Design Business Council
Design management = growth

I recently commented on the way that Australia lags Europe in design management.

This resulted in a number of people contacting me and asking me to define what I mean by design management.

We established a design studio 30 years ago and from the first estimates we submitted we put a line item for design management and explained it as ‘all the things that happened in a studio apart from design’.

That held true for some time but I think that for the past decade we have needed a better explanation. Many of the studio owners I meet tell me that they can’t charge design management; that their clients won’t pay for it. I think if we collectively tell clients what design management is and why they should pay for it we can all improve the industry.

My definition of design management.

The Design Management Europe website shows the following definition.

Design management is the cultural, strategic and operational use of the design resources (internal and external) available to an organisation, directed towards the creation and attainment of business and organisational objectives.”

(Professor Peter McGrory, University of Art & Design Helsinki TaiK)

The Design Management Institute describes it like this.

Design management encompasses the ongoing processes, business decisions, and strategies that enable innovation and create effectively-designed products, services, communications, environments, and brands that enhance our quality of life and provide organizational success.

Read the full article

For me neither of these is a practical definition that gives a studio owner a way to explain and sell design management to clients.

My explanation begins by understanding that design management operates on two levels: internal (people and processes) and external (strategy, tactics, project management). Underpinning both levels there is the financial aspect which ensures that design management is productive and profitable for the studio and its clients.

Internal design management

No matter how large or small the studio is there is a need to manage the people and processes.

This begins with defining the vision, mission, values and purpose of the studio, defining team roles, employing people and creating a culture through to measuring client satisfaction after they have paid for a project. That is all the role of a design manager. The financial viability of the studio is measured and tracked by the design manager who determines hourly rates, sets profit margins and calculates value add. To counterbalance this the design manager keeps track of productivity and the progress of jobs, ensuring they stay within the budget.

Within the studio the design manager also collaborates on the strategy and tactics for gaining, retaining and growing clients.

All this can be divided into two levels; administrative tasks and management. Administrative tasks include calculating hourly rates, profit on jobs, time tracking etc. The management includes developing a culture based on the studio’s values and setting strategies and tactics for getting new business etc.

When you consider all of this, even if it is done by the studio owner, there is quite a lot of work. The studio’s primary role - design - could not be accomplished without all of the design management that it takes to run the studio. That means it has to be costed and charged as part of every project. More about that later.

External design management

The design manager understands business. Her or his role is to represent the clients’ business interests as part of the design process. This means they understand how to develop a budget, make cash flow projections, manage the finance of a new project and gain a return on investment.

The design manager knows how to conduct a customer journey mapping exercise, to develop a value proposition, produce an empathy map and analyse the jobs to be done. They can introduce design thinking into a clients’ business and assist them to innovate. They do all of this to improve the clients’ business.

They also excel at project management. They know how to reduce costs, add value in the process, manage the players in the project and exceed client expectations.

The fact is that in varying degrees this is done in most studios even if they don’t have a design manager. The studio owner has learned these skills as she or he built their business. But this is an inefficient way to manage design. As with any other aspect of the design process the result will always be better when you have someone that is trained, focused and suited to the task.

Paying for design management

Many studio owners I talk to say that clients won’t pay for design management. My answer is to pull out some of the design management areas and sell them as an add-on service. Developing a strategy for design that fits with the business strategy is one example. The document, workshop or presentation that explains this strategy is a service that can be sold as an add-on. The truth is you will do it anyway and usually just include it in design development. Why not itemise it and pitch it to the client as an added service; keep the same design development fee and sell this service as an extra?

The other side - corporate design management

The trend in Europe, the UK and the United States is to have inhouse corporate design managers. This has even been elevated to Chief Design Officer in some cases. At best the inhouse design manager has responsibility for the integration of design into all parts of the enterprise, at least they are just a glorified production manager.

The Design Management Europe excellence awards showcase some of the enterprises that have used design management to improve their business.

In Australia we are seeing similar examples at the ABC and Medibank where design management is being used to rethink the organisation.

Want to know more about design management? The Business of design shows how design management can be applied in an Australian studio.

Greg Branson

Design Business Council

0412 762 045