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Creative Agencies: How can profit increase creativity?

Article By Brent Charlton | | Business Consulting, Technology Consulting

In a creative environment, discussions around profitability sometimes see “profit” labelled as a dirty word. 

There is the notion that business creativity and innovation trump all else and we do not need to focus on the profitability side of things 

Profit is seen as stifling creativity as we become too worried about the almighty dollar and end up with a feeling of personal compromise, as well as a compromised result for the client. 

However, in my experience of working with creative firms, profitability is vital for a truly creative business. 

Let me explain… 

Business creativity and innovation: its relationship with profit 

Most creative businesses start out with the purpose of being different to their competition. 

They will be truly creative and unconstrained, and only do work that fulfils them creatively. 

Over time, this enthusiasm gets weighed down by the pressure of keeping everyone employed, paying the rent, paying the BAS and hopefully being able to feed the family and meet the mortgage payments at the end of it. 

This pressure results in the business falling into the trap of doing the “right now” job, rather than the “right job”.  

In other words, they work on the projects that no one likes rather than the project that everyone wants to work on.  

Why is that?  

It’s because the owner is backed into the profitability - or lack of profitability - corner. 

He or she must chase profit to survive and, as a result, creativity loses out, playing second fiddle to financial necessity. 

Sound familiar? 

When profit boosts creativity 

From my experience, when a business starts to make a healthy profit it has a positive influence on creativity. 

Here are a few of my observations over recent years: 

  • Profit creates choices. No profit creates lack of choice.
  • Profit allows you the freedom to choose the projects you want to work on. No profit makes it imperative to do every job that might make a dollar.
  • Profit gives you the ability to reward your team. No profit means you can only pay your staff as little as you have to (and they are more likely to leave because of it)
  • Profit allows you to purchase the design tools you want. No profit means using free or outdated software on old computers.
  • Profit allows you to have great offices that encourage creativity and make it enjoyable to go to work. No profit means sharing a grey old office with an accountant (again making it more likely that staff won’t hang around)

What does profitability mean to you? 

Do you see it as a positive or a negative in terms of business creativity and innovation?