New darlings like Airbnb have emerged as design-led companies. Google finally cares about design. Apple is the most valuable brand in the world for the “Age of You”. Even Bloomberg Business Week (of all places) has added design to its masthead. Good design is good business, indeed.
Meanwhile, this has also been a season of change in the industry as the same forces that have propelled design into the foreground have reformed the consulting landscape. Most recently, Smart Design closed its San Francisco office while opening a new location in London. Capital One established an instant in-house team by acquiring Adaptive Path. Oculus acquired Carbon Design. Google acquired Gecko. Accenture acquired Fjord. Fuseproject relinquished its independence and was sold to foreign investors to fuel growth. And the big firms like frog and IDEO launched new initiatives and are experimenting with new business models and offerings.
So—amidst evidence to the contrary—are design firms “feeling the squeeze” as one blogger put it? Is design consulting disappearing? Is the sky falling? I don’t think so. Our industry is certainly evolving, as it always has to address changes in business, technology and culture. Even as the pace of change has accelerated, the argument that consulting is in decline seems somewhat myopic—even for Silicon Valley. This line of thought places too much importance on the unique challenges of one geography (SF) and one sector (tech), assumes that design is easy to integrate within organizations at scale, and confuses the singular discipline of UX with design as a much broader, hybrid practice. Most of all, it underestimates the role that consulting plays and the business value it generates relative to cost. Looking ahead, I believe design firms are positioned to thrive in the next year and beyond—even as insourcing continues to grow (as it should). Here’s why.
Design is Hard
Innovation in the connected world will be increasingly characterized by hybrid experiences that defy traditional organizational, technological and delivery boundaries. Integrated hardware, software and service design is incredibly complex—and it’s only the beginning. Now drugstores are healthcare advocates, healthcare providers are more like service providers, automotive companies are UX companies, and so on.
It’s easy to underestimate the complexity of introducing design into existing organizations, and maintaining its value once assimilated. Internal groups do have certain strengths: deep insider knowledge of both company and category, a long-term view, and of course “skin in the game.” And yet it remains to be seen how many recently-acquired internal design teams are truly sustainable, whether they are supported at the highest levels of the organization, whether they can retain the best talent, and whether they will ultimately be compromised by the political and cultural inertia that makes innovation so difficult to start with.
In-house design teams will also be subject to the same forces that make running a design consultancy challenging: competing for new talent, maintaining a creative culture, developing and integrating new competencies, balancing innovation and execution, anticipating what’s next, and simply doing great work. Organizations with fully integrated design capabilities—like GE, and IBM—have built design teams from the ground up and at significant expense. They also tend to be software companies. Or software companies that happen to live within other companies. For those unable to make equivalent shifts in priorities, design will be like a fad diet, producing short-term progress that eventually fades away.
At its best, a design consultancy is a collective intelligence that is bigger than the sum of its parts. It’s talent plus context plus exposure: talent in the sense that consultancies are comprised of odd combinations of brilliant, hybrid people; context in the sense that they work together in unique and unpredictable ways; and exposure in terms of everything they see and do across the studio’s work and its client’s businesses. Our clients engage us for access to these people, and our ability to assemble flexible, bespoke teams that are unique to a given problem and moment. These teams typically include a wide range of both generalists and experts drawn from across the firm—from researchers with deep psychology and healthcare expertise, to UX designers that happen to be deeply engaged in virtual reality, to business strategists, technologists and hackers to name just a few.
Consider the broad range of disciplines that have emerged and matured over the last decade—from design research and ethnography to service design, experience strategy and data visualization to name just a few. There is a peculiar alchemy produced by small groups of people working together in diverse teams subject to frequent recombination and exposure to multiple industries, trends, users and technologies. This lateral perspective—and the pace at which it can be generated—produces intellectual currency vastly disproportionate to its scale and difficult to replicate in a more structured environment.
The role of consultants is also expanding—encompassing both traditional outsourcing (e.g. “design the future…make something for us”) and new forms of partnership (e.g. “teach us how to design…work with us…help us change our organization”). Our clients expect increasingly transparent engagement models. They join us for field research, participate in ideation, and work closely with us to ensure full alignment across large internal teams and stakeholders. Industry-wide, this heightened degree of collaboration has resulted in the ongoing dissemination of design thinking in both theory and practice. Likewise, consultancies also need their clients to play a role. Integrated client teams provide deep knowledge of the business and category—and their involvement ensures seamless execution once the agency’s work is done.
Emerging Problem Spaces
As some doors close, others are opening. Distressed brands—particularly today’s fast followers—will need consultants to help drive and sustain innovation. So will smaller companies who can’t afford (or don’t need) dedicated design teams. Established innovators will engage consultants in niche products outside their core competency, in net-new innovation, and as a way of distributing risk. Neglected categories like enterprise software are relatively wide open, with the potential to improve the lives of millions of users every day. Emerging megatrends (e.g. big data, IoT, ubiquitous computing) and technologies (e.g. robotics), artificial intelligence and virtual reality) will continue to disrupt existing industries and business models outside of technology, creating space for consulting across multiple categories at the leading edge of what’s new.
George Nelson—the iconic mid-century industrial designer—once said that designers get the clients they deserve. The inverse is just as likely—which is to say that clients get the designers they deserve. As design continues to evolve, businesses will have to assess how best to integrate this fundamental but fragile discipline. Undoubtedly, that means the continued growth of in-house design and an increased role for design thinking at the leadership level. It also means that consultants will have plenty to do. Good design is good for everyone.
This article was originally written by John Rousseau for Artefact Group.