As the current recession was hitting, many in-house creative groups were asked to focus more on production work since that is where savings vs. external agencies tends to be the most obvious and most easily quantified. Now that we are hopefully pulling out of the recession, internal creative groups have an opportunity to build upon their proven value in doing production work internally and move upstream systematically to add value on ever more complex creative challenges. The ultimate goal may be to turn into a competitor with external agencies. This goal may not fit with all corporate strategies, but some degree of movement up the creative complexity ladder is probably the right thing to do for most in-house groups that are currently strong production shops.

A well run production shop can take the next step in increasing the complexity of its design output by adding designers with higher levels of skill (or by allowing designers who have been relegated to production work to use their full design talents) to tackle more complex design challenges for clients. This evolution from production shop to design shop would not involve highly complex creative challenges such as original advertising campaigns or rethinking a brand, but it would allow for marketing clients to obtain creative design work as opposed to merely the directed production they were getting from a production shop. The design shop may also expand its channel offerings, usually moving from print to web and video. The design shop wouldn't compete with external agencies on their highest-end work, but it would allow marketers a lower-cost alternative on many deliverables on which external agencies enjoy healthy profits.

Moving further up the creative ladder would allow an in-house group to create a competitive alternative for marketers against external agencies. Most in-house groups find that they can compete effectively with agencies in a few selected areas, such as print design or web design. However, some companies (usually large ones) go so far as to have in-house video capabilities for producing TV spots and to do their own media planning and buying.

As an in-house group moves up the ladder of creative complexity, the degree of competition provided to external agencies increases (as does the bottom-line savings to the enterprise) so long as the in-house group remains effective and cost efficient. Exactly where an in-house group should lie along the spectrum from production house to full-blown agency competitor depends on several factors:

  • The degree to which management wants internal competition to agencies (this decision can be heavily influenced by the degree of cost savings that can be proven)
  • The willingness of management to invest in resources (people, infrastructure) to manage a larger and more complex in-house creative group
  • The needs of the marketers within the enterprise

There is no one right answer, but a structured approach that considers the needs of the enterprise should drive the decision of how much creative horsepower should exist within an in-house organization.

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Peter Toth has over 15 years of experience consulting in process improvement and organizational design with dozens of companies across a variety of industries. Based on his recommendations, client organizations have adjusted their staffing mix; restructured operations both domestically and globally; and implemented workflow technology to realize measured improvements in each.