Bounce Back Series: How design agency, Clearleft, uses strategy and planning to avoid the fear of the future
Clearleft co-founder, Andy Budd, and operations director, Jessica Jebari, explain how building the agency on solid financial foundations gave Clearleft the freedom to support its team and clients.
It would be easy to think Clearleft suffered most from the COVID-19 lockdown and subsequent downturn in the economy, considering its focus… but that would be wrong.
Founded 15 years ago by Andy Budd, Jeremy Keith, and Richard Rutter, the agency has as its goal to “advance the practice of design”.
Explains Andy: “We want as many people as possible to use great design. Through our agency business, we do this by solving client problems.”
With a client roster firmly lodged in the travel business at the start of 2020, including Virgin Holidays and Crystal Ski - and a thriving live events business with events planned in the US, that kind of exposure to shutdown would put most companies out of business. Not Clearleft, which has shown through planning and strategic thinking that it’s possible to emerge stronger.
Andy explains the agency was already transitioning out of the travel sector when lockdown hit. But it is the gradual growth of the agency that has placed it upon solid foundations.
“We’ve always turned down more work than we take on,” he says. “I’ve seen so many of my friends stress their companies by growing too quickly beyond what their pipeline can handle and then having to make massive rounds of redundancies.”
Strategy and planning
The key to this is building up a reserve of cash in the bank that allows the business to avoid making knee-jerk reactions.
“A lot of agencies I know have less than a month’s worth of runway,” Andy says. “They’re invoice factoring and raise huge amounts of loans. It’s a constant level of stress."
“We want to invest in our people. Having that cash reserve has allowed us to grow the business to hire the people to make sure that they feel safe and secure if we hit rocky roads.”
The other benefit of strong cash reserves is the ability to be discerning. Cash not only protects the business in case of situations like COVID or a recession but allows the team to be picky about who they work with.
“A lot of agencies often are based around fear,” explains Andy. “Fear that if they upset the client, they will lose the client. If they don't do exactly what the client tells them to do, that they will lose the project."
“We can be honest. We can tell people what they need to hear, rather than what they want to hear.”
Leading Design events
As part of its mission to spread the word about the power of great design, Clearleft runs its own events to reach a wider audience. While the agency can service a small number of select clients at a time, events to reach outside its client base. This has led to their globally-hosted Leading Design events, which attract major brands, sponsors, and headline speakers.
“By running events, we can help hundreds of other people, thousands of other people also make a change,” he says.
However, just as the COVID emergency was unfolding in the States, the company was planning its Leading Design San Francisco event. While there were only a handful of cases in the state, there were a number of speakers, attendees and sponsors who were planning to attend from across the globe. Clearleft acted quickly and took the hard decision to pull the event.
“We took a massive financial hit - a really big financial hit. But we needed to do that because it was the right thing to do for our community,” Andy explains. “Of course, we took a hit to our reserves, but we've done modeling and we still have reserves that will allow us to continue on the current kind of run rate.”
Many firms have spoken about the impact of lockdown and working remotely on their staff. However, in the agency field where face-to-face can be a large part of the project, Clearleft has built this into the work to build a better experience for clients.
“It wasn't a huge leap working remotely but, for lots of our clients, it was,” Jessica explains. “What we've done is spread out some of the projects to allow people time to do the work."
“We’ve taken a hit on that but we've planned that in our scenario planning. We’re assuming our utilization rates across the board are going to be slightly lower in the next three months.”
Looking beyond 2020
For Clearleft, the immediate concern isn’t cash flow - for obvious reasons - but pipeline and so far this has held up. However, as Andy explains the agency world is unlike others in the sense there is a time lag on money allocated to projects.
“We’re like six months behind everybody else,” he says. “Our modeling is that it will be really challenging, probably until the first quarter of next year."
“Our hope is that people will buckle down, tighten their belts and really rein back any spending. Then coming out in March or April next year, people will be looking to the future and going, ‘Okay, we've got to get all these things in place next year.”
Andy is less optimistic about the prospects for the wider agency space who haven’t done similar modeling.
“Sadly, I think a lot of agencies will disappear. I think we're probably going to see about a third of agencies disappear, which is really, really problematic, and a real shame. But at the same time, what that means is when we come out of this, my hope is that there will be more requirement for work and less competition.”
With the rulebook ripped up, there are some opportunities that Jess and Andy see for the future of the firm.
“For recruitment, there is a real opportunity to be able to recruit people from all over the world now, not just in Brighton,” says Jessica. “And that's that, for me, is really exciting.”
“My feeling is that 2020 to 2023 and beyond will be pretty good for agencies, partly because of the change in internal versus external resources,” continues Andy. “A lot of our clients have had digital transformation fast-tracked “What might have taken them five years has now taken them five weeks and so there is a need for strategy. There's a need for tracking. There's a need for people like us.”
Andy Budd and Jessica Jebari spoke to Futrli CEO Hannah Dawson and COO Helen Cockle as part of the Futrli Bounce Back series. Watch the full interview below.