A guest post by Kharis O'Connell

In an earlier post we talked about the impact of the contingent economy on consulting firms. But consulting firms are not the only type of services company under pressure to change. In this guest post design expert Kharis O’Connell looks at what is happening to design agencies.

It’s 2015 and the inward-facing dismantlement of agency culture is in full effect. Everyday a new article is published, ringing the death bell, like this one from Wired Magazine. So how did we get to this point?

In my time working as an apparent ‘creative type’ (hate the term), I have had the joy of working inside of large, slow, unwieldy corporations, lithe, ravenous design agencies, and some small, fast start-ups. Here’s where I think this recent ‘creatapocalypse’ has come from.

Commodification

Back when I was in the aforementioned unwieldy corporation, working as a UX Design Lead, large (250+ people) external design agencies were sometimes called in to provide an exterior perspective or validation of an idea or concept. We worked with the largest, most respected (read ‘expensive’) agencies money could buy. And they came. And they listened. And they went away and did some stuff. When it came to the inevitable ‘handoff of deliverables’ we did receive. We received a pile of high-level design briefs. High-level design briefs that we could not use. Because they didn’t take into account any internal strategies, methods of creation, business intent etc. Why should they? After all, it’s not the agencies job to work out who is going to scupper the idea and provide a method to go around the obstacles to adoption. No, these documents were really just flights-of-fancy to help motivate designers, make product managers feel vindicated, and piss off developers. And as that kind of service, it really worked.

On the other end of the scale, over the last 10 years there has been an explosion of small (2-50 people) design agencies that positioned themselves as ‘full-service’, or in day-to-day actuality, “production”. These agencies concentrated on branding, marketing, website creation, and mobile apps. What was once perceived as a serious skill set that required digital sorcerers, a black art – the ability to not only conceive design, but make the damn thing – is now deemed a relatively trivial pursuit that is better served internally (as most modern business is fully digital now anyway). As design became homogenized, popularizing, having visibility, following trends (flat design), buzzwords (responsive), it became increasingly difficult for a company to decide who, maybe, was the “best”. Thus, the only way for agencies to compete, or stand out from others, was really down to how far you will bend over backwards to drop the price. Clients are generally quite savvy when dealing with agencies, and essentially get them fighting each other over who will do this quickest or cheapest (or both). When you reach that point it makes more sense to simply engage with online resource shops like Freelancer.com and the like. They are the cheapest, maybe the fastest, and are probably going to eat the common commoditised agency’s lunch.

So it’s 2015. Agencies are being acquired left, right and centre by Big Corps. But if you look at the acquisitions closely, those agencies that do get sucked up into the machine are not the ones getting sucked down the commodity path. Far from it.  And they are not being sucked up because they know how to code a website. I suggest they are being sucked up because of their BRAINS. Because they are clever people, who just might help Big Corps right their wrongs. And so, to me, this is a positive signifier.

The road ahead

I see continual death in the agency world. Oh, ok – to be specific – I see a continual death for design agencies that:

Don’t know how to help clients design, validate and bring to market products.

The products can be physical, or digital, or both.

Don’t know how to help clients explore new areas of business around their core business.

The new business opportunities get teased out through design.

Don’t know how to help clients stop making bad decisions.

Design experts have to learn how to say ‘no’ to clients.

Don’t know how to advance the technology.

You have to be able to bring the future into great products that will work right now.

I see the rise of design companies that have in-house vertical expertise across a plethora of technologies. Companies that are capable of developing solutions that will help clients understand the opportunity ahead. Then help their clients prove out the business aspects of any of the options. Oh, and we won’t use the word ‘Agency’ anymore.

The new model for design companies will be nebulous, always moving, always learning and always stimulating.

Successful design companies will become Prototype Companies, testing out the future.

MORE READING FOR YOU