them do their work better.

Another thing to consider is the maturity of the customer in relation to what you can offer. For example, the construction management software firm realized that it had to offer both software and people to operate the software for the first customers.

During the concept phase you can already start creating a buzz around the service; do test marketing, and perhaps make some service prototypes. Customer relationship building starts at this stage. On your company's side you'll have to define the business model that makes offering the service feasible. A business model includes the revenue and cost logic of the service.

3. Service design and operational model

The third phase focuses on the delivery of service. You will design the service and create the business platform for delivering it. This is the phase where you prototype, test, and launch your service. You will need the right people, systematized processes, and technical solutions to make the service delivery cost-efficient. Getting the right kind of customers and exceeding their expectations is the best marketing you can do.

4. Relationship value and improvement

The fourth phase is all about establishing the service as a first choice of existing and new customers. They will get more value from your service than anywhere else. You'll strengthen the customer relationships through learning and cooperation. You must systematize the service to a point where you can scale it up for an enlarged customer base or for new markets.

The model I have outlined is adaptive and dynamic. You must and you will go back to adjust your earlier assumptions. Improving the outcomes and making your processes more efficient guarantee that your business grows profitably in the years to come.
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14 Feb 2012

The untapped value of design
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A study published in January 2012 of 1,380 Finnish companies shows that most businesses don't consider design to be a competitive advantage. Quality, reliability in delivery, sales, pricing, marketing, logistics, and brand are more important, according to the respondents.

There hasn't been too much research on the business value of design. Some Finnish studies seem to suggest that design investments have a positive return. The best performers have managed to integrate design with R&D, marketing, and strategy. The benefits to this approach include accelerated growth of production and sales, and product and service differentiation.

The researchers asked, “what is design?” Four out of five respondents replied that it is the aesthetic design of objects. The responses that design "means customer centricity" or "is vital to a company's existence" got the least support.

Less than 20 percent of the companies had invested considerably in design in the last two years. Little over 30 percent had invested slightly, and 10 percent had made no design investments whatsoever.

Those that had invested some or nothing reasoned that design was not suitable in their industry, or that they could do well without it. One-fifth that had negative attitudes said that design would take too much time and resources. Over half of the skeptics felt that hiring a designer would be too costly or difficult.

Those who responded that design is the basis of their operations had to answer additional questions. Seventy-eight percent of them said that design is an element of all development of products or services. Six out of ten thought that design comes from inside the company, and 20 percent responded that it derives from the customer.

Why does design improve quality, according to the supporters? Sixty percent felt that design improves the usability, ergonomics, and durability of products. It reduces waste and errors, and makes products and services environmentally friendly. It also helps companies differentiate themselves from their competitors.

Companies that rely on design said that it speeds up market entries and that customers are willing to pay more for great design. Those who incorporate design into their strategy consider it to be a resource.

The study "What design means to companies" was conducted by the Association for Finnish Work in co-operation with four other Finnish associations.

Charts by AE Partners Oy
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27 Jul 2010

Service growth will come from older people
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Some years ago I was involved in an online database project. The database contains instructions on how to design homes and residential environments for the elderly and people with disabilities. Special needs of older people will be a challenge for societies and an opportunity for businesses.

A McKinsey study revealed that people over the age of 55 will drive two-thirds of all growth in consumer spending in France over the next two decades. The same will probably happen in many other European countries and Japan.

Seniors will use more services than younger age groups. The McKinsey study lists the following services that will get over 50 % of their spending increases from people over 55:
- Recreation
- Food at home
- Utilities
- Financial services
- Personal care
- Media and entertainment
- Food away from home
- Transportation services
- Housing
- Communications
It is not just the inevitable physical needs of aging that require special attention; social and emotional needs are equally important. Attending to the needs and desires of older people will be a big opportunity for businesses in all areas of design.

Photo: iStockphoto
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19 Jul 2010

Five ways to boost your design business profitability
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1. Sell solutions instead of hours

If you always wait until a client seeks a solution, you will be ultimately competing with price. Instead, find out what creates value in the client’s business and what is holding them back. Devise a solution that solves the same problem for many potential clients. Make your solution easy to understand, buy, and implement. Create a revenue logic that is not based on charging by the hour.

2. Build special expertise

Having expertise in a specific industry, like e.g. in sports, biofuels, or waste management, can be more profitable than being a generalist. A very narrow area of expertise often requires a global market, which is both an opportunity and a challenge.

3. Offer the same service to a group of clients

Serving a group of clients at the same time offers many benefits. The cost of marketing and service per client becomes lower. Having several clients with similar needs often generates new leads as the clients get to know you. You can either form a group by yourself or offer services to existing groups, like partnerships, chains, or associations.

4. Systematize your work

Being a creative designer does not imply that you could not systematize your marketing, sales, projects, relationship management, and so on. Plan your processes and use the net as business infrastructure. Use partnerships and outsourcing whenever it is feasible and does not make the processes too hard to manage.

5. Get the right clients

Surprisingly many design firms hold on to client relationships that will never become profitable. Determine your criteria for a profitable client relationship. Evaluate how your existing clients meet the criteria. Define your strategy with clients who do not comply: either give them up or plan how to develop a win-win relationship with them.

Photo: iStockphoto
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