As a business consultant who works with many leading creative firms around the globe, I’m excited to move into the new year and start anew. It’s been a trying last few years, both personally and professionally, for all of us. But, going into 2023, I hope that we’ll continue to take the learnings and insights that have been brought to the surface and truly re-think, evolve, and re-position our creative businesses, our professional relationships, as well as the creative profession at large.
Based on my consultations with clients and conversations with industry colleagues over the past few years, I’ve identified five trends that we need to learn from and adapt to now, whether we like it or not.
Trend 1: A new, employee-forward approach to “culture”.
The state of the world has had a real and tangible impact on many employers as they continue to evolve their understanding of the importance of addressing employees’ escalating — and more openly expressed and talked about — cultural demands and mental health challenges as well as shifting priorities. As a result, building a healthy, flexible workplace culture has become priority number one for our industry — especially since many similar “culture” conversations were happening within our industry pre-COVID — and has moved well beyond having a written mission statement, organizing “team-building” activities, and having a dedicated people operations person (a must-have for any team).
What these new cultural changes look like is something that we really need to rethink industry-wide. We need to be more transparent with our peers and colleagues so that we can learn from both our collective successes as well as failures. We need to get creative, involving our entire team to explore and build the type of culture that best fits their needs and the vision we have for our firm. We need to realize that the nature of work is shifting and take bold steps to shift with it. Beyond caring about our team’s happiness, health, and welfare — which, above all, is most important — changes to how we think about our culture are also critical to improving retention, recruiting, and even productivity/profitability.
Trend 2: Paying ourselves and our employees what we’re worth.
In order to attract new candidates, increase morale, and retain staff, many creative firms are realizing the hard way that what they’ve been paying their staff and themselves isn’t competitive or sustainable. Candidates and employees alike are becoming increasingly confident in asking for higher, more equitable wages. And, given the pressing challenge of a competitive talent pool, candidates and employees have the power to demand what they deserve more than ever. Thus, many firms have updated — and increased — their pay scales, often making them transparent to their team and, as needed, have raised salaries for their existing team to reflect industry standards. This is long overdue. In the past, we were expected to love what we do and prioritize this love over profit or money. This simply is no longer the case and rightly so. We should pay everyone — including ourselves — a fair, equitable, and livable wage.
Trend 3: Pricing based on our worth and value (or, at least we should be).
With a much-needed increase in salaries across our industry and a rise in our overhead costs because of inflation, we must increase our rates. Yet, instead, because we are working in a saturated and highly competitive industry — along with our desperation to win, often at any cost, and the misconceived “lack of work out there” mentality — our rates continue to plummet instead of rise. We have to stand our ground and remember that the more clients pay us, the more they are going to value what we do and this changes how they engage with us — i.e. shifting from a “we need this” or “do this” relationship to a “what do you think we need” and “how can you help us?” mentality. Raising our rates industry-wide will move us from being perceived as an on-demand service to a more consultative, advisory business.
And, yes — this does mean we will lose some projects but it also means we will win more valuable, desirable ones, and, ultimately, our focus should be on the quality over the quantity of those wins. I am therefore encouraging all my clients and everyone in the industry to raise their prices across the board. It’s now or never. I’m not asking for exorbitant increases, but ones that are fair and realistically reflect the true cost of running a business as well as the value of our experience, expertise, insight, time, and how our work directly translates to and positively impacts our clients’ businesses (think: return on investment).
Trend 4: Evolving and shifting partnership relationships.
Unsurprisingly, I have seen a spike in partnership challenges arise over the past couple of years. Many of us have begun to truly rethink our own personal and professional priorities, passions, and needs. This rethinking has made us question our roles as leaders and, often, our career choices. Previous unresolved tensions — as well as new ones — have bubbled to the surface and forced many partners re-think how they work together and, in some cases, partnerships have crumbled. In some cases, partners have moved away physically and are therefore no longer working together in person, putting a strain on interpersonal relationships. And, in other cases, I’ve seen partners re-think their own personal career path and choose to leave the industry entirely or move to another, less “risky”, full-time role in-house or elsewhere.
While partnership-based relationships have always been notoriously difficult to manage (like many marriages), these challenges have escalated even more due to the current global pressures. If you are in a partnership, take the time to have honest, open conversations and resolve any challenges you do have, before they continue to escalate. And, if you’re thinking about entering into a new partnership, be very thoughtful — ensure you’re being honest with yourself and your partner(s) on personal and professional priorities, goals, expectations, challenges, etc.
Trend 5: Nervousness about inflation.
There is rising nervousness among firm owners and their teams about 2023 and the impact of inflation on their firms. In fact, this is the number one question that everyone has been asking me (and their community): how are other firms feeling about 2023, and are they seeing a decrease or shift in future opportunities? Here’s my perhaps unhelpful yet realistic answer: Yes, we are all worried and have seen a slight slowdown of new work, but that’s because all our clients are also nervous and are in a wait-and-see mode and are therefore taking a bit longer to reach out and make decisions.
That said, most everyone I work with or have talked to is not seeing a major slowdown and are booked solidly in Q1 of 2023. I also haven’t seen or heard about any layoffs within our industry, and, as a matter of fact, I’ve seen the opposite: an increase in hiring. While, the rest of the year may still be a bit unknown, based on my own 35+ years of experience, our industry rarely has been able to consistently forecast income in future quarters — we often live quarter to quarter anyway. So, what can you do? What you should always be doing: having at least 3 months of overhead saved (as cash in the bank), 3–4 months of committed revenue, and signed contracts with all clients. Ultimately, those that struggle with maintaining this level of financial security have bigger problems than just inflation.
On the other hand, when our clients and companies implement hiring freezes and, in some cases, layoffs, there often is the opportunity to do the work that their reduced in-house teams can no longer handle. There is work out there but it may not be coming to you as quickly and easily as it once did. That is why firms should always be reaching out and shifting their business development strategies from being reliant only on inbound opportunities to a relationship-building mindset focused on outbound opportunities and “building the love” with potential prospects, existing and past clients, contacts, etc. Remember, it can take up to two years from when you meet a potential prospect to when they become a client (or recommend someone to you). Business development (i.e. relationship building) is a long-term commitment and a habit we all must be dedicated to.
Our industry is at a critical crossroads as we encounter new challenges, shifting priorities, and a complete rethinking of our personal and professional priorities, our businesses, our value, and our industry’s future. But, the good news is that these trends are driving much-needed positive shifts to our business practices, habits, and processes. Change will take gumption, fortitude, and some degree of risk but, as a result, our firms will be more financially stable, our employees will be happier, and our industry will thrive.
This article was written by Emily Ruth Cohen and reprinted with permission. A razorsharp consultant, Emily conducts strategic business planning retreats and provides confidential, best-practice insights and advice on staff, client, and process-management strategies. Learn more at https://emilycohen.com/, Follow her on Instagram or Twitter, get her book Brutally Honest: No-bullshit business strategies to evolve your creative business, or take one of her LinkedIn Learning courses. If you would like to submit an article to be featured on the FunctionFox Blog, email marketing@functionfox.com