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December 2017 – Piers Scott

UXswitch speaks exclusively to Piers Scott, Lead UX Designer and Content Strategist at Rothco, about the role of independent design agencies in an era when every other type of ad or technology, business development agency, and indeed in-house teams, seem to offer design services.

It’s happened before

In 1965 the iconic Industrial Designer Henry Dreyfuss was concerned by changes in his industry. After thirty or so years of development, formalisation and standardisation in both industry and academia, Industrial Design had gained a currency that business was beginning to understand. By the mid-60s clients had come to appreciate the value of Industrial Design and many of them were creating internal design teams. Dreyfuss welcomed the advancement and adoption of design, but he was concerned for what this meant for design consultants’ core skill: perspective.

“Economically, it may seem advisable … for a large corporation with a constant volume of design work to set up its own design department. Whether the economics are sound over a long period of time remains a question, there is the danger that the internal designer, no matter how good he is, may become frustrated by office politics and dulled by the sameness of this work, so that in time he loses his eagerness and his originality and takes the easy way.”

Fifty years later and anyone working in the digital design industry will recognise the obvious similarities with Dreyfuss’ situation (whatever about his pessimistic assessment). After many years as a specialist, and often expensive, skill design thinking has gained enough currency that it’s not only being adopted by other consultancy-side industries, but by clients.

“To look ahead one must learn to look back” – Henry Dreyfuss

This is an important change in the growth of design, but many assessments of this situation have just argued that the adoption of design by industry comes at the decline of the consultancy. Perhaps, but I think it’s important for us to assess what’s happening across other industries, if we are to understand what’s happening to our own. What we’re seeing now is larger than design; design thinking isn’t just being affected, many other industries are changing too.

Everyone’s getting in on the act

Some twenty years ago, many medium-to-large businesses would employ separate agencies for business consultancy, marketing, advertising, branding, web design. Each would work independently, occasionally coordinating on large projects.

In the same way that, 20 years ago, we got our TV, telephone, mobile packages from different providers, today we’re as likely to package these together under just one. Agencies are now bundling a broader selection of services, including design thinking, into single client-offerings. It’s this bundling that’s both expanding the market for design (and designers), and squeezing the independent design consultancy.

This shouldn’t be read as an assault on design, what’s happening is larger than the design industry. This is part of an industry-wide competitive strategic expansion where consultancies are absorbing as many future-facing services as possible. These include services as diverse as AI, machine learning, VR, AR, content, analytics, search, marketing, industrial design, IoT, business design, development, security, cloud, and product design.

As Design Thinking has gained currency outside of the UX industry established UX agencies have found themselves squeezed from many sides.

Traditional web agencies have expanded their service offering to include UX. Management and business consultancies have adopted Design Thinking as a way of commodifying innovation and strategy for their clients. Most famously with Accenture’s acquisition of Fjord in 2013.

To a similar extent, we’ve also seen Google and Facebook acquire design agencies of their own while also boosting their internal UX and content strategy skillsets (not to mention VR, AR, product design).

Looking specifically at advertising and marketing agencies, we can see how design is being adopted in various ways. Many of these agencies have discovered the strategic opportunity that this skill can offer them, and their clients. The challenge facing these agencies is moving away from a century-old product-based business model (TV, radio, out-of-home ads) to a service-based one. This partially comes from clients, many of which have their own design departments, and expect their consultancies to have the necessary skills to work with their design departments, but it also comes from the same place as web agencies’ adoption of UX – it’s currently a competitive edge.

Ad agencies’ adoption of design is as much pragmatic as it is strategic. Over the past two years some of the world’s largest advertisers have moved their existing ad spend to service and experience design. Speaking to the Financial Times, Nick Manning, chief strategy officer of marketing analytics group Ebiquity says that these large corporations are diverting more funds to UX and service offerings:

“Marketing spending is going up healthily but increasingly the money is going towards customer experience rather than traditional advertising.”

But for ad agencies, this transition from a product-based offering to a service-based offering (programmatic, apps, sites, physical services) isn’t simple one. As Peter Merholz and Kristin Skinner describe it in Org Design for Design Orgs,

“[the customer relationship] is now a continual relationship, and accordingly, every company is becoming not only a software company but also a services firm…[delivering on customers’ needs] is more complicated than ever.”

The best ad agencies have always looked beyond their commercial creative output towards helping their clients improve their service offerings. Now, this isn’t a case of going above-and-beyond it’s a requirement that each agency must deliver.

And some are, in September 2017, Droga5 appointed Jason Severs, formerly of Verizon and Frog, as its first Chief Design Officer with a remit to,

“lead the shop’s overall design department and help grow existing client relationships with new services, allowing creative and strategic offerings to feed directly into broader product and service development and innovation.”

Meanwhile, R/GA has been pushing this combined design and advertising service model for years, adopting data, IoT, product, and service design into the traditional ad agency space.

Separately, brands are growing their own design departments; often poaching talent consultancies. This gives brands, and their customers, access to the right tools to solve challenges, and it also (if done right) helps clients move away from a CapEX project-by-project approach to design (where designers are called into solve service and product challenges once they’ve become problems to the organisation), towards an OpEx process (where the customer’s voice, behaviour and needs are listened to).

But, as Dreyfuss pointed out half a century ago, in-house UX departments aren’t necessarily the solution. Many in-house UX departments are designed and operated as production departments, often given no space to affect the organisation on a strategic level – so while they may improve how customers experience certain services they don’t have the remit to improve the organisation on more than a superficial level.

Change can be harder to affect from inside out than outside in.

We could go on and on and look at Deloitte, KPMG, McKinsey, PricewaterhouseCoopers, and spend many hours looking at IBM’s recent rediscovery of design, not to mention the dozens of small and medium-sized organisations that have adopted design or merged with design agencies, but the point is made. Organisations at different levels and scales are expanding their services, not only in design, to compete across digital, marketing, VR, AR, service, AI, and business disciplines. These market changes aren’t just causing rough seas for design consultancies, they’re causing issues for quite traditional organisations too: just look at the financial, governmental, healthcare, and insurance industries’ recent adoption of design.

Where design has most impact

The challenge facing the design industry isn’t the broad adoption of design across various industries, or the increased competition facing design consultancies. These are strong signs of the healthy future design has.

The more roles available for designers, the greater flexibility they have to move between client and agency roles over the course of their careers. And this should help to raise the overall level of design.

Rather, the challenge facing the design industry is the way in which design is being brought into these other industries. How ad and other consultancies develop their design capabilities tells us whether they see design as a fundamental service or a line-item offering. These agencies typically bring design in in one of two ways.

  • Design is brought in as an extension of ‘tech’ or ‘digital’ product offerings.
  • Design is brought in at the executive level

Where design is brought in as a product offering, its output is limited to producing assets. In these organisations the designer has no role beyond the customer-facing product or service level. The type of products being produced, how they’re marketed, and how they’re maintained are largely out of the hands of the design department.

However, where design is brought in at the C-suite (as we see with Droga5), it can have a transformative effect on the organisation and their clients. Having a designer sitting at this level gives design teams the opportunity to improve the entire end-to-end process, including how the organisation itself is managed.

Just think of the different roles design played the growth of Microsoft (design as a product) and Apple (a design-led organisation) to get a sense of the difference.

But as design becomes ubiquitous it risks being neutered – confined to servicing specific departments and types of problems. Rather than leading: rather than improving how businesses are run and services are provided design falls in line behind the existing processes. We, as designers, then won’t have that ability to challenge or change the big problems.

This means that savvy designers should be aware of how design is being/has been brought into their organisation, and what voice it has within the hierarchy. Knowing this will help them understand what kind of impact design can have for customers, clients, and the organisation itself. And…if the organisation is missing a designer’s voice at management or C-suite level, then it, at least, points to an opportunity for a designer to become that voice within the company.

While the exponential growth of design roles is a good sign, the concentration of design and other skills into a smaller number of mid to large consultancies points to a possible rocky time ahead for smaller independent UX and design companies, at least in the mid-term.

Looking Forward

As the walls between ad, marketing, UX, AI, machine learning, IoT, web and other agencies break down the role and position of design expands too. Designers can lead and help produce each of these services, if they can position design at the right level in their organisation.

So what does this mean for traditional design consultancies? Many have already moved their design offering away from digital services towards business and product design, allowing them to provide strategic direction to their clients’ internal design, business, product, service and other teams.

But the consultancy industry is still changing, and will continue to change for some time. The role of design can have a transformative effect on companies, clients, and customers when it’s correctly positioned in the organisation. And as the ad, marketing, VR, AR, UX, AI, product, machine learning, IoT, web, and other services mix and merge the nature and scale of services we can design will change too – and we’re well equipped to handle these challenges, if we can keep our most important skill: perspective.

 

Piers Scott ux

 

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