As industry recovers from the economic downturn, practices need to be prepared to respond to new opportunities. In association with Deltek, the AJ gathered an expert panel to look at the challenges of winning work, building resilience and retaining talented staff
As the profession puts recession behind it and encounters growing demand for its services, practices are being more strategic about taking on work in a bid for intelligent growth. And this brings new challenges.
The AJ teamed up with professional services software provider Deltek to examine whether the industry is equipped to function efficiently in a growth economy. Directors from nine AJ100 practices recently met at Searcy’s, St Pancras, in London to discuss issues facing their businesses as competition increases and the workforce changes and adapts.
Here we report on the key messages from the discussion.
Winning new work
‘Now we are in more of a boom time we have to question which jobs we go for and which we don’t, because many of us around the table want to do everything,’ said Andrew Tate, director of TateHindle, prompting a debate about how to select projects that are right for your practice. With a higher volume of potential schemes and competitions in the market, delegates agreed that choosing where to focus resources was essential. Short-term pressure is often at odds with long-term goals and Tate advised architects to learn how to say no to potential jobs. Practices have to be ‘discerning and actually be able to say no to a client [today] that you might want to work with for the next project tomorrow,’ he said.
BDP director Graham McClements highlighted the need for practices to know their strengths. ‘We have identified the sectors in which we are particularly strong, so when an opportunity comes along we can judge reasonably well our chances of success,’ he said. Andrew Beharrall, a senior partner at Pollard Thomas Edwards, agreed that during the recession ‘there was a tendency to focus on what we were known for and our market share in those areas, as much as anything.’ But he added: ‘As we come out of recession we are increasingly saying, well, there’s more opportunity out there – in fact a number of our staff have good experience outside the sectors we are well known for, so why not think about how we can make a case to expand into new sectors?’
Now is a good time to consider diversification, delegates agreed – although several claimed they had not shied away from such a tactic even during the recession. ‘We diversified out of necessity,’ said Andy von Bradsky, chairman of PRP. ‘We decided to concentrate on housing, as that is the UK’s most prominent sector at the moment, but to intelligently diversify within that [into healthcare, homes for the ageing population, and so on]. Von Bradsky explained how PRP had brought other skills into the practice to add value to its offer. ‘We managed to bolster our overall profitability by adding new things, the latest of which was transport planning,’ he said.
While diversification was lauded as a possible way to win new work, delegates pointed out that nurturing the existing client base is crucial when it comes to coping with increased workloads in a more buoyant economy.
‘Between two-thirds and three-quarters of our new projects come from clients that have used us before on significant projects,’ said Christian Male, associate director at SimpsonHaugh and Partners.
‘When you are busy doing projects you can easily take your eye off the ball but nothing beats going round and seeing the client,’ added Tate.
Roger Wilson, director of Chapman Taylor, agreed: ‘It’s very easy to take your foot off the gas in terms of marketing during the good times when you’re busy – this is complacency. Then, when the bad times hit, everybody is scrambling around.’
The key is finding the right personnel who share the practice ethos and objectives and are prepared to promote this externally, delegates said. As Wilson warned: ‘Fewer and fewer architects are prepared to go out and meet people, and really be part of an industry.’ Hence, recruiting and retaining top staff is fundamental to maintaining resilience in good – and bad – times.
Jonathan Herbert, managing director of Bond Bryan, said: ‘You’ve got to have enough people of the right calibre to attract more people of that calibre. What we are doing is looking at some of the students working with us and seeing how we can fast-track some of them into our business. They’re really the best people, as they’re already part of the culture.’
‘There’s less talent out there because everybody’s busier, so you really have to know how to hang on to quality staff’
Some delegates said that practices should encourage their young architects to go out to meetings and help promote the practice, as they are often as business-savvy, if not more so, than the more senior staff in practice. And, while Male called on architects to ‘allocate and resource someone’ to carry out business development, others looked unfavourably on a specific business development function, reasoning that such a role is better fulfilled by the architects passionate about the work they are doing. Chapman Taylor’s Wilson said the practice ‘kicked around the idea for all of one and a half minutes’ and decided against it. ‘It’s much better to get your young architects out there meeting people, to promote the business,’ he said. However, it is not practical for every practice to carry out such extensive promotional activity, said Gianluca Racana, director at Zaha Hadid Architects. ‘We are based here but have a global reach, so for us to do the legwork is very difficult; we can’t just go to China every day.’ ZHA instead concentrates on marketing the brand via exhibitions, the press and, ultimately, getting projects completed to the highest possible standard, he said.
Meanwhile, keeping the talent you have is getting difficult, noted Gary Tidmarsh, director at Levitt Bernstein. ‘Employees are not only more expensive to hire, but there’s also less talent out there because everybody’s busier. So you really have to know how to hang on to quality staff,’ he said.
Male suggested the key to this was to ensure everybody within the business is working on an interesting mix of projects regardless of their level, and maintaining a clear hierarchical structure within the practice so staff have a clear idea of their prospects. Tate agreed: ‘People need to see their career path going forward. The older they get, the more that matters. They want to know what they’re going to be doing next year and in five years’ time; to reassure them you need a dynamic business with a clear vision.’
Herbert disagreed on this point, warning that architectural practices – as creative businesses – should avoid ‘tons and tons of structure and loads of layers. However,’ he added, ‘it is important to give people a clear sense of opportunity.’
BDP director Graham McClements insisted that money is not the main motive for the majority of architects; creating a strong practice ethos is more important for most. ‘After five years, people have adopted that legacy and sense of ownership – that is an emotional, rather than a financial, incentive,’ he said.
Andrew Beharrall, director at Pollard Thomas Edwards, agreed that architects need to identify with the ethos of the place to feel committed to it. But companies have a role to play in communicating this to their employees. ‘Much of the marketing PTE does isn’t aimed at potential clients, it’s aimed at potential employees and, above all, at us, at our existing people, to make us feel good about what we are doing,’ he said.
Investing in training is a priority for the practices represented at the event – even if there’s a risk it makes staff more mobile. Von Bradsky said: ‘During the recession, when there was less work on, we invested in training in new disciplines such as BIM and Revit and it motivated staff to stay and acquire greater knowledge for when the market picked up. Now they see it as further reassurance that they are valued in competitive times.’
That said, many architects still lack fundamental business acumen. ‘I don’t really think it’s in our DNA – the majority of people in our building just want to design,’ said Herbert.
Other delegates agreed, attributing some blame to the lack of practical business education included in traditional architecture training. ‘Schools could tap into this skills gap, teach business and young architects would learn a huge amount from that. Some [graduates] are so naïve, but at the end of the day, they all want to be doing projects that make a profit.’
Andrew Beharrall, executive director, Pollard Thomas Edwards
Chris Duddridge, senior business director, Deltek
Jonathan Herbert, managing director, Bond Bryan
Christian Male, associate director, SimpsonHaugh and Partners
Graham McClements, director, BDP
Blair Pringle, business director, Deltek
Gianluca Racana, director, Zaha Hadid Architects
Andrew Tate, director, TateHindle
Gary Tidmarsh, director, Levitt Bernstein
Kevin van Kirk, architect
Andy von Bradsky, chairman, PRP
Roger Wilson, director, Chapman Taylor
[Read a full transcript of the discussion in the attached document]
Round Table: Opportunity is out there, practices just need to respond