Is your firm working internationally or does it want to begin or expand services in other countries? Learn how to establish or grow an international design practice.
There are many very good reasons to work internationally: to find more customers for your services, especially with the limited domestic market for design; for the excitement of working in a new and often strange culture; and to challenge and develop your creativity and skills working in a new environment with project opportunities that may not exist at home. As Tom Friedman famously stated, the world is flat and we are experiencing a truly global marketplace for goods and services. International practice increasingly will become the normal platform for all major design firms around the globe. This not only applies to U.S. firms working abroad as we will see increasing numbers of foreign firms working in the U.S.
Plan Your Global Game
The rewards of international practice can be very satisfying in terms of design success and profitability. It is also challenging and has increased risks. Firms need to understand these risks and have a clear plan and strategy as well as operational expertise to succeed in the global arena. The international marketplace is becoming increasingly crowded with many Western firms established in the major markets and increased competency of local architects in those countries. Clients in developing countries are becoming more sophisticated and discerning in their selection of architects and in contract negotiations. Geopolitical and economic stability has been shown to shift dramatically and rapidly, turning relatively safe and prosperous markets into economically difficult and even physically dangerous areas/markets/places. Executing international projects has increased costs due to travel, translation and education and they can be demanding on the time of senior members of the team. Profitability is often at risk and it is usually difficult to recover overdue receivables. Before beginning a substantial international practice, firms should have strong and clear answers to the follow strategic questions:
- Why do you want to practice internationally?
- Where do you want to practice?
- What services will you provide?
- Who will be your clients?
The answers to these questions will inform the strategy for your global game plan.
Aspects of Global Practice
Every country has different practices, regulations and customs. The only commonality is that it will always be different in some respect from what you typically do at home. Success comes from carefully understanding how you must practice in each country. Often firms enter a foreign market without the opportunity to research and learn about operating there. Learning while executing the project can be painful and expensive. It is better to be strategic and create your global game plan before engaging in international practice. Your game plan should recognize the unique operational issues involved in practicing overseas. The following are some key operational issues to consider:
Key factors to win the project
- Recognized expertise in the project type.
- Geographic presence in the market and local knowledge.
- Personal relationships with clients based upon mutual trust.
- Design reputation.
- Management and technical capabilities to successfully execute the project.
- Competitive fee.
- Design competitions are often a requirement.
- Contract laws differ in every country.
- Customary design services differ in every country.
- Similar terms do not necessarily have the same meaning (e.g., detailed design is not the same as design development).
- Clearly define the scope of services in words understood by all parties to the contract.
- Dispute resolution may be impractical in some countries.
- Liability differs by country.
- The binding contract may be in the local language (can you or your lawyers read it?).
- Payments may be in local currency.
- Understand local taxes and who will pay them.
- How does this affect your profits?
- Project-related (“reimbursable”) expenses often included in the fee.
- Fee payments often made after completion and client approval of a design phase, not monthly.
- It may be difficult to pressure clients on overdue receivables.
- Fees may be lower due to competition and lower fee standards in that country.
- Fees for additional services may be difficult to obtain.
Design and Documentation Issues
- Understand local building codes, customs and construction technology — design what can be built.
- Know and respect the local culture — design appropriately.
- Consider the availability and cost of imported materials, products and technology before incorporating them into the project
- Documentation must conform to local practices and regulations.
- Understand the governmental approval process and its impact on schedule and fee.
- Documents (drawings and specifications) may need to be in the local language and likely will be metric.
- Understand the construction methodology in the location and how contractors are selected, contracted, managed and compensated.
- The design documentation must be consistent with the construction methodology and information requirements.
- Avoid corruption and improper activities.
Construction phase services
- The architect/engineer role during construction is different in most countries.
- Understand the role of the A/E expected by the client, contractor and the authorities and have all contracts reflect that role — you may not have a role during construction.
- The design may change considerably during construction.
Global practice has increased complexity and risks but it also can bring great professional and financial rewards. The key to success is to be smart and careful about your international practice. Have a clear strategy and game plan. Focus on selected locations and build a brand image there. Gain local knowledge and expertise and have good local partners. Pursue high value, high fee and expertise-driven projects. Take well managed risks.
In our rapidly shrinking and flat world, international practice increasingly will be a significant part of all firms. Success will come to those who have a clear global game plan that appreciates the issues, rewards and enjoyment of a limitless global marketplace.
Thomas K. Fridstein is a consulting principal with the Greenway Group. With extensive international practice experience, Fridstein has managed major architectural firms, including leading the world’s largest architectural practice at AECOM. He earned a Bachelor of Architecture degree at Cornell University and a Master of Business Administration at Columbia University. He is a fellow of the American Institute of Architects, a member of the Royal Institute of British Architects, and a LEED accredited professional.