Doing Small Things for Small People

When I began my architectural internship many years ago while an undergraduate at the University of Minnesota, I worked for a talented architect named Tom Gardner. His firm, Gardner Architecture, was located in Strawberry Point, Iowa, a small town in the northeast corner of the state. Like 79% of the members of the AIA, the firm had less than 10 staff. Tom was the sole architect. The firm is in a small barn that Tom renovated on his rural property — a really spectacular and inspiring place to practice architecture. Gardner Architecture developed quite the reputation for producing terrific buildings for small rural communities — libraries, fire stations, community centers, school additions, day care facilities, and visitor’s centers, just to name a few. The firm’s work might be described as simple or unassuming, much like the communities in which it practices. The spaces and buildings that the firm designed were not elaborate, they did not make you feel uncomfortable or make you question your surroundings. Rather, they made you feel comfortable, they were warm and welcoming. Tom had a unique ability to relate to clients from all walks of life who were sophisticated in their own ways but were involved in perhaps their only interaction with an architect in their lifetime. Tom once told me, “I do simple things for simple people. That is what architecture is about.”

I often think of Tom and my time with the firm, but upon receiving word this morning of Tom’s passing, at a much too young age, I have found myself again pausing to reflect on the lessons he taught me, and the lessons that our mentors taught us every day. Firms like Gardner Architecture create incredible insertions into the fabric of our small towns, creating communities that are enlivened and hopeful for their future. Working with communities of just a few thousand people — if that big — to raise funds for a new public library that might cost $1 million dollars. This may not seem like a lot of money, given the scale at which some practices work. But to a community of 2,000 people, that impact and sense of pride and accomplishment manifest in a building created an energy and hopefulness for the future.

Tom was also a firm believer in the power of the mentorship. He trusted his staff and challenged them to reach higher. My second day working at the firm he sent me to work with a group of community members who had formed a non-profit to create an African American historical and cultural museum. These hard-working men and women were passionate about preserving their heritage and yet for years had struggled to secure funding and support for their project. And Tom was their architect. They didn’t have the money to pay the firm, so we didn’t bill them. It wasn’t seen or thought of as pro-bono work — it was simply the right thing to do. During my two years working with the firm, this group became my client, and I worked with them on the most basic of ideas and struggles to strive toward success. I had Tom’s unwavering support and counsel. His passion for his work was remarkable.

Sometimes we get caught up in the struggles of the profession or the affect on globalization, issues of mergers and acquisitions or the effect of the economy on our practices. We wonder, dream, and hope for new models of practice in a sustainable, carbon-neutral world. And yet, there are small communities across our country — much less globally — that need the most basic of architectural interventions.

The loss of Tom to the communities he served is significant. And yet, he transformed the lives of thousands of people, one small project at a time. “Doing small things for small people. This is the power of architecture!” Thank you Tom for your mentorship - you will be missed.

Problems with Pricing

One inevitable effect of the recession is that more firms are chasing fewer projects. Hence, the odds of success are greatly diminished, and those firms that do win new commissions often have to discount their fees, sometimes substantially, in order to secure the work. To compound the problem, firms that have shed staff are spawning their own competition. The same qualified people who used to be employed can now compete on a much lower cost basis, which further drives down prices.

Since most projects have a lifespan of several years, this not only affects profitability in the near term, but it has long-term consequences as well. When the recession subsides and work becomes more plentiful, projects that suffer from low fees run the risk of becoming orphans. To recover financially, firms will be tempted to concentrate on the newer, more profitable projects at the expense of the older losers. This can cause quality problems, ultimately affecting the overall reputation of the firm.

In this challenging economic climate, careful consideration of fees is critically important. If you are forced into taking deep discounts to secure new work, don’t just give up the ship. Instead, the prospective loss must be well managed. Decide in advance how much you are willing to risk — and lose — in order to do the work. Budget the loss just like any other cost, and then stick to the budget. Don’t let the losers get out of control. Remember that each dollar of loss must be earned back later with profits from new work, so every loser places a very heavy tax on your future.

Despite low fees, never stint on quality. Whether or not a project eventually makes money, it must be done well. Each job done is a brick in the wall — it becomes a permanent part of your professional reputation. You cannot afford to install any defective bricks because they will be there for all to see for years to come.

Finally, and most important, avoid competing on price wherever possible. Every firm has a value proposition. What’s yours? Be able to communicate it clearly and convincingly to clients as well as your own staff. Demonstrate why choosing your firm is a smart decision and how you can deliver more value than the competition. Be specific. Remember that a low price is not always a bargain … it’s the results that count.

Let’s Believe in Our Own Future

Scott Simpson

While no prediction is ever 100 percent correct (including this one!), we do know this: Sooner or later, the current recession will subside. When it does, things will be different. The conditions that existed between 2003 and 2007, which created unprecedented prosperity worldwide, will not be returning. It follows that the successes of the future will not look like the success of the past.

Over the next five years, the A/E/C industry will undergo a profound transformation, powered by the three primary game-changers of building information modeling (BIM), integrated project delivery (IPD) and Leadership in Energy and Environmental Design (LEED). BIM is a technology, IPD is a process, and LEED is an attitude. Individually, each is very powerful.

Together, they combine to exert huge leverage for change. All three are at the tipping point; there is no turning back.

BIM provides a way to connect the silos of expertise that have traditionally divided the design and construction process. The increased transparency of who does what makes the interdependency among all the key team members painfully obvious. The traditional model of design/bid/build promotes a culture of self-defense, with each player on the team incentivized to consider individual interests first and team success second. With BIM, this is no longer possible; it creates a whole new sociology of design. Ironically, BIM promotes both creativity and predictability in equal measure. It’s a powerful design tool yet equally adept at demystifying design documents, bridging the gap between design intent and project execution from conception to creation.

IPD takes this a step further, substituting a single, inclusive contract that aligns the interests of the owner, architect, and construction manager. What a concept! The benefits are as obvious as wheels on luggage. IPD invites a whole new approach to decision making. Since IPD represents a truly integrated team, all the key players are at the table from day one. The traditional sequential approach no longer applies. With IPD, all the brainpower in the room can be focused like a powerful lens on the problem at hand (much as parallel processing does for computing), which leads to better, faster, and more creative solutions every time.

LEED symbolizes a profound social and political shift from an economy based on consumption to one based on the wise stewardship of shared resources. In the past, the winners were the ones who made the most or consumed the most. With sustainable design, values have shifted 180 degrees, inspiring us to ask how we can do more with less. Over the useful life of a building, even small improvements in energy use, water consumption, and air quality create huge benefits. Sustainable design is like BIM and IPD in that it forces us to recognize our interdependency — no one can win unless everybody wins. It creates an unbreakable bond of mutual interest.

As we consider what’s next, it’s important to keep in mind that design is both a noun and a verb — a thing as well as process. It’s also about creating value. As currently configured, the A/E/C industry is acknowledged to be hugely inefficient. About 37 percent of all construction materials end up as waste, some 30 percent of all projects do not meet budget and schedule, and more than 90 percent of clients believe that design documents are insufficient for their intended purpose.

A conservative estimate is that of the $1 trillion spent on construction each year, $300 billion is wasted. But here’s the good news: We can view that waste as a resource. By using new technologies, processes, and attitudes (BIM, IPD, and LEED), the waste can be re-deployed, funding innovation. The result will be better, healthier buildings, constructed faster, for less. Everybody benefits — owners, architects, constructors, and the public.

This is a natural and inevitable outcome of the post-recession economy, which will demand a new accountability for value creation. The downturn imposed a certain discipline. It made us much more cognizant of what we do, how we do it, and what we spend. Viewed correctly, this discipline, which seemed harsh at first, is actually refreshing. It opens the doors to new ideas, and as designers, ideas are our stock in trade. Going forward, we should behave as if we believe in our own future. The rest will follow.

Ralph Hawkins Interview

Heads-up on what sounds to be an interesting television interview next week.

As Chairman and CEO of HKS Inc., Ralph Hawkins leads one of the top three architectural firms in the country. The Dallas-based company boasts a diverse portfolio, and its brightest star right now is the new billion dollar-plus Cowboys Stadium in Arlington.

Next week, KERA, the public radio and television station for north Texas, features an conversation with Ralph Hawkins, CEO of HKS. The interview, which will air on the station’s monthly half-hour business program “CEO,” will include a tour of the new stadium. Hawkins will also discuss how HKS is confronting the troubled U.S. economy by expanding globally and working on projects funded by the government.

Hawkins is a Senior Fellow of the Design Futures Council and a member of its executive board. Needless to say, this should be an illuminating and fascinating conversation.

“CEO” airs at 7:30 p.m. Friday, July 31 on KERA-TV and at 5 p.m. Sunday, Aug. 2 on KERA-FM. Those of us outside the reach of north Texas signals can find it streamed online after the broadcast at www.kera.org/ceo.

An NCARB Lesson from Chicago: It’s Time to Think Growth

Let’s face it, the economy is not going to improve dramatically anytime soon. Architects and designers have been in an economic bubble that has proven to be unsustainable from several viewpoints: the developing world, macro and micro economics, real estate credit markets, and green and sustainable design.

Nevertheless, it is time to look at a new growth attitude. Here I’m talking about growth in quality, growth in green, growth in regenerative systems, and growth in our personal human relationships. At last week’s National Council of Architectural Registration Boards (NCARB) annual meeting in Chicago, there was a good deal of chatter about systematic, stratetic processes that are being put in place that will result in sustainable delivery systems. SOM’s presentation on the Chicago 2016 Olympic proposition was a case in point. With the marketplace changes, architects and designers can create not just incremental gains but exponential leaps by recognizing how professional practices are adding value to future opportunities. New and higher mental set points need to be established that focus on the changing marketplace. You will discover a richness of opportunities just below the surface.

Indeed, there can be growth in your value proposition — in your relevance to the clients of tomorrow. It’s time to create clarity about all the factors that affect your professional practice and understand that the problems and issues you have today are not insurmountable. In fact, they will give rise to new growth.

The unexpected lesson from NCARB in Chicago: It’s time to dislodge your professional practice from the rut and into the tango that is integrated project delivery. This is where the NCARB annual meeting had more than average relevance — apply some or all of these tactics and you’ll not only make the design professions more efficient, the planet greener and safer, but you’ll also get on track for superior success.

Authenticity Trumps Cynicism

Jim Cramer and Denise L. Lawrence at Cal Poly Pomona's Center for Regenerative Studies.

I recently found myself on the campus of Cal Poly Pomona, and it was there I had an opportunity to visit the ambitious John T. Lyle Center for Regenerative Studies. It is an interesting unit of the College of Environmental Design, which includes architecture, urban studies, landscape architecture, and art.

Here is a picture of me with Denise L. Lawrence, Ph.D., an anthropology professor who splits her time teaching architecture and regenerative studies. It’s a curious picture, and you may be wondering what it is we are doing out in the sun. In fact, we are admiring the harvest of the elephant garlic grown on campus. Quite the specimens!

But most important, Lawrence has a fascinating read on the future of the design professions, one that is worth heeding. She says we need to have positive expectations about the future — not just avoid the negative ones. She sees hope for the future because of the interest and actions taken by the students on campus and by the professional practices employing their graduates (firms like HMC located close by in Ontario, Calif).

Lawrence is not naive. Like most American universities, Cal Poly has had its share of setbacks. But she has a vision that has the capacity to change the course of events for the better. The Center for Regenerative Studies at Cal Poly Pomona is a highlight of the College of Environmental Design. (Watch  for an announcement regarding this and other highly admired programs in the July/August issue of DesignIntelligence, which focuses on sustainable design.)

Cal Poly Pomona an imperfect model, which is an authentic example of sorts because of how they have handled adversity. Success has not come easily. And while they are small, they can measure the benefits of the school in sophisticated ways — world-class ways. And this addresses the all-too-common cynicism on our college campuses today.

Opportunity to Lead

Kawneer Co. President Glen Morrison (from left), Leo A Daly Executive Vice President Charles Dalluge, Communication Arts Co-chairman Richard Foy, Greenway Group Chairman Jim Cramer, and DuPont Building Innovations Commercial Business Manager Casey Robb

Most striking about last week’s meeting of the Design Futures Council Executive Board was extensive talk about opportunity. What’s the best use of this recession? was the prominent topic of debate and brainstorming among members of this prestigious group of architecture, engineering, construction, and construction product leaders.

There was no denying that times are tough and getting tougher. “This recession is reaching around the globe and we’re not seeing many hiding places,” noted one firm’s managing partner. Another individual relayed his expectation that by the end of the year, the firm he oversees will be 50 percent as large as it was a year prior.

Yet almost without exception, participants outlined opportunities they are either currently pursuing or that they’re keeping an eye on:

• “There’s an opportunity do a lot better work in this economic environment.”
• “There are more high-profile, quality assignments now than during the building boom.”
• “There is pent up demand for our services.”
• “There is still demand for replacement hospitals.”
• “We’re putting a lot of focus on imbuing other project types with the hospitality experience, for example, health care and senior living.”
• “Crisis gives us a chance to change faster.”
• “Now is the time to be bold. It’s less expensive to be innovative than it used to be.”
• “We have more time now to get close to clients and understand their needs.”

While mainstream media continues to push messages that focus on the gloom of the current economic situation, leaders with foresight see opportunity and are willing to take strategic risks to turn those opportunities into advantages.

Innovation: A Strategic Imperative

In an April 2008 interview published in The McKinsey Quarterly, Pixar’s Oscar-winning director Brad Bird speaks about the strategic imperative of involving his staff, particularly those outside the traditional decision-making circle, in creating innovative strategies for success. “I would say that involved people make for better innovation,” he states. “Passionate involvement can make you happy sometimes, and miserable other times. You want people to be involved and engaged. Involved people can be quiet, loud, or anything in-between - what they have in common is a restless, probing nature: ‘I want to get to the problem. There’s something I want to do.’”

It is this sense of involvement in creating an innovative culture that world-class firms are beginning to embrace in the A/E/C industry. Ranging from design teams composed of individuals with diverse backgrounds of varying levels of experience to cutting-edge approaches to integrated project delivery - and everything in between - firms are only beginning to explore the fringes of what innovation truly means. In fact, I would argue that many firms that position themselves as innovative are in fact creating change, not innovation.

I believe that true innovation causes meaningful transformation from a social, economic, or process perspective. Programs such as Public Architecture’s, The 1%, and Architecture for Humanity, have created innovative approaches to addressing the social impact architects and designers can have on individuals and communities. Firms such as KieranTimberlake continue to explore innovative means of construction and fabrication through a dedication to research and development outside of the traditional architectural realm.

As the economic condition remains grim for the coming months, leading firms are using this time to reexamine current practices and position themselves to become true innovators within the marketplace. They understand that to be competitive in both a down economy and the new economy that will emerge, it is strategically essential for not only to embrace innovation but to practice it. They realize that to attract and retain the best clients and the best staff, they need to create an internal culture that fosters innovation.

Fortunately for professional practices, academic institutions across the country continue to explore, discuss, teach, and research truly innovative means and methods of representation, design, construction, and professional practice. Their graduates have begun to develop resources and knowledge about innovative practices and projects across the globe and are anxious to explore these in the framework of the reality of practice - even if this practice doesn’t look like the practice of today. Young leaders - and potential leaders - in firms struggle to find a balance between their personal desire to innovate and a healthy respect for and desire to learn about the realities of professional practice. While many of them are beginning to see the strategic imperative to innovate, they are often not in a position to lead this type of meaningful change in the culture of a firm.

If the leaders of professional practices see the strategic imperative of becoming innovative partners with their clients in the future, they will also begin to see the necessity of engaging young professionals in this change. These young professionals will lead transformation and innovation; there is no doubt about it. The choice is where they lead it. Is it your firm or somewhere else?

The Journey We Face

I just got off the phone with a reporter asking for my take on Foster + Partners laying off 300 employees. This is a huge reduction of nearly 25% of their work force. In recent weeks we have seen other firms such as TVS Design, Smallwood, Reynolds, Stewart, Stewart, and others of all sizes reduce staff due to the world-wide slowdown in architecture and construction. This is happening with world-class firms and regional firms including those of highest repute. Often the percentage has been in the range of 15 to 20 percent RIF.

In less than one year we are moving from full employment of the creative class that includes architects and designers to an unemployment rate of perhaps 15%. Some scenarios and business model simulations anticipate even more. A Design Futures Council roundtable reports that dozens of firms now have contingency plans in place to reduce their work force by perhaps 40 percent. Firms with the strongest brands will most likely experience less pain, but no firm will be completely immune unless they are a big player in infrastructure, sustainable design solutions, health care, adaptive re-use, or of course school remodeling and additions. It appears that the new educational facility package did not get through the U.S. Senate this week.

The Foster + Partners layoff is putting some very talented people out on the street. The firm will close its offices in Berlin and Istanbul. Some of the departing staff will pick up other assignments within a few weeks, others will form new firms, others will languish for a month or so and then adjust to options, including going back to school, learning a relevant specialty within architecture or engineering, or even pursuing related career options. No professional category is immune to this recession. But few economists in the real estate arena forecast such a bleak and fast moving downward cycle.

What is one to think? The decisions by Foster + Partners (a part of 3I Group) are an unfortunate but necessary response to the economic conditions we are in. I expect more projects to be delayed or cancelled over the next 12 to 18 months. It is a professional responsibility of firms to keep their professional practices healthy in both good times and bad.

The heart of the profession is being tested. Architects and designers — indeed the construction industry — will come out of the recession/depression stronger. But it will be a journey none of us have wanted to face.

Never Waste a Crisis

Charles Dickens had it right: this is the worst of times, but also the best of times. The effects of the current economic crisis have been sudden, broad and deep. Construction financing is as scarce as hens’ teeth, and many projects have been put on hold or cancelled outright as a result. Design firms across the country are facing rapidly diminishing backlogs and scant prospects for new work. Collecting fees has become more difficult. The first round of layoffs predictably affected primarily younger staff, but now the staff cuts are beginning to reach into the senior levels. Before the recession ends (do we still call it that?), a wave of consolidation will likely sweep the industry: mergers, acquisitions, and perhaps more than a few bankruptcies. One thing is clear: we know that the widespread prosperity of 2003-2007 (when the stock market reached an all-time high) cannot return to “normal” because it was built on false premises: loose lending practices, exotic investment derivatives that not even Wall St. experts fully understood, huge deficit spending by Congress, and in some high profile cases, outright large-scale fraud. Those conditions cannot be repeated, nor would we wish them to. Instead, the time has come to examine the lessons learned, clean up the mess, and re-tool. A sustainable future can only be built on a sound economic foundation.

While it might sound counter-intuitive, this is a period of unprecedented opportunity for savvy design firms. Clients will be looking to save money, both on capital cost and operational cost, and to find ways of getting more productive use out of the space that they already own. They will not tolerate sloppy design or inefficient practices. Those who are building will be looking for ways to speed up the process, build wisely, and eliminate waste. Best-of-class firms will respond accordingly. Fortunately, there are three compelling value propositions that the design profession can bring to the table: BIM, IPD, and green design.

Over the past several years, the imperative to embrace sustainable design has clearly passed the tipping point in the mind of the public. More importantly, it has also been embraced by the business community. Some of the smartest firms on the planet (such as Kleiner Perkins in Silicon Valley) have recognized the potential of an emerging market in “green tech.” They see huge opportunities and big profits ahead. With the equity and real estate markets in a steep decline, investors will be looking for growth in other areas, and green technology can provide it. Expect an explosion of innovation in the coming years. Because each dollar of energy cost saved goes right to the bottom line, much of this new technology will be “self funded.”

BIM is another idea whose time has come. It’s more than a clever piece of software; it has the potential to actually change the “sociology” of design-the fundamental way that individuals and teams deal with one another during the course of a project. By providing a common place to store information, by providing a platform for “multiple authorship,” and by providing for the transparent sharing of information that bridges the traditional professional silos, BIM has the potential not only to greatly enhance overall design quality, but to control budgets and schedules in the bargain. With BIM, the old saw of “time, money, quality…pick any two!” no longer holds. Clients want all three, all the time, and with BIM, designers can deliver the goods.

The third important innovation is IPD, or Integrated Project Delivery. This is not a warmed-over version of fast-track or design-build; it is a fundamentally different way of engaging the Owner, Architect, and Construction Manager to work together collaboratively in producing a project. It takes better advantage of all the brains at the table, aligning the disparate interests with the mantra that “we all work for the project.” IPD has the potential to reduce or eliminate much of the repetition and waste that is endemic to the design and construction process. Imagine, for example, building without the need for bidding, shop drawings, or submittals. In an economy that spends better than $1 trillion per year on construction, gaining efficiencies of only 10% (well within reach), will produce $100 billion in savings each year, which is triple the amount paid in architectural fees. Think about it.

The good news is that all three of these process innovations are readily available. The bad news is that it seems we have to be in crisis mode before we’re brave enough to take full advantage of them. By nature, architects are pretty good at inflicting change on others, but remarkably reluctant to embrace change in their own profession. The current crisis has brought its share of hardship, but it also presents an unprecedented opportunity. In today’s economy, design firms either re-tool or they risk going belly up.