There is power in understanding new knowledge and in making the future your friend. There is satisfaction in confronting the forces that can create an immunity to change. And there is newly born enthusiasm when leaders have a refreshed vision for the future.

“The pessimist sees the difficulty in every opportunity and the optimist sees the opportunity in every difficulty,” said President Lincoln, who went on to win a “hopeless” war. Defeatism is not a property of leadership. Pessimism rolls off the back of a leader like water off a duck. Defeatism is a self-fulfilling autopsy. (I think failure, therefore I fail.)

Constructive Paranoia

We all know architects, engineers, and other professionals at the top of the org chart who have ensconced themselves in a bubble of blind optimism. These people have missed growth opportunities due to their myopic naiveté and fluctuating analytics. They don’t know how to be strategic optimists, having forgotten the wisdom of constructive paranoia.

True, some professional services firms will perish as a new industry unfolds. But others will flourish. That’s because there are plenty of leaders who possess a combination of strategic optimism and constructive paranoia that allows them to reach for opportunities at the same time they are anticipating and dodging bullets. These professionals are creating organizational cultures that are resilient and even calculatingly confident.

During times of uncertainty — of rapid acceleration of change — visions can get blurred in even the best organizations, which can throw an organization off course. This happens when change proceeds faster outside an organization than inside. In these situations, one can sense the day-to-day relevance slowly draining away. Some of this is easy to measure because it can be monetized, and some of it is reflected in emotional and behavioral characteristics of loss. People inside the organization sense lost relevancy followed by the softening of marketing traction — just a little at first, perhaps, then rapidly.

Clients recognize the difference, too, and place their trust in organizations with strategic leaders who have a portfolio of value propositions — some in form, some in process, some in quality, and some in efficient fee economics. Clients are grateful for confident leadership energy. They value candid, upbeat professionals to whom they pay fees for solving, not mirroring, problems.

However, accentuating the positive does not inevitably lead to success. Organizational leaders can’t control every element of the dynamic, vastly complex economies and context shifts they face. Even Lincoln had his Bull Runs. But leaders can control the kind of energy and enthusiasm they bring to every meeting and situation, both internal and external to their organizations.

Who is better prepared for the future: those who look over their shoulders at real or imagined shadows or those who protect their rear flank while boldly embracing the future? There is power in understanding new knowledge and in making the future your friend. There is satisfaction in confronting the forces that can create an immunity to change. And there is newly born enthusiasm when leaders have a refreshed vision for the future.

Survival, Competitiveness, and Sustainability

The reason for my skepticism about the recovery of some professional practices and construction organizations is not due to the inherent economics of a prolonged recession; it is my doubt that many industry leaders will do what is necessary to exist.

The clear and present danger to the future of the design professions is failure to embrace new technologies and management process changes. Furthermore, there are organizations that are just not showing clients enough. They are not serious enough about their own unmanaged data and their risk management.
Moreover, they are not sufficiently penetrating clients’ psyches with overt stories of value. They are not growing their footprint of service innovation. They sometimes have an institutionalized comfort zone that insulates them from understanding the new context for relevancy.

On the other hand, I have seen professional practices that are not only surviving but are growing 5 percent to 22 percent this year and that are in a hiring push. Yes, hiring. They are recruiting staff with advanced knowledge in building information modeling, for project managers who can deal with a rapidly changing economy, for managing partners who are creating new integration structures, for leaders who are navigating new efficiency and pricing models.

What Should Professionals Earn?

There is a shakeout going on in professional practice compensation. This shift is bringing forth a new pragmatism in human resource management. Some of this is experimental — in the meritocracy sense. Firm leaders are coming to grips with deciding who stays and who goes. Forced layoffs have been unpleasant business decisions. Very few firms, perhaps only 15 percent, have escaped downsizing staff.

Thus, while mean compensation scores in the design professions have declined somewhat over the past 12 months, there has also been a consciousness raising about paying higher competitive rates for top talent. Leading firms have also recruited new top talent, understanding it as a strategic investment.

We can also ascertain that compensation ranges in some firms are increasingly stratified. In other words, there is a recognition that the highest performing staff should be paid according to their worth — their intrinsic value to the organization. For example, it is no longer unusual for compensation ranges to vary significantly between senior project managers with 15 years’ experience.

The Great Recession has led to double-digit layoffs in most professional practices and private organizations. Less hard hit are those who work in government and education. Every major city has seen firms close their doors, resulting in hundreds of architects, designers, and engineers seeking new employment opportunities. The transition to new employment has been and is projected to continue to be painfully slow in every classification. Supply-and-demand economics is the root cause (expected to be a short to mid-term issue) for the somewhat lower wages seen in most categories.

Some sectors of the built environment have seen decreases in construction spending from 15 percent to 60 percent. Additionally, some geographic regions are suffering significantly more than others. The current economy is an impediment to increased compensation for the great majority in the design professions but should not slow down 360 degree evaluations and meritocracy implementation. Notable exceptions are within some of the civil engineering categories and in specialized divisions within larger firms and organizations.

This year’s compensation study is our most thorough, with deeper and broader analysis. It will be discussed in depth at the Design Futures Council’s human resources think tank. We’ll have updated information on issues of talent and compensation in upcoming issues of DesignIntelligence and on www.di.net.

The uncertainty of the North American economy in architecture, engineering, and construction is expected to remain with us throughout 2010, 2011, and into 2012. Still, senior leaders in the design professions and in the construction industry are making the case that successful money-making is possible and that it will be combined with responsibility to serve societies needs. There are new ways forward with many puzzles yet to be solved.

Be courageous. The world has changed — a lot.


James P. Cramer is founding editor of DesignIntelligence and co-chair of the Design Futures Council. He is chairman of the Greenway Group, a foresight management consultancy that helps organizations navigate change to add value.