Amid a climate of aggressive fee-cutting and a competitive jobs market, expanding a practice can be tricky. Our panel of industry experts discussed the challenges they face and strategies for success. Sponsored by Equitone
There is more to growing a business than the financial headlines, according to Paul Rigby, partner at FaulknerBrowns Architects, but it is important to communicate the value a practice brings.
‘It’s about identifying the things that are going to help you build a better, stronger and more astute practice that maybe can differentiate yourself to command that little bit of extra fee in the future,’ he says. Income remains vital, of course, especially as the UK’s impending withdrawal from the EU casts a shadow of economic uncertainty.
So how can architects successfully expand their businesses in this climate? To find out, the AJ invited practices that have been shortlisted for, or won, the AJ100 New Member of the Year award to discuss the opportunities for – and challenges of – growing a practice, to see what others might learn from their strategies.
- Ian Chapman, director, Fairhursts Design Group
- Hannah Durham, partner, Cullinan Studio
- David King-Smith, director, 5plus architects
- Paul Rigby, partner, FaulknerBrowns Architects
- Rob Woolston, architectural director, rg+p
- Emily Booth, editor, AJ (chair)
- Diana Bullock, marketing manager – façades, Equitone (observer)
- Sam Spencer, specification manager, Equitone (observer)
Proceedings kick off with a presentation about 2018 New Member of the Year winner rg+p. Its director Rob Woolston says employees are key to business success. ‘If you haven’t got a good team, you’re not going to grow,’ he says.
Following the recession, the multidisciplinary practice, which has increased turnover by three-and-a-half times since 2009, re-evaluated how to invest in its 110-strong staff. Its offer now includes a whole-company bonus scheme, flexible working and in-house training and events. It also plans to focus on wellbeing, particularly mental health.
Rg+p makes a point of proactively finding its team, by going out to universities to look at students’ work, and directly approached five of the six graduates it took on this year. However, hiring remains a challenge.
While raising awareness of the practice’s philosophy means rg+p now gets approached by candidates, the quality of potential staff coming through agencies ‘isn’t great’.
On top of this, many of the practice’s employees are European nationals and Woolston worries what will happen after Brexit if that talent pool becomes more difficult to access. ‘There simply aren’t enough architects or architectural staff in this country,’ he says.
Rigby agrees that a practice must have a clear ethos.FaulknerBrowns redesigned its website to ensure its messaging was consistent, so clients and peers would understand what the business stood for. Communicating that message with the press, he says, has helped the practice attract ‘better staff, and staff with better connections and better capabilities’, leading to improved work.
‘We’ve got nothing else to sell other than the expertise of the people in the room.
‘We value that more than anything and we’re constantly trying to find people that align to the culture, and want to bring their expertise to share with our staff and then our clients. Hopefully then our work will speak for itself and we’ll get more work.’
New team members receive a ‘spirit book’ explaining the practice’s processes and culture.
It can be difficult for FaulknerBrowns to attract top talent to its Newcastle base though, so the practice changed its emphasis to highlight the lifestyle and wellbeing benefits of life in the North East as well as the more affordable housing.
You bring younger staff through their qualifications, at which point they are almost empowered to look around
Staff at Cullinan Studio in London ‘feel quite like a family’, says partner Hannah Durham, making lunch for each other every Friday. Durham herself teaches one day a week, while other staff are given time to do research.
‘We allow people to develop individually, which I think nourishes the team,’ she says. ‘Obviously we bring the knowledge back to the office and then we share it, which we find quite beneficial, and it creates that ethos of creativity.’
Retaining employees is key, however. ‘The London market is relatively transient, particularly around watersheds like Part 3,’ says David King-Smith, director at 5plus architects.
‘It’s one of the challenges of the industry that you do invest a lot in the younger members of staff, and bring them through their professional qualifications, at which point they are almost empowered to look around.
‘While we are extremely competitive in our salaries, you can always get more at some point in your career and we’ve been victim of that in the last 18 months or so.’ In the past, the practice has had half a dozen graduate recruits pass Part 3 on the same day, which is ‘quite a liability’.
The need to attract new people while maintaining existing relationships extends to clients. Ninety per cent of rg+p’s work is repeat but it has a business goal that at least 10 per cent of its work should come from new clients or sectors.
‘The repeat work and the frameworks are critical because they give you the solidity and the bread and butter to the business,’ says Ian Chapman, director at Fairhursts Design Group, the AJ100 New Member of the Year winner in 2017.
Not that being on a framework guarantees work. Rg+p, which targets getting work off half the frameworks it is on, has ‘not heard a dicky bird’ from some clients. It has been on an L&Q framework for seven years without getting a job. ‘We use the fact we’re on one of the biggest affordable housing provider’s frameworks in the country as leverage when we’re talking to other affordable housing providers,’ says Woolston.
For Durham, it is necessary to strike a balance between keeping your brand but reaching out to new clients. ‘Something we’ve found is if we as a practice know our purpose and know the kind of architecture we want to do … we actually attract clients who have a similar purpose,’ she says.
As architects we are all guilty of going ‘I really want to do this job’, and you lose sight of the money
Whatever the source of their work, practices need to make money. This leads AJ editor Emily Booth to ask: ‘If you want to grow a practice today, what does your attitude to fees have to be?’
Chapman says fee levels are yet to return to pre-recession levels so practices have had to find ways of being more efficient. At Fairhursts, this included increasing design review levels on schemes, which has cut discrepancies and errors, and being more analytical about the competitions and OJEU tenders for which it applies. At least two directors must agree a fee for a job, and the practice also appointed a finance director about four years ago.
‘As architects we are all guilty of going: “I really want to do this job”, and you lose sight of the money,’ says Chapman. ‘Now sometimes you just have to accept that, as a business, you really want to do the job and the money’s less relevant for whatever reason … The finance director is there to help keep our feet on the ground.’
Rg+p, which typically spends £5,000-£7,000 on a bid, has improved its success rate in winning work after appointing a dedicated bid manager. The practice remains ‘robust’ on fee levels. ‘We don’t buy work,’ says Woolston. ‘We never have done, we never will.’
While FaulknerBrowns spends ‘an extraordinary amount’ on design competitions, Rigby says they are fundamental to the business in terms of research and staff development, and bring fun thanks to the ‘freedom to be creative’.
But 5plus architects’ King-Smith believes the architectural competition culture poses a ‘massive challenge’, adding: ‘My own personal bugbear in practice is how this free work seems to generate the most enthusiasm.
‘This is an inbred culture we have [as architects] of being practitioners and not business people.’
The ‘ultimate challenge’, he suggests, is embracing that enthusiasm in everyday work.
‘I actually think there are too many architects, not too few,’ he adds. ‘You’re in competition for everything that you do.’
Challenges to growth
Growing a practice can mean more than numbers. Having previously targeted financial growth, rg+p is now shifting its sights to ‘more plaudits and exposure’, while Fairhursts is building on its track record in research and pharmaceutical buildings to expand into the healthcare sector.
But any business strategy in the current climate cannot ignore Brexit. Chapman says it is causing ‘some confidence issues’ and that, while projects are going to planning, clients are ‘getting jittery’.
Fairhursts is doing more work internationally – recently in Singapore and South Africa – and Chapman says the fact the practice opened a separate company in Paris 25 years ago should give it some protection against Brexit. He has registered as a French architect partly with that in mind. “Working with other architects, I think that’s a beneficial way forward,” he says.
Over the past two decades, between 20 and 25 per cent of FaulknerBrowns’ income in some years has come from work in Europe, giving ‘a really nice insulation against the peaks and troughs of the UK economy’.
‘Clearly, our friends in Europe are a little bit less willing to send their work to us right now,’ says Rigby. As a result, the practice is talking to partner architects in Canada and exploring more opportunities there.
‘When the waters get choppy in one economy, they may be choppy everywhere like in 2007, but usually they’re not,’ he adds.
Booth questions whether adding value is a way architects seek to grow their businesses, perhaps by providing complementary services such as principal designers or sustainability specialists.
King-Smith says the notion of adding value is ‘something competitive between architects’.
He adds: ‘I think we are massively underrated actually as a profession in terms of how, rather than adding value, we create the value.
‘We underrate the ability to turn a piece of white paper into a building. It’s an extraordinary, complex thing – and it’s getting harder and harder.’