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While you were out: changes in the global design industry
by Niti Bhan

Brad Nemer saw the future of the design industry when he arrived at the Illinois Institute of Technology in Chicago in January 2002. Next week during his commencement exercises, Brad will not only receive a Master of Design degree but also a Master of Business Administration degree. After completing this grueling and unique dual degree in only three years, he will work in portfolio planning at Motorola.

"I chose the dual-degree path for two reasons. After working in several high-tech startups, where the product essentially is the company, it became clear that no matter how grand the vision, design is managed in the context of business." He said as he explained his choice of degrees, "So it is critical to understand the basic forces of accounting, marketing, and organizational management, because otherwise even the best designs in the world will go nowhere. The much-celebrated divide between "designers" and "suits" is not only counter-productive to success all around, it's inaccurate. Once you demystify business fundamentals, they become just like any other design constraint, and are no more insurmountable."

And he isn't the only one recognizing the changes occurring rapidly in the design industry. Victor Lombardi, a consultant in New York, resigned his fulltime design management job to co-found The Management Innovation Group, a new breed of management consulting firm. "My partners and I view design as a way of thinking which is applicable far beyond the design of products" he explained. "Our clients want to explore innovative business strategies, ways of collaborating, and ultimately to develop their own innovation capabilities." So while Lombardi's firm thinks like designers, they work with executives to help them explore the options a more creative approach can offer. "It's not easy for people to stretch their thinking to encompass both business- and customer-centric points of view, but ultimately this is what we need to do to create innovative, human-centered organizations." His blog has an area earmarked for the intersection of business and design.

Increased competition in the industry, improvements in the global technology infrastructure, relentless pressure to lower costs in every industry are just a few of the forces leading a major shift in the field of design. Where earlier, design was the department brought in after marketing or sales or the advertising agency decided that a "new and improved" product or brand extension was required to penetrate a target market or increase profits for a brand. This usually resulted in incremental improvements in product and profits. Notes Sharon Reier in her article When looks count the most, companies are now increasingly seeking to integrate design as a strategic tool for creating shareholder value. These companies understand that the real value in design is using it to improve the entire user experience, where advertising specialists and marketing managers focus more on the buying decision alone.

In Redesigning American Business, BusinessWeek's Bruce Nussbaum underscores this shift, he says, "Design in America isn't about form but innovation, in the guise of new products and services." With the design industry's shift in core competencies from drawing to thinking, from styling to innovating, from shaping things to visualizing new paradigms, what are the opportunities for designers today?

Traditionally, the majority of the design profession considered itself above and apart from "big business", perceiving it as obsessed with numbers, dollars and the bottom line. To successfully pitch themselves as an innovation resource, as consultants for change, this thinking is the biggest hurdle to overcome. The language of design itself is evolving to incorporate terms usually bandied in the halls of business schools, such as ROI (return on investment), NPV (net present value), Porter's five forces and Kotler's 4 P's. Few design schools teach the basic elements of business, less so in undergraduate programs. In the meantime, business schools are quickly catching on to the importance of design thinking, and integrating parts of it into their curricula.

Where does it leave the traditional product designer or studio? Michael Winnick, Head of Business Development at GravityTank, a strategic product development adds "..with the increasing commoditization of the back end, low intellectual investment portion, a service that most OEMs in China can now offer as part of their service, industrial design firms need to restructure to focus more on the product definition end, the early research, the strategic design planning and platform innovation end of the development cycle in order to generate revenue and stay profitable." Nussbaum implies an evolve-or-go-under scenario for smaller design firms. Evolution implies a strong willingness to adapt to changing scenarios, "prototyping" so to speak. As designers, change, flexibility and adaptability should be easier than most to achieve. While there are no quick fixes, there are short term and longer-term solutions worth considering.

In the short term, design firms can partner with business strategy consultants to offer new and expanded service offerings above and beyond the norm. Expanding their services, hiring marketing and product management professionals with business degrees and incorporating them into their design teams will allow them to present complete solutions to their existing clients as business cases for new products.

Along with retooling their service offerings, smaller firms can look at developing new markets for their areas of expertise. Most major research universities have technology transfer offices that specialize in the commercial applications of nascent technology emerging from their laboratories. Partnering with such local offices to offer product development services to shorten the path to market and commercial viability of inventions benefits both partners. Good design increases the likelihood of the patents being licensed by large corporations and leads to new avenues for revenue generation.

In the longer term, American and European firms can seek new clients and partners abroad. Increasingly, Asian OEM suppliers are moving towards building their own brands and leveraging their cost advantage to enter developed markets. A major opportunity exists in designing products for Asian manufacturers for the North American and European markets. Attending consumer electronic and consumer product trade shows in the Far East is one way to reach new clients. While local design talent may be cost effective, Asian manufacturers are limited by their lack of exposure to the American consumer and the American market. This experience is a significant advantage for American design firms.

Many options for continuing education exist for mid career design professionals seeking to enhance their professional skills for the changing market situation. There are short courses on business fundamentals available in local community colleges, focused workshops and classes at business schools, part time programs in business or for those really looking enhance their marketability, fulltime graduate programs such as an MBA or the Master of Design Methods.

Fresh graduates, already concerned with the increasing competition for product design jobs and shrinking design market for traditional services, can begin to apply the same skills they honed as designers to reposition themselves as innovators, creative thinkers with the ability to think out of the box, a trait in short supply in business at the best of times. Areas such as marketing, advertising, promotions, event management, while not traditional design jobs, are all avenues to gain valuable work experience if the right design job is not available. Meanwhile, these industries offer opportunities for creative work without the job title of "Designer", to build your portfolio, and to explore other areas of business, all of which can add value to the designer's resume. For example, Motorola's Consumer Experience Division has advertised a position titled "Marketing Manager" but the job description and requirements point towards a communication design professional with the ability to visually communicate brand and marketing concepts with clarity. Continuing on to graduate school is, of course, an option, and here is a quick look at what you need to consider if you take this path.

The playing field in the design industry is very different today than it was even ten years ago. If you are a current student you should take care to ensure that your education is not preparing you for a game of baseball, because upon graduation you'll be playing futbol. For young designers five to ten years into their careers, you should familiarize yourself with your employer's plan to remain competitive over the next five years, and make sure that the plan includes a position for you. And owners of design firms should understand the forces at play and take care to develop plan to remain viable, before your employees start asking about it.

Niti Bhan is a global nomad, neither fully immersed in the West nor entirely at home in the East. With background spanning engineering, business and design, Niti is most adept doing what no one does best. Her present incarnation is as Director of Admissions at the Institute of Design, IIT.

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