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In the book “Radical Candor” the author writes about a concept called Ruinous Empathy. I recommend reading the book. It’ll give you good guidance for situations like this.
You wanted an art director but you hired a designer. Creativity and strategy are what separate an art director from a designer. When you mention “functionality,” that is more in the user experience space. A designer focuses on aesthetics and tonality. Don’t blame your designer; you hired for the wrong role.
It takes about six months to a year to mold a non-creative’s mind into “getting it.” Either send this person to advertising night classes, or hire an art director.
You’re not wrong. But if you want to fill a conceptual role and you post a job listing for “designer,” this situation is going to happen a lot.