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The High Cost of Saving Money: Corporate Design Management Faces Downsizing, Outsourcing, Elimination

As Originally Published on eBulletin, May 2004

By: Rob Wallace
Tel: (212) 755-2903
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Several months ago, a well-respected Fortune 500 consumer products corporation asked its design leader to fire his entire staff and re-hire them under the payroll of one of its pre-press consultants. As a reward for completing this awkward transition, the design manager was, in turn, laid off. The corporation required him to outsource himself out of a job.

Downsizing and outsourcing are only some of the increasing attacks on corporate design management. In a never-ending quest for cost efficiency, corporations are undermining one of their core competencies and eliminating one of their most valuable assets.

Why is design management so often in the center of the cost savings crosshairs? Why isn't the process more highly valued and properly supported? Why are design managers fighting to keep their jobs? The answers to these questions are rooted in three primary issues: an absence of "best practices," a lack of autonomy, and an inability to measure design's direct financial impact.

No Established "Best Practices"

Walk into virtually any consumer products organization and analyze how they structure their marketing function. Regardless of its size, global reach and product offerings, the vast majority of consumer product corporations organize the marketing process the very same way. Analyze how corporations manage procurement, accounting, sales-and again, chances are that these structures are very similar if not identical. However, analyze how these same organizations manage the brand identity design process, and you'll find virtually no two alike. Some combine a small internal creative and/or production staff complemented by a team of design project managers. Other corporate design functions are managed by a shrinking handful of overworked managers responsible for virtually every brand identity effort for an ever-increasing number of brands. Still others (and you might be surprised that they include some of the world's largest consumer product organizations) have one- or two-person departments doing their level best to orchestrate hundreds of annual design assignments. And an alarming number of companies, like the one mentioned earlier, literally have no dedicated internal design management. Some of these organizations outsource this function to their pre-press houses or their design consultancies. Others delegate design management to their marketing teams, some of whom have never managed a design program before. Of these, very few, if any, provide their marketing staff with any training in design management or any standardized process to follow.

Why does this inconsistency exist? If the brand identity design process is a discipline that can be tracked and measured, if design management requires a person with a defined skill set, then why are there no industry recognized "best practices"?

Accountability without Autonomy

If there is continuity in how corporations manage the design process, it exists in the limits that are placed on design management. As a widely exhibited generality, design management has no direct link to executive management; it does not hold the purse strings, nor does it have the exclusive authority to manage design assignments. In short, corporate design managers often bear all of the responsibility for the process but have little power to initiate or exclusively control it.

Few consumer product corporations provide for design leadership above the middle management level. While there are certainly executives who understand design's value, very few of them have risen through the ranks as creative process leaders. Even for those who've achieved extraordinary results in design leadership, the career path stalls at the Senior Manager or Director level. And even then, only the most successful maintain their positions by continually proving their value and the value of their self-created design process.

Few design managers have direct control over their own project budgets. Sure, design management has significant input in selecting outside resources and overseeing their pricing. And yes, all creative departments have an established budget for staff salaries and overhead. But virtually every design assignment is funded through-and therefore ultimately controlled by-the brand marketing team. In more cases than corporate design managers might like to admit, the decisions driving the design process are largely made by marketers, many of whom have little or no experience in directing a design project. As a result, corporate design managers and their consultants must first be on-the-job teachers, guiding their marketing teams in their new role as design project consultants must first be on-the-job teachers, guiding their marketing teams in their new role as design project managers.

No ROI Measures

An age-old wisdom asserts, "If you can't measure it, you can't manage it." One of the most important tools in establishing design's value-and the value of those who manage it-is the ability to determine the financial return that the design process generates. While all corporations can tell you how much design costs, few, if any, measure its direct impact on the bottom line. Working with more than four dozen consumer product corporations, we determined that only one has an established methodology to measure brand identity design's financial return, and these folks won't share their process or the data.

When asked about instituting such a measure, many design managers assert that it's all they can do just to get the job done. Continually tightening project budgets and timetables leave no resources for determining financial measures. Others suggest that the only measure that executive management cares about is market share. As long as the product sells, there is no desire to segment out those elements that were most critical to its success.

As a result, brand identity design is inexorably merged with advertising, sales incentives, retailer programs, and all other means of brand promotion with no understanding of the contribution that each makes toward brand success. This inherently undermines design's paramount value among all brand communications efforts.

New Hope, New Respect

Certainly it's not all gloom and doom for corporate design management. Cost-cutting efforts will soon prove to be cuts too deep. The pendulum having swung too far in one direction will eventually change its course, but not without the diligent effort of those dedicated design leaders who prove their value everyday. Those who document and promote a best practice, who fight for the autonomy to initiate and manage the process, who win more control over project budgets, who encourage marketing to share the design decision process, and who find ways to track design's paramount return on investment will succeed. And when they do, corporate design management will regain the support and respect that it so rightly deserves.

Rob Wallace, is managing partner of Wallace Church Inc., a Manhattan-based strategic brand identity consultancy with clients including P&G / Gillette, Nestlé, Coca-Cola, Schering-Plough, Kodak, Brown-Forman, Heinz and Kraft.

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