Effective design management for

small businesses
Margaret Bruce, Department of Textiles, UMIST, PO Box 88,
Manchester M60 1QD, U.K.
Rachel Cooper, Research Unit, University of Salford, Salford, U.K.
Delia Vazquez, Department of Textiles, UMIST, PO Box 88,
Manchester M60 1QD, U.K.

How small firms invest in design expertise to develop new products and
corporate identities to communicate their services is little understood.
The research reported here documented the ways in which small
manufacturing and service companies use professional design skills and
their approaches to managing product, engineering and graphic design.
Many firms are wary about the potential cost of employing professional
designers and are unsure about the commercial outcome of design
investment. Thus, a need exists to enhance design awareness amongst
small firms. Those firms that employed design effectively found that
design contributed to their business success. However, expertise in
sourcing, briefing, liaising and evaluating design were varied and so
training small companies in design management skills is needed also.
 1999 Elsevier Science Ltd. All rights reserved

Keywords: design management, design strategy

‘The effective use of design is fundamental to the creation of innovative products,

processes and services. Good design can significantly add value to products, lead to
growth in sales and enable both the exploitation of new markets and the consolidation
of existing ones’1.

1 HMSO White Paper on Com-
petitiveness (1995)
2 Walsh, V, Roy, R, Bruce, M
and Potter, S Winning by
Design, Basil Blackwell, Oxford
(1992)
3 Bruce, M, Potter, S and Roy,
R ‘The Risks and Rewards of
Design Investment’, Journal of
Marketing Management (1995)
Recent studies have shown that effective use of design by small companies
can contribute positively to business performance and competitiveness2.
However, studies have also shown that many small companies lack aware-
ness of the commercial impact that design investment can have on their
business performance3. The latter study surveyed over 200 projects in small
UK companies that had received a government subsidy to engage the ser-
vices of professional designers for a range of activities from new product
development to the redesign of packaging. The study identified some of
the major causes of design project failure, including:

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4 Bolton Report Small Firms:
Report of the Committee of
Inquiry on Small Firms. Chair-
man, J. Bolton. HMSO, London
(1971)
Table 1 Examples of definitions of SME’s
Bolton Report 1971
Owner Managed
Financially independent
Small market share
298
DST: design studies (page 2
쐌 Lack of senior management commitment to design;
쐌 Poor financing of projects i.e. allocating insufficient funds to cover
cost;
쐌 Incomplete design brief i.e. the brief fails to take account of user needs,
pricing strategy, etc.;
쐌 Inappropriate sourcing of design competencies.
Government policy in the UK is focusing on smaller companies to enhance
their design and innovation capabilities via the use of government agencies.
One major thrust is the establishment of agencies, such as Business Links
which employ design counsellors to act as intermediaries between small
companies and design professionals. The research reported in this paper
explores different approaches to design management by small companies,
both manufacturing and service, and identifies how they source, brief and
evaluate design. One of the main outcomes of the research was that differ-
ences exist between those companies that have had some prior experience
of working with designers and those that have little understanding of the
role of design in business. Also, investment in design as a ‘quick fix’ may
not solve other problems that small companies face, such as cash flow,
marketing skills etc. A framework for a design management process for
small companies is presented in this paper.
1 Defining small businesses
The first step towards understanding the context of the study is to define
small and medium sized businesses/enterprises (SME’s). Various public
agencies have produced definitions, as shown in Table 1.
The DTI’s Small Firms and Business Link Division’s view is as follows:
‘The first thing to emerge is that there is no single definition of what an SME is, this
is because of the wide diversity of businesses... The (Bolton) report (1971)4
recognised that size is relevant to sector, and it also recognised that it may be
DTI 1995 European Commission 1996
Small = 0–200 employees Very small (micro) = less than 10
employees
Medium = 201–500 employees Small = 10–50 employees, annual
turnover less than 7 m ECU
Medium = 51–249 employees,
annual turnover under 40 m ECU
Financially Independent—not more
than 25% externally owned
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 appropriate to measure numbers of employees in some sectors but turnover may be
more relevant in others...Across Government it is more usual to measure size
according to numbers of full time employees or their equivalent...In general the DTI
defines a small firm as fewer than 200 employees and medium sized firm as one with
200–500 employees...in practice a variety of working definitions are adopted
depending on the objectives.’

The precise definition of small businesses is problematic. Any definition

suffers from an arbitrary exclusion of some companies5. The problem is
that because company size is related to the market it operates in, (as the
DTI acknowledge above) there will always be companies that fall outside
a particular definition, that may be worthy of inclusion. The sample in this
study does not suffer from these problems because all the companies fall
within the Bolton definition of small firms, they are owner managed, inde-
pendent and have a small market share. The firms are all micro or small
firms according to DTI and EU definitions. An example is that of a product
company with 30 employees, a Managing Director who inherited the busi-
ness from his father and a market share that encompasses the local area.

2 The SME context

The next step towards setting the context is to define the size and impact
of the SME sector in the UK economy. In 1991 there were 2,697,000
businesses in the UK, of these only 3000 were large firms employing more
than 500 people6,7. Almost 2.7 million businesses in the UK are small and
medium sized businesses6,7. Of these 92% are micro firms employing 0–
10 employees. Small firms do have a significant impact on new job cre-
ation. Between 1987 and 1989, one million additional jobs were created
by firms employing less than ten people, which is almost as many as cre-
ated by larger firms8.

The UK SME sector has high ‘birth’ rates and ‘death’ rates compared to
5 Storey, D J Understanding
the large business sector in the UK. In each year over 14% of UK SME’s
The Small Business Sector
(1994) have registered for VAT in the previous 12 months5. In 1990 235,000 new
6 McCann, A ‘The UK
Enterprise Population, 1979- SME’s appeared and 185,000 SME’s died. Studies suggest that many small
1991’ The Natwest Review of
businesses have a short lifespan, 10% deregister for VAT after one year,
Small Business Trends Vol 3 No
1 (1993) pp 5–13 50% after 5 years and two-thirds after 10 years9. These figures suggest a
7 Daly, M and McCann, A
‘How Many Small Firms?’
very volatile market environment involving rapid change. Research indi-
Employment Gazette, unpub- cates that the successful small business needs to be able to adapt to chang-
lished paper, July (1992)
8 Daly, M, Campbell, M, Rob- ing markets quickly1. Research also indicates that small firm survival is
son, G and Gallager, C ‘Job
Creation 1987–1991’, Employ-
linked to a diversified customer base and to an ability to regularly introduce
ment Gazette February (1991) new products5. SME’s will occasionally introduce a fundamentally new
9 Burns, P and Dewhurst, J
Small Business and product/service9, but they are more likely to produce a product or service
Entrepreneurship. Second Edi- differentiatied from the major players in a particular market. They will
tion. Basingstoke, Hampshire
(1996) typically occupy a ‘niche’ in the market.

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 3 SME organisational structure
Micro businesses have a distinctive organisational structure and managerial
style, they tend to be owner managed10 and they tend to operate with a
personalised management style and structure. Smaller companies
employing over ten staff start to appoint non-owner managers10. This size
of company also tends to move towards more formalised working practices
with teams of managers with devolved responsibilities11. The major distinc-
tion between large and small firms is the presence of the owner-manager,
small firms tend to be managed in a personalised way9. This may present
problems as the firm can become over reliant on the skills and experience
of one individual. If they lack awareness about the potential value of design
for their business, or have not the time nor skills to utilise the design
professional’s skills adequately, then the integration of design com-
petencies in their business process may not occur.

10 Atkinson, J and Meager, N

‘Running to stand still: The Small 4 Small businesses and design management
Business in the Labour Market’
in Employment, The Small Firm
Research supports the case that design skills positively affect small busi-
and the Labour Market, J. Atkin- ness performance, but only if effectively managed and if the company
son and D.J. Storey (eds) Rout-
ledge, London (1994) has identified that design management12,13 requires effective methods of
11 Lyons, B R ‘Subcontracting sourcing, briefing and evaluating design. This study focuses on analysing
and the Small Business’ End of
Award Report, ESRC, Swindon these three key themes within small businesses.
(1991)
12 Oakley, M (ed) Handbook of
Design Management
Blackwell, Oxford (1990)
Basil
4.1 Sourcing
13 Jevnaker, B Developing The acquisition of design skills that are appropriate for the creation and
Capabilities for Innovative Pro-
duct Designs: A Case Study of implementation of new products and for the development of new corporate
the Scandinavian Furniture
Industry in Product Develop-
identities, packaging and so on can be risky. In the UK, there is a surfeit
ment: Meeting the Challenge of of design suppliers and the barriers to setting up as a design agency are
the Design-Marketing Interface,
M Bruce and W Biemans (eds), relatively small, so both high quality and poor quality design suppliers
Chichester, Wiley (1995) exist side by side. The larger design firms and those that have been in
14 Bruce, M and Morris, B
Approaches to Design Manage- business for a number of years have some repute but are too expensive
ment in the Product Develop-
ment Process. In Product Devel-
for small companies to use. Buying design skills demands some skills on
opment: Meeting the challenge behalf of the design buyer to be able to discern the appropriate design
of the Design-Marketing Inter-
face, M Bruce and W Biemans expertise required14. Some degree of ‘personal chemistry’ and trust is
(eds), Wiley: Chichester (1995)
15 Bruce, M and Docherty, C
needed between the designer and the client so as to allow for an open and
‘It’s All in a Relationship: Com- creative dialogue15. Sourcing design is a critical aspect of design manage-
parative Study of Client-Design
Relationships’ Design Studies ment16.
Vol 14 No 4 (1993)
16 Topalian, A The Alto
Design Management Workbook,
Alto (1994)
The complexity of sourcing appropriate design skills is illustrated by the
17 NEDO ‘Competencies that Competency Model for Designers shown in Table 1. NEDO17 suggests that
discriminate outstanding design-
ers’ NEDO Garment and Textile a ‘good’ designer should ideally combine all the qualities described in
Sector Group (1993) Best Prac-
Table 2. The issue is, how can a small company evaluate all these qualities
tice in design and development.
PE International (1993) effectively within a designer or a design consultancy.

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Table 2 Competency Model for Designers

Design Competencies
• Objective creativity
• Technical
• Colour and Conceptual Design
Business Orientation Competencies
• Organisational, planning
• Problem solving
• Commercial skills
Driving the Process Competencies
• Commitment, enthusiasm, self-confidence
• Results orientation
• Team orientation
Perspective and Framework Compentencies
• Gathering and using information
• Strategic thinking
• Consumer/customer focus
Interpersonal Competencies
• Builds relationships
• Presentational skills
• Flexible

NEDO Garment and Textile Sector Group (1993)

4.2 Briefing
Research has shown that designers encounter problems if the brief is not
prepared correctly2. Studies indicate that a designer needs a great deal of
information, both overt and tacit, in order to produce an effective solution
for the client18,12. The designer needs to have marketing information, such
as details of the target market, the competition, the intended price points,
the objectives underlying the proposed design; details of the mode of pro-
duction and plans and time-scales for implementation19. Otherwise prob-
lems may arise later, which may result in valuable resources being wast-
ed20.

18 Cooper, R and Press, M

Cooper and Press (1995)18 suggest that a design brief should contain the
The Design Agenda A Guide to following:
Successful Design Management
Wiley and Sons, Chichester
(1995)
19 Alexander, M ‘Creative
쐌 Background to the Company;
Marketing and Innovative Con- 쐌 The Design Problem;
sumer Product Design-Some
Case Studies’ Design Studies 쐌 Design Specifications, Product Attributes;
Vol 6 No 1 (1985) pp X–XX
20 Hollins, W and Pugh, S 쐌 Consumer And Market Information;
Successful product design Lon- 쐌 Costs, Budgets;
don: Butterworth Heineman
(1991) 쐌 Timescales.

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Table 3 Types of Evaluation

Evaluation of concept against brief (Cooper and Press 1995).

Evaluation of product or concept against success in the market place. (Walsh et al.1992.)
Evaluation of corporate design strategy and performance against competitors. (Cooper and Press 1995).

4.3 Evaluation of design

Evaluation of design can occur in many forms and at various levels within
organisations (see Table 3). Evaluation can be the assessment of a concept
against the brief18, as well as an analysis of the design’s market success
measured by such criteria as sales performance, increased awareness of the
service, breakeven points, etc2.

5 Design management model

The above brief literature review has raised issues of sourcing, briefing
and evaluation of design. From this a model of the key phases of the design
management process has been developed as shown in Figure 1. This model
takes account of the whole design management process, from recognising a
need for design to briefing, sourcing, launching and evaluation. The model
highlights critical points in the process and suggests that reviews should
be taken at key stages in the design process to allow for full discussion
of the implications of the design for resource allocation and subsequent
development. It was used as a heuristic tool for the study. The model was
used as a basis for the interview agenda, and as a framework to explore
the management of design by small companies.

6 Methodology
The main aims of the research were to:

(1) Document how SMEs use professional design skills;

(2) Examine current approaches to design management.
The first phase of the study involved drawing together a conceptual frame-
work based on the current best practice literature in design, design manage-
ment and new product development. This framework is represented here
in the form of a design management model. The second phase consisted
of qualitative research through in-depth semi-structured interviews,
presented in the form of short case studies. The methodology of the quali-
tative case study phase is outlined below.

6.1
6.1.1 Sampling
Eight small companies were interviewed and these ranged from service to
manufacturing companies supplying careers advice to IT services to

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Figure 1 Framework for design management. PM = Project Manager

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 medical treatment. These firms were selected with the help of Design
Counsellors located in different areas. Design Counsellors are employed
by government agencies in Business Links and TECs to provide manage-
ment advice and training to SMEs. There is bias in the selection in that
they were chosen due to their known association with design.

6.1.2 Data collection

Involved interview schedule preparation, and carrying out tape recording,
the interviews, plus collection of visual and documentary material such
as company literature. The interview agenda covered: company structure,
company history, briefing, sourcing and evaluation methods, company
structure, company history, and marketing policies. Much care was taken
to cover all the main issues in the interview agenda, respondents were
allowed and encouraged to expand on themes but at times respondents
were directed to backtrack to fully cover the issues.

6.1.3 Data Analysis

Involved five stages. Stage One was the transcription of tape recordings
and interview notes. Stage Two involved the organisation of the interviews
into separate issues. Stage Three involved sending the transcripts back to
the respondent for accuracy checks. Stage Four involved gathering all the
information together and analysing it. Stage Five was the discussion of the
results. As far as possible two researchers visited the companies and so
they were able to discuss the data thus gaining a deeper insight into the
issues faced by the companies and to cross check their own observations.

6.1.4 Data Reporting

The resulting data is reported in the form of written case studies. Back-
ground information, and information from the interview was integrated into
a full case, with an analysis section and conclusions.

6.1.5 Validity
Of the material was ensured by the using multiple sources of information,
cross comparison and by careful sampling of respondents.

6.1.6 Reliability
Of the research method was promoted by holding all the procedures as
constant as possible. All companies were approached in the same manner,
one of the interviewers was present throughout all of the interviews and
this helped to ensure that the same issues were addressed in each company.

6.1.7 Research Limitations

Ideally the sample would be much larger, it could be argued that these
eight companies face unique problems which are not representative of the

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 wider SME population. It is not possible due to time and resource con-
straints to replicate the study on a wider scale and it is felt that the richness
and depth of data will compensate for small sample size.

6.1.8 Findings
The results are displayed in the taxonomy of design management (Figure
2). This paper then presents detailed case study information on three of
the companies interviewed. Two of the companies sold services to their
clients and were using design to produce a leaflet or a brochure to generate
further sales. One company was developing a new product design to enable
them to break into a new market. The paper will outline the cases and
compare company practice to the best practice in the literature and thus
attempt to draw out some of the issues facing small businesses and the
integration of design in the business process. Due to space constraints in
this paper only summaries of the case studies will be outlined.

7 Taxonomy of design management

The taxonomy presents the responses collected on the issues of briefing,
sourcing and evaluation of design. The taxonomy also records whether the
company was a manufacturing company or a service company, and whether
the design project under study was a product design project or a graphic
design project. The taxonomy allows company comparisons to be made.

Success was defined using the companies’ own criteria, and this ranged
from meeting the design objectives in the brief to increased awareness of
the service offering, as well as sales performance, impact on turnover,
etc. It was clear that design success was not always evaluated in purely
financial terms.

쐌 Sourcing: This category refers to the method the company used to

source the designer, these included personal recommendation, rec-
ommendation from a government agency source, a cold call and past
experience.
쐌 Briefing: This category refers to the method the company used to brief
the designer, these included verbal and written methods.
쐌 Evaluation: This category refers to the method the company used to
evaluate the design process, these include the pure cost of the design
against sales ratio, and evaluation of the design in terms of meeting
the brief.

7.1 Analysis of the taxonomy

From the sample, it is clear that a variety of design management methods
(ie for sourcing, briefing and evaluating design) are employed by small

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 Figure 2 Taxonomy of design management

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21 Potter, S, Roy, R, Capon,
C H, Bruce, M, Walsh, V and
Lewis, J The Benefits and Costs
of Investment in Design: Using
Professional Design Expertise in
Product, Engineering and
Graphics Projects. Design Inno-
vation Group, the Open Univer-
sity and UMIST
Effective design management for small businesses
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businesses. However, where there was a clear objective for embarking on
the design project, for example quality improvement, then the project was
likely to be completed. Personal recommendation was the sourcing method
for three of the cases and Design Counsellors were also used as an inter-
mediary between the SME and design firm.
Graphic projects were more likely to be successful than products, these
are perhaps less complex and risky and require less additional resource for
market implementation. This tentative result reinforces research carried out
by Potter et al21.
Whilst the taxonomy provides an overview of the design outcome of the
projects and the type of activity entailed for sourcing, briefing and evalu-
ation, the context in which firms are operating and the company culture
are not explored. Vingnettes of three of the companies are presented, which
provide background and contextual details.
8 Levels of confidence
The company vignettes highlight three different experiences of small com-
panies attempting to integrate design management into their business pro-
cess. Vignette 1 demonstrated that extensive design management experi-
ence from previous work could be transferred into a small company
because design awareness and sourcing, briefing and evaluation were fam-
iliar activities for the MD. The MD stated that:
‘I recognise the value of design because I come from a publishing background...there
was a clear relationship between cover design and sales levels...I have done a lot of
briefing throughout my working life so briefing wasn’t a problem...I have an
advantage over other small companies in that I was Managing Director of a company
that spent millions on print and design a year, so I have grown up with design’.
Managing Director, Career Advice Service.
Vignette 2 highlighted that the presence of Transferable Design Manage-
ment Skills could aid the design management process. This means that
skills in briefing, in this case had been acquired from experiences in other
companies, or from work that has related skills, for example solicitors take
briefs from their clients and so are familiar with a briefing process. Vignette
3 shows that product design is complex and expensive and that adequately
conveying technical issues at the briefing stage are critical.
The first point to be made is that small companies, even ones of similar
size and structure, possess different levels of design management expertise
and face different design problems. Where the companies are aware of the
role that design could play in their business and have some knowledge of
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 the management activities involved, then these could be regarded as ‘con-
fident’ at design management. However, without this awareness and under-
standing, then projects may fall into difficulties and staff in the companies
would require some support to manage a design project effectively. How-
ever, skills in related tasks, such as a solicitor taking briefs could assist
the design project in running smoothly.

The main features of the experienced users of design are outlined below.

쐌 Confident about briefing, sourcing and evaluating design.

쐌 No external help required to brief, source or evaluate a designer.
쐌 Frequent and confident users of design within their business process.
쐌 A design awareness fully integrated into the organisation.

Less confident in their approach to design were those companies where

design was perceived as risky, in that design may not achieve its objectives
and was likely to be very expensive. Some companies found it very diffi-
cult to put a brief together.

As the MD of a Medical Supplies Company explains:

‘The Business Link were very instrumental in the development of our project, we
needed to source a capable designer and they helped us with that. They helped us in
planning, production and even helped us write the design brief that enabled us to
move to the next stage’.

The characteristics displayed by the less confident and more apprehensive

companies are summarised below.

쐌 All companies needed external help to source a designer, this task was
perceived as highly risky by all inexperienced companies. Personal rec-
ommendation acted to lower the perceived risk of sourcing a pro-
fessional in an unfamiliar discipline.
Some companies within this group require a lot of external help to compile
a brief.

쐌 All these companies were very apprehensive about using design and
needed external trusted agents to recommend designers and to ‘coach’
the inexperienced company through the design process.
쐌 Some of these companies were aware of the value of design but very
wary of the potential cost. Once a design project had been completed
successfully these companies then developed from an awareness of the
value of design to a knowledge of design and the necessary skills need-
ed.

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 쐌 Success was linked to the presence of transferable design management
skills within the company, such as the briefing skills present in Com-
pany 1 and 5.

9 Conclusions
Small companies have a range of business needs for design, but have vary-
ing levels of awareness and competency to manage design effectively. Two
different types of companies could be discerned from the study: ‘confident’
and ‘apprehensive’ design users. The former companies had had experience
with design, typically in previous work experience and the latter had little
awareness of design. For the inexperienced design companies, various fac-
tors were identified that assisted the effective design outcome: the relative
simplicity of the project, possession of strong briefing skills acquired in a
different discipline, sourcing skills, such as personal recommendation form
a trusted intermediary, and evaluation skills obtained through an intermedi-
ary or acquired in a different discipline.

However, employing a professional designer may not be the ‘quick fix’ to

solve the company’s problems. Although, this is not discussed fully in this
paper, the success or otherwise of the design project was influenced by
broader issues facing smaller companies, for example, cash flow, marketing
skills, capital investment and so on. For one of the companies, the design
concept was acknowledged as a marked improvement on existing designs,
but the company had to find sufficient capital to invest in manufacturing
the new product design. In another company that had no prior experience
in using a professional designer, a clear vision of the target market, a
healthy cash flow and a straight-forward project facilitated success in
design. Even from this small sample, it is evident that design is intimately
related to wider management skills and resources, which have to be
addressed along side the design project. For all of the companies, the bene-
fits of design were recognised. Even where the design project had not been
as smooth as intended (see the ‘hot box’ trailer project).

Segmentation of small businesses by design management experience levels

is important. Skill levels can vary and this influences the company’s atti-
tude to the design management process, either positively or negatively,
therefore steps must be taken to identify these experience levels and to
tailor the level of aid accordingly. Some companies may need extensive
coaching others may only need to be put in touch with a designer that fits
the company’s needs.

Acknowledgments
This work was part of the Co-Partnership Programme of The Design Coun-
cil whose support is gratefully acknowledged.

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