Competing for the Future

Beware the unimaginative and the Luddites who portend the end of the profession, and open your mind to a future of relevant possibilities.
~Tweet

Beware the unimaginative and the Luddites who portend the end of the profession, and open your mind to a future of relevant possibilities.

This issue of DesignIntelligence takes a detailed look at the latest data and trends in professional practice compensation in our “2012 Compensation and Benefits Survey.” But there is more in these pages than mere numbers. There is strategic optimism, deep energy, and detailed thoughtfulness.

Perhaps you read the Salon article “The Architecture Meltdown” last month that cites the distress experienced by star architects as well as those less celebrated. Or the Washington Post article that paints a picture of architects and designers as largely jobless (“New Study Shows Architecture, Arts Degrees Yield Highest Unemployment”). Other articles have portrayed architecture as a profession with little resilience during the recent and still lingering recession. A once-proud profession that has lost much of its glamour is the characterization. We members of the Design Futures Council take issue with these sentiments.

Let’s start with an obvious contrast. The Design Futures Council recently completed its 8th Annual Leadership Summit on Design Innovation & Technology in La Jolla, Calif. The speakers were bright and informed. Each was optimistic, and not merely optimistic, but strategically optimistic. They could count the ways by which they had positive motivations. They were armed with stories, data, and visions. Instead of seeing only problems, Summit delegates saw opportunities. They did not shy away from the analytical; however, they were quick to connect the dots to a more hopeful and relevant future.

Disruptive Changes

I have to wonder if professionals and their associations are giving too much air time to cynical and dark pessimism about the future of professional practice and not enough attention to entrepreneurship. The inwardly focused priorities should open to an industry primed for revolution. Is the future of the design professions going downhill? Or is it being reinvented? Change is disconcerting, and some people become so frightened by it that they can’t see past their temporary discomfort to where the change may lead.

I have to ask: Why are we giving all this attention to the unimaginative? Why not use this tumultuous time to explore new models and entrepreneurial visions for the design professions and for tomorrow’s A/E/C industry?

There is much to learn right now. Economic trends, professional practice changes, and technology shifts have disrupted the rules. This presents a challenge. Yet we must also play the hand we have been dealt. Yes, some people will try to thwart even the best ideas. They see opportunities as barriers, solutions as problems. Theirs is not just an issue of squandering creativity but also of poor time management and misplaced value judgment.

Rapid advances in technology and better managed professional practices have made it possible to design better and faster. Data collected by DesignIntelligence and the Greenway Group show that design professions and the construction industry are more creative than ever in their business practices. For example, architecture and engineering practices are about 80 percent more productive in the past seven years, as measured by revenues per full-time equivalent staff.

It’s true that this is a time disruptive to traditions. The game has changed. The new game is full of challenges — and rewards. Furthermore, the new professional practice paradigms are quite different from those being taught at most colleges and universities. So yes, many professionals are unprepared for today’s context of change and opportunity.

Cultivating High Performance

Why are innovation and change management not more highly prized as core values and essential strengths for the professions? Firms can and should be more open to learning from cause and effect. We are part of an experiment even as we are players in the unfolding of a new A/E/C industry. I encourage professionals to grab hold of these three principles:

1. Develop a constructive paranoia: Remain restless for continuous improvements that can allow you to leapfrog the competition. By constructive paranoia I’m talking about the kind of daily self-examination that leads to professional fitness. Cynicism has no place here.
2. Work in communities that possess empirical talent — those that seek much more than average metrics in both process and output.
3. Dedicate yourself to behaviors of extraordinary discipline that will reward you for risk-taking.

Along with those three principles, there are several questions professionals should ask of themselves and their peers at their partner meetings:

• Is our firm more relevant this year than last?
• What might change next?
• Why do we do things the way we do?
• How do other professionals do what we do?
• Are we moving quickly and deliberately to reach tomorrow’s opportunities and new achievement levels?

Organizations should ask themselves these questions every six months or even more often. Don’t wait until you have an off-site retreat. Discuss them over lunch. Make them part of the organizational lexicon by weaving them into your thinking and your conversations.

Statistically speaking, role model professional practices account for about 15 percent to 17 percent of the profession. We know this from our recently completed research for the Design­Intelligence Almanac of Architecture & Design, which was a fascinating, year-long project revealing mounds of data we’re continuously sifting through. Role model organizations are renowned for their ability to do great work, to make a healthy profit, and to attract and keep top talent. They have learned (often through trial and error) to achieve a high-performance culture.

What Really Drives Performance

Let’s pull back the curtain to reveal ways in which successful professional practices consistently deliver on the promise of exceptional performance. Too, let’s examine several action steps you can use to achieve exceptional results in your own firm, whether you have 10 employees or 5,000.

Greenway Group has been measuring the culture of firms since the mid-1990s. We do this through appreciative inquiry, 360-degree interviews, and analysis of key metrics. Figure 1 shows 14 of the categories of cultural measurements used in the Greenway LEAP (leadership, empowerment, accountability, and processes) analysis. The Peer Group column represents overall scores from all firms, including architectural, interior design, landscape architecture, and engineering firms, including award-winning organizations, firms of the year, and those recognized by business journals as exemplary places to work. The Best-of-Class column includes the scores of only the top 15 percent performers. Our experience thus far is that no firm scores best-of-class in all categories, and the best possible score in any cultural characteristic would be a 99.

Greenway also charts client data that tracks firm profitability and compensation levels so that we can explore the correlation between financial performance and meritocracy recompense. We then conduct cross analytics to see how meritocracy programs benefit partners and owners and, most important, clients. Next, we review the issue of executive compensation to examine base, bonus, and benefits from several angles, and we speculate how top talent and human relations policies translate into satisfying levels of best practice. Our goal is to capture and manage knowledge in a way that will support strategic and tactical decision making as it relates to compensation and other HR policies.

In order to best measure high performance, we use the Greenway Group’s LEAP analysis of determining best practices. The intent here is to provide an executive summary of the differences between firms at several differentiated levels. Greenway uses the 14 characteristics in Figure 1 as well as specific fields of analysis to show fundamental benchmarks. The top 15 percent of firms are the exemplars. These firms know how to frame issues, create collaborative teams, and solve problems focused on the scope of work at any given time.

To measure relative brand strength, we draw upon the DesignIntelligence brand index as outlined and quantified in the Almanac of Architecture & Design. Of the 16,000 North American firms we reviewed, only 114 were found to achieve the top-tier level of five-star status. About 1,000 ranked in the top three tiers of performance (out of five).

It is interesting to speculate why more firms don’t achieve higher levels of performance in our A/E/C industry. We’ll explore this question further in a future issue of DesignIntelligence, but we can assure you that it likely won’t include those architects and designers who are disgruntled and who subscribe to the tenets of “The Architecture Meltdown.”

If high performers in our profession are thwarted by unimaginative or Luddite professionals, then we have reason to be pessimistic about the future of the A/E/C industry. However, I don’t see that as a real threat. Not at all. Our current situation of flux calls for ever more leadership and innovation. It is time to further unshackle the entrepreneurs of every generation into the expanding opportunities in our A/E/C industry.

Related

DesignIntelligence Compensation and Benefits Survey, 2012

James P. Cramer is chairman and CEO of the Greenway Group, a foresight management consultancy. Cramer is president of the Design Futures Council, the publisher and founding editor of DesignIntelligence, and former chief executive of the American Institute of Architects.