On Manhattan’s bustling Sixth Avenue – the street that stretches from Central Park to Tribeca, and running adjacent to its more famous neighbour on Fifth – sit the offices of karlssonwilker: a studio that’s successfully riding the storm of global recession. “A small studio like ours bobs around the ocean,” reflects founder Jan Wilker. “We’re concerned only about our immediate microcosm, mostly untroubled by global tides.
“While some of the biggest agencies have been forced to let go of half of their workforce, small studios like ours have kept somewhat busy, not maligned by huge monthly overheads and payrolls,” he goes on. “We live from crumbs that fall off the table in good and bad times.”
Established in 2000, the New York City design firm has first-hand experience of running a profitable studio in both times of economic downturn and uptick. Wilker and partner Hjalti Karlsson made a conscious decision to keep their setup small – currently numbering five, including an intern. When the recession hit, this proved a shrewd decision. The reason karlssonwilker remained compact, however, had little to do fiscal thinking.
“We’re what you might call bad managers,” Wilker smiles, “meaning we’re not good – and ultimately not interested – in telling people what to do, or checking up on them. We’re hands-on designers.”
There’s a lesson to be learned from karlssonwilker. Although far from being part of some great master plan, the firm proves that smaller ships can sometimes weather stormy seas better than larger ones. But aside from staying tight-knit with minimal wastage, what other steps can you take to run a profitable studio in the current climate?
Austerity’s pinch is one felt by all. The credit crunch that began in 2007 was a financial meltdown by 2008. In the subsequent recession, few have escaped cuts and austerity measures completely unscathed. Belt-tightening and downsizing is commonplace across all business, and the design industry is no exception.
But history tells us design thrives in lean times. In the winter of 2008, Design Council Magazine wrote: “From forecourts to textiles, IT and the cinema, the record shows that, in economic downturns, investing in design is not a luxury, it’s a competitive necessity.”
Is this true of the most recent, ongoing recession: does design loves a depression? “I’m not sure I agree with that statement,” reflects Wilker. “Design seems to be an easy expense cut for companies. It’s seen as a luxury; an appendix; beyond-the-bottom-line thinking.”
He continues: “Austerity doesn’t breed creativity. People who say it does don’t have proper design budgets. My guess would be that austerity brings with it repetitive solutions, safe outcomes and behaviour detrimental to strong and excellent work, like pitches, crowd sourcing and underbidding.”
While this may be the case, Darren Jessop, managing director at Leicester-based creative consultancy Six, believes studios can use decreased budgets to their advantage. “Trade the reduced budget for more creative freedom,” Jessop advises. “This is a smart move, as the designer or agency can, potentially, come up with a real grandstand piece to help win more lucrative work and generate some good PR .”
Six was founded in December 2007: recession is the only financial climate the studio knows. This has moulded its ethos, and particularly the way Jessop works – he’s the team member charged with finding new clients, and looking after existing ones.
“We’ve been very numbers-focused,” he continues. “Creating a solid sales pipeline, building a war chest for any leaner times ahead, keeping costs under control and strengthening existing client relations are all sensible measures for enabling your agency to come out the other end of the recession in good shape.”
Creativity in austerity
The most recent Industry Insights report by the Design Council found that clients are “becoming more and more adept at tapping into the services of design consultancies.” This, combined with a general shift in the perception that large business has of design (design’s stock as a business resource being higher than ever before) means studios are expected to show greater levels of professionalism.
“Client relationships are absolutely central to our business – and should be for any agency, for that matter,” agrees Jessop. “I think it’s particularly vital for Six, because much of our work is overseas. Forging good relationships remotely takes time and effort. It’s vital to make strengthening relationships an ongoing process.”
As well as considering external factors, regularly re-evaluating internal working methods also helps to maintain a smooth course, and allows a studio to correct any issues early. This is the opinion of Craig Redman, half of transatlantic design duo Craig & Karl. “We can’t speak for our clients,” says Redman, “but we certainly invested in our own work during the initial stages of the downturn. Not financially: just in terms of time spent experimenting and developing new work and styles,” he adds. “We’ve found it’s important to keep this process going. New styles usually start becoming a core part of the business two to three years after they’ve been developed, so it’s important to work on them during slow periods and to also have the self-discipline to continue it in better times.”
The pair’s remote setup – Redman in New York, and partner Karl Maier in London – makes its situation different to most studios. But Redman relates to the concept that austerity breeds creativity: “We’ve found it actually made us more productive and motivated,” he suggests, “and this has certainly helped our business today. Perhaps it allowed us to be a little more reckless in the way that we developed new ideas, by not being so constrained by what we thought our work should look like. This was definitely the time when we started shedding our old skin for a shiny new one,” he grins.
Redman stresses that there’s no room for average work, and even great work isn’t enough alone. Exceptional creative must be bolstered by smart self-promotion.
“We let our work do the talking, but we also make sure we’re on top of all our social media outlets,” he says. “This allows us to keep our output current and relevant – the higher our profile and the more people we reach, the more work that comes in.”
As well being proactive about steering your studio safely through the downturn, it’s also crucial to shore up your defences. During tight times, fledgling studios in particular are always eager to accept any work that comes their way. But some clients can do more harm than good – a few unpaid invoices will put a serious strain on finances.
Will Anderson is company and commercial solicitor at Clarke & Son, a law firm representing studios such as ilovedust, Creative Cherry, 44th Hill and Built By Buffalo. He outlines behaviour common in unscrupulous clients: “Requests for additional time to make payment; failure to make payments, which are often accompanied by excuses as to why payment is late and promises of payment soon; client and client contacts becoming increasingly difficult to get hold of; high client staff turnover...” he reels off. “These are just some of the many warning signs that suggest all is not well with a client.”
Of course, recession doesn’t discriminate against studio size. Creative agency Dare – which has offices in the UK, US and Canada, with in excess of 200 employees at its London office alone – has also felt the pinch. Like its smaller counterparts, the agency has reverted to a back-to-basics philosophy.
“We’re lucky in that we get a lot of approaches,” says Dare deputy chairman John Owen. “We also use events, publications and proactive thought pieces, which is all really just good practice in this field. But, ultimately, doing a great job for your current clients is the best way to generate new business – both in terms of organic growth, and attracting new prospects on the back of your reputation. It’s in everything we do – from the way people on reception greet our guests, to the creative work we do, to the pitches we make.”
Despite differing approaches, one shared belief between all these studios is the importance of diligence: nothing short of exceptional creative and even better communication skills will suffice. Professionalism and client care is paramount, as is the need to constantly seek out new business to keep things ticking over.
“Listen to clients’ needs,” Owen concludes. “Pre-empt them where you can, and generally be immersed in their business and its requirements. That is, quite simply, the day job.”