It’s been said that “design” is both a noun and a verb—a product and a process. While we may have words to describe design, it’s devilishly difficult to define because it means so many different things to so many different people.

It’s been said that “design” is both a noun and a verb—a product and a process. While we may have words to describe design, it’s devilishly difficult to define because it means so many different things to so many different people.

Indeed, architects and designers are so notoriously diverse in their opinion about what constitutes “good” design that it’s nearly impossible to achieve consensus on even the most basic issues. A big reason for this is that designers are creative people, adept at inventing more than one solution for a given problem. Asking which building is “best” is like choosing between Robert Frost or Emily Dickinson; it’s a charming question without an answer.

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Other professionals encounter similar ambiguity. In medicine, there are many ways to diagnose and treat an illness; each patient is slightly different. Lawyers are skillful at arguing both sides of a case (sometimes simultaneously!). Even in mathematics or engineering, where answers are presumably right or wrong, there is plenty of room for theory. However, when it comes to professional practice, doctors, lawyers, and engineers have a big advantage over architects: the value of their services is relatively easy to measure. One might argue whether a surgeon should be paid $10,000 for a few hours’ effort to perform a delicate cardiovascular procedure, but very few would question that a successful result is worth the cost. Not so in the world of design!

For architects and clients, setting fees and negotiating contracts are complicated because we lack commonly accepted standards of value. While it may be possible to compute the hours required to complete a given task and the cost of those hours in terms of salary, benefits and overhead, it is not possible to know in advance how the whole design process will unfold. The nature of the client/architect relationship precludes this from happening; there are just too many variables and too many unknowns beyond the control of either party. Still, the business of architecture demands that contracts be negotiated to provide some semblance of predictability in an unpredictable profession. How do we establish a value for “good design” when we cannot define it?

The problem is not with the concept of value itself; it’s that we haven’t learned how to describe design value in business terms. While there are many non-quantifiable factors in “good design,” there are plenty of “value drivers” that can be measured more objectively. By and large, architects are not educated in the language and thought process of business, so when it comes to discussing the value of their services, they are at sea. When they can embrace the concept that design is inherently valuable and find the words to properly communicate this value, it will make everyone’s life easier.
The clients will get more of what they want, and the architects will be able to provide it and get paid an appropriate fee. What’s “appropriate?” It’s the amount of money that the client feels the service is worth and is willing to pay.
It’s been said the best way to catch a rabbit is to make a noise like a carrot. The same is true in negotiation; it’s critically important to understand the issues from the other side of the table, whether or not you agree with the perspective. Often, the architect is selling something that the client either doesn’t understand or doesn’t wish to buy. Instead of discussing cost, talk about value—what the client will gain. Here are a few examples of how good design—both process and product—can contribute to the client’s bottom line. If you can communicate this effectively, the question of fee is almost a non-issue.

Make speed a friend. Speed is a big issue not only in architecture, but also in society at large. Is faster always better? In arenas such as transportation, computer processing and manufacturing, there’s not much debate. But what about design? If a client is building a commercial project that will generate rental income, the answer is clear. Using the example of a project with 100,000 rentable square feet at $25 per square foot, each month saved in the design and construction process is worth more than $200,000 in your client’s pocket. Add to this the benefit of reducing inflation cost by finishing earlier. If you can deliver the goods that much faster, the fee is easier to negotiate because it has tangible value. Speed is something that affects nearly every project to some degree. The next time you negotiate a contract, devise specific ways to make speed a competitive advantage. Remember that time is money, and it can be measured.

Put a flashlight on value. Many clients loathe the public approvals process—it’s time consuming, expensive and unpredictable. But it’s also a fact of life. Just about any major project is subject to public approvals of some kind. Owners often fear that they will be required to give up too much to get their permits; they’re looking for guidance in how to manage the process to their best advantage. If your firm is familiar with names and faces at city hall (particularly the support staff) you can guide your client through the regulations, filing deadlines, reporting formats, meeting schedules, and hearings. With this knowledge, you can get the project approved in less time, and this is worth real money. Too often an architect does not charge sufficiently for this since it’s not seen as “real design.” When you negotiate fees, be clear about this value and make sure it’s factored in.

Tie your fee to the client’s bottom line. If your firm is knowledgeable about zoning, you are in an excellent position to help your client’s bottom line.

By designing a project that makes maximum use of the allowable zoning envelope, you can create more measurable value. In a recent project in the Boston area, the client included a lawyer on the design team with just this in mind. By working closely with the legal counsel, the architect was able to get an additional 90,000 gross square feet approved. At a nominal value of $300/sf, the client’s asset value increased by $27 million. The architect’s fee was based in part on the firm’s ability not only to design a great building, but also to maximize the asset value. It paid off for both sides.

Think people, not business cards. Just like the approvals process, management is an essential design skill. (If you doubt this, try running a project without it!) You not only have to manage your own staff, you must deal with a host of consultants—structural and MEP engineers, elevator consultants, A/V specialists, code consultants, food service experts, and so on. Your ability to set agendas and run meetings effectively, distribute minutes in a timely way, process the billing, and coordinate the work of the entire design team takes a great deal of time and attention. This attention is not free, but it’s often treated as inconsequential during contract negotiations. If you are not in the habit of charging a premium on your consultants’ fees to handle this responsibility (10-15 percent is standard), start doing so on your next project. If clients balk, invite them to engage the consultants directly and take on the management (and the liability) themselves. They’ll soon get the point.

Design processes, not just space. Buildings are not just containers of space; they affect to a great degree the human activity that transpires within. Thoughtful design can create a layout that makes better use of space or personnel, and the payoff can be huge. For example, if a nursing unit in a hospital can operate effectively with just one fewer staff member, the savings will be worth about $1 million over the life of the bond issue financing the construction. If you can design a research laboratory with 75 percent efficient space utilization (rather than the standard 60 percent) the client will enjoy millions of dollars in savings—either through a smaller structure supporting the same level of activity, or by increasing the amount of research that can be fit into the same size building. This is a huge advantage; because improved space utilization is a recurring benefit that pays annual dividends for the life of the building.

Measure what no one else does. This one’s often taken for granted, but it shouldn’t be. Your clients need to know that you care about how their money is spent both before and after the building is built. Talk is cheap—be prepared to show the data with regard to electricity, water, gas and other utility usage. Discuss operational and life cycle costs, and select materials and equipment with this in mind. Bear in mind that over the life of a typical building, capital cost represents only about 7 percent of the total, so even small savings in day-to-day operations will be be extraordinary. If you offer to monitor the project for a period time after the building opens—say two years—you’ll not only generate additional fees but also build your own data base. If you broaden your definition of the architect/client relationship to cover the lifespan of the building, both you and your client will be rewarded. Who wouldn’t gladly pay $10,000 in fees to reap $100,000 in additional savings?

Put every cost up for grabs. True budget control is rare in the design profession. Establish clear targets at the beginning of each job, and then monitor the estimates continuously as part of the ongoing design process. Keep track of every time any member of the team (including the owner and the consultants) proposes a change. This ongoing budget management process eliminates the need for value engineering (and the expensive revisions) at the end of the job. Make sure all team members are engaged in this process; you’ll be surprised how many good ideas you get. Here’s an example: in a recent high tech project, the design team set a budget of $150/sf on day one, and delivered it two years later for $141/sf without compromising the quality or design. This savings was worth nearly $3.3 million to the client. In other words, don’t just talk about budget control. Use it as an integral part of your design process. This puts real money in the hands of your client and bigger fees in your own pocket, because you can measure the bottom line savings. Everybody wins.

These are just a few examples of the design value inherent in every project. New buildings are not just inert piles of steel, glass and concrete—they have an economic life of their own. Capital cost, maintenance, energy cost, and the amount of money spent in salaries and benefits to support the people who work in them are all part of the equation. If you think that design is just about shape, material, or the width of a window mullion, broaden your perspective. Design affects nearly everything that goes on in the building, day and night—and every aspect has a value driver of some kind.

Remembering that design is both a noun and a verb, it’s not only what you do but also how you do it that affects the economics of the client/architect relationship. If you can show your clients how your design skill will enhance their bottom line, then you’ll have a much better chance of negotiating fees that make sense. The fee should cover your costs, of course, but ultimately clients don’t really care about that. How you run your business and whether or not you make a profit isn’t their concern (nor should it be). Instead, look at the value proposition from their point of view. What are they trying to accomplish? How will they measure the cost and the benefits? What specifically can you do to provide more of what they want? If you can communicate this in a language that they can understand, you’ll be on the path to a more productive future. Bottom line, good design is good business. And in most cases, the value created exceeds the fee many times over. How will your clients come to understand this? You have to tell them.