Enduring design firms pair creative ambition with business discipline, strategic clarity, and the courage to grow.
What does it take for a design firm to thrive in today’s competitive landscape? While creative excellence is the foundation, the ability to pair a strong design culture with robust business management is what truly sets enduring firms apart. For many founders, the journey from visionary designer to strategic business leader is both challenging and essential.
The hand and glove interplay of a strong design culture coupled with a solid and well-run business team can be the elixir that assures the firm’s ability to deliver outstanding design and assure the firm’s long-term growth.
The topic of business management and growth can be controversial for a design firm. Often there is an inherent avoidance of growth as something that tarnishes the design side of the business. However, having a well-developed strategy for both organic growth (growth from within) and inorganic growth (mergers and acquisitions, or “M&A”) can be the key to expanding the firm’s talent pool and service offerings, as well as putting the firm on track to become a legacy company.
M&A can provide a pathway to healthy expansion of a company’s reach across a wide spectrum of business metrics, including:
- A pipeline of new talent to regularly expand the firm’s design capabilities and vision
- Opportunity for geographic and international expansion, thereby broadening the firm’s access to new markets and project types
- Incorporation of new service offerings that are not currently part of the firm’s portfolio
While these benefits are appealing and will help to build a dynamic, growth-focused firm, it is important to recognize that M&A is not a simple pathway. Long-term strategic planning is critical to the success of M&A efforts. With a roadmap and strategic planning in place, it is much easier to avoid the misstep of engaging a firm with a misaligned vision or culture that could significantly disrupt your growth.
Before pursuing a merger or acquisition, investing time in crafting a strategic plan that defines your firm’s vision for the next five to 10 years is critical. Your plan should consider the following:
- What is your firm’s mission and vision for the future? It’s important to develop and express those ideas to define who and what you are.
- What impact does your team want to have on your markets, industry, or the world at large?
- What size will the firm grow to in terms of revenue, number of employees, and number of locations?
- Do you see the firm expanding into particular markets or geographic regions?
- What are your succession and exit plans for the management team?
- What other metrics are noteworthy drivers for your team?
Once the strategic work is complete and there is agreement amongst the management team, an M&A strategy can be developed that complements the goals and vision of the strategic plan. With your team, it is important to explore the elements of a merger or acquisition that will best meet the needs of your long-term plan.
For example, perhaps your strategic planning revealed a weakness in your next generation leadership pipeline. You want to put individuals in place who can facilitate the future transition of shares and firm management, and you see the integration of additional leaders as a potential solution to recharge your current team. In this case, you are searching for a team that aligns with your culture but also injects fresh vision and unique skill sets into the firm. These attributes will assure a smooth transition of shares and firm management in the future.
Alternatively, perhaps your strategic plan surfaced the need for a larger geographic footprint to open up new markets, design opportunities, and financial growth. In this scenario, you might start by identifying regions with the greatest potential upside (a significant project in itself) and building relationships in those markets that will help you identify compatible firms for acquisition or talented leaders seeking an opportunity to establish a new office under your banner. Either of these options will allow you to expand your reach to new regions.
Regardless of your scenario, the road to a successful merger or acquisition will be a demanding and exciting one. The chances of successfully implementing your plan will rise significantly if your efforts are based on a well-thought-out strategic roadmap that has full buy-in from your management team and staff. If you see a merger in your firm’s future, begin your journey by drafting a five-year strategic plan with your leadership team, followed by a supporting M&A plan to provide the intellectual scaffolding that will guide your efforts and future success.
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Ken Douglas is a senior principal at HLB, leading the firm’s New York City and Dubai studios in addition to business strategy for both national and international expansion. Connect with him on LinkedIn. |