But what is the purpose of our interactions between businesses? Is it control? Power?

Walmart – The Evil Empire

What company better defines the abuse of power better than Walmart? With a rich history of marketplace bullying, Walmart has routinely used it’s market authority to drive prices well past the breaking point for their vendors and suppliers. In order to do business with Walmart, vendors that sell basic products that don’t change are forced to cut their prices EVERY YEAR. This has resulted in an unbalanced (and self-corrupting) business model for the vendors, reduction of salaries including unethical compensation for some of the lowest paid people in the world, and record profits for Walmart.

So it seems that it’s possible for Walmart to enact almost universal control over both it’s vendors and consumers. Vendors are hoping to make money by supplying the worlds largest company. Consumers are looking for the best price they can find. It seems that Walmart is an unstoppable force. But this conclusion demands that we admit that one company can enact full control over another company. It demands that the current U.S. economic model of capitalism supports this unique power imbalance, and fortunately it doesn’t.

The continual evolution of the company mix in the U.S. is a testament to the desire for a balanced market structure. The dominance of a single company is constantly under pressure from others vying for the same market space. This constant shift is the result of a consumer base that refuses to stand still long enough for a single company to fully consolidate the market. This is good news for consumers, and bad news for corporate greed.

The Great Lie

But the underlying problem with the struggle to attain power is the tenant in which it’s based on. The lie is simple: “I can control you”. This belief is at the center of many of the unethical practices that are so common among businesses. Companies believe that if they can control their vendors, their customers, and their competitors, they can control their own destiny. What they are missing is that it is fundamentally impossible to control another person. History shows that people will fight, violently if necessary, against being controlled. Control is not the goal, relationship is.

Relationship is the single most important business principle in the world, and one way that relationship can falter is when one party tries to control the other. This struggle never ends well, and while short-term success can sometimes be achieved, the long-term goal of creating brand equity suffers as a result.

The Truth

So if we can agree that relationship is the primary driver of successful business, then it must also be a primary driver for profit as well. As all business exists to produce a profit, then this must be the case. Let’s examine.

So if profit is revenue – expenses, then how is it possible to say that relationship is the primary driver of business? In order to further this discussion, let’s assume that all of the measurable attributes of a business can be placed into one of the following three categories:

• Internal – employees, executives, owners
• External – suppliers, partners, competitors, government regulation
• Customers – current customers, past customers that have left and went to a competitor, future customers that you hope to get

The relationship between a business and the people who make it run is somewhat easy to understand. In the example of Jim Collins of Good to Great, the right people must be in place to “drive the bus”. Employees and owners alike must be fairly compensated, empowered, and given clear direction. The goal of these internal relationships it to create internal harmony, not to exact control. The best companies in the world understand this, and use it to their advantage. Companies like Apple, Pixar, Google, and Cisco (just to name a few) attract the best talent by creating a relationship in which both the company and the employee benefit.

The external relationships with suppliers, partners, and even our competition is also vital to a successful business. While it is easy to see that a good relationship with a partner would be beneficial, it is important to understand that in order for a relationship to exist, it must benefit both parties. So this means that we must allow for our partners and suppliers to have reasonable profit margins as they work with us. As a business owner I completely understand the need to control costs, but in order to maintain good relationships our suppliers and partners must see the value in working with us. The value of our relationship must be greater than the sum of its parts.

As it relates to customers, the value of relationship simply can’t be ignored. Unfortunately the business world has not been the primary driver in the need for a better understanding of our customer relationships. As marketing messages have continued to flood our consciences, the word brand has been created to describe this unique relationship between businesses and their customers.

Branding is simply defined as “What my customers think of me”. Using Coke as an example (and knowing that they won’t mind as I’m a Diet Coke drinker); “What do I say about Coke”. I would answer that by saying “I love it”. Coke has created a relationship with me over the years, and created a situation where if I go to a restaurant that only serves Pepsi, I’ll drink water. Now that’s a monogamous relationship indeed.

In fact, the new truth to marketing is more like a marriage than ever. I can see it now, “…do you Chad, take this Diet Coke as your soft drink of choice. To enjoy when you are thirsty. In sickness and in health…“. Funny, but true. We call it marriage, Coke calls it brand loyalty. And as far as it’s role to play in corporate profits, it probably goes without saying that happy loyal customers leads to greater revenue for Coke.

Control != Relationship

So this entry all started with the realization that it is a lie to believe that it’s possible to control another person while having a good relationship. This is true in marriage, in business, as a parent, and with friendships. When I realized that this means that I should never set out to try and “control” a client relationship, I immediately started trying to get my head around what that means to FORGE, and me personally. Thanks for listening.

A Quick Disclaimer
I hope This post isn’t too much of a mess. I’ve been thinking about this specific issue of client relationships for a while now, and this entry is simply a way for me to put some of my thoughts down. I’m well aware that there are numerous books and teachings out there on running a business, and it was never my intent to suggest that I have it figured out. As Managing Director and a Partner at FORGE, in Dayton, OH, I am figuring out many of these things as I go. Thoughts and feedback below. -Chad

A False Truth

My original understanding was that the price that a creative firm charged was based upon an objective value placed upon the firm. This value was believed to be computed from the firm’s quality, reputation, availability, and timeliness, and other factors. I find that this is a common belief, as I hear it from both my partners and current and potential clients. It is believed that the higher quality of work will allow the firm to charge higher prices, as the demand will go up. The general thinking is that the best firms in the industry charge more because they are the best, and therefore demand a higher price.

The assumed link between quality of product and price is not as clear as you may think. One understanding is that price is the main way in which design firms control the supply and demand of the goods and services offered. A higher price would reduce demand, and a lower price would raise demand. It would then be the role of the firm to set a price that most accurately conveyed the quality of the service in question, as well as attract the type of clients that would pay this price.

While this may seem logical, it’s not entirely correct. In the design industry, as any industry, the role of price is to affect behavior, not to, as previously stated, control demand. This may seem like a crazy game of who’s on first, but in reality, it’s a different way of thinking.

A Slight Variation

Prices not only affect the behavior of consumers, but also of the firm itself. As a creative firm can’t possibly know what every client (both current and potential) want, prices helps us to gauge the demand for our services. It provides us with a road map in which to choose the details in the services that we offer. Price helps us to tailor our services more closely to the market demand.

As a point of discussion below is a list of some of the things that happen when building a website.

• Brainstorming Ideas
• Planning
• Competitive Analysis
• Content Strategy
• Content Creation
• Information Architecture
• Design (both user interface design and site design)
• HTML Coding
• Scripting (PHP, ColdFusion, Ruby)
• Database Work
• Content Input
• Testing

Now the above list is by no means comprehensive, but it’s a pretty good list. Early on, FORGE had difficulty breaking even on web projects, let alone making a profit. Typically, the reason has been our refusal to eliminate anything from the above list on a project that was priced way too low. In this case, price should have served as an indicator of what the market was looking for.

The small-to-medium business website market is typically only willing to pay for the following:

• Design
• HTML Coding
• Scripting & Database (if needed)

As web professionals, we recognize that this lack of proper planning will result in an inferior website. However, the truth is that there is a market for building websites at this price. Our job as a business is to choose if we are going to offer something for this segment.

In Conclusion

We are working hard to try and fully understand the demand for our services.  Our main goal is to put together a world-class group of creative professionals.  This journey (and the economic climate) has led us to spend a large amount of time working through the business realities of the creative industry.

Simply stated, price always perfectly brings balance to supply and demand.  It is impossible for somebody to “pay too much for something”, as if something is paid for then it must have been priced correctly for that transaction. As we try to find the proper price for our services, we hope to gain a greater understanding in the creative services industry.

How has price affected your business?  Comments below!

So I was wondering what it would be like if FORGE treated potential clients like we treat prospective employees.  Instead of us selling ourselves, we would let potential clients know if THEY fit the bill. Here’s my first draft:

INDUSTRY: Any

POSITION: FORGE client

JOB DESCRIPTION:
FORGE is looking for a client with a solid understanding of the world of business, and how design and the web effect their brand as touchpoints. This company must have relevant needs and be willing to discuss these needs with FORGE. This company must also be willing to discuss their budget with FORGE. Also, they must have a budget!

You know you’re the right company if:

• you know what a brand is (or are willing to learn)
• you know what a brand standards manual is (or would like FORGE to create you one)
• you are willing to actually put relevant, well-written content on your website (not just once, but many times)
• you are looking for a long-term partner
• you have a marketing plan (or would like FORGE to help you create one)

You know you’re not the right company if:

• you think that a website is an SEO project
• you think that the Yellow Pages = eMarketing = a good idea
• you just want somebody to draw you a picture
• you want a flash website cause somebody told you it’s cool
• you want to hire a company that “offers search engine optimization and internet marketing services”
• you want a splash page for your website
• you have a great idea for a website, and if we’ll partner with you and make it for free we’ll get paid once it takes off

DESIRED SKILLS/DUTIES:
Applicants must have relevant experience in the “being a client” industry. Although FORGE will consider applicants without experience, they must have a degree in french cooking, as we like to eat. A lot. Potential clients must like to surf (no reason, we just think it’s cool) and have no problem paying their bills on time. Good ideas are helpful, and potential applicants must show experience in approving designs and copy. A college degree is helpful, but not required.

Please send applications to FORGE.

“Being brilliant is no great feat if you respect nothing.” ~ Johann Wolfgang von Goethe

As I work in the creative field, I am constantly interacting with people. While I sometimes think back to the times where, as a programmer, I found myself a bit secluded in my day-to-day routine, I generally like that aspect of my job. The work that FORGE does simply can’t exist without the insight and collaborative partnership of the clients that are paying us. This collaboration is crucial to a successful project of any type, and is dependent on things like trust, professionalism, and honesty.

While price is the universal leveler when it comes to economics, contracts are the glue that binds the relationship together. So while price is busy helping us (or hurting us), the contract is ensuring that everyone does their job. So why then do we find ourselves in the precarious situation at FORGE of having our contracts treated as a “mild suggestion” rather than a legally binding agreement?

It’s funny to me how things work out. We can plan, research, work hard, study, and generally we awesome at our jobs, but in the end the best work is produced when everyone is moving in the same direction to achieve a goal. In the book Good to Great, Jim Collins talks about the formation of a company being like filling a bus. HP, for example, started by finding the right people. While hiring great people may seem pretty obvious, they didn’t always have a position predetermined for them. HP just wanted to fill their company with the best people they could find, then figure out where the bus was going to go together. This is exactly the position that FORGE is taking. We are trying to fill our company with the most amazingly talented people we can find, then decide together where we want to go. The thing that makes this work is the unified push of talented people towards a common goal. When FORGE is hired to help a client enhance their brand, for example, why is the client not key to have on the bus. If the client has a separate agenda, then the project will be much more difficult, and the likelihood of spectacular results is diminished.

There is a level of trust and respect that, I think, must exist in the creative field between clients and the creative professional. This may seem obvious, but I assure you, it’s not. I have seen projects go adrift because of things like agenda and outright lies during the planning and production phases. While, this is certainly rare, I can’t seems to shake the feeling that misplaced personal agenda and power struggles are a detriment to the successful completion of creative work.

One example of this happening is on a web project. During the planning phase, we created a timeline schedule that was agreed on by the client. However, during the design phase, we were continually being bombarded by our client asking for us to “hurry it up”. At this time, we were ahead of our agreed-upon schedule, and the constant harrassment was beginning to wear on our designer. Our repeated questions on this were met with double-talk and manipulation. As it turns out, the reasons for the push were purely personal, as our client was trying to impress his boss by delivering the project early. We eventually delivered the project slightly ahead of schedule, but only after unneccessary strife, stress and some long hours.

On many occasions, we talked about the fact that, if he would only treat us with respect and not lie and manipulate us, that we would gladly help make him look good for his superiors. We routinely work extra hours for our best clients, because we like and appreciate them. We do the things that we don’t get paid for, and are glad to do it. We have, on occasion, made small changes and updates for clients and not billed them, just to say thanks for working with us.

At FORGE, we always put in the extra work to get to know our clients business (not a shameless plug, read on). We have found that an in-depth kowledge of, for example, the train industry will give us the ability to help make better decisions and recommendations for one of our clients, DPG. While we will never know as much as they do, we feel like it is our duty to know as much as we can. What winds up happening when you spend this kind of effort on a client? Relationship! The more you know about someone, the more that you are personally invested in them. You begin to care. You begin to put in extra effort without even trying. You don’t know why, but your’e going to go ahead and tweak the design one more time, just to make sure it’s as polished as it can be. This isn’t favoritism, or lack of professionalism, but the result of relationship.

People are desparate to care. In an earlier post, I talked about the role of project manager in a design firm. I talked about the fact that the people producing the work and the people paying for the work need to know each other. The traditional role of project manager keeps this from happening. It’s hard to care about someone that you don’t talk to.

Professionalism is not a removal of all things personal, but rather a combined focus on the task at hand. This unified focus, mixed with a high level of skill and desire, will always produce amazing results. Results that both client and producer can share in. Isn’t that what everyone really wants, to be proud of what they have achieved. If we are honest with ourselves, what else is there.

I’d love to hear some thoughts on this. A story or 2 perhaps (not all bad, of course). Be blessed!

At first glance the RFP could be considered a fair way to find common ground in which to compare different companies to do the same project. While I would mostly agree, I would question why this needs to be the case. No two companies are the same. If FORGE tried to mimic another design firm, we would at best be similar. The truth is, we are unique, whether we want to be or not (in this case we very much want to be.)

When we answer an RFP, we spend the majority of our time trying to make sure that we give the appropriate attention to the areas that seem most important. This is sometimes a very difficult process, as the questions are rarely framed in the same light as we would ask them. Our experience leads us to sometimes tackle technical problems by looking at the overall strategic approach and suggesting a change of direction. Conversely, a content problem is sometimes easily solved by utilizing correct programming in the right place. Offering unique solutions to problems at the correct time is perhaps one of the greatest strengths of an experienced and highly-skilled staff. However, by attempting to protect themselves from firms that aren’t able to handle the work, companies create an RFP that is so detailed that it doesn’t allow for unique approaches to the project.

So let’s assume that the RFP is an inevitable truth in our business. How is an organization supposed to determine if a design firm has the creative and technical ability to complete a project, as well as allow the answering firms to communicate their unique approach to problem solving and overall process? The answer lies in the RFP approach. While the following is certainly not a comprehensive, it is perhaps a good place to start. (Note: all of the below examples are for web projects)

Always Include in the RFP

1. A detailed explanation of who the organization is and how they got there. This is great to have and will only need to be created once, as it can be reused on future RFP’s.
2. The objective of the project. This does not necessarily need to include any suggested ways of solving any technical or other problems. Instead, describe the desired outcome of the project. Ex: sales goals, membership levels, increased website traffic, corporate pride, etc.
3. Describe the intended audience of the project. Who are they? List out the different types of audiences, including any internal audiences (board members, executive management.)
4. Request a detailed technical solution breakdown. Ask the proposing firm to explain their approach to the technical and strategic issues presented in the RFP.
5. Always give the firm a chance to present the proposal in person. This will allow the organization to get a feel for how the design firm represents itself.
6. Qualifications. Request a detailed description of the skills and qualifications that will enable the firm to complete the project. Specifically ask for qualifications and experience that sets them apart from their competition.
7. Proposal Format. If an organization requires a specific format for the proposal, PLEASE include all of the necessary details of this format (perhaps an outline or example.)

Leave out of the RFP

1. Any technical specifications that are not absolutely necessary. NOTE: There are many cases where language, database or other requirements are driven by organizational needs or mandates.
2. An unnecessary focus on SEO (to be clear, ALL well built, semantic, standards compliant websites are automatically optimized for search engines.)
3. Specific time lines, unless absolutely necessary. Also, don’t propose both a start and an end date to a project. It’s fine to propose one of the two, but allow the firm to offer suggestions or alternatives to help solve the problem of timing if one exists.

The most important thing to remember is that the RFQ process should always give the proposing firms a chance to show the qualities that make them unique. Companies spend a great deal of time and money on differentiating themselves from their competition. This focus on value proposition is also important in choosing a design firm to work with. This relationship can (hopefully) last for many years and it’s important to not only know which companies have the ability to perform the required tasks, but what other skills and potential qualities make the firm unique.

Again, the above list is nowhere near exhaustive, but I thought it would be a good place to start. Hopefully you can think of things that would improve the list. I’d love to hear some improvments and critiques in the comments below. Good luck and happy RFQ’ing.

There’s no denying that somebody needs to manage projects. With anything but a very basic project, somebody needs to ensure that tasks are accomplished, deadlines are met, and that both the client is happy and the project is profitable. This is a LOT of responsibility for one person to have. I have only known a couple of people who have been able to do this well. For example, a web project requires that the project manager have at least a decent understanding of database design, programming theory, user interface design, copywriting, HTML, and CSS, as well as be incredibly organized, friendly, and have a strong presence. This list is obviously ideal, but highlights the complexity that comes with the job of managing web projects.

So what is the main complaint that I’ve heard from clients? The main concern that I’ve heard is that they are not able to discuss the project details with the people that are actually doing the work. We have found that our clients are very much interested in knowing who will be doing the work on their projects, and they would like to be able to talk to them directly. At FORGE, we have tried to create a culture where every employee shows professionalism and respect to our clients. While mistakes will be made with this approach, we feel that it’s worth it. The fact that our employees get a chance to know the people whose work they are creating is very valuable.

At FORGE, we assign a project manager to each project from the team that is doing the work. We are still trying to evaluate the exact mix of responsibility, but overall we feel that this will deliver great service to our clients. The hope is that everyone will have a greater understanding of the projects that we are working on, and therefore create a higher quality product. In the end, our goal is simple; accurately determine the most efficient work methods and patterns that will create the highest level of quality. We don’t feel that this is just one persons job, but should be the job of everyone at our company.

From a business standpoint, the strategic choice of partnering with another company is a very important one. It’s a choice that can make or break a small company, and greatly affect a large one. Choose correctly and each company get’s a profitable bit of business, as they are each able to work within the operational efficiencies that they have established. Choose wrong, and the problems that come with the decision can take years to make right.

So really what we’re talking about here is the distinction between a design firm being utilized as a vendor or as a strategic partner. I thought it would be interesting to discuss.

Some definitions:

vendor - A Vendor is a seller of products or services. Often in contracting with a business or the government, the supplier is called a vendor. The term vendor is often used interchangably with the terms independent contractor, freelancer, and consultant.

strategic partner – According to the Oxford Dictionary, the word strategic means: forming part of a long-term plan or aim to achieve a specific purpose.

Now while I understand the choice of the word vendor, as a design firm is definately selling a service, I have found that the suggestion of branding, design and web development as simply a “service” to be an oversimplification. Using the word “service” company suggests that the design firm is simply providing a set of skills to achieve a pre-defined task. Design firms are utilized usually because a company can’t or does not want to hire the designers/developers necessary to complete the projects in-house. The idea generation, brainstorming, goal setting, and other strategic efforts are usually completed (or not, as the case may be) by the company prior to looking for a design firm to fulfill the work. In this scenario, a vendor is the appropriate word to use.

Strategic partnerships, as a point of comparison, also involves the completion of the stated work, but with one big difference; a shift in the responsibility. The line separating the responsibility for determining how the specific plan meets the long-term goals of the organization from the creators of the actual materials is at best blurry. If all of the necessary assets to complete these tasks are in-house, then the problem is solved. This line of separation is not important, as the company can shift personnel around appropriately. If this company has an established relationship with a design firm that has a strong understanding of marketing and brand strategy, then the design firm takes on extra responsibility in the area of strategic planning. It is important to understand that I am not suggesting that corporate marketing completely shift to the design firm, but rather I am simply trying to highlight the flaws of bringing them in too late in the process.

Below are some example questions that may help when “interviewing” potential creative firms.  These questions are not meant to be exhaustive, but may provide some insight.  Please keep in mind that a design firms website should serve as a great tool for establishing things like design quality and general creative ability.

Questions to ask when looking over the portfolio of a creative firm:

“Talk to me about the original goals of this project”, “how were those goals met by this project?”

“How was this project integrated into the overall brand strategy of the company?”

Questions to ask if you are looking specifically for web work:

“What was the content strategy of this project?” and “Who handled the content creation?”

“How were the keywords chosen and integrated into the overall website?”

“How did you integrate this website with the overall business needs?”

So in choosing a design firm, I would recommend looking for a firm that has a broad understanding of Brand, Marketing and Design (in that order.)  Marketing and design, when performed outside of an good overall strategy, can be disastrous, or at best ineffective.  At FORGE, we have worked hard to understand the complete effect that marketing and design has on the business goals of the organization.  While we are certainly not the only firm to do so, I am constantly amazed by how design firms neglect the vital connection that design has with the business.

So as you search for a strategic relationship with a design firm, keep in mind that your results will be greatly increased if you find a company that you can trust.  By sharing all aspects of your marketing initiatives (budget, goals, etc.) you can benefit from the collective talent of some of the most creative people around.

In part 2 of this series, I will discuss the RFP process.

In my defense (if there is one) what was I supposed to do.  I had just left a job that I loved, with people that I loved to go out on my own.  My years spent at Real Art were a tremendous learning experience in the ways of a design firm.  I had worked on incredible projects, won some awards, and generally been proud of who I had become.  Truth is, I felt like a slave.  Weird statement I’m sure, as I was treated great at my job.  They gave me creative freedom, cared about me and pushed me to succeed.  While I didn’t agree that we were always spending as much time as we should on projects, the work that we produced was something to be proud of.

After spending a year working on projects with Ben, Jeremy and Jän, we decided to join forces and FORGE was born.  We spent months preparing to work together, talking about our dreams, visions, likes and dislikes.  We read business and design theory books, discussed the finer points of business ownership over many pints at the local pub, and generally got to know one another.  I was free, but felt like there was more.  I had some amazing clients, completely flexible hours and a great office; what more did I want. The discussions around FORGE just felt right.  Our unique mix of talents were perfect for creating a unique approach to the work that we were doing together.

So we decided to create “A Company of Experts“.  While calling ourselves experts is a bit presumptuous, we really wanted to hold ourselves to the highest of standards.  In the first few months, we tried to figure out Accounting, went through 3 Internet providers (grr), and generally fumbled our way through things.  There was always enough to make it to the next week.  We started running into amazing talent, and decided to hire them.  We couldn’t really afford to grow in the traditional sense, but it seemed like a perfect fit so we went for it.  This happened several times, and now we find ourselves doubling in size in the first 9 months of existence in the 2nd worst recession in the history of our country. Woot!

So I’d like to offer this blog as a record of our journey.  Hopefully, I will bring some insight to the trials and tribulations of a modern design firm.  I also hope to challenge traditional thought, bring up new ideas, and offer insight and understanding to the business community.  I will be wrong, misquote people and generally make a mockery of web journalism everywhere.  If all goes well, I’ll do more good than harm.