The design agency world has turned upside down with the recent news of Adaptive Path finding synergy with a bank, Smart Design calling it quits in Silicon Valley, and [insert design shop here] getting scooped up by the Faceoogleboxes. Silicon Valley, which is known for putting whole industries on notice, has quietly killed the design agency. Or have they? While Silicon Valley isn't afraid to eat its children, it's also thinking an internet generation ahead as it produces hit after hit. So with chaos comes clarity, then chaos. It's a cycle. Until the next innovation.

The Design Industry is not immune to this fact. Silicon Valley wants to scoop up all the star design talent. But it's not as easy as hiring design talent in-house. You need a way to scale and bring purpose to the work at hand.

The Traditional Agency Model for Product Design Won't Survive

ZURB is a product design company. We've learned quite a bit over the years providing services by avoiding the traditional model of handing stuff over the "agency wall." Product design doesn't work well in a typical agency model because creating great products is more than 50% operational. Great products require investment across many different parts of a business, so we put a bigger effort on collaborating with our customers.

Will "web" agencies exist? Sure, but if they want to create a high-margin business, they won't be able to provide services in the same way. However, chop shops will continue to exist. There will be plenty of work out there, just not the type of low-margin business most agencies desire. IDEO went through this transition 15 years ago with physical products. I briefly worked there when they acquired the startup I worked for. The writing was on the wall — that they couldn't sustain their business with only huge amounts of engineering work.

The traditional agency model is a transfer of bloat and processes into what is perceived to be a short-term consulting cost for the business instead of hiring. And because this model is flawed from the outset, it doesn't change the organizational dynamics or shift the way people think about building great products. It's a costly "butts on seats" strategy, where projects with more people convey importance to the larger organization.

Getting Their Design House in Order

Facebook and Google went on a design/product buying spree specifically because they needed to figure out how to own design thinking on their team. It's too important to their businesses, as Eric Schmidt recently shared in a presentation titled, "How Google Works." Other tech companies have followed. Traditional firms will follow as well, though this will take awhile. Companies WILL figure this out. Great companies WILL create environments that creative people want to work in. If design is a strategic part of their business, they're going to work really hard to figure it out.

Does this mean agencies won't exist? No, but the nature of the services provided will change. When most of the design work has been commoditized, why would a company want to pay three times more for a specialist? That's where differentiation comes into play. It's also a wake up call for agencies that think their commodity services, void of training and education, will be enough to keep them going.

When will companies get a clue? Well, it's already happening, though it's going to take some time to get right. Companies are recruiting highly-specialized talent to do a waterfall process, passing work from one person to another, leaving the designers to work in silos and create relatively low value for their cost. Meanwhile, startups are building very small teams of product designers who do the whole stack. These startup designers get domain expertise, which agencies can't quite match, but they tend to focus designers on feature sets rather than bigger vision goals.

Companies seek us out to understand it through more collaborative engagements where knowledge sharing happens at a high level. It might take a long time for this to completely shift an industry, but it's going to happen. We saw what was happening in the mid-2000s and I committed ZURB in a blog post, titled "The Dreadful Mission Statement," to what I believed would be the next generation of design companies. As a learning organization, we've always prioritized learning as a key part of our customer interactions and it made complete sense.

20 Years in the Valley Will Harden Your Soul

I can distinctly remember sitting in my one-bedroom apartment in the early days of the the first Dot Com Boom turning down work as a consultant. The person on the the phone was desperate to get me onboard for her consulting project at a large agency. It was a name-your-price opportunity that had to start in a day, but also had vague goals that needed to get done ASAP — all the red flags of a consulting gig trap. I was so busy at the time, I had to turn the opportunity down, but I remember the 10,000-person company closing its doors soon after.

Then BAM! 2001 was an amazing swing of events and suddenly the internet world was not flying so high anymore. The internet now had a bad sting to it and Silicon Valley suddenly shed everyone who couldn't find an opportunity to learn how to web. The 101 became a string of ghost towns connected by a freeway. I focused on my craft by finding ways to create real value in the web product cycle. This meant taking more time to educate, explain tactics and train companies. It was energizing and it had me reinvested back into why I loved the web in the first place.

Once Bitten, Twice Shy

Companies in the Valley were pretty quick to rebound, but what became clear is that they needed something more to sustain growth than just being an "internet" company. Over the last decade and a half, Apple created a new design awakening with their cool iPods and iMacs. One out of every two clients I worked with wanted to be like Apple. 'Make it like Apple,' they said. Most of this thinking was surface level, but over the last decade companies started to grasp that there was more to the problem than just glossing things up at the end of a product cycle.

As an industry, we've slowly moved past digital brochures. The Apple fetish has turned to interactive discussions about what people actually want. Companies flashed "UX" in their organizations to say, 'We get it.' In our ZURB work, we started to overlap with internal design teams. While there was harmony in the need for design thinking, there was something also horribly wrong with the approach companies were taking. UX design is completely misguided.

UX Design Isn't a Department

UX Design dept/agency as a concept isn't a model that will last. UX design was an opportunity to change design management — something that has existed for many decades, but rarely executed in way that shapes organizations around the user problem. Most designers, however, don't have the management skills to do this kind of work. Wireframing and dreaming new flows are great, but that's not a department. It's a skill.

Google tried this model, but disbanded the notion of a centralized group. This might have changed, but I don't believe setting up a UX group is the way of the future. It's certainly not a way to drive design innovation in an organization. And the problem with UX teams is about the lack of need for "UX design" not about companies setting them up right or using agencies to outsource this effort. It's a siloed activity on its own that doesn't create momentum across the product life cycle.

Agencies, Design Thinking and the Need for Progressive Design

Just last week we were writing about design thinking and the immense pressure companies are facing to make design a focus of their business. Ten years ago, this was the bread-and-butter of agency life, but companies aren't really sure if they want an agency experience. Agencies have been promising the fruits of design thinking for years now and companies are trying to figure it out, but it's still a mess. Many companies have decided to take on the burden of just dealing with the mess rather than spend money on outside help.

At ZURB, we were well aware of what was happening, and committed to an approach we've been using for 15 years that provides huge value to our clients by keeping the bloat of a traditional agency out of our engagements. Typical agencies have project managers, account managers, and specialized front-end people to provide services with segmented, specialized skills sets. Our approach is more nimble — we remove project managers, invest clients into the work and focus on smaller deliverables to create momentum. We invest a small group across the entire product development cycle, thus providing value beyond just wireframe flows.

Progressive Design is a collaborative approach that works for companies that need the expertise of a design specialist, and provides a structured approach so that they too can drive design in their organization. We even augmented our business strategy by releasing tools, open source software and training to help shape this new reality for companies trying to harness design capabilities. And it's working. Foundation is an example of how our own learnings have been packaged into an open-source responsive front-end framework.

All Hail Progressive Design, Death to the Agency

I won't lie to you that it's a rewarding feeling to have seen ahead, past the initial UX trend a decade ago. We've found harmony in a sustainable, actionable way to create design momentum in a company.

"Innovate or die" goes the saying here in Silicon Valley. Typical agencies need to heed the calling and differentiate. There's too much noise in the market now for companies to simply slide in under the guise of bringing design thinking to a company. Companies in turn will need to adopt an operational approach that focuses their money and approach not just on 'UX' wireframes, but the entire product life cycle. This requires spending on higher-value work and a knowledge transfer across their organization.

I'm just guessing that companies' need for design help won't disappear, but their expectations will be bigger and their eyes wide open instead of just throwing bodies at problems. We've been successful building a design company since 1998 and we're excited to share our knowledge, culture and design approach with the world. Progressive design is amazing and we're pumped to help companies figure it out.

Update: We recently continued this conversation in the post Fat Cows, Disillusioned Scarecrows and Greener Design Pastures.