Partnership Case Study: Pentagram

With 19 partners working from offices in the U.S. and the U.K., Pentagram has built an unshakable reputation for stellar design. What makes the company so successful? The secret is rooted in the firm’s organizational structure, which dates back to its founding in 1972. While many design businesses have adopted top-down management schemes, limited themselves to one director-owner or made half-baked attempts at sharing ownership, Pentagram has finessed a democratic, multifaceted approach to partnership.

What can you learn from this legend? Here are six tips on making the Pentagram model work for you:

• Be passionate about making all partners equal. Pentagram exists without a hierarchy, and each partner has the same voting rights on decisions from day one. This democracy among partners is vital to the open exchange of knowledge and must be founded on a fair and equal distribution of ownership.

• Partnerships live and die by communication, so invest significant amounts of time and money to regularly bring all the partners together to examine each other’s performance and discuss issues. Pentagram does this at its twice-yearly partner meetings.

• All partners must be open to critical analysis of their creative work and financial performance. Honest critiques are key to Pentagram’s reputation and success.

• Carefully consider the dynamics of the organization you want to create, and constantly search for new potential partners who will add to the creative value of the business as a whole. Create synergies between partners rather than duplicate design disciplines and approaches.

• Help new partners adjust to the challenges and commitment required. For example, Pentagram eases the up-front financial burden for new partners buying into the firm.

• Accept that bringing exceptionally talented people together within one organization will always involve clashes. Promote a clear culture of rational debate, so issues can be aired publicly among partners, debated and settled through an open and democratic voting process.

From HOW, December 2000.