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by Andrew Lam-Po-Tang
At a recent party, there was group of graphic designers talking shop
(surprise, surprise!). The topic was "business models", specifically the
different options that studios have for organising and staffing themselves.
There seems to be pretty much two basic approaches that cover most studios,
with a few variations within each approach:
Everyone does everything or Functional specialisation
The typical model seems to be that the principal does most of the selling,
and that designers have project management responsibility, ie. "everyone
does everything". I think the reason why it is typical is that the vast
majority of studios are pretty small (under 4 people), therefore it may be
difficult for the principal to imagine paying for someone who is not
directly involved in design and production.
The other approach, "functional specialisation" is characterised by
dedicated account or project managers who don't do any design, and have both
selling and project management responsibilities. This model seems to be
favoured by larger studios.
Variations on each approach include;
- Bookkeeping & accounting completely outsourced
- Dedicated finished art people (or completely outsourced)
- Dedicated production & supplier management
- Dedicated selling/account management but project management by the
designers
- The overall business management responsibility separate from the
principals (who usually have overall creative responsibility)
- etc.
Interestingly, it would appear that there are an increasing number of
smaller studios that are adopting the functional specialist model. Certainly
in my experience this characterises many of the more successful newcomers
(in both traditional and new media) - however, I am not sure that means that
functional specialisation is the way to go. What it does indicate is that
these studios are prepared to think about their economics (how they make
money) in a non-traditional way.
In order to evaluate the pros & cons of each approach, it's worth thinking
about the key assumptions that underpin each approach:
Everyone does everything - key assumptions
- The way that principals and designers manage the non-design functions
in a studio is "acceptable"*
- Functional specialists are only affordable for big studios
* I use the word "acceptable" to mean "it must be at least bearable by
the studio otherwise how can they still be in business?"
Functional specialisation - key assumptions
- Functional specialists will do a better job of their area than a
designer
- Non-design specialists will 'pay their way' by doing a better job and
freeing-up designers to be more productive (both in time and lack of
distractions)
There are clearly a whole other bunch of assumptions that underpin the wide
variety of opinions about what works, but I have endeavoured to pick out the
ones that are both universal and critical. What is interesting about the two
sets of key assumptions is that they are not mutually exclusive - this
suggests that the business models are also not mutually exclusive, and that
there may be a mix-n-match answer as well!
Back to the conversation I mentioned at the beginning of the article - the
million dollar question was, "So what is the *right* model?" I am not sure
there is one right answer to that question, but I reckon that a good place
to start is by examining the key trade-off that most studios face:
How do I develop both high quality design and professional service, and
succesfully integrate both parts of the studio's performance in a manageable
and stable manner?
I think the smart way to approach the problem of how you organise yourself
is to start by identifying the major groups of tasks that need to be done.
Then go through that list and ask yourself - to what extent do the designers
need to be involved in these tasks in order to a. do a good design job and
b. not get out of synch with where the client is at.
For tasks which rate low on both questions, farm them out. For tasks which
rate high on both questions, put them in your designer job descriptions. For
the tasks that end up somewhere in the middle, that's the list of
responsibilities that you want to think about whether or not it is better
for your studio to either outsource or hire dedicated resources for.
Next article, I'll quickly work through the economics of the two approaches
for a 2-designer studio. It'll be Members Only, so see you there!
Return to Observations
AGDA Members: Discuss this article in AGDA's Business Forum.
The views expressed this article are not necessarily those of AGDA. Please note that the information in this article is the opinion of the author only. I can therefore accept no responsibility for actions taken on the basis of this information. Copyright Andrew Lam-Po-Tang (andrew@lam-po-tang com), 1998-2008. Permission is granted to freely copy this document in electronic form, or to print, for personal use. Reprinting for non-personal use will require the express permission of the author (which I will generally be very happy to give).
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