P64 A Competitive Advantage Business Model Personal Example

Listen to the podcast

  • This podcast is about something that I have lots of personal experience with. As I mentioned in the very first podcast, I have not only been an executive at large companies like Procter & Gamble and Gallo but also been a very successful entrepreneur.
  • This is about one of my current companies in the story of how I started it, but more importantly the business model and strategy I used in starting the company.
  • I was having a conversation with a longtime friend and client who had just become president and CEO of a national company. I had done millions of dollars of projects for him over the years in the innovation area. Going back further, I had hired him from Procter & Gamble to work for me at Gallo.
  • He was in the early days of his new assignment. We were talking one evening when he mentioned that he had an internal graphic design group at a location in another state from where the headquarters was. He indicated that he was very dissatisfied with the work they were doing. He showed me a specific example of a project where you gone through three rounds of new design work for an important graphic design need. Prior to this conversation, he had made the decision to eliminate the internal group and hire an external graphic design company.
  • For reasons I will never completely understand, I responded by saying, “what if I started a graphic design company to meet your needs and had – and I named a person – as a part of this new company?” He responded by saying, “are you sure you can get – the person I named?” I responded by saying, “yes.”
  • The person I named was a great designer that both of us knew very well. We knew that any work that he and designers he knew would be truly world-class work. I had talked of this designer on and off in the recent past and knew he would agree to be part of the new company.
  • He clearly was interested. I asked him to give me 48 hours and I would get back to him with a very specific proposal. I did so and we started the company 30 days later. But I’m getting a little bit ahead of myself right now.
  • In those 48 hours I designed an innovative business model and set of services or graphic design business. While I had never run a graphic design business, I had been the client of graphic design companies and groups both internal and extra external for most of my business career at Procter & Gamble and Gallo. Put another way, I knew the graphic design business from the perspective of being a client/customer.
  • This perspective informed this business model and the set of services I created for the new company. I was going to create a graphic design company specifically designed to meet the most critical client needs better than any other graphic design company I have ever worked with. I had worked with very, very good graphic design companies and internal groups at Procter & Gamble and Gallo.
  • The number one client graphic design needed is truly great graphic design solutions that create competitive advantages for the client. This is not just beautiful work. This is not graphic design companies designing to win awards from their peers. This by the way, is the goal or objective I felt from many of the external graphic design company side work with. They were more interested in what they thought looked good instead of truly wanting designs that created wins in the marketplace enabling the client to sell more and make more.
  • I knew that if I started a traditional brick-and-mortar graphic design company that I would be limited to the world-class designers that were within a fairly short radius of the new office building. In addition, they would have to be available and not working for a competitive graphic design company in the same city. I quickly realized, I need an entirely new approach to developing a world-class designer team.
  • It was at this point that I decided to be a virtual company. I knew really great designers throughout all the Western United States. I knew that all these designers were currently freelancing and that I could invite them to work as independent contractors for the new graphic design company.
  • Starting with the designer that I had named previously, I quickly developed a list of world-class graphic designers willing to work as independent contractors for the new company. By deciding to be a virtual company instead of a traditional brick-and-mortar company, I quickly created a world-class designer team with capabilities that were at least 100 times better than I could’ve created in a traditional office environment.
  • Check the box for having a world-class designer team.
  • There were other aspects of graphic design companies that I have previously worked with that I did not like when I was a client.
  • First, when I worked with an external design group or even an internal design group, I would never know what the project I wanted to have them do was going to cost until the work was completed. And at that time I would often get sticker shock – that little project cost that much?!
  • So my first objective was to make sure the client knew the cost of a project before it started and they agreed to that cost.
  • I also wanted to create greater value. We immediately began a process of getting competitive bids from our world-class designers on a new client project. We would choose in the vast majority of cases the low bid and ask for the clients agreement to that price.
  • But I wanted to add another level of value. As a result, we made a promise to deliver 100% of projects on budget. If the client change the scope of the project in midstream, we would requote it and get their price that they agree to.
  • When we finished we had a client know what the price of the project was going to be before work began, they knew it was a high-value price because it had been competitively bid, and we committed to delivering the project on budget – no nasty surprises.
  • My other frustration in my previous experiences with graphic design suppliers was that they often had little sense of urgency and projects were seldom delivered on time.
  • We fixed this problem by promising to deliver 100% of projects on time. When the client agreed to the price, they also agreed to a timeline. If the client changed the scope of the project, the timeline would change and we would deliver against that new timeline.
  • With us had our 100% promise – we deliver 100% of projects on budget and 100% of projects on time.
  • The final point all mentioned as the economics of the company. Everyone in the company with the exception of me as an independent contractor. As a result, I only need to pay people when the client is paying me for a project. When a graphic designer wins a competitive bid, they know what they are going to be paid. I only pay them when work is being done that the client is going to pay me for.
  • This means very low overheads and a virtual guarantee of profitability.
  • Getting back to my friend who was president and CEO, when I share the business model and people in the company he quickly agreed. The most critical person after the great designers was the overall creative director for the company. This was the first person I called after I had had the conversation with my friend. She had the successful experience to do the job. My friend also knew her and respected her skills and abilities. So I had an exceptional company leader and truly world-class designers harnessed to a high service and high-value business model. It’s very difficult to say no to this.
  • The company is Blue Sage Creative and you can see our website at bluesagecreative.com. The company is thriving. Sometimes the growth is so fast that it is stressing our capabilities, but the creative director is showing excellent leadership in helping the company grow. We added another national client and are working to get even more business.
  • The bottom line is that this is a business model that enables a service company to deliver exceptionally better quality work that occurred as a brick-and-mortar business and then wrapping that in a very high value and very high service model. Clearly, all of this does not work if you don’t have the right people. Today we have an exceptional team capable of growing with the business.

Leave a Reply

Your email address will not be published. Required fields are marked *