Game changer: rethinking your value

Where are you in clients’ thinking?

It seems obvious that while the contractual basis for the overwhelming majority of brand and design business is project-by-project, we must look for ways to wrap that contractual fragility in more continuous, more meaningful client relationships. Unless you prefer the adrenaline rush of life on the edge and short term business, never quite knowing where the next project is coming from, which in any case you will be made to compete for over and over.

Consultancies need to build or extend their ability to add wider value around the core deliverables. Value that is up-to-date, relevant and useful to the client; and if possible, revelatory.

New technology and new media channels are continuing to bring tumultuous change to marketing service-based businesses. ‘Advertising agency’ no longer seems at all an appropriate label for what those companies do for their clients. Digital agencies, in the midst of an unprecedented boom time, are enjoying the gold rush, or enduring it, according to their ability to keep up with the pace of change. Media companies are, again, completely reinventing the potential for speed and immediacy of response to events with autonomous and programmatic media buying in online exchanges.

We propose that this is an important time for brand and design-centred consultants to be thinking hard about what share of mind – what share of authority – they have with their clients.

Ryan Avent is a senior editor and economics columnist for The Economist. In his new book, The Wealth of Humans: Work and its Absence in the Twenty-First Century, and in an accompanying article in The Observer, he explores the concept of the modern firm as an information-processing organism.

He refers to a recent comparative analysis of the way firms are valued – what it would cost to duplicate them if you had to – which used as its sample the Standard & Poor’s 500 index of large companies with common stock on the NYSE or NASDAQ. In the 1970s, 80 per cent of the value comprised tangible assets – buildings, machines, technology, workers and so on. The rest of the value ‘is “dark matter”, the intangible secret sauce of success’ – culture, incentives (motivations) and contextual knowledge that are specific to each company.

The analysis found that today the percentages are directly reversed. The physical stuff of businesses now accounts for less than 20 per cent of value. The dark matter is now more than 80%:

‘Successful companies, be they Goldman Sachs or Buzzfeed, evolve a way of gathering, processing and acting on information that is critical to their success and cannot be easily replicated. The value generated by a firm’s culture…is social rather than individual.’

We suggest there is good news here: brand and design businesses have always been about gathering, processing and acting on information. It is intrinsic to creativity; an almost unconscious assimilation of ideas and knowledge and fragments of life that feed the thinking process and deliver proposals for action. And this is substantially a collaborative – i.e. a social – dynamic.

The not-so-good news: far too much of it – perhaps almost all of it – is internalised; kept within the workflow of the agency, to serve the creative process. Not nearly enough is framed within the business strategies and language of the clients and delivered to them as essential, and possibly revelatory, value.

More crucially, practically none of it is carried out spontaneously, not as part of a related paid-for project, not in reaction to an unfulfilled client need, nor as recognition of the potential for a bigger relationship, to show the client you are thinking about their business, to demonstrate the real consultancy value you offer.

Our discussions with brand and design clients repeatedly reveal they feel that consultancies are project-focused not relationship-focused. Consultancies ‘show no understanding of our business needs’ and ‘give little attention to our ongoing design needs’, i.e. after the immediate, funded project. Clients feel there is ‘no work or research or thinking outside the brief.’ ‘New perspectives and ideas and found stuff would positively inform our relationship with an agency.’

In his work Fifth Generation Management: Co-creating through Virtual Enterprising, Dynamic Teaming and Knowledge Networking (1995), the international business consultant Dr Charles M Savage asserts three waves of human socio-economic development:

‘The first wave was the Agricultural Age with wealth defined as ownership of land. In the second wave, the Industrial Age,
wealth was based on ownership of Capital, i.e. factories. In the Knowledge Age, wealth is based upon the ownership of knowledge and the ability to use that knowledge to create or improve goods and services.’

Clients need a constant supply of new knowledge to inform their immediate decision-making and their future planning. One definition of the knowledge worker is given as someone who is involved in non-routine problem solving that requires a combination of convergent, divergent, and creative thinking.

All of this pretty closely describes the work that is the natural regime of brand and design companies. Yet the big arguments for clients are being conducted elsewhere.

Brand and design businesses need to assert their place at that table, and having got there, need to assert their eminence.