The Design Council heads up a network of regional programs that help harness the creative energy of small businesses as an engine for national growth
Alastair Fisher was never a big believer in the value of design. For nearly 170 years his family's company, Sheffield-based Harrison Fisher, had been making the kind of quality knives and cutlery for which this city in the north of England is renowned. But Harrison Fisher, like manufacturers all over the world, has become increasingly vulnerable to low-cost competition from Asia. The mainstay of Harrison Fisher's business—supplying big-name British retailers such as supermarket chain Sainsbury (SBRY) with private label products—was under threat as retailers began to buy cutlery directly from China.
So five years ago, when an associate suggested he take part in Designing Demand, an initiative from Britain's Design Council to help small and midsized businesses become more competitive through the strategic use of design, a skeptical Fisher figured he'd give it a go. "We realized there were storm clouds on the horizon and that in our business you have to compete on more than just price," says Fisher, the company's joint managing director.
How It Works
Designing Demand is the brainchild of Design Council Chairman Sir George Cox, part of a pioneering program which aims to use design strategically to make small businesses a viable engine of national economic growth. The initiative, which is being rolled out nationwide this year, is supported by $40 million in funding from England's nine regional development agencies. (The Design Council itself, which is entirely funded by the British government via the Department for Innovation, Universities & Skills, developed the program, while the regional development agencies finance its delivery in each region. The Design Council takes care of the program's overall coordination, ensuring that it is rolled out evenly and consistently.)
Here's how it works: interested companies apply to their regional development agency for entry into one of three free programs. "Generate" is a six-month program that focuses on one specific project; "Innovate," a yearlong program aimed at high-tech businesses, offers an initial three-day workshop followed by one-on-one mentoring for two hours each month. "Immerse" is a service aimed at larger businesses that offers an initial three-day workshop with a dedicated design associate providing 12 days of advice over the following 18 months. The latter two workshops include a visit from a team of four independent experts in branding, product development, and design management, selected and paid for by the Design Council. They identify areas where design could be used to kick-start innovation and then act as mentors to management, highlighting potential design opportunities and offering advice on how to implement them.
The process is competitive: all applications, which include an analysis of where a company thinks it needs help and an executive summary of its existing business plan, are vetted by a panel comprising senior members of the regional agency and a handful of invited experts in fields ranging from design to business and finance. To be accepted, companies must show they are willing and able to invest significant resources in design, as well as to ensure senior management is available to make strategic decisions quickly.
Updating Design of Marketing and Products
In the case of Harrison Fisher, the Design Council's team found that the company needed to be more proactive. Instead of reacting to the demands of a handful of powerful customers, it needed to use design to develop a strong consumer brand and product range. To do that, the company rebranded itself Taylors Eye Witness, after the company's biggest brand. They commissioned a local consultant to produce new logos and packaging ideas that were both modern and reflective of the company's long heritage.
Then, to refresh the product line, the team also recommended the company use a signature designer. Fisher invited proposals for an updated design of an already successful product, a knife sharpener. Sam Hecht (BusinessWeek, 12/19/06), a talented designer whose clients include Japanese retailer Muji, presented a foam model rather than paper sketches. This reassured Fisher and enabled him to compare the new model with the product's previous incarnations—both to understand the evolution of the design and to ensure that the product could be made using the company's chosen manufacturing methods. Since then, Hecht's designs have gone on to win international awards.
The company spent more than $200,000 on design and is now reaping the rewards. Though Fisher declined to share sales figures, Taylors Eye Witness has won new business from high-end British retailers such as Conran Shop and Heal's; and, most recently, from Williams-Sonoma (WSM) in the U.S., its first international customer. "They invested a lot to make all these changes—and it totally re-energized the company," says Jonathan Ball, the independent design manager who led its Designing Demand program. "Now with the rebranding and new products they have a second wind."
Even the once-doubtful Fisher is a design convert. "Not all the new products have been as successful as we would have liked," he says. "But design has helped change people's perceptions of us as a company; it has helped us take our brand more upmarket."
Bolstering Britain's Creative Edge
Designing Demand is just one recommendation outlined in the Cox Review of Creativity in Business, commissioned by then Chancellor of the Exchequer Gordon Brown in 2005. The review aimed to enhance business productivity by drawing on Britain's creative and cultural industries. According to an independent June report commissioned by the Department of Culture, Media & Sport, Britain's creative sector employs 1.8 million people and contributes 7.3% of the national economy—roughly the same as the financial services industry. Cox, who's been chairman of the Design Council since 2004, warns that Britain has a "window of opportunity" of 5 to 10 years before countries such as China and India have the creative skills to compete with their British counterparts.
Cox's other recommendations include the creation of higher education centers offering multidisciplinary courses combining management studies, engineering and technology, and creative disciplines; a national network of design centers; and a change in public procurement policies to encourage suppliers to be more innovative. And, of course, Designing Demand. Since the review was published, more than 1,000 businesses have completed the program—and Cox hopes to reach 6,500 by 2010.
It's a fraction of the estimated 4.3 million small businesses in Britain, but Cox believes that the program's economic impact will be much bigger. "Companies that go through the process develop an appetite for continued innovation," he says. The hope is that they in turn, will spread the word to others. "It's a trickle-down effect," he says. "There is a growing recognition that if we are going to revitalize the economy, it will be based on utilizing our creative skills," He adds: "I don't care what industry you're in; if you're not innovating you don't have a future."
Innovation as Daily Business
That's something Edward Naylor, chief executive of Naylor Industries, a Yorkshire-based clay drainage-pipe maker, knows all too well. Since Naylor, a former accountant, took over his fourth-generation family firm in 1993, he has expanded the business into plastic pipes, concrete products for the construction industry, and high-end ceramic planting pots for consumers. After having had to invest heavily to automate and modernize the business, he had little money to spend on things like branding or new product development. "Coming from a financial background, all of our effort and resources went into buying things like machinery that would give us an instant impact on productivity," Naylor says.
But for Naylor to expand its business, it needed to change its strategy. "With sewer pipes, we had been serving businesses," he says. "Now suddenly we had to deal with packaging, branding, and promoting directly to consumers. We needed an entirely new skill set." So Naylor signed up for Designing Demand.
A team first visited the company three years ago, and suggested that Naylor begin working with students at Staffordshire University, a college with a strong ceramics program. The students, who were paid, worked closely with the manufacturing side of the business to come up with several new designs that led to five new products. Branding expert Fiona Myles, of Myles Consulting, was hired to revamp the company's image and develop a new brand language that was applied to everything from promotional materials to the Web site. And a formalized process was put in place to encourage internal product development, something that Naylor has since expanded to all three divisions of the company. The result, he says, "is phenomenal." After spending $400,000 on design, the company saw a tenfold increase in annual sales in 2006. "Our market share [for ceramic pots] went from less than 1% to 10% in three years and we took our first order from Japan a few months ago," says Naylor. "We took a leap of faith and it paid off."
The Design Council knows that if the program is to stay relevant to the needs of Britain's small businesses, it needs to move with the times. That's why it is increasing the program's scope to incorporate sustainability issues and service design. "Smaller companies tend to be focused on the day-to-day needs of running the business," says Ball. "It's up to the design associate, who is used to incorporating sustainability and the design of services into their work, to make the company aware of the kinds of issues which may impact their business in the future."
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