12 posts categorized "Success by Design"

The 10 Building Blocks of Design Studio Culture

The 10 Building Blocks of Design Studio Culture. Great studios are able to balance all of these factors as part of their day-to-day operations. (Illustration by David Sherwin.)

This is an excerpt from from my new book, Success by Design: The Essential Business Reference for Designers, out now from HOW Books.

Culture is everything people in a design business do that supports the process of making work happen. Culture can create joy for designers, while improvements in process can facilitate profit. A common misperception is that culture emerges organically based on the decisions of a business owner or CEO. But a design studio’s culture is not created solely by those at the top. For a design-led business, culture is generated from ongoing contributions and discoveries from both studio owners and employees.

In researching my recent book on how design businesses can be more successful, I began to see important building blocks that were present in the most successful studios. These building blocks are divided into two groups: hard building blocks and soft building blocks. Hard building blocks are realized through a budget, meaning that you can allocate money and time for them as part of business overhead. The soft building blocks can be created through the decisions employees make over the course of their daily work, life and play (with less material investment by the owners).

A healthy studio culture draws equally from both types of building blocks. They provide emotional and material stability to employees in the face of ongoing work challenges, and often clients, family and the general public perceive them as ingredients of the company’s brand. These building blocks are equally present within design firms and in-house design teams—though for the latter, the composition of some building blocks may be heavily influenced by the company's overall behavior and needs.

Let’s take a deep dive into these building blocks, with important questions to ask yourself (and your team) in order to create a strong studio culture. 

Continue reading "The 10 Building Blocks of Design Studio Culture" »

"How To Manage Client Feedback" on FastCoDesign

How to Manage Client Feedback

Clients deliver feedback on everything we create for them: proposals, deliverables, project schedules, email communication styles, what we’ve worn to a meeting with their CEO, and so forth. Soliciting and receiving feedback from clients is a crucial part of any ongoing collaboration between a client and a designer. To quote Robert Allen, “There is no failure. Only feedback.”

The inability to manage client feedback causes your design work to suffer. Here are some ways to work with feedback that will help keep your design projects running smoothly, while reducing the tension that poorly considered feedback can cause in a client relationship.

Read this excerpt from Success by Design at FastCoDesign.

What Aspiring Designers Need to Know About Strategy

Segmentation strategy... for Cute Overload

This is an exclusive excerpt from my new book, Success by Design: The Essential Business Reference for Designers, which was recently released by HOW.

As I read through his resume, the designer stared at me expectantly. He had a wealth of great design projects under his belt. He had been seeking out personal projects to build out his portfolio. He had internships with sterling businesses and design studios. But there was one thing that leapt out at me from the list of core skills he’d listed at the top of his resume: strategy.

Not brand strategy, content strategy, interactive strategy, media strategy, or the MBA-land of business strategy. Just plain ‘ol strategy.

This has been happening more and more frequently, for a few reasons. In the process of providing strong service to our clients, we increase the likelihood of becoming a strategic partner. We finally have a seat at the table when the client is talking strategy—and we can offer a range of strategic services that verge outside what may be considered a designer’s core area of expertise. This is a good thing. With the ongoing expansion of design’s role in business, today’s designers are helping to solve problems that transcend mere decoration and instead impact the core functions of a client’s business.

But in our haste to be strategic partners, I’ve discovered that many designers don’t fully grasp how strategic services fit into their client offerings. And when I ask designers out of sheer curiosity how they’re functioning as strategists—what experiences they directly bring to bear on being strategists rather than having a strategic orientation—they can’t easily answer the question.

If you’re going to run a design-led business, it’s inevitable that you will need to talk strategy with your clients. So let’s explore the types of strategies you might create as a design businessperson, as well as how they may support the efforts of your clients. It’s my hope that this information will open up some new paths for you to explore in your career as a designer.

Read the whole piece on frog's Design Mind.

Design Business by the Numbers: One-Percent Prepayment Discounts


This is a post in an occasional series I'll be running on ChangeOrder about the benchmarks that design businesses use to help maintain their long-term success. These benchmarks are drawn from the research that I conducted when writing Success by Design: The Essential Business Reference for Designers.

In my previous post, I wrote about how it's important to encourage new clients to pay you in advance of providing design services. Many designers and studio owners struggle to put this advice into practice, as their clients often have their own accounting and bookkeeping policies that conflict with paying for services in advance of their completion.

So, how do you bend these policies in your favor? A number of studio owners shared with me the following line of text that they had included in the estimates and invoices they'd provided to their clients: "Client shall receive an % discount if payment is received in advance of date."

That's right. Many companies have policies that require advance payment of an invoice if there's a discount. It doesn't have to be a huge discount, too—sometimes as little as one to two percent off a large-ticket project can be enough to encourage advance payment. (Though I've seen it at anywhere from 2.5% to 5% in previous agencies I've worked at.)

Highlighting this clause during contract negotiations will help you, as long as you preserve your profit margin for the project if the discount is exercised.

Other posts in this series include:

Design Business by the Numbers: Extending Zero Credit

Net Zero

This is a post in an occasional series I'll be running on ChangeOrder about the benchmarks that design businesses use to help maintain their long-term success. These benchmarks are drawn from the research that I conducted when writing Success by Design: The Essential Business Reference for Designers.

When starting up a design studio, it can be tempting to do whatever it takes to win project work with new clients. A common mistake, however, is to extend credit to new or existing clients rather than require payment up-front for project work.

It's never a good idea to extend credit to a brand new client, and minimal credit should be extended only for long-term clients that have a strong track-record of deposits, on-time payments, communicate about honestly money, and have asked you for the privilege.

In our laissez faire, credit-saturated culture, it can seem as easy to use credit cards as it is to provide credit to others. However, as a business owner, taking on debt in order to fulfill a service isn't wise. Take a deposit on the work that you'll be completing, with a signed contract in place that outlines a payment schedule tied to your project milestones. No work should start until the first payment is received and deposited.

Running a credit check on a client isn't enough. You may discover that a client has ample income at their disposal to pay you, but that isn't the only issue. You want assurance that, as the project progresses, there will be a fair balance between what compensation you receive and the you've created that is shared with the client.

Imagine in your head an old-fashioned scale. This is the kind where you place objects on one side of the scale, then various weights on the other to assess how heavy the objects on the other side are.

Let's say the client has one side of the scale, and you have the other. On your side, you pile up your expertise, which they've hired you for. It's invisible and weightless—you haven't created anything tangible yet. On the other side, the client places their money. Oh, wait—they haven't paid you yet. So right now, the scale has nothing on it. It's in balance, right?

Wrong. Your side is burdened with your studio's operational overhead, the hours that you'll be spending working on the client's work, and the projected value of each deliverable that will be provided in return for due compensation. If you aren't paid up front, the scale is always tipped in the favor of the client. With each hour that you plan to bill and each deliverable that you provide without compensation, things are further and further out of balance. You're beholden to the payment terms you'd set up in the contract: all the time you've spent working on the client project, plus all the time it takes for them to pay you back.

The larger the client or project, the harder it is to make this happen. They may have a blanket policy for how they handle vendors, or for how payment up front should be handled. They may be under the gun and want to start the project as quickly as possible, no matter what due processes must be followed. And in some cases, they may believe that since they have the money, they have the leverage. Believe it or not, some companies have unspoken policies to drag out payment for vendors as long as possible, as they can earn interest on that large amount of money in the short term before it's disbursed.

The right way to handle the situation is to make what's on the scale even. When you start the project, the client has place a deposit on their side of the scale, and on your side, you're placing a hold on the time and materials necessary to get the work done equivalent to that deposit. If you aren't paid up front for that first chunk of work, you're the one bearing the full onus and risk.

Instead of offering Net 30 payments on invoices for work that you've fulfilled, set up a clear schedule for payment. Depending on the length of the project, split it up 50/50 (half at start, half when you're halfway done) or 33/33/33 (a third at start, a third at the first third, and a third before the final stretch of the project). If the payment doesn't arrive on time, per the terms of your contract, you stop work and there is a fee to restart the project (this is in your contract).

No matter what, ensure that your final invoice is paid before you deliver the final work for your project. This isn’t NET 15 or NET 30. It’s NET 0. Mark the final invoice "Net 0" and circulate it with them well in advance of final delivery, so you don't end up in a situation where you either withhold providing your final deliverables to the client or end up showing a "good faith" measure.

Letting invoices ride out can be "business as usual" if that studio has a strong cash-flow buffer and clients that regularly pay on time or early on those estimates. You may feel like you have little to no leverage in negotiations, especially when it comes to the size of your project fee or when you expect to get paid for the work. But it's your business, and your rules regarding how you run it and how you manage your company's cash-flow. Choose them wisely.

Other posts in this series include:

Design Business by the Numbers: The 80/20 Rule of New Business Development

Eighty Twenty Rule of New Business Development

This is a post in an occasional series I'll be running on ChangeOrder about the benchmarks that design businesses use to help maintain their long-term success. These benchmarks are drawn from the research that I did when writing Success by Design: The Essential Business Reference for Designers.

Do you track how many of your clients come back and work with you again? I hope so. Ideally, 80% of all new business should be repeat business. It should come from your existing clients that you're working with right now, or clients that are returning to you after a successful project in the past. This is the 80/20 rule of new business development. You should aim for an 80% retention rate for existing clients, and diversify your client base with 20% new clients and projects.

I'm not suggesting, however, that 80% of your retained client work is coming from a single source. Many design studios will end up being extremely successful with a single client, and without paying attention that client will command fifty to eighty percent of the studio's portfolio of business. (At this point, the studio needs to diversify and find new clients to help reduce their dependency on that single relationship.)

The 80/20 rule is a hard benchmark for a service business to meet, for a number of reasons:

The studio isn't tracking client retention—or retention isn't even a focus. Some design studios are so focused on getting the work or fulfilling the work that client retention is an afterthought. Just beginning to keep a metric of how many clients are retained year-over-year can send a strong message to both studio employees and studio leadership about how important it is to provide great design work AND a great client experience.

The studio isn't seeking out long-term fit when landing new business. A common reason studios don't hit the 80% retention target has to do with how they initiate relationships with any new client. Design studios in general need to put more diligence into vetting client fit when pursuing and winning project work. When submitting a proposal for any potential studio project, you should be looking closely at what long-term potential there is in working with that client.

The studio isn't providing solid client services alongside the work. If you're doing killer creative work, but every deliverable review with your client feels like another round of The Hunger Games, you're not going to build relationships that last outside of your projects and lead to future work. (This should be obvious, but I'm continually surprised to meet designers that harbor an us versus them mentality regarding how you collaborate on a client project.)

The studio isn't staying in touch and directly asking for future work.This may seem like a duh. If a project goes well for a client, you shouldn't be afraid to ask if there are any other potential opportunities to work with them in the future. You should also plan to regularly contact them just to stay in touch. It's possible that if they go to another company, they may be able to bring you business from that company. Keep in touch, and there's a higher likelihood you could start a conversation around a future project.

The studio's work isn't strong enough to stand up to competitors. Usually, we lose clients because of poor client service or project management. But if you start slacking in the quality of work that you deliver across a few projects, you can risk losing the relationship. Take a hard look at what you're delivering, and maintain the quality.

Keep in mind that not every project needs to be about the long term. Truly great projects come along all the time where we do great work, we have a satisfied client, we put the work in our portfolio, and we move on. But be aware that your studio becomes more efficient when securing new projects from return clients. Plus, working with the same clients can help contribute to the profitability of future projects, if they are managed effectively.

Other posts in this series include:

Design Business by the Numbers: 3% Proposal Percentages

3 percent proposal percentages

This is a post in an occasional series I'll be running on ChangeOrder about the benchmarks that design businesses use to help maintain their long-term success. These benchmarks are drawn from the research that I conducted when writing Success by Design: The Essential Business Reference for Designers.

You need to write that proposal to get the project. And you need to do a good enough job of writing the proposal to make sure your client understands why you're the right partner for it.

But that proposal isn't going out the door until it's been finessed within an inch of its life. Right?

As designers, we may be perfectionists at heart. But when crafting a proposal, we can't be carried away and lose ourself in the effort like we're polishing a beautiful design.

A useful benchmark to make sure you're not spending too many hours on your proposal is to hold yourself to a three-percent proposal percentage. This benchmark was shared with me by David Conrad at Design Commission. His studio uses this benchmark to make sure that they never spend more than two to three percent of proposed project budget to secure the project. This includes any necessary negotiation and revisions with the client through the new business process. The time spent on new business is then factored into the hourly rate and overall utilization of the studio, rather than being tied to successful project fulfillment.

Putting the hours used for writing a proposal against the future project budget is a big accounting no-no. This is a common mistake a lot of design studios make.

Why is this a bad idea? Because you are blurring the lines between the expenses your firm bills against the project budget and the expenses that your firm incurs on all the activities acquired independent of staffing those projects. You should be optimizing your new business process to acquire work independent of how efficient you are in fulfilling the projects once they're in your studio. This is the equivalent of trying to keep a monthly budget for your household, only to discover that someone else in the household has been using your credit cards and racking up debts that suddenly you're liable for. This isn't fair to anyone involved.

So get out of this "credit-card spending" mentality. You don't have an incentive to spend weeks on a proposal. You should be spending the minimum necessary effort to generate the best proposal for a potential project that you have a high likelihood of winning.

If you're going to try and keep to this percentage, here are some common issues that stand in the way of successful implementation:

You haven't set up templates to work from on your proposals. If you're generating new or custom proposal elements that can't be leveraged or updated for future proposals, you're burning time that won't make your new business acquisition process more efficient. Even if you're selling bespoke services, you can generate templates for how you sell them.

You aren't pitching a good fit in terms of subject matter or expertise. If you're conducting reams of research to figure out what to say in every proposal, you may not be perfectly suited to win the work. Be selective about where you make these investments at the proposal stage, rather than have those activities become part of the paid work.

There is too much time to write the proposal. It's important that you ask for the appropriate amount of time to craft a quality proposal. However, I've seen proposals drag out in draft after draft because there isn't adequate motivation or pressure to complete it and send it out. This is where bad habits can form. Try to hold yourself to a "shadow budget" and realistic schedule for writing, vetting, and submitting your proposal.

Other posts in this series include bid/win ratios for new business pitching.

"12 Essential Negotiating Strategies for Consultants" on FastCoDesign

12 Negotiating Strategies image from FastCoDesign

When first striking out on their own as businesspeople, many consultants and designers don’t know how to bargain or strike a deal. In this exclusive excerpt from Success by Design: The Essential Business Reference for Designers on FastCoDesign, read about the strategies consultants use to successfully come to meaningful agreement with their clients.

Check out the article here.

Creating a Design Studio: The Elements of Design Studio Experience

The Elements of Design Studio Experience

There is a constant tension between the demands of your business—receiving monetary reward for your level of effort—and the knowledge that what you make has some form of meaningful impact. As design business owners and leaders, we wrestle with certain fundamental questions: What if I can’t earn a living running a design business? Am I going down the right path? Does this work make me happy?

Exactly how do you balance the competing demands of sustaining a profitable business with a joyful design practice? In the coming weeks, I'll be sharing the worksheets that comprise the last section of my new book Success by Design: The Essential Business Reference for Designers. You can use them to determine what your ideal design studio experience should be like. David Conrad (studio director of Design Commission) and I devised them, and we hope you can use them to better structure your design business to support what you love. Profitably.

The worksheet that kicks off this section of the book is The Elements of Design Studio Experience. This is a revised version of the framework I first wrote about two years ago on this blog (read more about it here).

Here's the new version of the worksheet, which you can download from SlideShare:

In the coming weeks, I'll be providing activities and accompanying worksheets that help you determine the five key elements in this framework that are necessary to create a stable design business: 1) Philosophy, 2) Customers & Staff, 3) Process & Culture, 4) Market Need & Capability, and 5) Product. By working your way from the bottom up, you’ll better understand how structure your design business to support your goals. I'll also provide you with an additional activity you can carry out to course-correct your business every three months.

Note: The worksheets I'll be sharing are covered under a Creative Commons Attribution-NonCommercial-Share Alike 3.0 Unported License. For details on this license, go to creative-commons.org/licenses/by-nc-sa/3.0.

My Second Book "Success by Design" Is Officially Out!

Success by Design: The Essential Business Reference for Designers Book Cover

My second book, Success by Design: The Essential Business Reference for Designers, came out early! You can purchase it at your usual online retailers, including Amazon.com, Barnes and Noble, and My Design Shop. You can also grab a copy at your local fine bookseller when it arrives in stores on December 4th, 2012.

Concurrent with the print edition is the release of the eBook, which you can get for Amazon Kindle and through iTunes for your Apple devices.

Want to read a bit of the book before getting a copy? Other than clicking to look inside on Amazon.com, you can also see a preview through Google Books.

Here's how I've introduced the book on the back cover:

In your career you may have been like me: Trying to keep projects on the rails and clients happy. Digging through blogs for useful advice. Wondering if there was a better way to handle all of the demands of being a design professional and running a creative business.
The wisdom contained in Success By Design: The Essential Business Reference for Designers will help you become a stronger businessperson and better plan your career path as a design leader. This book was born from in-depth interviews with a slew of successful designers, studio directors, project managers, and client service professionals across a wide range of creative industries. It contains the business secrets I needed the most when I started as a designer sixteen years ago.

If you'd like some background on how this book came about, I was recently interviewed by GraphicDesign.com about what inspired the book. In the coming weeks, excerpts of chapters from the book will be appearing here on ChangeOrder and in other publications. There are also a number of free worksheets and resources mentioned in the book that I'll be blogging about. Links to them are aggregated on my website at http://www.davidsherwin.com/success.

Here are some kind words from people who took a peek at an advance copy:

"The best design business secrets are out of the bag--and it is about time! David has found a pithy and brilliant way to share the wisdom and knowledge that most of us had to learn the hard way. I wish I had this book when I was learning to run a design business unit at IDEO."
--Dr. Kristian Simsarian, Interaction Design program Chair at the California College of the Arts and IDEO Fellow
"With your nose up against your monitor, it's easy to lose sight of the big picture. This book reminds you to step back and take inventory of all of the things that impact the success of your projects, products, and teams."
--Kendra Shimmell, Director of Cooper U
"The world of design is famous for its mystique, secrecy and "special sauce" but David Sherwin breaks it all down into the three fundamentals of team, client and project management, taking out the complexity of what it's like to run a design practice along the way. He organizes the book with straightforward concepts and follows up with easy-to-understand language. But make no mistake. This is not a primer, but rather an insightful work drawn from a keen understanding that the essential element to being successful in design (and therefore with clients) is the human element."
--David Merkoski, Chief Design Officer at Greenstart
"David's comprehensive and thoughtful treatment of the business of design is an education by proxy. As any experienced consultant, he maintains a fine balance of caution and enthusiasm yet withholds nothing, offering a depth and care typically only found in the classroom."
--Christopher Butler, Vice President of Newfangled and author of The Strategic Web Designer: How to Confidently Navigate the Web Design Process

If you want to delve deeper into the book design, I've created sets with most of the chapter illustrations on Flickr and Pinterest. Here are a few of my personal favorites:

Success by Design: Accounting Spread

Success by Design: Negotiation Spread

Success by Design: Process Spread

Business Development Illustration from Success by Design: The Essential Business Reference for Designers

Freelance Illustration from Success by Design: The Essential Business Reference for Designers

Budgets Illustration from Success by Design: The Essential Business Reference for Designers

Recent News: Success by Design Presale Begins, Creative Workshop Translations, Upcoming Talks

Happy Monday! Here's a roundup of a bunch of recent news about Success by Design, Creative Workshop, and some talks I'll be giving over the next six months.

Success by Design


Success by Design: The Essential Business Reference for Designers Presale Begins

This past week, Success by Design's print edition went on sale through Amazon.com. There will also be an e-book edition that will be available through the usual providers (Kindle, iBooks, etc.

The book is completely done, 60,000 words and 50+ illustrations later. I recently had an interview with Andy Polaine at The Designers' Review of Books about this book's genesis. Here's some tidbits:

AP: Tell me about your new book, Success by Design: The Essential Business Reference for Designers. Where did the inspiration for this come from?
DS: The idea for the book came from informal group therapy. When I lived in Seattle, every Wednesday night was dubbed “Burger-Drama” – an assortment of friends and refugees from various design studios, agencies and in-house design departments around the Puget Sound region blowing off steam in the middle of their work week at a local bar and grill. Every time we would meet, there would be a point in the conversation where the “cone of silence” would be lowered over the table. While munching on onion rings and drinking IPA beers, we would share the successes, failures, trials and tribulations of running design businesses. No client secrets. No unverified gossip. Just lessons from the school of hard knocks and the occasional story of a crazy co-worker.
Over the first few months of conversation, it became apparent that the majority of our problems had nothing to do with the design work itself. They had to do with being a good businessperson. No matter how many blog posts and books we read, there wasn’t any one in-depth resource we could turn to that would help us answer our recurring questions—and especially not in a fun way!
AP: Do you follow all the tips in your book or did you gather from others?
DS: Much of what is in the book is hard-fought wisdom from my years working as a designer at studios and consultancies, but much of the text could only be written by collaborating with friends in the industry that had experiences that I hadn’t and that were crucial to understanding design as a business. I reached out to some of my former co-workers and friends in Seattle and curated a series of lectures called “Design Business for Breakfast” sponsored by the local AIGA chapter, co-written and delivered with David Conrad, Erica Goldsmith, Fiona Robertson Remley, and a fellow frog that used to live in Seattle, Justin Maguire. These were client service professionals, project managers, studio owners, and creative directors. The lectures were about providing great client service, structuring and managing projects profitably, cashflow management, how to set up a design studio, and design leadership. The series went over really well, and after spending a lot of time with the material and delivering it in person with these collaborators, it felt like it would make a good book. I just knew that it would take a solid year or so to translate the presentations into a 300-page book.
AP: And you’re doing the entire design of this book?
DS: Since I’d designed the lectures, it made sense for me to do the design. I really wanted it to balance in-depth content with visual wit and fun… This visual component is lacking in a lot of design business texts, which can be all prose or serious charts and graphs. I think that can be painful for a lot of readers who are visual thinkers.

The interview also goes in-depth about the work that went into Creative Workshop and how different readers have been using that text for their personal growth, in design studios, in corporate America, high school and undergraduate design education, and beyond.

There will be a Success by Design website to accompany the book, which will archive the worksheets and other materials referenced in the book. It will be up in late August. Also, I revised a presentation I gave last year that touches upon a few points in the book and lists out the table of contents for the book:


Creative Workshop Translated into Traditional Chinese

Last year, two overseas publishers embarked on creating Chinese language translations of Creative Workshop The first one was recently released in Traditional Chinese, and one in Simplified Chinese will follow later this year.

The Traditional Chinese edition is available from Flag Publishing in Taiwan, and their website lists a number of providers from which this edition can be purchased across Asia.

They've been incredibly faithful to the design vision of the English edition:



Upcoming Talks at Conferences (and Design Drumming!)

I'll be doing some talks at upcoming conferences (and performing!) at some upcoming design events, including the following:

AIGA SF's Open Studio Tours, San Francisco, CA
Wednesday, June 13, 2012, 7-8 PM: Playing drums for frog's band The Sticky Notes at the frogSF open studio in SOMA, 660 3rd St, 4th Floor

HOW Design Live, Boston, MA
Friday, June 22, 2012: "Effective Brainstorming for Designers" workshop
Saturday, June 23, 2012: "Becoming a Design Leader" talk

AIGA Into the Woods, Seattle, WA
September 21–23, 2012: "Design Is Hacking How We Learn"

HOW Interactive Design Conference: DC Edition
September 27-29, 2012: "Know Thy User: The Role of Research in Great Interactive Design"

HOW Interactive Design Conference: SF Edition
October 29-31, 2012: "Know Thy User: The Role of Research in Great Interactive Design"

Details about "Success by Design: The Essential Business Reference for Designers"

Cover for "Success by Design"

Hot off the presses, I thought I'd share with you the cover for my next book, Success by Design: The Essential Business Reference for Designers.* The book will be out in November 2012 from HOW Books.

Want to be notified when the print and e-book versions begin their presale through Amazon.com and MyDesignShop? Sign up for my mailing list for the book. I'll only send one email a month, and will never sell or give out the email address to others. I will also share via this email free worksheets, templates, and bonus chapters that you can download and use along with the book:

I've wrapped designing the 325-page book, from the cover (which you can see above) to the interior illustrations and typesetting the content. While the cover does share some DNA with Grace Ring's awesome art direction for Creative Workshop, the interior balances crisp, informational charts and graphs with some tongue-in-cheek design humor that you've seen on this blog over the past few years. Over the summer, I look forward to sharing some sneak peeks with you!

* In previous posts, I'd been calling this book Design Business from A to Z, but that was a placeholder name through the writing process… this is the final title for the book.)