My favorite television program is Chicago Tonight, on Chicago’s public television station WTTW. Last night, as I watched an episode on this protest and the discussion of copyright protection vs. free speech, I couldn’t help but think of recent APDF Exchanges featuring Joe Hustein of Stanford University and our discussions on intellectual property.

Essentially, as the video clip below points out, it’s extremely difficult to stop all of the “pirates” (especially since most of them are in foreign countries that the U.S. does not have jurisdiction over), so this legislation would make the Googles, YouTubes, Facebooks, etc., of the world “responsible.” One piece of the legislation has already been deleted – that the government could literally “shut down” or “block” a website such as Google, if pirated information was found. Watch the story below:

http://chicagotonight.wttw.com/2012/01/17/internet-censorship

A number of prominent websites wrote a public letter in the New York Times, stating:

“We support the bills’ stated goals — providing additional enforcement tools to combat foreign ‘rogue’ websites that are dedicated to copyright infringement or counterfeiting,” the letter said. “Unfortunately, the bills as drafted would expose law-abiding U.S. internet and technology companies to new uncertain liabilities, private rights of action and technology mandates that would require monitoring of websites.”

As design firms, we face similar IP and copyright infringements. A difficult challenge indeed – the Internet!

Share your thoughts on ways to combat this ever-growing problem.

Cathy Brownlee, Executive Director
APDF
The business resource for design firms

One of my commitments is serving on the Board of Directors (serving as Secretary on the Executive Committee, as well as serving on two other Committees) of Trilogy. Trilogy is a private not-for-profit behavioral healthcare organization with 40 years of experience serving people with serious mental illness in the Chicago community of Rogers Park and its surrounding areas. Not only have I learned more about the fiduciary aspects of a non-profit Board (which has helped me in my position as APDF Executive Director), but also the operational aspects of running an organization that is largely dependent on state funding. For any of you that follow, the State of Illinois is right up there in the top 10 states in severe financial trouble!

Additionally, I’ve met some great people during my term on the Trilogy Board as well!

Volunteers are at the heart of all associations, including APDF. Throughout its 27-year history, APDF has been blessed by the commitment of its volunteers, both at the Board of Directors and Committee levels.

At APDF, we’re grateful to have volunteers committed year-round that make this organization even better. As we look to ensure member value throughout 2012, APDF welcomes volunteers to join us!

If you’re interested in learning more, please contact me!

And, share what you did (or do year-round!) on this “Day of Service!”

Cathy Brownlee, Executive Director
cbrownlee@apdf.org
APDF
The business resource for design firm leaders

Kevin Budelmann

APDF is the leading entrepreneurial management organization for design firms. We serve growing and established design practices around North America, including product, interaction, brand, communication, interactive, environmental and strategy firms. Our offer today is focused on two key ideas:

1. Exchange, offering platforms for peers to exchange best practices information, learning from thought leaders and each other

2. Publishing, or sharing the results of these exchanges for the benefit of the membership

Our mission is to improve our members’  businesses, and therefore the business of design as a whole, through this exchange.

In addition, we have decided to channel our core offer to four strategic pillars vital to your business:

1. Leadership: Vision, strategy, behavior, management styles, change

2. Marketing: Positioning, trends, communications, business development

3. Talent : HR, attraction, retention, work styles, creativity, training

4. Operations: Work process, efficiency, finances/FPS, project management

Our programming is focused on the exchange and publishing of information in these four key areas.

As such, we will now hold four key APDF Exchange live events each year – one per quarter – aligned with the four pillars. We will continue with additional web-based programming to augment these sessions and topics, but much of our effort (and your attention) will be focused on these signature events. We hope that by sharpening our focus and increasing our consistency, you will be able to better plan to attend events.

You may want to encourage other senior members from your staff to attend sessions, to create more opportunities for robust conversation (for example, your HR or marketing manager, your business development or operations person, in addition to or instead of leadership alone). We also hope to encourage peer networking by category (e.g., Operations people talking to Operations people).

Here are the next few APDF Exchange dates and topics. Again, you can plan on one per quarter. Mark your calendars!

–March 2, Atlanta – APDF Exchange: Talent

–May 18-20, New York – APDF Exchange: Leadership

–September 21, Chicago – APDF Exchange: Operations

An important difference that separates APDF from other design organizations is our emphasis on Exchange. These events are participatory. APDF Exchange sessions are being deliberately designed to not only hear the advice from our guest presenter, but at least half the day is dedicated to letting the experienced professionals surface and share their collective wisdom so we all wind up smarter!

We are working on a new version of our website. The public section will be focused on finding new members of course, but the members section which will be focused on Publishing. Imagine a database of previous Exchange information, webinars, listserv discussions, and other and best practices learning, searchable and organized by the four pillars. This may take a little time, but we have a lot of good content and are moving as fast as we can. This will be a key members-only benefit, an online reference for best practices in design firm leadership, marketing, talent and operations.

While much is changing, our foundation has not changed. As ever, we remain focused on these core attributes:

- Business focus
- Information about how to run my design firm
- Professional peer exchange
- Design firm leaders only
- Opportunities to be a part of industry leadership

We believe in strength in numbers, and look forward to your continued support and independent peer outreach. We also strongly encourage members firms to get involved with APDF programming and leadership as we look ahead. We are ever looking for volunteers to help plan events, suggest topics and become future board members.

Finally I’d like to share that we have refreshed our graphic identity which you will begin to see in all the usual places. We hope that it reflects our refreshed outlook and the spirit of what’s to come in the next 25 years.

On behalf of our hard-working volunteer Board who has bravely taken these important steps, I thank you for your attention. We look forward to your participation and feedback on all fronts as we take these next steps together.

For over 25 years, APDF has been providing opportunities for design firm leaders to exchange information and learn from each other. Today, we continue to focus on our primary theme of exchange – in live events and beyond. We strive to create more and more focused opportunities for meaningful exchange.

One such opportunity is our Webinars. Webinars allow for a targeted, one-hour discussion on a specific topic. We decided that these Webinars are the perfect venue for a foll0w-up exchange on our in-person events — giving members that attended and those that couldn’t attend — an additional opportunity to learn from each other on a particular subject.

On Wednesday, November 9, APDF will be hosting its Webinar Series: Member Perspectives on Monetizing IP.

The goal of this APDF Webinar is to further the dialogue started at the recent APDF Exchange, Monetizing IP, with Joe Hustein, Lecturer at Stanford University. Joe began by sharing what IP is legally, who owns it, how to protect it, and its ultimate commercial value. Joe challenged us to think about other ways to profit from our creative output and to create additional revenue streams. 

Now it’s time to see what APDF members have done to either execute, adapt or maybe even challenge some of the principles shared at the Exchange.

Our APDF Member panelists include:

• Brian Matt, Founder & CEO, Altitude
• Philip Hague, Managing Creative Director, Webb deVlam 

Brian Matt

Philip Hague

Whether you attended the Exchange in September in Chicago or not, you will gain value from this discussion!

Details and registration are available. And, the Webinar is FREE to APDF Members!

Cathy Brownlee, Executive Director
APDF
The business resource for design firm leaders

Climbing out of the recession and faced with a new economic climate, business owners are experiencing a renewed interest in business development, considering it a key factor in the difference between failure and long-term success.

For APDF’s next Exchange, Friday, December 2 in La Jolla (San Diego), Calif., David C. Baker of ReCourses, Inc. and APDF have worked together to develop an interactive session of key business development topics. We will spend the morning learning from David, and then break into groups in the afternoon to discuss, debate, and develop actionable steps for you to bring back to your firm on Monday!

Together, we’ll explore and debate these topics:

Your Relationship with Prospects and Clients
–what you can and cannot fix
–distributed control
–22 different tests of your positioning

Best Methods to Attract Sufficient Opportunity
–what you can do right now to increase opportunities
–the ultimate marketing plan 

Growing Existing Accounts
–working within the revolving CMO environment
–what makes a good prospect (and ultimately, a good client)
–methods for growing current clients

Talking About Money
–managing to be consultative rather than transactional
–3 key ways money ties to your business model

David C. Baker, ReCourses, Inc.

David C. Baker has consulted with 650+ marketing firms around the world since 1994, interviewing and profiling 13,000+ employees and principals (through ReCourses, Inc.). He has written three well-received books and is on his fourth one. His work has been featured in the Wall Street Journal, Forbes, BNET, USA Today, Inc., Fast Company, and BusinessWeek.

David says it best: You’ll already know much of what ReCourses points out, but we will put the pieces into context, save you from experimenting, and bring solutions that may not have occurred to you yet. We’ll gently pull you out of the marinade of indecision and warm up the grill!

Details and registration are available. Hope you can join us!

Cathy Brownlee, Executive Director
APDF
The business resource for design firm leaders

The Association of Professional Design Firms (APDF) annual Financial Performance Survey provides specific benchmarks and goal-setting parameters for design firm management not found in any other industry-related survey, including: pricing ratios, salary comparisons, balance sheet, and profit and loss statements; each a valuable benchmark to gauge business performance against the industry.

Originally launched in 1998, with an online version launch in 2002 and updated in 2011 in partnership with Function Point, the APDF Financial Performance Survey represents a substantial base of historical data focused on using industry performance benchmarks to help monitor, analyze and optimize design firm profitability.

“We use APDF’s financial performance data to not only give us a sense of position relative to our peers, but more importantly, it provides an insight into the causal relationships between our people, place, processes and potentially new ways to understand the effects of our actions,” said Randy Rossi, president of APDF member firm Bally Design.

Almost 50 firms of varying size and disciplines contribute to the survey annually, making the APDF Financial Performance Survey one of the most powerful comparison tools available. “The survey allows us to compare ourselves to firms of similar size and focus, whether it’s balance sheet health or simply net profit,” said Ronna Chisholm of Vancouver B.C.-based APDF member firm Dossier Creative. It’s an invaluable tool.”

Those APDF Member and APDF Alliance Member firms participating in the APDF Financial Performance Survey are building their profile, and will be able to review their progress year-to-year in future editions of the survey.

One of the factors for firms that have done well during this recession is that they closely monitored performance indicators which made them more agile and able to react quickly to a changing environment. (Deltek – Operating Statistics Report 2009)

Why Financial Benchmarks Are Important
The financial performance metrics included in the APDF Financial Performance Survey are the key indicators in our industry that:

–provide benchmarks to control, correct and compare project-focused professional service firms
–provide a pathway to higher profits and warning indicators to which changes should be taken
–share a method for comparing your firm to other like-type firms in your industry
–are indicators to the overall health of your firm

The purpose of these metrics is to give principals enough information to steer and correct the firm’s direction to determine “What’s right, what’s wrong, what do I need to do?”

You cannot manage what you cannot measure.

APDF, with industry consultant Phil Edwards of Edwards Management Group, will be hosting a FREE Webinar, Wednesday, September 7, on the survey and survey results. (NOTE: webinar only open to independent design firms.)

For details and registration: https://www.apdf.org/events/upcoming-events

Cathy Brownlee, Executive Director
APDF
The business resource for design firm leaders

Joe Hustein

Joe began by discussing Master Service Agreements. Some of the thoughts he shared included:

–Can be good if the client will entertain some changes. No one wants to hire/pay a lawyer.

–“We have a standard purchasing agreement.” Play the game – do an addendum.

–As design consultants, we need to educate people why the master agreement doesn’t work for services.

Joe shared some insights on these additional key contract negotiation topics:

VALUE PROPOSITION:
–Design firms are not fungible; we’re not interchangeable. When we create something – it’s IP. IP has intrinsic value. This is an argument that you can use.

–Most corporate counsel lawyers focus on corporate law and compliance issues. That’s a government agency orientation. Don’t assume that they know what they’re doing.

–If agreement comes from the Purchasing Department,  go to the client’s website and get their customer agreement. And, you’ll see how it could be 180 degrees different. Use it!

WARRANTIES:
–Product liability is tort law – everyone in the chain can be sued. Client should indemnify you. They have the insurance.

–What do you want to guarantee? What’s the likelihood it will result in a suit?

INDEMNITY:
–Exercising your legal options might not be the right decision. You might just want to walk away.

–Responsibility for legal protection of the Trademark should be put to the client. OR, if you do it – hire the lawyer and mark-up.

APDF Members can access full Exchange summary notes and speaker presentations in the Members Only RESOURCES (Archived Presentations) area of APDF.ORG.

Cathy Brownlee, Executive Director
APDF
The business resource for design firm leaders

Naomi Stanford, Organization Design Consultant

Naomi began by sharing that the phrase “business model” is used a lot, and just like the word “culture” - it means a lot of different things to different people. The real challenge is getting it right…if that’s possible!

Often people aren’t as intentional as they need to be – they’re too busy drumming up business. Your business model is important. It’s critical to ask yourself:

–What is your value proposition?
–Who are your customers?
–Who is your business model addressed to? Not all customers want the same things.

Naomi recommended that we find definitions to describe our customers as we begin to look. Think about your business model in “buckets.” You need to be intentional about these elements. And, they need to have a relationship to each other. Look at the following segments:

1. Key Activities
2. Key Partners
3. Resources
4. Cost Structure
5. Value Proposition
6. Customer Relationships
7. Channels
8. Revenue Streams
9. Customer Segments

 As you pull together answers to the nine segments, remember that what’s critical is that your business model is regularly reviewed. Peter Drucker recommended quarterly – with planned abandonment. Are you being effective? What should you do differently? What should you give up and when? Policies? Processes? Standards? Look at it all.

In outlining your value proposition, the next step is to think about: what does the value translate into? When you make the CHOICE: what are the consequences of that choice? Why am I making this choice? This can’t always be determined – but run the scenarios. 

Naomi emphasized that we shouldn’t get frightened by this process – keep it as simple as possible. Don’t get paralyzed. Make your business model flexible and adaptive.

EFFECTIVE BUSINESS MODEL QUESTIONS TO ASK YOURSELF:

1. Is your business model intentional and thought through?
2. Are you aware of the strengths, weaknesses, opportunities and threats inherent in each element of your business model?
3. Does it work to deliver the strategy? (Do you have a strategy?)
4. Are you making good choices? Do you know their risks and consequences?
5. Are you regularly reviewing the business model at different organizational levels and in relation to your competitors/the context?
6. Where can you improve/do things differently? 

Finally, where does your exit strategy fit in the model? When are you going to cut your losses? We all have a life cycle. Very few people do this conscious planning to say “I will shut down at this point.”

Some references:
–Business Model Generation App
–Habit Judo: helps you as an “incentive” to keep to your business model review on track

Also, for more, read Naomi’s recent book Corporate Culture-Getting it Right.

APDF Members can access full Exchange summary notes and speaker presentations in the Members Only RESOURCES (Archived Presentations) area of APDF.ORG.

Cathy Brownlee, Executive Director
APDF
The business resource for design firm leaders

Hazel Henderson, Ethical Markets Media

Hazel encouraged us, over the next ten years, to  look at metrics not included in financial and economic information. For example, corporate portfolios and pension funds don’t look at risks that come from the environment and many other trends. Hazel also shared that environmental, social and corporate governance should be bullish for our industry – because of the design revolution from top to bottom.

In Hazel’s view, GNP hasn’t changed much since WWII. We value material goods and set the value of people and environmental resources at zero. NET GNP adds in all social costs as if they were a desirable, valuable product. For more information on NET GNP: http://www.beyond-gdp.eu/

Net GNP includes the “love economy” and “mother nature.” For example, if you have to spend money to clean up your water supply. Thus, when you change the scorecard – you change the game!

Another resource Hazel recommended looking into is the Calvert Group’s quality of life indicators. This is a new tool for assessing national trends: www.calvert-henderson.com

This tool looks at the indicators that are not in money, but are real wealth (e.g., human rights, health, environment). The dashboard model allows the user to pick and choose and decide what statistics are most important for each state, city, etc., and essentially creates a new scorecard for you to monitor.

Hazel feels that the Green Transition Scoreboard is another important indicator to monitor. The world economy is bifurcating from the fossil fuel era. The scorecard looks at how different countries are investing in the solar age. You can see who is doing the investing in these alternative energy areas and in Hazel’s view, this is the future that needs to be measured. If we can eliminate some of the legacy industries – we would have plenty of resources to close the current deficits and allow the green economy to come forward.

Hazel ended by sharing that the financial system needs to be transformed – it’s not a global casino –  to serve Main Street, rather than dominate it!  (www.transformingfinance.net)

APDF Members can access full Exchange summary notes and speaker presentations in the Members Only RESOURCES (Archived Presentations) area of APDF.ORG.

Cathy Brownlee, Executive Director
APDF
The business resources for design firm leaders

Alan began his presentation by sharing that the management that got you here isn’t going to get you there. You can’t get stuck in what you were doing. He also reminded us that we’ve been here before. Despite the naysayers that profess doom and gloom – it’s all a re-cycle. The trends can guide us!

Alan Beaulieu, ITR

While the economy is not as friendly as we would like, ITR predicts that we will like 2012; the economy will flatten in 2013; there will be another recession in 2014 (mild to medium); 2015, 2016 and 2017 are really good years; recession in 2018 and 2019 significant recession.

So, what should you do?
–Live well below your means; live below your debt; have cash set aside; have no debt
–Keep the big house, because the kids will come back. They will boomer-rang!
–This is a global event – inflationary pressures will be easing up. Our customers (exporting countries) will be slowing; the weaker dollar will help us.
–Unemployment rate is useless piece of information – employment is the one you want to watch! The longer we add jobs – the better! Watch private sector employment.
–Promising jobs is not an easy thing to do (in listening to the politicians). Employment will take 10 years to get back to original level. The U.S. however, will recover faster than Canada!

What about our firms?
–Standard of living will slip (our employees) – then, productivity slips
–Employees will blame you, but take it out on your customers
–We have to maintain our employees’ standard of living
–You have to be viewed as a premiere customer service provider
–Borrow money at a fixed interest rate – borrow as much as you can.
–Invest in inflation adjusting assets (your business) but something that makes you more efficient and gives you an edge!
–Make sure you know your competitive advantages

Alan referenced the book: Creating Competitive Advantages by Jaynie Smith (Smart Advantage).

Alan closed by emphasizing that we need political will and dialogue in order to see change. And, not everyone will lose — but not everyone will win. We’ve lived through two great bubbles – and we’re getting back to “normal.”

Most important:
–FOCUS: CUSTOMER SERVICE!!!!
–Deliver on your customers expectations – not on your expectations! You really need to work at it.
–It’s not how smart you are; it’s how responsive you are!

Want to hear more from Alan and ITR? LISTEN TO: VOICE AMERICA BUSINESS.

APDF Members can access full Exchange summary notes and speaker presentations in the Members Only RESOURCES (Archived Presentations) area of APDF.ORG.

Cathy Brownlee, Executive Director
APDF
The business resources for design firm leaders