It’s 2am. You’ve just started working on a presentation for a client. The meeting is tomorrow morning at 10am. It should have been started much earlier but the studio has just been slammed. Your mind starts drifting to the last couple months. The whole team has been over capacity – but at the same time the bank balance hovers between mild discomfort and max credit line. The thought of your pay per hour makes you uneasy – you know you should get paid more for the effort. The projects are too small and seemingly far too many to service properly. The team is getting tired…asking for the workflow to lighten up but at the same time they are hungry for more creative challenge. Your best designer half joked last week that she can’t take it anymore…and you could sense the truth in it. You feel the same – overworked to no benefit and not excited about the type of work being pushed out.
You start to think. “What the F. This needs fixing. We need to hire. I need more time to work on moving our studio forward and bringing in exciting new work. Perhaps a new designer will pump out more billable work and free my time, or a studio manager will keep us on time/budget and free billable team members to be more efficient, or maybe a producer will help with the workflow and management of deliverables. Once this person is on board we can turnover more work and I can focus on getting better, higher value projects. Plus, this is in line with our goal to have a 10 person boutique studio and will add to our studio culture – the vibe of moving forward.”
What if there is better way to “move forward”? The culture of business growth tends to only celebrate revenue. More clients, bigger projects, awards won, more sales: increased revenue. There are many other ways to move forward. On paths that lead to flexible time, more cash, better clients, higher quality work, more freedom and an increased quality of life.
If you’re consistently slammed busy without a rising bank balance. Boom – dynamite time. Blow up you’re business structure and put it back together again. It’s time to get selfish about this. This is your business and should be benefiting your needs first and foremost. You took the risk to set this studio up and you deserve more from it. You know in your gut that the current business needs to change and it’s time to face it head on.
Below are restructuring methods as alternatives to reactive hiring or hustling for more revenue. They are often only considered in last-minute reactions to near worst case scenarios when cash dries up, but should be proactive strategies to re-building a kick-ass business when your studio is slammed busy without a rising bank balance.
Step 1: Fire clients. Take the bottom 25-30% of your clients (by profitability, scope of work ad culture fit) and let them know you’re no longer able to service them. When you do this – don’t overthink it. There are dozens of designers that would love the opportunity to work with these clients on their way up. The clients will find their way and deserve to be someone’s top 30% rather than your bottom 30%. Once they are cut – no longer accept new clients in this group. That would be a step backwards.
Step 2: Fire employees. Damn. We went there. This is not easy. Proactively fire employees? It’s rarely ever done when it should be and often only when cash flows are desperate. Digging into debt as a result of denial can make recovery lengthy if not impossible. The earlier you admit that your business model isn’t working – the better off you’ll be (as will your remaining employees). Once you’re bottom 30% of clients are gone you’ll have to shrink your team size to match. It may feel like the hardest thing to do, but very much worth it to build a healthy business, continue to employ people and add value to the world in the future.
Shrinking as Moving Forward:
By shrinking your revenue/team – you can take pride in moving forward in other areas. The bottom 30% of your client base is your least efficient and likely take up a higher proportion of studio time. Your top 70% become your new referral base for future work. You’ve increased studio efficiency and with this the quality of work improves, the bank balance grows and anxiety dissipates. When the opportunity for growth comes around – it’s based on a better client mix with both higher revenue per client and better creative work.
Changing People or Roles
When a team in any professional sport isn’t performing to expectations, they will often attempt a trade. When the season is in full swing, owners assess holes or weaknesses and will bring on team members that can help plug those areas to perform better. To be successful they need a different team member in a different position.
It’s unfortunate that design studio owners can’t execute trades. It would make it easier to accept removing a wrong fit at the right time. You’ll have to accept a rougher approach: let them go. We’re back at this ugly taboo topic again but it’s a necessary evil that has to be confronted at some stage in the running of a studio.
Maybe you’re desperately in need of an operations role. You have 3 awesome designers but the inefficiency of your process prevents anyone from working at potential. Look at this as a trade. You’ll need to let a designer go – but give them plenty of notice / severance and look for an experienced operations person to help your team kick ass. You can provide fair severance or notice and help the designer into the next phase of their career while also taking that time to find the right ops team member.
Also note that sports teams rarely move team members to new positions. In hockey you never see a forward asked to become a goalie. It would be a disaster. On rare occasions you do however witness wingers moved to centre or even more rarely a defencemen moved to forward. It has to be a very special person and special situation. It’s quite unlikely that your right brain dominant designer will be able to move into the left brain process oriented ops role. However moving a producer or client services team member into ops? That’s a potential solution…with the right person.
Create an effective workflow
If firing clients or employees makes you sick to your stomach and you’re desperately hoping for another solution…review your workflow. This isn’t likely to solve the problems of a “slammed busy with a poor bank balance” scenario. However, it might make sense to put time into workflow design at the outset to convince yourself that you’ve exhausted your options. At least the process will teach you about the holes in your people structure or efficiency. This process asks a basic question: “have I set up the team for success”? Take it on as a design challenge. Design your workflow.
Chances are you can’t afford to hire a workflow expert or operations role for this task. Own this project yourself as a leadership opportunity. What is the right process and roles for a project to flow through your studio to the best possible launch? Take yourself and your team member’s names out of this exercise. Just steps in a hypothetical workflow process with skills that need to manage them.
Get back to basics here. There are many nuanced versions of workflows in the creative agency/studio world, however we recommend distilling down your workflow into its most simple version when attempting to asses challenges in your business model. The simplest version: a classic waterfall workflow model where a project moves through sequential phases toward completion. Example:
[See the waterfall here?]
If the workflow exercise is successful by increasing efficiency – you’ll need to maximize your new found capacity. Before a reactionary hustle for clients – think about whether shrinking or role changes would be a better solution to the best version of your business.
We’ve put forward a few tough strategies here to avoid tough problems. This isn’t easy work, but sometimes necessary. There is pride in facing hard decisions head on and making moves to create the best version of your business.
Success by Design
The Business of Design