Posted: March 14th, 2011 | Author: Jonathan Bahe | Filed under: Economy, Global practice, Professional practice, Strategy, Uncategorized | 2 Comments »
A recent article in the Financial Times noted that in 2010, China spent more than $1 trillion on new building projects, overtaking the United States. Comparatively, investments in construction - both private and public - decreased in the United States from roughly $1.5 trillion in 2005 to $983 billion in 2010. Decreasing opportunities in the United States - and increasing opportunities abroad - are of no surprise to most architecture firms in the US and firms of all shapes and sizes are now working in overseas markets.
Since 1998, Greenway Group, on behalf of the Design Futures Council, has conducted the Multinational Design Firm Fee Survey, which examines the 30 largest exporting architecture firms headquartered in the United States. Nine firms have held a spot on the Top 30 list for the past 12 years:
- Cannon Design
- Kohn Pedersen Fox Associates
- Perkins + Will
Fee growth by firms in the DesignIntelligence Top 30 US-Based Multinational Design Firms has taken place every year for 12 years without exception - and we expect 2011 to be no different. The annualized growth rate for the DI Top 30 in their non-US based revenue is 29.9%. A report released by Global Construction Perspectives forecasts that China will account for 20% of total construction by 2020, up from 14% today.
We believe that developing resilient strategies and engaging foresight scenarios is critical for firms engaged in international work, and for those exploring opportunities in these markets. Is there money to be made? Of course. But for inexperienced firms, there may be more to be lost. Are the design opportunities unique? In many cases yes.
The design professions, particularly the A/E/C community, have a tremendous opportunity to impact future development of cities, whether in China or in another slice of the $97.7 trillion global construction market over the next decade. How globalization continues to shape our practices - and how we in turn shape our environment - is a constantly developing paradigm of practice. We may not know exactly how, but we certainly know that within the challenges of global practice lay numerous opportunities for growth, prosperity, great service, and meaningful design.
Posted: December 7th, 2010 | Author: Scott Simpson | Filed under: Economy, Leadership, Planning, Professional practice, Strategy | Tags: AEC, change | 4 Comments »
A Brief History of the 21st Century and What It Means for Design
A mere 10 years ago, our biggest worry was Y2K. We were bombarded with dire predictions about computers going crazy at one second after midnight on Jan. 1, 2000, snarling all things digital and randomly rearranging our e-mail, financial records, and air traffic control. Some people even canceled their New Years travel plans, fearing that their jumbo jet could become hopelessly lost in the heavens. Alas … didn’t happen. But in the intervening decade, a lot of other stuff did.
With 9/11, the prospect of systematic terrorism on U.S. soil was thrust onto center stage. This was followed in short order by a war that seemed to be over within months but hasn’t ended yet. Then a huge surge in the stock market created historic levels of new wealth, which in turn fueled unprecedented growth and prosperity worldwide, especially in China. Awareness of global warming also made an appearance, just in time to cast a pall over the burst of industrialization. Then, of course, the Great Recession, from which we learned that if enough people in Florida get behind on their mortgage, an entire country can be bankrupted (Iceland). Who knew?
While all this was going on, nerds from Stanford (Larry Page and Sergy Brin) and Harvard (Mark Zuckerberg) were pulling all-nighters inventing Google and Facebook, which allow us to find out pretty much anything we want to know on a 24-7 basis and then share it (along with our most intimate secrets) with thousands of our closest personal friends.
Toss in a few natural disasters (tsunamis, hurricanes, and volcanoes), and just for good measure, add the very real prospect of nuclear proliferation, courtesy of Iran and North Korea. That’s a lot to digest in just a few years.
What have we learned from all this?
The key lesson is connectivity. Politics, finance, commerce, weather — everything is intimately intertwined, we’ve come to understand. Even a very small change, like a degree or two in the average temperature of the ocean, can have huge consequences. As a result, we have developed a new appreciation for systems thinking and the power of context. From this, a different kind of economy has emerged — one that is more about creating networks and experiences than making tangible things. In turn, individual effort is being supplanted by the power of teams, with a focus on partnering, value creation, and collaborative learning. Indeed, mass collaboration is the only way we can succeed from here on out.
Why is this so important for designers? Because design thinking is what creates the interface between technology and people. Design helps us deal with change, making disruptive innovation possible. Case in point: Technology made Internet banking plausible, but it was the design of the ATM that made it accessible and then pervasive. Ditto for cell phones, iPods, and e-books.
Access to huge amounts of information would be meaningless without a way to organize, manage, interpret, and apply it. The amazing tools that have been developed in the past 10 years are merely a preview of things to come. For example, now that the human genome has been decoded, the possibilities for inventing new medical therapies are literally boundless. Google maps already keep us from getting lost, but pretty soon they’ll actually be doing the driving as well, knowing in advance which motels have vacancies.
And what about buildings? Today, they are relatively inert, but in the future, they’ll develop thinking properties, manufacture their own energy, adjust their heating and cooling systems automatically as weather and occupancy change, and even make more coffee when the pot runs low. They might even become kinetic, swiveling on their foundations to catch every available solar ray or gust of wind, essentially becoming very large, self-charging batteries in which people happen to live and work. Design will make all this, and much more, possible.
Throughout history, various classes of leadership have emerged to shape society and culture. There have been religious leaders (pharaohs and popes), military leaders (kings and generals), business leaders (industrialists and financiers) and even artistic leaders (from the Renaissance to rock-n-roll). Because the world has become so complex and interconnected, the next generation of leaders must include a new kind of priesthood: design thinkers.
We’ve already seen how powerful design can be when applied to improving mundane products such as vacuum cleaners and luggage. How much more pervasive will it be when applied to whole systems, such as health care, education, or even government? Could designers create a justice system that is swift, fair, and inexpensive? Why can’t going to court be as simple as renting a car?
You get the idea. Design, which is both a verb and a noun, is about process as well as things. This is powerful stuff. Design enables us to explore the unimaginably small (via the Large Hadron Collider at CERN) and the immensely huge (via the Hubble telescope), plus everything in between. It’s how we envision and invent. Most important, it’s essentially optimistic. Design thinking assumes successful outcomes and carries a conviction that there is always more than one way to solve a problem. Design is also democratic. It’s about what works, and anybody can do it. Design transcends borders and is not inhibited by cultural or language barriers. A great idea travels fast and is easily adopted and adapted.
But here’s a question: What will we call the great designers of the second decade of the 21st century who will provide the new ideas, strategy, and leadership that are so desperately needed? Will they be architects? Architects are creative, to be sure, but to be truly effective, they also need to develop an appetite for risk and entrepreneurship.
Perhaps it’s time that design thinking is applied to the design profession itself. How should we be training the next generation? What do they really need to know? How fast can they learn it, and by what means? How can design thinking be broadened to include other disciplines, such as finance, politics, and medicine? Why not think of business managers as process designers, law enforcement officials as designers of secure neighborhoods, and public health officials as designers of our collective good health? Getting the right answers starts by asking the right questions, and designers can lead the way.
Posted: November 24th, 2010 | Author: James P. Cramer | Filed under: Economy, Leadership | Tags: change, Leadership, opportunity, performance | No Comments »
It is very likely that your role in the design professions and in our industry will be changing rapidly. This is because there are new competitive threats from outside the traditional A/E/C industry structures and there are new technologies to navigate … not to mention all the reasons associated with the economy.
This changing context often leaves people confused about their long-term goals. Our position at Greenway Group is that the future is and will continue to be brimming with opportunities. If you are planning new goals for next year here is what I recommend:
- Develop a coherent and positive point of view. Right, it’s not easy to do today, but it is essential that you do this now. No one outperforms his or her own aspirations. Your point of view should be expansive and should get your adrenaline rushing. This is an essential choice you must make. This is your angle on the future.
- Revise your vision for the next three years. Backcast the action steps that will be needed to achieve the vision. Think non-linearly about inventing your future. Your plan should be edgy, not last year’s formula.
- Make more friends and be more likable. Build relationships with a quality network.
- Extinguish inertia. That is to say, co-opt and neutralize the anti-change forces around you. Push away negative forces.
- Create and use a posture and a vocabulary of action and motivation. This will become your personal dynamism. Don’t worry and stew over today’s molehill problems; take advantage of this time to think in new ways. Build bridges toward new opportunities that are often just outside the boundaries you’ve been operating in.
If you want to change anything major, you have to make a choice to do some things differently. Then, you will ride the ascendancy path toward some very interesting opportunities ahead. You’ll be amazed not only by what has been accomplished but also what you’ll be looking forward to.
Posted: November 19th, 2010 | Author: Scott Simpson | Filed under: Economy | Tags: association, conference, convention | 4 Comments »
Though there are recent signs of a thaw, the effects of the recession on the A/E/C industry as a whole have been severe and will be long-lasting. Construction spending is way off, there have been widespread layoffs, and financing for new projects is still very difficult to come by. Recovery, when it comes, is likely to be slow and incremental. In response, firms have cut expenses and are looking for ways to use technology and new processes, such as IPD, to create a much leaner, more efficient business model.
At the same time, there are significant leadership roles that need to be filled: Both the AIA and NCARB are currently in search mode for new CEOs. This is an ideal time to take a close look in the mirror and decide how to shape the future of the A/E/C industry as whole.
It’s time for some fresh thinking, and we won’t get there by replicating the paradigms of the past. Here’s a thought: create a “super convention” that will gather together the combined membership of the entire industry, including AIA, NCARB, NAAB, IIDA, AGC, the USGBC, etc. If all of these organizations would agree to hold their annual conventions at the same time in the same city, the assembled brainpower would be enormous and would provide a unique platform for cross-fertilizing the best ideas from across the country and around the world.
Such a gathering would be huge and would demonstrate just how influential the combined resources of the A/E/C industry could be when working in concert. This would provide the springboard for a host of new ideas, energy, and optimism, all of which are desperately needed. A better future tomorrow depends on great thinking today.
Posted: November 9th, 2010 | Author: James P. Cramer | Filed under: Economy, Leadership, Planning, Professional practice, Strategy, Uncategorized | Tags: Communications, Culture, Leadership, management, Motivation | 13 Comments »
Each day I get asked about — or find myself in a discussion about — executive level leadership. Both the American Institute of Architects and the National Council of Architectural Registration Boards are looking for their next chief executives. Several of the largest firms in the country are also considering transitions in their leadership brought about by economic, demographic, and opportunity shifts in their professional practices.
These search and selection processes give us pause. The stakes are high. How should these organizations determine the best leaders?
Whatever else the leader’s role in an association or professional practice, there are 10 base essentials. When these foundational characteristics are present, the organization functions with energy and competence to serve its mission. Here is what I believe is essential.
1. Leaders act as both visionary and key day-to-day resource for overcoming difficulties. They set the tone for the can-do culture of the organization.
2. They develop and conceptualize the organization’s tactical plans to accomplish strategic ambitions. They develop and keep clarity around goals. This develops strategic optimism.
3. Communications are sincere, open, and energized. The leader is not intimidating and has the wisdom of perspective, good humor, and agility to work with a diversity of situations.
4. Leaders are able to manage demanding schedules, and their agenda is always focused on what matters most.
5. They listen and then coach every situation they find themselves in.
6. Financial matters are monitored, measured, and communicated, and these leaders tend to consistently bring in the bottom line — no matter the excuses of the day.
7. There is an ambassadorial quality about them. They are sought out to problem-solve and inspire along the way while building bridges.
8. Today’s issues are never ignored, and there is a sense that the longer-term plans can be realized through today’s actions – no matter how painful.
9. Resilience is manifested in the language of the leader who is prepared for inevitable surprises.
10. Accountability is never shirked and the leader takes final responsibility for results and outcomes. This is a stand-and-be-counted attitude that becomes contagious in the life of the organization.
Leadership is demanding. Great leaders are rare. These 10 characteristics are framed by lifestyle and attitude. Leaders are not perfect, but they have an uncanny knack for applying sensible, inspired, day-to-day actions that make all the difference.
Posted: September 29th, 2010 | Author: Jonathan Bahe | Filed under: Leadership, Strategy, Sustainability, Uncategorized | 9 Comments »
Holstee is an organization was founded in 2009 by two brothers who are passionate about sustainability and wanted to pursue this lifestyle and its links with innovative design. They have produced a variety of products including shirts, wallets, and jewelry - you can find more of their products here. To help its customers understand the ecologic impacts of the product they sell, Holstee has developed a series of badges which describe the key sustainable elements of each product. They have also taken great care to address issues of shipping and packaging - two significant issues for the sustainable product realm. And if this wasn’t enough, Holstee has committed to using 10% of all sales as micro-loans to entrepreneurs in developing countries.
Holstee has tied this all together with their manifesto. Not only graphically pleasing, but also contains powerful beliefs which guide the organization. Not only has it generated a decent amount of press, but it also makes their consumers aware of who they are and what they believe.
What if you were to develop a similar “manifesto” for yourself as a design leader? What would it say?
How about for your professional practice or organization? What bold public statements are at the core of your work - define the essence of your practice? Are they different than your personal beliefs?
Posted: September 27th, 2010 | Author: James P. Cramer | Filed under: Best Practices, Professional practice | Tags: competitive advantage, speed, value | 1 Comment »
“Slow” kills professional practices. It brings death to careers. It is often defended for reasons that are about protecting the quality of design process and product.
The arguments against speed are often well crafted and well intended, yet they most often stifle progress and exhibit an attitude of denial, not innovation. These defenses trend toward academic statements that address old contexts of professional practices ignoring technology and new management science.
This is changing.
Evidence points to speed as a friend. In fact, it is unfolding as a new competitive advantage. Professionals must be light on their feet and cover ground quicker. This is one reason firms are abandoning centralized bureaucratic practices.
Ours is an impatient world, and it’s accelerating. You’ve got to be lean, quick, agile, fast — and good.
Why be a drag on your firm? Put some extra quickness in your step and get your brain to imagine a duality that includes both high-quality design and faster delivery. Put some velocity in your process and watch your value grow.
Posted: August 30th, 2010 | Author: James P. Cramer | Filed under: Global practice | Tags: Add new tag, architecture, Shanghai | 9 Comments »
Paul Doherty contributes the following guest blog. Paul is senior vice president of Screampoint, which provides governments, multinationals, and large real estate portfolio companies with visual solutions to manage and maintain their assets.
I am enjoying my adopted home country of the People’s Republic of China. I have settled into having a wonderful family, a growing business, and a feeling that the future is very bright. You take a keen interest in design when you make a place home. Just ask any residential designer about their clients’ interest level of every detail of their home.
I live and work in Shanghai in an area called the French Concession. Shanghai has been a city constantly shaped by its foreign trade, foreign invasions, and foreign occupation. You can see the influence of each era in the different parts of the city: the Bund, the German Concession, the English Concession, the French Concession. Thus, I live in an area that could be picked up and placed in the middle of Paris and not miss a beat.
But what makes a city is not just the vocabulary and context of its buildings. It lies in its smells, sounds and people. What makes Shanghai so wonderful is the variety of its smells, sounds, people … and its neighborhoods that make you feel as if you are in a different city by entering any one of them.
Shanghai is hosting the World’s Expo at the moment. Seventy million people have been to this city already to experience the Expo, with two more months to go. The showcasing of the world’s cultures, foods, and design are making this year’s Expo one of the best. The astonishing architecture and design of the numerous pavilions alone is worth the trip. But with the exposure to the world’s designs at the Expo — and understanding that Shanghai has a past that is shaped by outside design influences and architecture — a sensitive question is beginning to emerge in the design community of Shanghai and throughout China: What is modern Chinese design?
My personal view is that the Chinese are struggling with finding their own design vocabulary when it concerns buildings and the context of urban design. The majority of building design for large-scale development is coming from Western-based design firms. This has created a disturbing array of geometric shapes throughout cities like Shanghai that have not created a design movement, trend, or vernacular that can say to the world, This is a Chinese building.
One trend that is emerging is a movement toward historic preservation, seen in developments like Xintiandi, Tian Xi Fang, and the new Sinan Mansions. Taking its cue from the past, the rehabilitation of older Chinese structures and repositioning them for modern functions has rekindled an interest in older Chinese design forms, culture, and meaning. This combination of learning from the past to define the future could be giving rise to a new generation of Chinese designers who will define this century’s design in China.
One can only hope that in their home, a true design emerges that helps better define a city, a culture, and its people.
Posted: July 14th, 2010 | Author: James P. Cramer | Filed under: Leadership | Tags: baseball, management, steinbrenner, yankees | No Comments »
I love baseball, but in all honesty, I never thought much of George Steinbrenner. His leadership style was flawed. While Yogi Berra was quirky and quotable, Steinbrenner was most memorable for being pushy, tempestuous, and arrogant. I doubt that we’ll remember many leadership lessons from his tenure despite the success of the oft World Series champions.
But I do have a fond memory and a management lesson from Steinbrenner. A couple of years ago when leading a firm retreat at the Four Seasons Hotel in Philadelphia, I met “The Boss” in the hallway. We were on the same schedule leaving our rooms and heading for the elevators to the hotel lobby. He said first, “Good morning” energetically and insisted on holding the elevator door for me. When we arrived at the lobby level, I held the door and said, “After you.” He then said, “No, after you!” We exchanged once again but I succumbed first as he boldly insisted.
That day I decided I liked the man more than I thought. And I even began to like the Yankees — just a little.
Posted: July 12th, 2010 | Author: James P. Cramer | Filed under: Best Practices, Economy, Leadership, Professional practice, Strategy | Tags: benchmark, DesignIntelligence, fees, negotiation, professional service firms | 21 Comments »
“Recent interviews and fee negotiations have convinced me that it is a race to the bottom on fees,” a client just told me during a phone conversation. I know this is a very real feeling among many in the design professions. The truth is that it is increasingly common for professional practices to lower their fees to get scarce work. While it is a legitimate business model used to survive the economy, it is not fun. It is often not sustainable, either.
Regrettable quality problems often follow these hastily put together fee models. There are limits to how low fees can go and still serve clients’ needs responsibly. The good news is that there are tools and attitudes to adopt when you find yourself in this situation.
One of the DesignIntelligence benchmarks in real-time productivity, for example, measures best practice revenues per full-time staff. It is currently in the $172,000 range. But some firms are getting that number today. Others are still hovering around $100,000. The difference is in categorical commodity services provided by firms that range from high to low.
Those at the lower ends are feeling more squeezed and threatened. They know that it is difficult to deliver quality results to clients without resources. Moreover, it is common for firm partners to settle on low fees before negotiating tangible benefits to clients. There is measurable value in such overt services as schedule acceleration and reduced risk of project delay, optimal construction sequencing, and reduction in errors resulting in unbudgeted change costs.
The irony here is that fee trends are not always led by clients. Too often it is the practice leaders who panic and forget the value of their services, their brand, and their long-term measurable benefit.