Regardless of your niche in the design business, we all struggle with similar challenges. And these situations are often the drivers of change that influence our lives for better or worse.
There are few people that I consider masters of the design business on a global scale but more are emerging and they are growing their organizations in both relevance and business success. These leaders are finding that they can operate effectively on a global scale, provide simultaneous processes on a 24-7 basis, and create dynamic entrepreneurial professional firms that serve clients expertly. They also have overt evidence of their success: they are making a better and healthier planet.
Success at this scale does not come easily. There is a price to pay. It takes courage. The secrets to success in this regard are found in each situation. The situation we will be exploring in depth in this issue of DesignIntelligence will be the global growth of design firms with focus on the top 30 U.S. based multi-national organizations. We will also explore the demographics of change in design and we will relate how organizational design impacts success.
Success in design is seldom, if ever, led by armchair theorists. Instead, it is led by designers who provide strategic blueprints for shaking things up. Disruptive change is flowing through our entire AEC industry right now and this makes for a new competitive business environment in which new visions and action models are emerging.
One way to gauge the real success of firms is to assess their LEAP™ ratings. LEAP™ is a diagnostic analysis created by the Greenway Group that assesses the culture of an organization as it relates to real world success. Twenty-six critical areas of a firm’s culture under the umbrella zones of professional services, marketing, finance, and operations are analyzed. There are 12 categories of best practice and another 14 categories of cultural health that are explored. Together, these 26 test points can determine not only the business success but also performance as relates to health, safety, and welfare issues. This LEAP™ diagnostic has been used for over three years now to identify strategic priorities, to create alignment in merger situations, and to create a meritocracy environment that produces high performance firms.
Before exploring Greenway’s LEAP™ in greater depth, let us consider demographics of change. As the charts in this issue of DesignIntelligence clearly show, the design professions are a small profession in a large industry. Take architecture for instance. In California, we have a ratio of 50 per 100,000. In Texas, that changes to 15 per 100,000. There are only 1,500 African American architects and of those, only 130 are women. Black architects are at levels that do not mirror the general population levels or those of business and industry. Cultural rapport between the professions and the population is missing in action. Moreover, while the value of diversity is embraced in theory by each design profession, the overt actions are noticeably feeble.
Generational differences too present a challenging situation. The Census Bureau and the National Institute on Aging project that by 2030, close to one-fourth of all Europeans will be over 65 and in North America the projection is for over 20 percent. China and Japan both have serious issues concerning aging. The life expectancy of working adults has risen to the low 80s. In design, we see many architects, landscape architects, and interior designers working well into their 70s and 80s. For many in the design professions the likely retirement age will be 80, not 65.
For design professionals who seek more influence on a global scale there is urgency to change things for the better. Frankly, today there are firms and organizations that are powerful enough to guide BIG CHANGE. These firms and organizations need to perform even more dynamically. Today’s new leaders should extinguish those pockets of foolish consistency in our organizational policies and actions. We need to get the vision right and this includes much stronger financial incentives for younger professionals – those we sometimes refer to as the gazelles, those who are in their 20s and 30s. We must not lose this generation. Moreover, the gravitational pull that comes with traditions in our professions should be questioned. This includes the entire AEC order of hierarchy. Design should not be sidelined nor relegated to patron class high art. The stakes are simply too high.
If architects and designers are to win more and lose less, we must find leadership pathways that empower actions. We need more architects and designers who are able to act, who feel motivated to act and who do act. One high performance strategy is to create meritocracy environments in design organizations. In these organizations, leadership is encouraged to work together, collaborate, create lean systems, and bring forward change that improves the health of their organizations. The LEAP™ program measures effectiveness of leaders and actions that can make change stick. New and winning behavior can be achieved and can strengthen the voice of design, of business, and of change. Let us look now more closely at the potential to understand change through the lens of LEAP™.
You will recall from previous issues of DesignIntelligence that we have discussed the twelve areas of best practice. These twelve have been reviewed by the Design Futures Council and have been updated several times since they were defined nearly ten years ago.
In addition, Greenway Group has tracked 14 cultural characteristics of success and has worked with leading firms around the globe to monitor success and how pay-for-performance and incentives affect organizational success. One of the outcomes of this work is Greenway’s LEAP™ diagnostic. The LEAP™ acronym is derived from the words leadership, empowerment, accountability, and processes. In brief, here are the fourteen categories:
- Challenging processes – continuing improvements
- Vision clarity – ability to inspire others
- Systematic priority planning, enabling others to succeed
- Role model – stature in field
- Boosts morale especially during times of stress
- Builds financial resource strength
- Communications are at exemplary levels
- Collaborative spirit enriching the people and organizations
- Steady and strong without alienating egotistic pride
- Work ethic without micromanagement
- Applied brilliance – intellectual power
- Builds rapport, respect, admiration
- The firm delivers extraordinary designs
- Project management is a real strength
Taken together, these 26 measures provide powerful understandings of performance issues and also just where and how performance can be improved. When combined with a firm’s compensation and evaluation program, Greenway’s LEAP™ can clarify those strengths and weaknesses that matter most and can increase the urgency for change that empowers actions to improve the health of the organization. Sometimes this leads to change in executive compensation, other times it leads to role and responsibility changes. A firm’s strategic course can change as required. The chart below shows the contrast between peer groups of large multi-national firms contrasted with global best of class scores. Note the significant gap variances.
Now let us take several examples that compare two firms to peer scores and best practice scores. From these examples, you can begin to understand how firms are dramatically different in their character and performance. The chart shows fourteen LEAP™ categories and contrasts the results of what we will call Firm A and Firm B against peer scores and best practice scores. Notice how dramatic the difference is between the firms. This provides one explanation for why such a high percentage of IDP interns report unsatisfactory work and mentor experiences in some design firms.
Upon closer analysis, consider how Firms A and B compare regarding the area dealing with Steady and Strong Leadership without Alienating Egotistic Pride. (58, 83 on vertical bar chart). Firm B in this example has a leader who is a dynamic mentor and who empowers action. This leader is a good role model and encourages winning behavior. A confident leader, she communicates well and reminds each employee to follow the vision and to align vision with strategy and tactics for the change efforts. The turnover ratio is ten percent lower in firm B. Firm A has a leadership issue that must be addressed or they will continue under-performing at sub-par and will continue to “leak” their best staff to other better-managed organizations.
Regarding the key characteristic of Challenging Processes, Making Continuous Improvements, note on page 9 now how Firm A and B contrast significantly as well. Firm A administered the LEAP™ diagnostic to each of nearly 500 employees and the score of 71 was three points higher than in their previous year. However, Firm B’s score on this item was 80, which, while not best of class, is significantly better than peer group scores. This indicates that employees feel able to act and to improve the state of project delivery with each project. There is strong knowledge sharing and there is urgency to change things for the better. The staff are making wave after wave of change to improve results. There is also a tendency to make things lean and efficient to benefit the project delivery performance and the profitability of the firm.Getting the vision right is surprisingly rare. This picture of the future and the direction of the firm are too often cloudy in the minds eye of staff. As we look at scores for Vision Clarity – Ability to Inspire Others, consider now the wide gap between Firm A and Firm B. Firm A in this example has little understanding that there is a vision or direction for the future. This will tend to be increasingly discouraging over time to employees and the levels of excellence required to stay competitive will dissipate. Firm B on the other hand has a strong vision and it is so strong that it continually motivates the staff of the enterprise. It empowers action and it builds esteem.
The twelve best practice categories and the fourteen LEAP™ categories combine to build both attitude and accountability. The process of creating a leading firm is not easy but it is increasingly possible when discipline and the best available tools are combined to bring forward a flow of change in the key areas and also in those subtle areas of a firm’s communications and culture.
All of this leads to the questions implied regarding those ultimately responsible for improving the workplace. How should the results from each of the critical list of 26 translate directly to leadership evaluations? There is a direct correlation. In a meritocracy environment the performance of the group, the team, and the whole staff provide a leading indicator of the performance of the leaders in the firm. These are the ones responsible for the creation of a culture of high performance. If we take the scores of the categories of culture and align this directly to leadership, the results can be interpreted approximately as follows:
This individual is in the best of the best category and is truly committed to achieving results which improve the performance of the firm in all areas of their responsibility. All behavior appears to be contributing to organizational effectiveness. Leadership and management duties and competence appear to be excellent. This individual is taking the lead as a role model by showing the contributions that can make to the organization’s total success.
This individual is strong and is contributing to organizational success. This individual is better than average in regard to job role and responsibilities. The culture of the firm is significantly improved because of the contributions made. Although the attitude toward achieving results is good, and most of the approaches appear to be advancing the firm, there is still room for improvement. Additional emphasis is needed where noted.
This individual performs inconsistently in the organization and improvement is needed. The performance is average to below average and the attitude toward results and the approach used in implementing successful actions are less than desirable. There are times of ineffective behavior and action is needed to improve. At this moment in time this individual appears to fall short of making a significant contribution to the firm as expected in the merit culture of the firm.
This individual shows little or no aptitude for achieving results that are expected in the firm. Most areas of responsibility appear to be ineffective and improvement is needed if the individual is to continue in his or her current role in the organization. Urgent attention is needed to make this individual more effective in contributing to the success of the organization.
When we look at all the day-to-day responsibilities in a design firm we must be prepared to ask “does what we are doing really add value? Do we have the right leaders in place? Are we increasingly relevant in what we do?” When there are affirmative responses to these questions, leadership knows that they have faced today’s dilemmas and predicaments with courage and that they have created healthy organizations able to compete and even to be world-class.
Ducking the more difficult parts of leadership is ultimately not at all satisfying. Leading change, despite the gravitational pulls of habit and tradition, can be satisfying professionally and also highly rewarding.