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THETOP100
CONSULTANCY SURVEY
May 2007
CHARTING THE DESIGN BUSINESS IN BLOOM
The Top 100
Contents
BRAIN POWER
Rune Gustafson looks at how designers can prove their worth
IN THE VANGUARD
A year in pictures, with research by Emma Germain
BUSINESS SAVVY
Keith Hunt offers some advice on how to make money in the industry
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ALL CHANGE
Lynda Relph-Knight on the lessons to be drawn from the Top 100 charts
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THE TOP 100

The most successful design consultancies, ranked by 2006 fee-income
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ON THE UP
Amanda Merron picks out the main trends in an upbeat sector
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SPECIALISMS
Lynda Relph-Knight considers the top performers in each discipline
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HYPER INTERACTIVE
Mike Exon warns digital groups against overconfidence
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EFFICIENCY
Even big agencies can enjoy high fee earnings per head
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HOLDING STEADY
Lynda Relph-Knight on how to strike the right staffing balance
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PALE PERFORMANCE
Amanda Merron on the underperformance of global group subsidiaries
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HOLISTIC APPROACH
Scott Billings examines the fast-growing discipline of service design
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SETTING UP SHOP
Clare Dowdy reveals the designers keen to succeed as brand-owners
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All illustrations by Lucy Vigrass

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Editor Lynda Relph-Knight (lyndark@centaur.co.uk) Deputy editor Mike Exon (michael.exon@centaur.co.uk) Features editor Fiona Sibley (fiona.sibley@centaur.co.uk) Senior reporter Sarah Woods (sarah.woods@centaur.co.uk) Reporter Gina Lovett (gina.lovett@centaur.co.uk) Editorial assistant Emma Germain (emma.germain@centaur.co.uk) Production editor Madeleine Minson Sub editor Martin Shelley Art director Ivan Cottrell (ivan.cottrell@centaur.co.uk) Group art director Colin McHenry Group advertising manager Vicky Adams (victoria.adams@centaur.co.uk) Display sales executives Polly McGillivray, Bryn Piper, Ed Swain Recruitment manager Lauren Cheeseman Classified sales executives Polly Christison, Imme Jones, Susan Paul, Helen Richards, James Youern Project manager Jerome Wyer-Roberts (jerome.wyer-roberts@centaur.co.uk) Interiors project manager Magda Ashman (magda.ashman@centaur.co.uk) Production team Louise Edlington (louise.edlington@centaur.co.uk), Nicola Merry (nicola.merry@centaur.co.uk), Annette Anderson (annette.anderson@centaur.co.uk), Janice Hoyes (janice.hoyes@centaur.co.uk) Online production Neil Ayres (neil.ayres@centaur.co.uk) Marketing manager Joi Chuku (joi.chuku@centaur.co.uk) Publisher Declan Gough (declan.gough@centaur.co.uk) Office manager Aminah Marshall (aminah.marshall@centaur.co.uk) Publishing director Roger Beckett (roger.beckett@centaur.co.uk) Design Week Editorial and advertising Postal address: St Giles House, 50 Poland Street, London W1F 7AX; Messengers to 79 Wells Street, London W1T 3QN. Telephone 020 7970 4000 Fax 020 7970 6730 Subscriptions 020 7292 3704 Design Week accepts no responsibility for loss or damage, however caused, to material submitted for publication. No part of this publication may be reproduced in any form without prior permission from the publisher. Printed by The JPS Group, JPS House, 1 Dalling Road, Branksome, Poole, Dorset BH12 1DJ, on Skye Uncoated Brilliant White 90gsm paper from James McNaughton Publishing Papers (020 7501 6010), a subsidiary of The James McNaughton Paper Group, www.jmcpaper.co.uk. Registered at the Post Office as a newspaper. ISSN no: 0950-3676 Subscriptions: UK 85 for 50 issues, 162 for 100 issues, 223 for 150 issues Europe 138 for 50 issues Rest of World 160 for 50 issues. Audit period: July 2005-June 2006. Total net circulation of audited issue 9871. Average net circulation per issue during period 8654
DESIGN WEEK MAY 2007 3
The Top 100
Introduction
Brain power
Design is a fragmented industry, thriving on its broad mix of skills and applications. Rune Gustafson argues that its vital to find ways of demonstrating the value of what we do both the creative work and the intellectual rigour behind it
DONT you feel that we are all now spending less time justifying why design is important? People get it. Every year we have the opportunity to look back and marvel at how design has materially contributed to the wellbeing of our society and our clients. Now, design covers a multitude of different capabilities from corporate identity to packaging, from retail design to product design and beyond. So, to keep it simple Ill focus on the broader subject of brands, a subject dear to my heart. In my humble opinion, the challenge that lies ahead for us all is to explore how much more design can deliver in our client relationships, in integrating more skills into the design process and in demonstrating the impact and the intellectual foundation of our work. Our world is now populated by clients who have worked with design consultancies on more than one occasion. They are savvy and understand what it takes to get the best out of their design partners. This in itself puts a stronger emphasis on a mindset that focuses on buying relationships rather than just work. Clients need stronger partners that understand their business and consistently deliver insightful solutions that work. Which, when you think about it, should over time be the death knell of free creative pitching. Im sure none of us would be too disappointed to see that happening how often can you say that a client won through a free creative pitch has produced a long-term relationship that has delivered excellent work? Let alone a profitable one. But our client relationships are also fragmenting with the marketing director being only one of the stakeholders who we have to satisfy nowadays. The rise of the procurement department, for example, means that we have to work harder at delivering a compelling business case. An increasing proportion of our clients are dealing with brand issues that have an international perspective and this will only increase as growth is driven from less developed markets. Our stretch is as much cultural and operational as we strive to deliver appropriate solutions for distant markets.
The Top 100
Introduction
RUNE GUSTAFSONS CAREER

Professional posts 2007- Chief executive officer, Interbrand 2003-2006 Senior partner, Lippincott Mercer 1996-2003 Managing director, 20/20 1991-1996 Director and co-founder, European Design Register 1983-1991 Fitch RS. Positions held in reverse order: client services director; group marketing director; and marketing director, retail division 1980-1983 Product group manager, Camano UK 1978-1980 Product manager, HJ Heinz Co Education BSc (Hons) in Management Science, 1976 Diploma in Industrial Studies, 1976
Meanwhile, these changing client pressures have seen our industry adapt to create further value. We are a fragmented industry both in terms of capabilities and scale of operations. We now attract talented people not only from the traditional design disciplines, but from every other skills sector you care to mention. This rich mixture of skills allows us to look at and deliver impactful design from a much wider perspective. Our challenge is to truly integrate these differing viewpoints in a productive way. And because of this, there is the need for consultancies to embrace the complexity of capabilities and international reach through genuine collaboration of partnerships or more permanent networks. As other related industries, such as advertising, compete with us to own the brand agenda, we have a great opportunity to seize the intellectual high ground. We need to encourage our clients to be leaders to set the pace in their markets, to be restless and to constantly adapt and innovate. It has never been more important for our clients to understand branding as a central organising principle to ensure that they continue to have a long-term sustainable proposition in their marketplace and it is because of this multidisciplinary approach that we can lead the brand debate. So what else should we be thinking about to ensure a healthy future for our industry? To my mind, we still have to work hard at demonstrating the value that we contribute to our clients businesses. Better-quality fees are normally a result of a client understanding the return on that investment. At Interbrand this has been a mainstay of our business for many years. Having pioneered brand valuation, we can show clients the clear financial benefits of choosing one course of action over another. Armed with clear facts, clients become braver. But, there are many ways of demonstrating effectiveness and we, as an industry, need to innovate continuously to develop new ways of helping clients understand the drivers of the value of our work to inform overall business strategy through to specific marketing tactics. We should also think more about how we should judge our legacy. We tend to focus on the outputs of our work and there is certainly nothing wrong with that. One our greatest strengths compared to other sectors such as management consulting is that we can turn our thinking into tangible solutions consumers can experience. But it is our thinking that I would also like us to be recognised for the insights and our interpretation of that knowledge. Our creative capital is often recognised, but how good are we at capturing our intellectual capital? However, as our industry tries to adapt to the new demands of our clients and their marketplace there are, reassuringly, some principles that still shine through. The importance of talent and our ability to attract, grow and retain our people has never been more important. Our ability to compete is entirely dependent on great people. Finally, as we ponder our challenges for the next 12 months, lets not forget the simple fact that great ideas still count we ignore this at our peril. G Rune Gustafson is chief executive officer of Interbrand
DESIGN WEEK MAY 2007
Year in Pictures
The Top 100
In the vanguard
From the new Beatles stamps to the Red campaigns launch in the US, our images of the year provide a round-up of design projects that stood out from the crowd. Research by Emma Germain
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3 DESIGN WEEK MAY 2007
The Top 100
Year in Pictures
1 Beefeater Gin was given a new identity by Design Bridge. The bottle kept the imagery of a Yeoman Warder, but the background became simpler, featuring London landmarks. 2 Every Scottish city has its own character and thats reflected in the events of Scotlands biggest design festival, the Six Cities Design Festival. The posters were designed by Keith Dodds at D8.
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3 Zune is Microsofts challenger to the iPod Apple crown. The company says that the Zune brand is designed to create new ways for consumers to share entertainment. 4 Urban regeneration project Liverpool One briefed Bostock and Pollitt to build on its existing, though relatively new, identity by Wolff Olins. 5 Innocent is currently using an eco bottle, designed by Pearlfisher, for one of their thickie drinks. 6 Christian Aid Week, 13-19 May, saw the use of Johnson Banks logo, which retains the heritage of red collection envelopes while stressing the word aid over Christian. 7 In March, the Campana brothers collaboration with Disney showed at The Albion Gallery, London. Their chairs use the faces of Mickey Mouse, Minnie Mouse and Pluto. 8 For the 50th anniversary of John Lennon and Paul McCartney meeting, the Royal Mail asked Johnson Banks to design a set of Beatles stamps. For the first time, die-cut stamps had irregular edges. 9 The Macmillan Cancer Relief rebrand by Wolff Olins won Best of Show in Design Weeks Benchmarks. 10 Simon Gofton created a vinyl/DVD hybrid for a Rumble Strips album. Record company Island claimed the design of the reversible disc was a world first.
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The Top 100
Year in Pictures
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11 The International Food and Beverage Award recognised Ziggurats packaging design for Mrs Masseys food range in May 2006. Ziggurat kept a home-made element to the products, which sit on the shelves of Harvey Nichols and Fortnum & Mason. 12 The tapering, conical, polished stainless steel ring posing as a reception desk at The Hotel Duomo in Rimini is a key focal point, designed by Ron Arad Associates.
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13 Center Parcs celebrated its 20th anniversary by unveiling a 60m upgrade of its visitor accommodation. It was orchestrated by Target Living. 14 The cross-media campaign to eliminate Aids in Africa, Red, continued its growth when it launched in the US on 13 October 2006. Its brand, strategy and naming are the work of Wolff Olins. 15 Fitch was tasked with creating a look and feel for the 15th Doha Asian Games in Qatar, which would launch the city on to the world stage, and create a lasting legacy. Official mascot Orry the Oryx was used across various platforms. 16 Commercial building consultant Malcolm Hollis had Radley Yeldar create a new brand identity. Its starburst logo is made up of more than 100 hand-drawn icons. 17 AV Browne created a branding system with flexibility and attitude for the Ireland-based film production company 4X4. Its name is repeated graphically.
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The Top 100
How to make money
Business savvy
The last recession led to the creation of tightly run, financially successful design start-ups, which are now developing into mature, independent businesses, ripe for takeover. Keith Hunt offers some tips on how to make money in the industry
UP UNTIL 2000, large design consultancies flourished. This was a purple period, particularly for those focusing on branding. Major corporations were reinventing themselves with new identities and, by and large, using well-known design groups to assist them. There were several high-profile successes, but some well-publicised controversial branding projects too such as British Airways ethnic tailfin, the Post Offices Consignia debacle and the makeover of Abbey National to become the more soft-focused abbey, prior to the bank being bought by Spanish company Grupo Santander. The recessionary years, from 2001 to early 2004, had a marked impact on the design industry. First, businesses in this sector suffered as corporate spending on design is often the first to be cut in a recession, and the last to be reinstated when the going improves. Second, while corporate marketing managers still wanted to use large, well-known consultancies, the reduction in their budgets meant they had to buy smarter. This meant that, as design groups started to initiate redundancy programmes, many small start-ups evolved, and marketing managers found they could buy design from the latter at a fraction of the price of the big boys still carrying heavy overheads. As a result, prices across the industry came under pressure. Small groups did well, big ones particularly those without a diverse offering aside from branding did not.
During 2006, the picture began to improve. Corporate spending grew again, with some heading to the larger consultancies, some remaining with the start-ups themselves turning into mature businesses so the cycle came round again. New names, new people, new ideas. There is nothing wrong with this, as the whole point of design is that it must always be fresh. Now, well into 2007, we are seeing a resurgence in all areas of design including branding, which was the biggest casualty of the recession. But can we still make money out of it? What are the issues? It is an industry with very low barriers to entry, clearly seen when the major consultancies scaled back and the start-ups began to flourish. It is also an industry that has traditionally focused on excellence rather than profits. The growth of procurement departments within client structures is a double-edged sword they want the savings that can be had by using smaller groups, but also the comfort of solidly audited accounts. This drives prices down as the big boys in branding and graphic design either compete with the start-ups, or die. However, there is an upside to procurement on the basis that projects are now more contractually bound than ever before, it leaves less scope for project creep (where a client takes a project way outside the brief and doesnt expect to pay additional fees) and more clearly defines the payment terms, so consultancies can improve their cashflow.
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How to make money
The Top 100
Procurement aside, in terms of making money, there are two key issues. The first is to get a proper grip on the numbers. While passion and creative excellence are extremely important, so too is getting properly rewarded. A creative director who does not understand money is of no use to anyone. As price competition increases, so does the necessity of being able to ensure that the time worked by designers is the actual time charged to clients. A strong financial controller is just as important as a talented creative director. Developing a commercial awareness among staff, and rewarding them, is vital. So too is being single-minded about choosing the right clients and culling those that dont bring you fame or fortune. The second key is to make sure that the consultancy provides services which are not so easy for rival groups to break into. Its also about moving up the value chain so that design groups are thinking for the client rather than doing, and so building a long-term partnership relationship rather than a master/servant one. This requires strategic thinking it is important to assess where markets are moving and so gain first-mover advantage. Areas such as the provision of annual and corporate responsibility reporting, employee communications and change management have higher barriers to entry, can enjoy higher profitability and are increasingly sought after by buyers. These areas blur the boundaries between design and investor communications, and are more of a strategic buy rather than pure design. Additionally, FTSE 100 companies are unlikely to give time-sensitive corporate reporting responsibilities to an under-financed business. Innovation is another area making a comeback. How this fits with design can be spurious as it moves more into the area of consultancy, but there are plenty of creative industries working profitably within this area. And, of course, theres on-line. Design consultancies that can demonstrate an understanding of how their creations will work in the on-line environment will be more sought after in terms of service provision, as well as finding themselves more attractive as takeover targets. It is this last point that will perhaps be of most interest to executives running design businesses. Many large independents were acquired in the run-up to 2001, and only a handful remain. In recent months there has been a renewed acquisition interest in the design sector. Consultancies that are strategically and financially focused, benefit from an on-line presence and have revenue-generating bluechip clients should not only expect to enjoy strong profitability, but also to be on the shopping list of corporate predators. G Keith Hunt is managing partner of Results International
HOW TO MAKE MONEY

Get a grip on the numbers: make sure you are paid the right fees for the job; ensure all senior staff, including the creative director, understand money; and exercise rigorous cost-control Choose the right clients and dont be afraid to cull those that dont bring you fame and fortune Move up the value chain with clients, think strategically and form long-term partnerships or relationships with them, rather than fall into a master/slave scenario Choose your markets carefully, moving into emerging ones, such as corporate responsibility, innovation and on-line, whenever you see the opportunity to gain first mover advantage
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The Top 100
Introduction
All change
With climate change and other shifts high up on the business agenda, the design industry is under pressure to compete responsibly in an increasingly global market. Lynda RelphKnight looks back over a year of transformation and welcomes many new entrants into the Top 100
WE ARE constantly reminded by the media that we are living through a time of great change. With recession behind them, UK businesses are seeking new models to counter new challenges from emerging nations, technology continues to affect every aspect of our lives and concerns for the environment have reached new heights, resulting in an unprecedented level of talk about ethical business, corporate responsibility and the like. Design is part of this change. Like any other commercial sector it is affected by contemporary business issues, but in many instances it has been heralded as a solution to some of these broader business ills. Global expansion, meanwhile, has created the chance for some UK design groups to spread their wings in terms of client base or their own location. It will be a while before these opportunities have a real effect on the fortunes of design businesses, but the promise is there. Packaging can be minimalised through design, for example, and products can be made more sustainable. Meanwhile, other shifts in general business practice are causing design groups to rethink their strategies. The area most affected here is communications, with digital media in its various manifestations starting to rival print as a means of communication. It not only saves paper (as long as you dont print everything out) it can also reach customers and stakeholders instantly. Some of these themes run through this years Top 100, which charts the fortunes of independent UK consultancies during 2006. There are significant changes this year on a scale we havent seen since, four years ago, US legislation the Sarbanes-Oxley Act prompted by the Enron debacle forced us to separate out consultancies owned by global marketing services networks such as WPP, Omnicom, InterPublic Group and Havas from the rest. Brand experience giant Imagination is untouchable at the top of the listings, earning over 20m more in fees than its nearest rival. That rival, Leicester retail specialist Checkland Kindleysides, meanwhile dispels the myth that the high street is ailing and with it retail design groups, having improved its performance by 9 per cent year on year. We see great strides being made by consultancies across the board, from branding and packaging to product and interiors, with digital design continuing to fulfil expectations of a revival for a sector that was hit hardest by the dotcom bust of 2001. We see some groups sadly wavering as they are not quite able to rise to new challenges not many of these have been brave enough to put themselves under public scrutiny this year and have opted out of our trawl for data. More importantly though, we see more new names coming through with about a third of consultancies listed making their Top 100 debut. This may make it difficult to compare performance year on year, but it gives a taster of the future, with thrusting newer groups entering the fray, several with strong creative credentials. G
CHART HIGHLIGHTS
No 1 Brand experience giant Imagination with fee-income of 31.3m No 100 Graphics group 300million with fee-income of 584 000 Greatest growth in fee-income Loewy with fees up 51% Biggest drop in fee-income Retail specialist Lumsden Design Partnership with fees down 126% Total fee-income 332.7m up 10% year on year Total turnover 493.32m up 9% year on year Total staff 4381, including 1946 UK-based designers and 182 overseas staff
HOW WE DID IT
The data included in the charts have been gleaned from a questionnaire, posted on the Design Week website and e-mailed to consultancies on our editorial database. All readers were invited to take part and to submit figures for the 12 months from January to December 2006. We asked participants to submit figures that were audited or signed off by an independent auditor, as well as a consultancy director, as being in keeping with the companys accounts. The Top 100 chart is based on design fees billed through consultancies UK offices. These do not include earnings for print handling, property deals, direct marketing, contracting and the like. The ranking is a purely financial measure and takes no account of physical size or creativity, which we will assess in a separate Creative Survey supplement later in the year. We rank some of the smaller specialist groups not big enough in terms of income to make it into the Top 100, but nonetheless important in their field, in the Specialisms charts covering various disciplines (pages 27 to 37). We also look at efficiency, based on fee-income per head of full-time staff. This doesnt take account of freelance staff, but gives some indication of how the bettermanaged groups are faring. All data has been verified and analysed by Amanda Merron at accountant Willott Kingston Smith. WKS has also compiled a separate chart for the big networks, basing it on the latest financial reports filed at Companies House (see page 55).
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The Top 100
The Top 100
DW top 100 design groups

Theres been a lot of change this year, with many smaller groups entering the chart, says Lynda Relph-Knight. Figures compiled by Emma Germain
R AR EA YE T Y S I CY S N LA TH TA N N L O O TI TI SU N SI OSI CO P PO
E L M L TA TA TH CO TO W IN TO O FF EED F R A 00 FE FF G SH AF 00 ST 0 LI RS IN TA 0 ST E ED E B E S R ES N S ID M CT TH K TA N IG VE U EA W LI JE CO DW ES O ES IP RS N R AL RO RL RO -IN D T R A P G E SC O VE K DI YE O W U TO % TU % FE
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1 3 4 6 18 2 7 12 5 15 10 9 26 11 13 21 23 17 70 31 25 33 32 16 29 20 27 37 39 46 24 55 43 30 38 28 35 49 42 57 47 52 44 68 36 50 65
Imagination Checkland Kindleysides Radley Yeldar Red Bee Media Loewy Jones Knowles Ritchie Design Bridge Start Creative Corporate Edge Group Conchango DCA Design International Twentysix Reading Room Rufus Leonard Syzygy
31 276 9145 8795 8788 7932 7926 7784 7336 7231 6509 6277 5760 5615 5379 5300 4860 4754 4739 4684 4629 4214 4208 4140 4021 3989 3915 3900 3875 3853 3800 3721 3706 3680 3600 3531 3336 3316 3230 3137 3107 3100 3007 2980 2810 2778 2664 2645 2641 2613 2610
7 9 18 32 105 -7 22 51 2 54 14 2 68 4 10 30 31 20 172 37 23 33 32 -3 26 3 17 36 35 46 2 61 35 8 19 3 7 27 17 45 11 23 3 46 -6 8 38
103 096 13 326 13 200 8788 13 023 8614 9430 8101 8978 6509 6565 6349 6275 6197 5700 6300 6422 5606 5249 6017 6375 5193 4883 4803 7117 4322 7198 3800 4118 7495 4440 4100 4119 3792 5920 5446 4833 4151 3980 3609 8071 3640 3079 3983 3476 2997 2918 2946
7 10 10 0 8 10 10 25 10 15 24 10 10 10 20 20 30 8 28 15 20 10 7 25 15 10 6 9 5 10 40 10 5 15 5 10 10 50 15 15 5 0 10 15 10
260 87 94 98 107 82 87 70 88 293 69 85 94 64 69 46 55 58 46 67 53 73 62 51 42 46 51 76 36 60 67 51 36 56 53 27 36 40 27 31 45 30 40 44 67 41 31 30 16 28
171 43 36 40 31 42 37 45 42 19 50 20 73 25 12 6 16 29 18 30 14 43 19 40 17 34 20 38 14 20 50 25 18 12 17 15 16 28 11 12 15 18 17 30 15 21 21 10 11 12
260 87 94 101 107 82 142 70 88 311 69 85 106 64 69 46 55 67 84 67 53 73 63 51 42 46 51 76 36 60 67 52 36 56 64 27 44 40 27 31 45 30 40 44 67 41 31 30 16 28
0 0 0 3 0 0 55 0 0 18 0 0 12 0 0 0 0 9 38 0 0 0 1 0 0 0 0 0 0 0 1 0 0 11 0 8 0 0 0 0 0 0 0 0 0 0 0 0 0
1978 1979 1986 2002 1929 1990 1986 1996 1972 1991 1986 2000 1996 1989 1996 1979 1982 1989 1993 1982 1996 1997 1998 1984 1989 1976 1997 1994 1984 1995 1983 1980 1991 1990 1992 1995 1983 1988 1988 1987 1987 1995 1989 1982 1980 1983 1988 1992 1997 1990
ABDEGH ABCDEG CDEGH CG ABCDEG C C DEG ADEGH G CF G G DEG G EGH DEG CDEG CE AE DEG CDG ABCDEGH F DEH CE G BCDEG CE G AC CDEG CD G CDG BDEG ADGH CDE BCDG DEG BCDEG ABCDEG CDEGH BCDEG ACF CDEG CDH AE C CD
Nucleus
The Team Elmwood Design Blue Marlin Brand Design RPA Vision Emperor Design Jupiter Design Moving Brands Seymour Powell SAS Springetts E3 Navyblue Holdings Dragon Cimex Media Dalziel & Pow Linney Design Tynan DArcy Graphico Pearlfisher Kugel Sheridan The Chase Impact IM Bostock and Pollitt Hunter Lodge Oakwood Design Consultants Live and Breathe 999 Design Group Conran & Partners Brahm Stocks Taylor Benson Allen International Ocean Design Parker Williams Design
WE HAVE a very different Top 100 this year, with almost a third of consultancies featured making the chart for the first time. This reflects the state of flux the industry is in, with new alliances and start-ups within the independent sector reported daily, but it also shows a reticence by some to share data in what has possibly been a difficult year financially for them. Hence, while Imagination holds on to the top slot its fee-income of more than 31m putting it way ahead of the rest thrusting London graphics group 300 million makes its debut at the bottom of the chart with fees amounting to a 50th of that. Though this scenario mirrors the state of design at present, as it regroups, inevitably it affects the overall totals we use to sum up Top 100 performance. Surprisingly, they are up. The combined fee-income of Top 100 groups was 332.7m up 10 per cent on last year on turnover of 49.33m, up 9 per cent. The shift in emphasis has other benefits. For years we have regretted the fact that some of the more creative groups have opted out of taking part in the survey, on the grounds that they are more concerned with creativity than business. That is clearly a mistaken view in that design is a commercial enterprise whatever the size or inclination of a consultancy. Incoming groups such as Manchesters Love (84), Browns (88) and 300million (100) regularly succeed in creative awards schemes. Exhibition design specialist Met Studio Design (79) meanwhile won Best of Show in the Design Week Awards in 2000. Looking to the top of the charts, theres been a significant reshuffle in the top ten. For the past couple of years London packaging and branding groups Jones Knowles Ritchie and Design Bridge have been jockeying for position under Imagination. Last year JKR won out, coming in second to Design Bridges seventh. This year Design Bridge holds on to seventh slot with fees up a healthy 22 per cent, while JKR drops back to sixth, yielding second slot to Leicester retail specialist Checkland Kindleysides, its fees having decreased by 7 per cent. Theres hardly a whisker now between the rivals.
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25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Key: A = Interiors B = Exhibitions C = Branding/Packaging D = Print E = Corporate identity F = Product G = Digital media H = Other
The Top 100
The Top 100
R AR EA YE T Y S I CY S N LA TH TA N N L O O TI TI SU N SI OSI CO P PO
E L M L TA TA TH CO TO W IN TO O FF EED F R A 00 FE FF G SH AF 00 ST 0 LI RS IN TA 0 ST E ED E B E S ES N S ID M CT TH VER K TA N IG U EA W LI JE CO DW ES O ES IP RS N R AL RO RL RO -IN D T R A P G E SC O VE K DI YE O W U TO % TU % FE
51 52 53 54 55 56 57 58 59 60
41 64 48 75 53 58 56 54 -
Tayburn Limehouse 20/20 The Nest HMKM Precedent Communications Small Back Room Boxer Turquoise Branding Bloom Pod 1 P&W Design Pure Equator Portland Design Volume LMC Design HRG Creative Lynx Vivid Brand Salter Baxter Siebert Head 35 Communications JHP Chaos Design Intro Aqueduct Cleara Group Arapaho Group Met Studio Design The One Off Creative Leap Brinkworth The Open Agency Love To The Point Good Creative Artisan Creative Agency Browns Mansfields Ralph Odd Turnbull Ripley Dew Gibbons Robson Dowry Associates Reach Appetite Thin Martian Uniform Lumsden Design Partnership 300million
2539 2494 2476 2461 2403 2366 2339 2306 2182 2100 2085 2080 1983 1900 1854 1746 1729 1699 1676 1646 1641 1600 1564 1474 1449 1369 1333 1325 1325 1300 1270 1241 1180 1171 1159 1139 1086 1032 1000 1000 993 947 942 900 890 813 790 704 585 584
-6 31 -1 48 7 16 8 3 82 9 21 22 23 11 32 -14 27 13 5 7 0 -6 33 -56 -
4118 7100 2843 2809 2613 2600 3935 3530 3373 2400 2085 2300 1983 2200 2474 2564 3435 3284 1945 3133 2030 2540 1700 1843 2059 2051 1482 1656 1342 1600 1300 2371 1578 1924 1544 1434 1551 1032 3200 1200 2790 1147 1066 1128 1054 1740 1336 892 585 876
35 10 10 8 10 10 16 27 20 70 15 10 20 15 8 20 10 5 40 0 40 5 0 10 42 35 10 10 37
38 50 31 28 28 40 37 30 26 26 32 20 18 25 37 23 24 36 20 28 21 27 21 15 31 20 20 9 15 32 17
16 12 10 16 20 7 16 13 11 13 10 15 10 15 11 16 10 16 10 10 11 8 17 10 12 9 8 3 7 18 12 16 7 7 8 10 8 8 5 4 6 7 6 10 8 7 11 13 6 9
38 50 31 28 28 40 37 30 32 26 32 20 21 25 37 23 24 39 21 28 30 27 21 15 31 20 20 9 19 32 17 21 17 21 16 21 18 16 11 15 13 13 13 12 13 16 17 17 10 11
0 0 0 0 0 0 0 0 6 0 0 0 3 0 0 0 0 3 1 0 9 0 0 0 0 0 0 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
1979 1998 1988 1999 1990 1989 1977 1996 2003 2001 2001 1987 2004 1987 1997 1985 1990 1986 2000 1998 1972 2003 1979 1971 1988 2002 2002 1993 1982 2003 1996 1990 1983 2001 1991 2004 1996 1997 1905 2005 2002 1989 1997 1976 1998 1994 1998 1998 1994 2003
CDE DEG AC ACDEH AC DEG BDG CDEG E CE G C C ABE DEG CDE BCDEGH ABCDF C DEG C DE ABCE DEG ABCDEGH BCDEGH CDEG CDEFG ABH ACDEFG CE A DEG BCDEGH ABDEG CDEGH BCDE DE BDGH G BCDEFGH CDE CD CDE C CDH DG DG AE E
61 100 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 78 82 85 79 94 63 93 88 83 90 96 97 80 92 -
15 13 25 10 20 25 20 5 20 7 10 100 15 15 5 40 48 20 23
21 17 21 16 21 18 16 11 15 13 13 13 12 13 16 17 17 10 11
Surging into fifth position is Loewy, the independent conglomerate, whose fees were up 105 per cent last year, before it acquired The Team in March. Also making great strides are Radley Yeldar (3) and former BBC creative arm Red Bee Media (4) now owned by Australian investment fund Macquarie. But the biggest leap is made by Start Creative (8), which rises four places with fees up 51 per cent last year. Starts ascendancy is perhaps on the back of its extensive work for Virgin Mobile. But its success is unlikely to be shortlived. In April it took on Jonathan Cummings, former marketing director of the Institute of Directors, as a board director as part of an expansion plan. Start is not the only group reporting a significant rise in fees. In the digital arena, Pod 1 (61) saw fees up 82 per cent, Reading Room (13) 68 per cent, and Conchango (10) 54 per cent. Ones to watch at the top half of the chart include Bath-based branding and structural packaging group Blue Marlin (19), which makes a significant debut since it regrouped in last year, with former Coley Porter Bell creative director Martin Grimer joining. It is projecting 30 per cent growth in 2007. Emperor Design (21) reports fees up 37 per cent, with a further 28 per cent anticipated this year. Meanwhile, last years shooting star, Nottingham-based Jupiter Design (22), which handles much of local client Boots work but is broadening out, reports a 23 per cent rise in fees, with 15 per cent growth projected. Graphico (34) is among the more bullish groups. Having achieved 61 per cent growth in fees last year, it is planning for a further 40 per cent rise this year. Only three groups in the top half of the charts report a decrease in fees last year: JKR (6), Springetts (26) and Allen International (48). But it is interesting to see Manchester and London group The Chase (38) being so cautious following its acquisition last year by Midlands conglomerate Hasgrove. Its fees were up only 3 per cent last year what you might expect when a deal is going through and energies are diverted but it projects just 5 per cent growth this year. As for disciplines, branding generally continues to be healthy with most groups seeing their fortunes improve, particularly those with a strong packaging focus, such as Elmwood Design (18), Dragon (29) and Pearlfisher (35). We hear its tough in retail and interiors, meanwhile witness the decline of Lumsden Design Partnership (99), which saw fees more than halved last year. But Checkland Kindleysides (2) improved significantly, while retail specialist Dalziel & Pow (31) saw fees up 35 per cent and 20/20 (53) stayed more or less level year on year. But with groups such as Design House (ranked 81 last year) declining to enter the survey this year, the picture isnt complete. Nor, inevitably, is it wholly up to date. The Nest (54), for example, owes a significant part of its 48 per cent growth in fees to its interiors offering. With this now axed (DW 26 April), we can anticipate a big change for the London consultancy owned by ad agency St Lukes. Product design rarely gets much of a showing in the Top 100, because consultancies tend to be small and shy. But DCA Design Internationals success (11), coupled with the continuing growth of Seymour Powell (24), suggest that it can be very lucrative. All eyes have been on digital design and the charts bear out the return to health of the sector. We have not heard from independent creative boutiques such as All of Us, Lateral and Airside, but more corporate groups such as Red Bee Media (4), Conchango (10) and Cimex Media (30) make a strong showing. One factor over the past couple of years is the rise of groups outside London. The capital is still a key global centre for design, but the Top 100 charts are more representative of the UK as a whole. Towards the top end of the charts, Checkland Kindleysides (2), DCA (11), Elmwood (18), Navyblue Holdings (28), The Chase (38), 999 Design Group (44), Brahm (46) and Tayburn (51) all claim heritage outside London. We can expect this to continue as technology allows start-ups to locate wherever suits the founders and some clients prefer local groups working on their projects. It adds to the mix and is a welcome development. G
19
The Top 100
Analysis
On the up
Overall, consultancies report strong results this year, and most groups are very bullish when it comes to projecting growth for next year. Amanda Merron picks out the main trends in an increasingly upbeat sector
THE TOP 100 reports a different mix of entrants and a very encouraging set of results this year. Between them, the Top 100 design consultancies generated 332.7m worth of fee-income. This represents a solid 10 per cent growth rate for the basket of the Top 100 consultancies. Yes, there have been some fairly significant changes in the makeup of the Top 100, most notably the absence from the top 25 of Vibrandt Starchamber, PDD and Design Group, all of which chose not to enter this year. All of these are relatively substantial design groups and you might expect their absence to drive down the total fee-income generated. Vibrandt Starchamber, for example, would have ranked 16th, with fee-income of 4.97m on turnover of 6.16m, but its data wasnt received in time for the trawl. This is not the case and strong performances from both new entrants and names familiar from previous years generated a strong overall result. Astound is meanwhile closing down. Imagination continues to stand head and shoulders above the crowd-generating fee-income of nearly three-and-a-half times its nearest rival, Checkland Kindleysides. In the short term that position seems unlikely to change, although both Loewy and Start Creative
MOST BULLISH TOP 100 GROUPS

CY AN LT SU N CO TH W RO G
ON TI SI PO
N G SI DE
ES N LI IP SC DI
ED CT JE O PR
1 2 3 4 5 6= 6= 6= 6= 10 11= 11= 13 14 15
Dew Gibbons Pod 1 Hunter Lodge Uniform Aqueduct Graphico Salter Baxter 35 Communications Thin Martian The One Off Limehouse Cleara Group Blue Marlin Brand Design Emperor Design Turquoise Branding
CD G BCDEG DG BCDEGH G DEG DE DG ACDEFG DEG CDEG CE DEG E
100 70 50 48 42 40 40 40 40 37 35 35 30 28 27
Key: A = Interiors B = Exhibitions C = Branding/Packaging D = Print E = Corporate identity F = Product G = Digital media H = Other
21
The Top 100
Analysis
LEAPFROGGERS
CY N TA L SU N O C
N N IO G IT SI OS DE P
IN CE EN ION ER IT FF S DI PO
1 2 3 4= 4= 4= 7 8 9 10= 10= 10= 10=
RPA Vision Pod 1 Salter Baxter Graphico Stocks Taylor Benson The Nest 35 Communications HRG LMC Design Oakwood Design Consultants Parker Williams Design JHP Intro
50 39 24 21 21 21 21 18 16 15 15 15 15
continue to power up the chart. Start Creatives growth appears primarily to be organic, whereas Loewy has combined organic growth with an ambitious acquisition strategy. Having brought Williams Murray Hamm and Bite in 2006, Loewy went on to acquire The Team in March. If we amalgamate Loewys and The Teams figures for 2006 they would have generated a combined income of 12.7m, which would have put Loewy firmly in second place overall. Some significant new entrants this year are Blue Marlin Brand Design, Moving Brands and Live and Breathe. Live and Breathe is the combination of Leeds-based MSC and London-based Explosive, both of which have since rebranded as Live and Breathe. Once again a number of groups generated significant growth and so leapfrogged up the charts. RPA Vision shot from number 70 to number 20 as a result of nearly tripling its fee-income. An impressive
performance was also reported by Pod 1, where fees nearly doubled. Other leapfroggers all generated improved performance, but their move up the charts was also due to the changes in the make-up of the Top 100. Looking at growth in fee-income probably sheds more light on where performances have improved or declined. Loewys feeincome grew by 105 per cent largely because of acquisition, while Pod 1 nearly doubled in size. The chart pulling out growth in fee-income shows that the top ten all increased fees by more than 45 per cent. Given the generally accepted view that growth in marketing spend in the UK is slower than many other regions around the world, the increases reported here are, indeed, impressive. These growth levels are probably due to seizing market share, as well as to underlying improvement in the sector. This may well explain why some consultancies have opted out this year, reluctant to disclose their results.
23
The Top 100
Analysis
GROWTH IN FEE-INCOME
CY N TA L SU N O C % 06 5/ 00 2
N IO IT OS P
N G SI DE
E G N HA C
E AS RE C IN E 000 FE
1 2 3 4 5 6 7 8 9= 9=
RPA Vision Loewy Pod 1 Reading Room Graphico Conchango Start Creative The Nest Stocks Taylor Benson Linney Design
172 105 82 68 61 54 51 48 46 46
2929 4071 941 2271 1368 2293 2488 796 835 1163
DECLINE IN FEE-INCOME
CY N TA L SU N O C % 06 5/ 00 2
N IO IT OS P
N G SI DE
E G N HA C
SE EA CR DE E 000 FE
1 2 3 4 5= 5= 5= 8 9
Lumsden Design Partnership Ralph Siebert Head Jones Knowles Ritchie Tayburn To The Point Allen International Springetts 20/20
-56 -33 -15 -7 -6 -6 -6 -3 -1
-738 -500 -270 -583 -172 -78 -158 -127 -22
Design groups reporting a fall in fee-income also give some cause for concern. Lumsden Design Partners income more than halved, falling 56 per cent, and significant reductions were also reported by Ralph and Siebert Head. However, other groups experiencing drops in fee-income reported decreases of less than 7 per cent. How does this compare with what consultancies thought was going to happen last year? Pod 1 was the most bullish group last year, predicting annual growth of 100 per cent, which it very nearly achieved. Reading Room predicted 56 per cent growth and achieved 68 per cent. Graphico predicted 50 per cent growth and similarly overachieved with 61 per cent. Conchango modestly predicted 40 per cent growth, but actually achieved 54 per cent. Last year, a high proportion of the most bullish groups were digital specialists. Only four of these are among the top ten groups reporting growth in fee-income, but most of them did report improved feeincome, with the notable exception of Ralph. Product designers consistently show good growth and interiors specialists also fared better. It is worth considering the impact of these figures on the financial performance of the Top 100. This year some 40 groups generated fee-income per head of some 80 000 or more. This, combined with the growth indicated here, suggests that profitability is improving. This should mean that design consultancies can reinvest in the businesses to take advantage of fairly strong market conditions. This year, none of the Top 100 design groups is predicting a reduction in fee-income. Projected growth is generally very bullish, with most consultancies anticipating at least 10 per cent. The most determined to grow is Dew Gibbons, which projects 100 per cent growth in fee-income. Pod 1 remains optimistic, with a forecast of 70 per cent, and Hunter Lodge again predicts growth of 50 per cent although it achieved only 15 per cent this year. Once again digital specialists are the most bullish, probably rightly reflecting the markets appetite for on-line communication. G Amanda Merron is a partner at accountant Willott Kingston Smith, which specialises in working with creative businesses
25
The Top 100
Specialisms
Specialisms
Lynda Relph-Knight considers each separate discipline to see which groups came top. Research by Emma Germain
BRANDING AND PACKAGING UK TOP TEN

CY AN LT SU N CO
ON N TI IG SI ES O D P
E OM NC I EFE 0 K 00 U
1 2 3 4 5 6 7 8 9 10
Jones Knowles Ritchie Design Bridge Blue Marlin Brand Design Springetts Pearlfisher Tynan DArcy Elmwood Design Ocean Design Parker Williams Design Loewy
7926 7784 4537 3414 3401 2870 2834 2613 2575 2424
AS BEFORE, this chart focuses on the consumer-facing side of branding, bringing packaging expertise to the fore. This is again proving lucrative, particularly to fmcg specialists. Jones Knowles Ritchie and Design Bridge once more jostle for position at the top of the charts, with hardly a whisker between them this year, JKR having dropped almost 7 per cent in fees and Design Bridge having gained some 22 per cent. Springetts goes up a place, though its fees are down 6 per cent. Tynan Darcy is still there, though its fees fell slightly, and so is Ocean Design, with fees up 8 per cent. The big news though is Blue Marlin Brand Design, the Bathbased branding and structural packaging group that enters the chart in third place. Last year it regrouped, taking on Martin Grimer from WPP-owned Coley Porter Bell as executive creative director. That appears to be paying off. Also new this year are Pearlfisher, known for award-winning designs and materials innovation, and Elmwood Design, the thrusting Leeds, Edinburgh and London group that has now ventured abroad to Melbourne in Australia. Both are fixtures in awards schemes as well as business successes. Envoy-owned Parker Williams Design, making its debut in the ninth slot, is, judging by its regular appearance in Design Week, a prolific player. But the one to watch is Loewy, the acquisition-hungry independent network headed by the energetic Charlie Hoult. Its acquisition of creative superstar Williams Murray Hamm last December might not make much impact on its performance in branding and packaging this year but next year it surely will.
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27
The Top 100
Specialisms
PRINT UK TOP TEN

CY AN LT SU N CO
1 2 3 4 5 6 7 8 9 10
Radley Yeldar Jupiter Design Emperor Design Loewy Checkland Kindleysides Impact IM Corporate Edge Group Oakwood Design Consultants The Team 999 Design Group
5900 3617 3323 3304 3087 2750 2726 2227 2069 1966
If you thought the days of print were numbered in this digital age, this chart should make you think again. Some of the brighter new talents may be entering digital design, but the stalwarts of print have had a good year in terms of business, even if the sector failed to greatly impress the Design Week Awards judges this year. Annual reports provide a regular source of income and it is no surprise to see specialists Radley Yeldar and Emperor Design doing well. Radley Yeldar remains in the top slot with fees up 4 per cent; Emperor meanwhile takes third place, with fees up a massive 37 per cent. In between, Jupiter Design continues to boost its fortunes. The Nottingham group that last year shot into the Top 100 largely on the strength of work from Boots as the high street chemist outsourced its design has since broadened its portfolio and increased its fees by 33 per cent. Loewy, similarly, is in the ascendancy, with fees for print work up a staggering 62 per cent, perhaps through its rampant buying policy. Meanwhile, former Roundel director John Batesons move to Corporate Edge hasnt done any harm, its print fees being up 36 per cent and its identity work booming. An interesting omission from the print chart this year is Start Creative one of the rising stars of the Top 100. Last year it ranked sixth for print, with fees of 2.09m. Now the emphasis appears to be in identity, where it has doubled its fees this year (see page 31).
29
The Top 100
Specialisms
CORPORATE IDENTITY UK TOP TEN

CY AN LT SU N CO
1 2 3 4 5 6 7 8 9 10
Red Bee Media Turquoise Branding Start Creative Corporate Edge Group The Team Loewy Rufus Leonard Dragon Navyblue Holdings Moving Brands
5437 2182 2055 1905 1880 1812 1762 1703 1643 1398
With the big global identity players ruled out of the Top 100 by the Sarbanes-Oxley Act in the US, and so from this chart, weve seen a very different picture in identity over the past few years. To see how the likes of WPPs Enterprise IG are faring alongside their Omnicom rivals Interbrand and Wolff Olins and InterPublic Groups FutureBrand, check the global chart giving the latest data (see page 57). But that does not detract from this ranking of independents, which has changed radically over the past 12 months. Shooting in at the top is Red Bee Media, the former BBC design arm now in Australian hands, emphasising the potency of TV branding. Its fees of 5.43m put those of last years chart-topper Dragon into the shade, though the latter has boosted fees by 14 per cent year on year. Turquoise Branding, with offices in the UK and the United Arab Emirates, makes an impressive debut in second slot. Loewy and Moving Brands are also newcomers and obvious ones to watch. Going out are The Chase, whose performance surrounding its takeover by Hasgrove has been static, SAS, 35 Communications and Design House, which didnt enter the survey this year. Start Creative moves into third place, having virtually doubled its fees. Though theyve dropped in the charts, Corporate Edge Group, The Team, Rufus Leonard, and Navyblue Holdings all show fees up by 86 per cent, 30 per cent, 19 per cent and 132 per cent respectively. Growth has been phenomenal in this sector and, with new overseas markets opening, we can expect it to continue.
31
The Top 100
Specialisms
DIGITAL MEDIA UK TOP TEN

CY AN LT SU N CO
1 2 3 4 5 6 7 8 9 10
Conchango Twentysix Reading Room Syzygy E3 Cimex Media Red Bee Media Graphico Rufus Leonard Start Creative
6509 5760 5615 5300 3900 3800 3346 3312 3231 2976
Digital media is the real star of the Top 100 this year with fees up across the board. Last years top ten specialist groups mustered fees of 32.69m collectively. This year it was 43.74m an increase of 34 per cent. Developments in the sector have taken digital design way beyond designing websites, with TV and telecoms being among the current markets. This means that digital skills are highly prized by clients and by consultancies of all disciplines and we can expect a year of acquistions and diversification as a result. A huge number of groups, especially in branding and print, claim digital expertise as part of their repertoire and that number and the fees they command are set to increase as demand for digital communications escalates. In the top ten, Conchango leapfrogs Twentysix and Syzygy to come top. All three consultancies report increased fees, up 54 per cent, 2 per cent and 10 per cent respectively. Other chart stalwarts report similar successes. Reading Rooms fees are up a massive 68 per cent, E3s are up by 26 per cent, Cimex Medias by 36 per cent, Graphicos by 48 per cent and Rufus Leonards by 11 per cent. Newcomers Red Bee Media, the former BBC TV branding group, and thrusting branding specialist Start Creative show the diversity of the sector, ranging from broadcast to retail. They replace Tonic Design and Nucleus in the top ten. Tonic declined to take part this year; meanwhile, 2m in fees up 16 per cent year on year did not qualify Nucleus for a place in the charts.
33
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INTERIORS AND EXHIBITIONS UK TOP TEN

CY AN LT SU N CO
2 00 800 buy fonts

1 2 3 4 5 6 7 8 9 10
Checkland Kindleysides RPA Vision Dalziel & Pow Allen International HMKM Sheridan Met Studio Design Brinkworth 20/20 The Nest
5691 4071 3428 2320 2103 1894 1302 1241 1166 1102
With so many groups of all disciplines claiming to do a bit of exhibition work, most earning less than 500 000 for it, we have again combined those totals with the fees for interiors. Interiors, meanwhile, also includes retail design, which remains more lucrative for design than you might image hearing the woes of high-street retailers. Retail is a prime interest for Leicester group Checkland Kindleysides, which once more tops the charts with fees up 9 per cent and including 82 000 from exhibition work. RPA Vision ranks second meanwhile, having patently boosted its portfolio in Europe following its return from the US, with fees up almost 150 per cent on last year. Dalziel & Pow, ranked third again with fees up an impressive 39 per cent, has shown that a rethink of the strategy in tough times to offer both retail graphics and retail design has paid off handsomely. Coming into the chart this year are Met Studio Design , Brinkworth and The Nest. The ascendancy of Met, best known for its award-winning exhibition design, is due to a greater involvement in interiors, which accounted for some 64 per cent of its fees last year. The Nest, meanwhile, is unlikely to hold its position for long, having now disbanded its interiors team. Dropping out of the charts this year are Din Associates, which closed its doors earlier this year after a period of dismantling the business. Conran & Partners and Tibbatts Associates meanwhile make surprise exits.
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The Top 100
Specialisms
The Top 100
Specialisms
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PRODUCT DESIGN UK TOP THREE

CY AN LT SU N CO
1 2 3
DCA Design International Seymour Powell Conran & Partners
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Though several groups claim product design as a discipline in their portfolio, it isnt their main skill. Being a support to work in, say, packaging, interiors or exhibition design, it is far from being a major earner for them. There are arguably only two consultancies for which product design is the main thrust in the top ten this year Warwick-based DCA Design International and Seymour Powell. Both would claim that they are not just design groups any more, making their name through consultancy as well and, to an extent, the new business of service design (see feature, page 59). We have included multidisciplinary group Conran & Partners as the third serious contender in the product design ranking. Though only 17 per cent of its total fees of 2.8m came from product design last year, the work by director Sebastian Conran and his team in furniture, tableware and household products is a separate stream from the main architecture and interiors business and therefore worthy of note here. In fact, only six groups in the Top 100 ticked the box for product design. Apart from the top three in the table, they were Arapaho Group, Odd and The One Off. Of these, only Arapaho mustered more than 100 000 in fees from product. Product designers are relatively coy and a number of key names are missing from this table, notably Priestman Goode, Kinneir Dufort, TKO and Farzer Design. Nor do furniture stars such as Pearson Lloyd and Barber Osgerby feature here. We might also expect packaging specialists such as Jones Knowles Ritchie, Design Bridge, Blue Marlin Brand Design and Pearlfisher to claim product expertise here, given that each has a good reputation for creating structural packs. They obviously see this as integral to branding design for their largely fmcg clients and dont separate it out in terms of fee-income. G
37
The Top 100
Digital media
Hyper interactive
The interactive design sector is showing strong signs of growth, fed by the unstoppable rise in on-line ad revenue, but, as Mike Exon warns, consultancies should tread carefully to avoid the pitfalls of the last dotcom boom
IF 2005/06 was a year of new shoots emerging in the once-fted digital sector, then 2006/07 was the year to marvel at its extraordinarily visible growth. Interactive design went truly overground this year for the second time. Last year, everyone was building digital capability and this has continued over the past 12 months, albeit at a slowing rate. Some design groups, like Imagination, began rebuilding their multimedia infrastructure organically, from the inside out. Others, like Syzygy, have continued to acquire their own new capability. The digital group added Unique Digital Marketing to its fold, a move that followed its acquisition of the German-based on-line media agency GFEH in December 2006. Both deals demonstrate the growing importance of offering the full breadth of sub-disciplines within the digital and interactive sphere. US interactive groups like R/GA showed renewed interest in the UK digital market, following a number of barren years. The Interpublicowned group promised a three-fold increase in its UK headcount this year following its LOral account win. Start-ups and breakaways have been fewer, as consolidation has taken hold of the sector, but there has been the odd new design entrant. Signal Orange (founded by the former Syzygy creative director Matthew Bagwell, no less) is just one example. Digital trends and statistics The future of interactive seems more or less assured, if the research is to be believed. According to the forecasts, we will soon be spending more time on-line than we do watching television. Moreover, says the Internet Advertising Bureau, online advertising revenues have now overtaken those of press advertising. Good old radio has already succumbed to the rise of the Web, falling behind on-line as the third-most popular broadcast medium. Television, currently the favourite, is set to topple next.
UK AD SPENDS 2006
On-line: 2.016bn (up 41%) TV: down 4.7% Newspapers: 1.9bn (up 0.2%) Radio: falling On-line make-up: Search advertising: up 52% Classified ads: 18.8% share of on-line spend (up 45%) Pop-ups on the decrease, accounting for only 0.7% share of on-line spend
39
The Top 100
Digital media
THE INSIDE VIEW Perhaps the most telling sign of the growth of interactive is the level of service that clients now expect from their interactive agencies. For the first time, clients have begun turning to the bigger digital players to handle all of their communications needs. Glue reportedly lost the Eurostar advertising and digital account to the ad agency Fallon, but only just. Ikea, though, hired Agency.com, not just to oversee all of its online work, but to handle all of the retailers print and outdoor advertising as well. And similarly, AKQA was appointed by Yell.com to run communications across the whole of the brand, from outdoor and television advertising to digital. AKQA also become one of the sectors first groups to take the private equity route, with a 150m deal for a majority stake acquired by the private equity business General Atlantic in the US. According to AKQA founder Ajaz Ahmed, what will differentiate creative agencies and consultancies in the future is not media specialism, but the quality of creative ideas. Quality of execution is certainly a differentiator, but powerful ideas are really the only currency that a creative consultancy has. Its only the quality of work that keeps a consultancy current, he says. It used to be that the above-the-line agency would be the lead on client activity. But the convergence of media has changed all that and now no one really talks about above-the-line or below-the-line as there is an increasing emphasis around on-line. So what is fuelling the demand for interactive design? And where is the earning growth coming from? Many concur with Poke creative director Nicolas Roope, who thinks that, contrary to popular belief, the single most important future earner for digital and interactive groups is not video, but the production of entertainment. All of Us director Orlando Mathias says, On-demand services, by which I mean film, music, games, TV and so on, are now a large part of our business, alongside the physical interactive experiences that we create. We all knew that this would inevitably be a large part of the
The Top 100
Digital media
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Internet offer, and now that the broadcasters have acknowledged this, there is a rapid demand to develop the right systems to facilitate it, he says. There are rather important question marks over some aspects of interactive design that are generally deemed to be popular, too. Mathias suggests that user-generated content will have a finite lifespan, and that professionally produced design, content and journalism must ultimately prevail. For Roope, it is the role of video that is in question. There seems to be a latent lust for video, mainly borne by people who havent truly fallen for the Web yet. Video is a content type in a digital world, not a medium in itself, he says. So does Roope think clients understand what they need? Are they up to speed with media convergence and are they prepared to increase their spending on interactive? Convergence is increasing healthily, but most clients are very far behind, he says. Brands are usually run by marketers who make clear divisions between media for many reasons from budgetary and operational considerations to ignorance yet their customers increasingly engage with their passions across all their devices with no prejudice at all. As it becomes clearer that value exists for clients that can converge their offerings, the money will, of course, follow, he adds. The fact that the money is returning is good news for the interactive design world, but there is also a resounding call for some levelheadedness now. There is a concern that too much expectation from the non-specialist business world could start to undermine the efforts of those at the cutting edge of digital, and few have fond memories of the last time it got to this stage. Things are getting a bit over-hyped so people need to stay calm. But avoid doing nothing, that could be a big mistake, too, warns Roope. G
The Top 100
Efficiency
Efficiency
Efficiency makes for a healthy business, especially in terms of staffing. It may be easier to be lean and mean, but our chart shows that its possible to employ a large staff without letting overheads become too much of a burden
CY AN LT SU N CO R PE AD HE E M CO IN E- 005 FE 2 R PE AD HE N IO IT OS P N G SI DE E M CO IN E- 006 FE 2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Ocean Design Kugel Imagination Impact IM Pure Equator Dragon Nucleus Checkland Kindleysides Start Creative P&W Design Tynan DArcy Blue Marlin Brand Design Oakwood Design Consultants Bostock and Pollitt Chaos Design Jones Knowles Ritchie SAS Radley Yeldar Parker Williams Design Sheridan
163 000 124 000 120 000 116 000 110 000 107 000 106 000 105 000 105 000 104 000 102 000 102 000 100 000 100 000 98 000 97 000 95 000 94 000 93 000 92 000
115 000 97 000 119 000 122 000 101 000 97 000 78 000 98 000 95 000 112 000 106 000 80 000 84 000 88 000 108 000 82 000 90 000 75 000 -
EFFICIENCY has long been one of the rallying cries of our professional commentator Amanda Merron. Merron, a partner of accountancy firm Willott Kingston Smith, has cautioned consultancies since recovery from recession started to take a grip that earning good fees means nothing if you fritter it away on business overheads. Of these, staffing is one of the easiest to control. How many people you employ and what you pay them can make a significant difference to the bottom line of a consultancy. Merron generally advocates that earnings in excess of 80 000 per head of staff make for a healthy business. Below that, margins are too tight for comfort, she maintains, and certainly dont impress would-be buyers or partners. Its good therefore to see that a big group like Imagination can rake in the cash 31.3m in design fees last year employ 260 people and still be efficient. The brand experience supergroup managed to earn a healthy 120 000 per head of staff last year, making it the fourth most efficient group in this years listing. It is beaten though by four groups that, judging by their performance overall, are looking to do great things economically. Ocean Design, which tops the efficiency chart this year, has a sound future mapped out for itself. With fees of an impressive 163 000 per head, it saw 7 per cent growth last year and is looking for 15
per cent next year. Ocean, along with 13 other groups ranked above, have achieved more than 100 000 per head, which puts them in the premium business bracket, according to Merron. Looking towards the bottom of the efficiency charts, it is surprising to see established groups like Anglo-Scottish branding group Navyblue Holdings and Conran & Partners, with its interiors and product design strengths, reporting fees of 50 000 or less per head of staff. Indeed, more than half of the Top 100 fall well beneath the 80 000per-head bar laid down by Merron, with thrusting groups Loewy and RPA Vision mustering only 74 000 and 69 000 per head respectively. These groups and most others in the business need to address their performance by boosting fees while retaining staff levels, cutting staff or finding ways to remunerate them other than through pay rises perhaps through holidays, shares in the business or pension deals. Of course, the use of freelances throws the staffing figures out for many a group, and so calculation of earnings per head are best taken as a guide. But the difference between freelances and fulltime staff is that one group can easily be dispensed with if work dries up or other circumstances change, while the other remains a responsibility, affecting the bottom line whatever fluctuations there are in the workload. G
45
The Top 100
Staffing
Holding steady
Efficiency, striking the right balance of capabilities and making the best use of freelances are prime ingredients for success, says Lynda Relph-Knight, as the consultancies in our Top 100 charts have found over the past year
TOP-STAFFED UK DESIGN GROUPS
CY AN LT SU N CO 06 20 05 20 04 20
Conchango Imagination Loewy Red Bee Media Radley Yeldar Reading Room Corporate Edge Group Design Bridge Checkland Kindleysides Twentysix Jones Knowles Ritchie Navyblue Holdings Jupiter Design Start Creative Syzygy
293 260 66 98 94 94 88 87 87 85 82 76 73 70 69
205 246 58 86 83 84 90 81 85 92 79 66 73 51 57
352 80 74 107 87 90 76 58 56 51 -
IN THE EARLY DAYS of the Top 100 survey, consultancies were ranked according to the number of staff they employed. Size mattered in the days before design was deemed to be a business sector and, in most instances, the vast majority of employees were designers. Now, though, a consultancy is judged by its fees and aspirations hence the basis for our rankings now. But just as crucial to its performance is its efficiency. The all-important earnings per head of staff measure is what really indicates a well-run business (see page 45). Accountant and creative industry commentator Amanda Merron suggests a figure of 80 000 per head of full-time staff for a consultancy to qualify as an efficient business, while earnings of more than 100 000 a head will put it into the realms of being a premium enterprise. And it isnt just designers who need to earn their keep. The proliferation of new business and client services teams within consultancies, not to mention the advent of planners and strategists brought in to make a difference and up the creative offer to clients, means there are more mouths to feed in the average design group than might previously have been the case. It is now harder than ever to retain the right balance and still meet the bills. But keeping staffing and other overheads to a realistic level is likely to make a consultancy attractive to would-be buyers and business partners increasingly a concern of entrepreneurial founders keen to cash in on their investment of time and money in order to fund new ventures or enable them to simplify their lives.
The Top 100
Staffing
LARGEST INCREASE IN STAFFING LEVELS
CY N TA N L IO SU IT N O OS C P
E AS RE C IN
1 2 3 4 5 6 7 8= 8= 10
Conchango Moving Brands Blue Marlin Brand Design Loewy Live and Breathe The One Off Parker Williams Design Turquoise Branding Bloom Portland Design
88 62 46 41 40 32 28 26 26 25
Your pupils dilate, the blood rushes through your veins, your mind focuses, your wits sharpen and your energy rises This is what happens to your body when you believe in something Make that something your CAREER
Nor is it only the likes of WPP or the acquisitive Loewy that demand evidence of good management. Clients, too, are looking for groups that can not only fulfil their design needs in a creative and strategic sense, but will also be in business long enough to see a project through or to develop a relationship by way of a roster. Staffing levels fluctuate, nonetheless, according to other shifts in the business. They are some indication of the confidence consultancy bosses have in the reliability of their workload. Where there is a sudden upsurge in projects which has happened to many groups since the crippling post-2001 recession loosened its grip those who have been through the pain of parting with valued staff through redundancy are more likely to rely on freelance support, particularly for their design teams, until they are confident that the shift in fortunes is not a temporary blip. The pool of freelances has expanded in size and quality across all levels of experience so far this century and a number of consultancies include them as part of the mix now, from WPP-owned Landor Associates, say, to creative star Williams Murray Hamm, which was acquired by Loewy last December. This means that, to really understand a consultancys financial health, you have to dig a bit
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49
The Top 100
Staffing
LARGEST DECREASE IN STAFFING LEVELS
CY N TA N L IO SU IT N O OS C P
5 CE 0 N 20 RE TO E FF 06 DI 20
1 2= 2= 4 5= 5= 7= 7= 9= 9=
Limehouse Twentysix Brahm Tayburn Kugel Ocean Design Siebert Head Lumsden Design Partnership RPA Vision The Chase
-28 -7 -7 -6 -5 -5 -4 -4 -3 -3
deeper. The Top 100 charts give a clear indication, but because it is hard to pin down the number of freelances employed by consultancies, they dont tell the whole story. In terms of staffing, it is interesting to weigh up the balance of the full-time team a designer-heavy consultancy will have a different capability and culture from one that boasts more strategists, sales people or client services personnel. A good business should aspire to the right blend of both. Those who remember the recession of the late 1980s and early 1990s will recall the number of start-ups emanating particularly out of the company then known as Michael Peters Group, which created a new consultancy model of designer and planner, perhaps with a salesperson on the board. That model set a trend, and arguably gave design the backbone it needed to become a business rather than remain purely a craft sector. It isnt always the volume of project work that prompts consultancy bosses to increase their full-time staff. Digital group Conchango ranks top of the chart for team-building this year, with a 43 per cent hike in numbers during 2006. This partly reflects the boom in digital work anticipated by many industry commentators, but with a 25 per cent growth projected for 2007 it suggests it has bigger plans. Loewy, meanwhile, reports a massive 61 per cent rise in staff numbers during 2006. This does not yet take account of The Team, which it bought in March, but it does include Bite and Williams Murray Hamm, both of which it bought in towards the end of last year. With Loewys ambitious chief executive Charlie Hoult on record as being keen to buy other groups, we can expect to see more of this and a further boost to staffing levels as he surely prepares his independent network for a stock market listing or sale to a bigger global player. As design turns the corner from recession, losing staff on a significant level perhaps tells a bigger story. Retail design specialist Lumsden Design Partnership has, for example, fared worse than most in what has been a difficult area of business over the past couple
The Top 100
Staffing
MANAGEMENT LONDON
G IN AG AN M R DI EW N S BU R DI T N U CO AC EC EX R IO N JU C A/ R G M R IO N SE C A/ R G M T N U CO AC R DI N IO CT DU O PR
R G M O DI U ST
R G M
Print graphics Packaging and branding Exhibition Furniture Corporate identity Interiors and architecture Product Digital
81 667 77 222 73 571 40 000 85 556 58 333 71 250 81 250
54 444 59 444 60 000 35 000 55 833 61 666 39 375 61 562
21 875 21 750 21 875 27 000 20 937 23 750 24 500 21 214
23 625 23 437 23 571 22 500 23 500 23 167 23 833 23 437
35 312 35 812 35 312 40 000 35 812 36 500 33 333 36 071
47 375 49 250 47 375 65 000 48 562 56 000 45 666 49 571
37 778 38 125 37 778 40 000 38 750 44 167 40 625 38 750
28 700 35 875 35 875 35 000 37 000 37 167 34 900 36 285
MANAGEMENT OUTSIDE LONDON

Print graphics Packaging and branding Exhibition Furniture Corporate identity Interiors and architecture Product Digital 60 200 59 200 59 111 40 000 63 000 55 000 58 143 61 250 48 900 48 900 48 900 35 000 49 000 51 500 46 286 50 625 19 944 19 750 19 937 23 500 19 750 20 900 19 083 19 944 21 056 20 950 21 562 22 000 20 950 21 600 21 750 21 056 34 611 34 150 31 611 27 000 30 250 31 300 30 643 30 278 39 850 39 682 40 389 29 000 39 150 42 000 37 214 39 278 32 750 32 750 33 056 27 000 32 722 34 000 29 583 30 643 30 667 30 667 30 750 25 000 30 437 31 667 30 167 30 500
DESIGNERS LONDON
OR NI JU E DL ID M R IO N SE VE TI EA CR R DI ER RK O TW AR
Print graphics Packaging and branding Exhibition Furniture Corporate identity Interiors and architecture Product Digital
19 800 19 800 19 875 20 000 19 600 19 667 20 333 19 562
27 000 27 000 27 312 26 500 27 091 28 000 28 167 27 062
36 300 36 550 36 000 30 000 36 818 36 875 34 000 36 687
60 600 61 682 58 875 42 500 62 364 60 400 47 833 61 333
27 350 28 318 26 687 21 500 28 318 27 125 27 167 27 437
DESIGNERS OUTSIDE LONDON

Print graphics Packaging and branding Exhibition Furniture Corporate identity Interiors and architecture Product Digital 17 200 17 200 17 200 16 000 17 000 17 375 16 583 16 687 22 091 24 300 24 300 20 000 24 450 26 333 23 250 24 375 29 409 32 350 32 350 27 000 33 200 34 250 30 167 32 750 49 850 49 409 49 409 42 500 46 500 52 000 39 750 49 611 22 900 20 818 22 900 18 500 20 600 22 625 21 667 22 562
of years, and has lost almost a third of its staff over the period. Like others, it has plugged the gap where necessary with experienced freelances, but we might expect to see some sort of deal with another going down before too long. Its a fickle world where the loss of two or three consecutive pitches or long-term clients bent on a change can make a real difference to a business, but the dwindling fortunes of a small group like LDP can be reversed just as quickly, so its best not to judge too soon. When a bigger group with greater overheads goes through a similar experience, though, its time to speculate on the outcome. With so many new entrants appearing in the Top 100 charts this year, its hard to assess the overall picture for staffing in design. The total number employed by groups in the charts was 4381 last year, including 1946 designers and 182 overseas staff, which compares favourably with the previous years totals, though the mix of groups is different. A lot of groups appear to have stabilised in staffing terms, gaining or losing only two or three people over the 12 months. Meanwhile, the results of our recent salary survey, based on input from specialist recruitment agencies, suggest a greater value is being put on designers than suits at present (see tables on this page). Anecdotal evidence suggests that, while there have been too many design graduates coming into the industry for a number of years for the jobs available, there is an acute shortage of experienced creatives. Strategists, planners and client-facing people have been easier to come by, given the decline in advertising and the number of good people who have crossed into design from that sector. How that balance will shift, now that work has patently picked up for most consultancies, remains to be seen. A lot can happen in 12 months and it will be fascinating to see how this works out in the future, as design rebuilds itself. G
53
The Top 100
Global groups
Pale performance
The results of design consultancies that are owned by global groups have been relatively static and lacklustre, in stark contrast to the general UK scene. Amanda Merron takes stock of the international sector
THE TOP 100 design consultancies ranking presents a pretty good shopping list for acquisitive groups as the bulk of the entrants are privately owned. This is because those that are owned by international publicly quoted marketing services groups are prohibited from submitting their figures under the US Sarbanes-Oxley legislation. There are some substantial groups excluded from the Top 100 and EHS Brann and Enterprise IG would have ranked second and third respectively, followed by Wolff Olins at number three, had their figures been incorporated. Indeed, some years ago WPPs interest in design was so significant that the group itself entered Design Weeks Top 100. These days its design interest is far from insubstantial, totalling 35.6m of fee-income. Of the international groups, WPP continues to dominate the design scene with the Havas-owned designers generating fees of 22m, Omnicom approximately 23m and Interpublic Group 16m. Does the multinational groups experience of their design subsidiaries performance suggest that they would be keen to invest further in the sector? In the case of each groups basket of designers the answer may well be no. UK design fee-income within the WPP stable remained roughly static, while Havas, Omnicom and Interpublic all saw fee-income decline. This is particularly surprisingly given most international groups view that UK marketing spend was relaDESIGN WEEK MAY 2007
tively static compared with that enjoyed in other parts the world, particularly Asia-Pacific and Africa. Given that most of the UK groups will primarily operate in this country and that a number of the international group-owned subsidiaries will have access to overseas income you would have expected stronger growth. One reason for group-owned designers performance being relatively lacklustre may be group-wide deals on fees, but this is relatively rare in the design sector. It would be more usual to see other communications disciplines such as advertising and media buying working on global deals. The bulk of the figures reviewed here relate to 2005, whereas the Top 100 have submitted figures to 2006 and this discrepancy may partly explain the difference in performance as the general consensus is that 2006 was a better year than 2005. That said, the groups must still be disappointed at this relatively static performance. Is it harder to incentivise leaders and inspire teams in a groupowned structure? That may be the case, although individual businesses within the WPP stable have reported good growth. Enterprise IG grew income by 27 per cent, which is a good result by any measure. Fitch Design Consultants also reported good growth at 15 per cent. It will be interesting to watch Fitchs performance going forward following Rodney Fitchs return to lead this business.
55
The Top 100
Global groups
CONSULTANCIES OWNED BY GLOBAL NETWORKS

Y N PA M CO E M CO IN EFE L TA 000 TO R VE O N R TU L TA 000 TO L TA TO F AF ST L TA TO
CY N TA L SU N O C
T EN AR P
R VE O N R TU 0 K 00 U
K U
Addison Corporate Marketing Coley Porter Bell Digitlondon 1 Enterprise IG Fitch Design Consultants Lambie-Nairn & Company The Partners (Design Consultants) CGI Brandsense (formerly CGI London) Conran Design Group EHS Brann Interbrand Newell and Sorrell 2 Pauffley Wolff Olins FBC (FutureBrand) Jack Morton Worldwide Total Average per company
1 2
WPP WPP WPP WPP WPP WPP WPP Havas Havas Havas Omnicom Omnicom Omnicom Interpublic Interpublic
3800 (4.7%) 3959 (-9.7%) 1117 (226%) 15 016 (27.4%) 7372 (14.9%) 4175 (7.7%) 1310 (-49.7%) 1753 (-15.5%) 2708 (-20.9%) 17 721 (0.6%) 3422 (0.5%) 12 326 (-8.8%) 5779 (-3%) 10 482 (-3.5%) 89 823 (-5%) 6909 (-5%)
5259 5141 1552 20 592 9556 5972 3419 2419 3302 28 327 3892 15 455 7675 41 130 152 139 11703
5259 (2.7%) 3420 (-17.2%) 1552 (34.9%) 12 149 (1.9%) 6889 (28.6%) 4162 (31.2%) 3419 (-35%) 2419 (-20%) 2511 (-28.4%) 28 327 (5.7%) 20.10% 3118 (12.4%) 5324 (-32.2%) 5448 (40.2%) 21 074 (24%) 103 519 (2.6%) 7963 (2.6%)
35 (9%) 40 (-2%) 21 (40%) 120 (12%) 68 (-14%) 36 (5.9%) 36 (-12.2%) 16 (-23.8%) 39 (-18.8%) 241 (13.1%) 78 (-3.7%) 31 (-13.9%) 114 (-1.7%) 68 (-10.5%) 77 (6.9%) 999 (-4.1%) 77 (-4.1%)
Small company, so it only has abbreviated set of accounts Profit and loss statement missing from Companies House report, so fee-income and turnover could not be given
Coley Porter Bell did less well, with fee-income shrinking by nearly 10 per cent and a 2 per cent cut in staff numbers. Lambie-Nairn grew fee-income by 7 per cent, but cut staff numbers by 6 per cent perhaps suggesting that business was overstaffed in the previous year. The Partners suffered a terrible year with fee-income falling by nearly half and staff numbers reducing by 12 per cent. At Havas only EHS Brann reported an increase in fee-income, but that was modest at just 0.6 per cent. EHS Brann has a significant element of direct marketing and digital income, and this may well be what sustained it. Its fellow-subsidiaries, Conran Design Group and CGI Brandsense, both saw fee-income drop by 21 per cent and 15 per cent respectively. Staff numbers also reduced substantially. Omnicom-owned design groups did little better, with Pauffley reporting static income and an 11 per cent drop in staff numbers and Wolff Olins fee-income declined by 9 per cent with a 2 per cent drop in staff numbers. The story was similar at Interpublic. Omissions this year are Innocence, the Omnicom group that was merged into Interbrand and ceased to exist as a separate entity
in 2004, and WPPs Oakley Young Associates, for which there is no report available at Companies House and which is defunct, according to a survey. Landor Associates, one of WPPs branding flagships, appears to report into the US company and has a very small UK income. The merger and acquisition market in the UK has recently been fuelled by mid-tier marketing groups such as Aim-listed Cello, Cagney, Media Square and The Mission Marketing Group, as well as of the longer-established, fully listed Creston. Private acquirers such as Loewy and Engine Group have also been active. But, generally, they have not bought design businesses, with the notable exception of Loewy. They have shied away from what they perceive to be project-based businesses and struggled to find ways to integrate them into their communications offer. This provides an interesting challenge for design businesses anxious to sell to understand their role in the marketing mix and how they would contribute to a group strategy. The results here dont suggest that that will be easy. G
57
The Top 100
Service design
Holistic approach
Variously known as co-design and experience design, service design is a wide-ranging, but hard to define, discipline. Scott Billings looks at this fast-growing sector, and also talks to some leading practitioners
1 TimeBank, a client of Thinkpublic

1
THERES a slippery discipline rising through the ranks of the design industry at present, one that encompasses any number of traditional design skills, but also scoops up a good measure of ethnography, user participation, management consultancy, policy strategy and even social movement theory along the way. Often known as service design but also as co-design or experience design, among other terms the growing number of its practitioners are capitalising on the UKs heavily service-based economy and a push by the Government to transform public services over the next few years. But perhaps service-based economy is itself a bit of a slippery term. Just what is a service, anyway? And what isnt? Many service designers work for the public sector where its fairly obvious what this means the health service, or prison service, for example. Here, its clear that service processes and environments might be improved, with or without designers help: think harshly lit waiting rooms, confusing signs, poor information. But then theres a host of commercial companies all recognising that what they really need to get right and what makes them the most money is not necessarily the sale of a product alone, but the provision of a whole set of services orbiting around it. The motor industry, for example, makes more money from after-sales financial services than on the ticket price of the cars themselves. Commercially, its these kind of add-ons, and the way they are communicated and developed, that are thought of as services. The service design discipline has perhaps also become associated with social improvement. The Design Councils now-defunct thinktank Red adopted a progressive definition of design to focus on areas such as healthcare, an aging population and notions of citizenship and democracy. A strategic approach to what we receive from health,
community and education services is starting to become the domain of some designers in this way. While the term itself may have been coined fairly recently by design consultancies, its pretty obvious that this is not a new notion. The health service has been around for more than 50 years and provides a vast and complex set of inter-related services, developed internally by people who would probably not be described as designers. Equally, Frank Picks impressive legacy as chief executive of the London Passenger Transport Board shows that putting holistic, co-ordinated design at the heart of a public service is neither a new idea nor an optional extra. So, why the swell of activity in the design sector now? And what exactly do designers have to offer? Technological developments play a large part, as they affect all organisations. Designers can help make sense of these changes and develop strategies for using them, offering disciplines such as interaction or information design. And the fact that service design consultancies, by their nature, draw in a wide range of skills (digital, industrial product design, graphics, information design, architecture, strategy, branding and more) means that a well-equipped group can cut across all of the touch points a client has with its users. It can bring to complex, multi-layered organisations the kinds of skills that any good designer will possess an ability to simplify and communicate issues, and develop and prototype new ideas, as well as implement them. A lot of these skills are already offered by management consultants and branding groups. But, according to proponents of service design, its focus differs. Where management consultants have the bigger operational framework in the picture, service designers are more concerned with the final effect, down at the bottom with the
59
The Top 100
Service design
2 School Food Trust, another Thinkpublic client

2
end-user empowerment, enfranchisement and understanding are their key concerns. While branding consultancies persistently tote the brand message, service designers claim to be more concerned with the ultimate user experience. On the public sector side, particularly, service design may seem like strategic, blue-sky thinking kind of stuff. If so, are we giving the word design a flaccidly elastic definition: a catch-all, touch-everything discipline draping itself hopefully around policy, psychology, management consultancy and the rest? The designers in the sector profiled here stress how they use traditional skills such as product, digital or graphic design to create tangible tools that can help an organisation make decisions. They say that the combination of design skills, along with an outsiders perspective, can help a clients staff and users to produce better ways of working. Its definitely an emerging sector: the handful of service design specialists all reference each others work at present. Below is a selection of these groups and individuals, looking at how they approach and define what they do, and who they do it for. JOHN THACKARA Programme director of Dott 07 www.dott07.com Design activist John Thackara is currently programme director of Dott 07, a year-long series of community projects for the North East of England, centred on Newcastle and Gateshead. Its aim is no less than to explore how design can help generate a sustainable and beneficial future for the region in the fields of health, food, schools, environment, transport, energy, mobility and tourism. Thackara is a pioneer of using design for collaborative service development through his Doors of Perception work, but he refutes the use of the term service design. I would question use of the term specifically, he says. I have tried to avoid very nuanced definitions of things. It is more a case of organisations having problems and looking at who can help to answer them. It is more
interesting to me to look at what questions the clients are asking. For the Dott programme, Thackara is asking what products and services the people of the region need. Dotts designers, actually referred to as senior producers, will bring different groups of people together and help orchestrate the process. It is some kind of design skill to run a project like that. We make a comparison with the film industry, where the producer gets all the people listed at the end of the film to work together, he says. However, Thackara questions how much consultancies really involve users in service development. Designers say they involve end-users in the development process, but I would question the extent to which they really do. Very often it is just designers being creative, with a little bit of user testing. THINKPUBLIC www.thinkpublic.com Deborah Szebeko set up Thinkpublic in 2003 and its six-strong team works solely in the public sector. Clients include the NHS Institute for Innovation and Improvement, the School Food Trust, the Department for Education and Skills, as well as Dott 07. What we do is really about co-design: how to work with people to design better. This is what I call it, but you could also use the phrase experience design, as well as service design, says Szebeko. The objective is to look at how you can create a service that is continually being co-designed by people. How do you engage frontline staff and patients and give them the belief that they can really do something different themselves? People know what the flaws are [in a service] and what will work well, but they dont know how to communicate it and make it happen. They often see things in a very microscopic way [from within the organisation]. Thinkpublic is currently working with the DfES looking at strategies to connect with hard-to-reach parents. It is also involved with national volunteering charity TimeBank, helping to generate volunteers in the health sector.
61
The Top 100
Service design
3 London car rental service Streetcar, developed with Livework

3
LIVEWORK www.livework.co.uk Ben Reason co-founded Livework five years ago with Chris Downs and Lavrans Lvli. At the time, they adopted the phrase service design, perhaps for the first time, says Reason. The consultancy has offices in London and Newcastle and Lvli is returning to his native Norway to set up an outpost there. Like Thackara, Liveworks founders wanted to cure the world of its obsession with products a curious ambition for a design consultancy, not least given Downs training as an industrial product designer. But the backdrop is a UK economy to which services contribute more than 70 per cent, notes Reason. Everyone needs to think about service now; if you only think about products, you commodify yourself, he says. Designers are becoming more involved in service design now because of the timing, related to new technologies. I think you can draw a comparison with the beginning of the era of industrial production, when the role of the designer in the process really emerged; previously, they would have been designer-makers. For the NHS, Livework is working with multiple sclerosis patients, looking at how they can be encouraged to ask about additional services they might need, but didnt realise were available. Is this a design project? Reason thinks so. [The approach is] still on a system or tanDESIGN WEEK MAY 2007
gible tool level and might be a guidebook to services that the patients are given when visited, he says. Other clients include Orange, Sony Ericsson, Fiat and Dott 07. PARTICIPLE www.hilarycottam.com Reds former director Hilary Cottam is now hoping to tackle largerscale programmes of engineering social change through design with her new organisation Participle. It will launch a major London-focused project this autumn. Building on the social welfare approach to service design pioneered at the Design Councils Red unit, Participle aims to bring together public and private organisations, citizens and designers to develop solutions to what Cottam describes as the intractable social issues of the 21st century. Despite winning the Design Museums Designer of the Year award, Cottam admits she is not a designer in that sense. The programmes she hopes to establish at Participle may sometimes create new services, but might just as easily offer more intangible approaches to social problems. This transformation design steers much closer to policy-making. Indeed, Cottam is working towards what she describes as the Welfare State 2.0. Participle is being co-founded with strategic consultant Charles Leadbeater and former head of Ideo London, Colin Burns.
63
The Top 100
Service design
4 Bank of Americas Keep The Change service, developed in conjunction with Ideo
4
IDEO LONDON www.ideo.com As head of service design at Ideo, Fran Samalionis is one of the original pioneers of service design as a distinct design approach. Ideo has been developing its service design offer for the past ten years, originally under the broader umbrella of experience design. Its sixstrong core practice reaches out across the 500 people in Ideos six other practices to offer the multidisciplinary approach that service design depends on. Human behaviour is at the essence of what we do, and we treat psychology and behaviour studies as a design discipline, says Samalionis. She claims that a service is made up of lots of moments, from the initial awareness of an advertising campaign, through to a call centre or product demonstration. This begs the question: what isnt a service? Product design stops when the product is manufactured and put on a shelf. Service design is a continuous process and brings in all disciplines product, environmental, branding, experiential and so on. It goes much deeper into an organisation, says Samalionis. Ideo worked with Bank of America to develop a service called Keep The Change. Capitalising on the psychology of people who save loose change, the service rounds up purchases made on a Bank of America Visa card to the nearest dollar and the extra change is tucked away in a savings account.
We will definitely see more design consultancies doing service design. If you scratch the surface of digital design and branding groups now, they are all really starting to talk about what they can do in terms of service design, says Samalionis. NHS INSTITUTE FOR INNOVATION AND IMPROVEMENT www.institute.nhs.uk Led by its head of innovation practice Dr Lynne Maher, the NHS Institute for Innovation and Improvement has put design at the heart of its processes. Three years ago, Maher embarked on an examination of a range of innovative companies, seeking to understand how they operated. Among these were Starbucks, Yahoo! and Wieden & Kennedy. I came back and tried to synthesise the ways these companies worked into our own processes so that we were genuinely being innovative. I then became very interested in the design industry and we have tried to understand, in a naive way, how the design process works and have drawn heavily on this, explains Maher. Based at Warwick University, the institute now has three rosters for improvement, innovation and user-centred design featuring design groups such as Ideo, Thinkpublic, Livework, Engine and independent consultant Jan Casey. It also previously worked with Red on a scheme to help people cope with diabetes by giving patients an agenda card to aid interaction between patients and professionals. G
65
The Top 100
Start-ups
Setting up shop
More and more designers are building their own brands, producing anything from furniture to clothing. Clare Dowdy reveals whos joined the ranks of retail entrepreneurs lately
WHAT makes designers, who have nicely fulfilled day jobs, want to risk it all by playing client? Whether its furniture or dog collars, T-shirts or tea bags, some designers want to do their own thing for a change. The upshot is a handful of brands not only created, but operated and owned by the likes of Pearlfisher, Elmwood and Vince Frost. The latest designer-owned efforts include Elmwoods Make Mine a Builders tea, and Allies Poochie Amour dog accessories brand, with Pearlfishers Dick Moby boxer shorts and Frosts T-shirts, rugs and surfboards in the offing. These follow long-running ventures such as Lamb & Shirleys Shaker business and Ian Logans design shop. But while they may give the designers themselves immense satisfaction, and they may garner the consultancy a bit of extra PR, do they really do the core business any good? Management consultant Ian Cochrane of Ticegroup is sceptical, to say the least. I dont know why design groups would do it. The people who do are often those who are failing at design. The top (design) businesses focus on being the top businesses, he says. A more usual route, he says, is for designers to hope someone else wants to buy an idea off them. When designers have some down time, they come with a product and punt it around to find someone to back it, he maintains.
1 Packaging for Dick Moby boxer shorts by Pearlfisher 2 Make Mine a Builders tea by Elmwood 3 Packaging for 37 baby clothing products by Pearlfisher
67
Start-ups
The Top 100
4 Dog collars from Poochie Amour by Allies 5 Dick Moby boxer shorts from Pearlfisher 6 Jumpsuit from 37s baby clothing range from Pearlfisher
Elmwoods newly launched tea concept was initially offered to a client and a prospective client on the basis that we would take a royalty rather than a fee, explains Elmwood chairman Jonathan Sands, but while both liked the idea, our idea didnt fit in with their plans, so we thought, well, lets do it ourselves. We thought it was too good to let go. Others are inspired by personal experience. Susanna Cook, creative director of Allies, was driven to launch on-line dog accessories retailer Poochie Amour after she struggled to find a stylish dog collar for her new pet. It all sounds exciting and fun, but is this really the best use of designers time? And do they really have the skills to be a client rather than a supplier? Many of these entrepreneurs admit that it takes an awful lot of time and sometimes money. As Cook puts it, You make more money if you stick to your knitting, but designers with creative minds cant help going off on a tangent. Running baby clothing business 37 and launching boxer shorts range Dick Moby is taking 75 per cent of the time of Pearlfisher creative director Karen Welman. Im trying to do it on a proper scale, she says. Sands admits that if hed known the real cost at the start, we probably wouldnt have started it in the first place, so thank God we didnt. It has probably cost us about 250 000 in cash to date and the same again in time. Monitoring agency Assosia listed the tea brand in third joint place, accounting for 9 per cent promotional activity in the tea category for the weekend 31 March to 1 April this year. Tim Lamb opened his Shaker shop on Londons Marylebone High Street in 1989 and now runs bespokeshaker.com, after selling the
68
original business to Fired Earth. He is very honest about his experience. Youre either a retailer or not. Retailing is something Im not very good at. We lost a lot of money, he says. But, like Cook, he couldnt help getting involved with Shaker, and he has no regrets. He says he fell in love with the notion of Shaker, and if you have a passion like that, you cant ignore it. Frost, whose products will start appearing in June, has similar feelings about his venture. I have an entrepreneurial spirit and I get excited about making things. But why am I doing it for my clients all the time? Just like Lambs business is now on-line, Welman has taken 37 out of retail and on-line, and Dick Moby will launch in the US via the Internet. Poochie Amour is also on-line. But what if these ventures fail? How does that reflect on a business that is touting itself as being able to help clients perform better? Sands isnt fazed by this risk to Elmwoods reputation. At the end of the day, you have to believe in your craft and your advice, whether it is for yourself or a client. If anything it is less risky doing it for yourself, because if you f*ck [sic] up for a client you lose the business. If you do it for yourself, you just lose your investment and perhaps a little face. But the upside is fantastic. You demonstrate your skills in building a brand beyond just the look and feel. You demonstrate your understanding of the whole process. You also learn new skills, which makes you a more worldly wise and authoritative consultant, he says. Designers have already expressed their entrepreneurial spirit by setting up their own consultancy, so perhaps its no wonder when they get the taste for trying their hand at it again. G

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