How practicing architects of high professional competence acquire high managerial capability.

Practicing architects typically receive promotions in their firms to general management positions (GMPs) on the basis of their track records of professional accomplishments. Most frequently, they become heads of operating subunits, such as studios, disciplines, specialty practices, geographic offices or regions. More often than not, they take on these positions in addition to their professional engagements. As a rule, they are named principal at this career stage with their firms. These practicing architects have gained experience as managers of design teams. In recent years, such teams have grown in size and complexity, comprising not only larger in-house groups, but also, and often from early conceptual design phases on, members of other firms.

Team management yields management experience. But presiding over an entire operating subunit of the firm is different from heading up a design team. This difference is perhaps best exemplified by large firms that place into their operating subunits authority and responsibility not only for unit P&L performance, but also for the formation/reformation of unit business strategy and its implementation.

Such company structuring — decentralization, if you wish — demands of practicing architects in charge of operating subunits that they possess a firm grounding in strategic/ organizational/financial management relevant to B2B professional service firms. Nothing less should be acceptable to the leaders of architecture firms than to expect of their operating subunits not only great professional performance in the execution of client commissions, but also solid contributions to firm-wide financial results.

Solid economic performance joined with great professional performance by all operating subunits is particularly critical at a time when, as one observer put it, “the business high tides of past decades in the global construction industry, in which nearly any professional service provider to the industry could float, are unlikely to return any time soon.” Also critical during times of level or falling primary demand is to have embedded in every operating subunit an ability to win new commissions from existing as well as new clients and to execute such commissions to the delight of clients and at positive operating margins. Such ability requires leaders/managers at these operating levels who combine high professional competence with high managerial capability.

How do practicing architects of high professional competence who are promoted to GMPs — or show potential for such promotions — acquire high managerial capability? We explore this question at some length in the following pages. At the end, we set out action recommendations for CEOs of architecture firms who are concerned over the depth and breadth of the general management capability in their organizations at levels below the C-suite. We begin with a look at management education in schools of architecture.

Management Education in Schools of Architecture

It is generally acknowledged — and periodically lamented — that students of architecture, upon graduation from architecture schools, begin their careers as practicing architects without any study of management in the context of architecture firms. Addressing this state of affairs prompted the president and CEO of HMC Architects, Randy Peterson[1] (writing in DesignIntelligence) to cite his director of architecture, Pasqual Guiterrez, as observing that “entering a large architecture firm from school without a management background, there is often a long waiting period before you are qualified for many crucial aspects of the architectural profession.”

In a similar vein, architect and associate vice president for facilities engineering and planning at Rice University, Barbara White Bryson, wrote in a 2010 volume published by Greenway Group titled The Owner’s Dilemma: “Architectural schools continue to struggle to squeeze business . . . experiences into a traditional curriculum focused on design and theory. Elite schools measure success by the quality of graduates’ design skills to the exclusion of other abilities. This happens in spite of the fact that [only] a small percentage of architects spend their professional lives focused purely on design.” She went on to say: “Exposure to business skills is usually very limited. In spite of the formidable problem-solving skills of the formally trained architect, our profession is rarely considered a resource for leaders in other industries.” Echoing this theme, journalist E. E. Dickson wrote in the September 2010 issue of Architect that “for too long, architecture schools have shied away from teaching business basics.”

It would appear from these and similar writings that if graduate schools of architecture offer any courses in management, these courses address, at most, certain functional disciplines that are related to general management, but are not general management itself. Examples cited by Dickson are marketing, inter-personal communications and employee relations deemed relevant to the work of practicing architects. Missing seem to be courses in strategic, organizational and financial management, which would provide students with a solid foundation for general management work that they, as successful practitioners, will be asked to perform sooner rather than later.

Let’s assume that there is wide and strong support by all interested parties for building into the study plan for graduate architecture students a set of courses specifically designed in their teaching content as well as teaching methodology to provide this very foundation. That is to say, leaders of architecture firms, professors of architecture schools and graduate students themselves agree upon the desirability of core management knowledge geared to architecture firms to be in the students’ travel bags as they journey from classroom to work place.

Would all parties agree upon the feasibility as well? Or might the opportunity costs be perceived as too high, given the ever-growing architectural design knowledge and know-how that must without question be in the graduating students’ travel bags? Would professors be open to the trade-offs between teaching architecture and teaching architecture firm-centered management? Would deans be willing and able to attract to their schools professors and practitioners specializing in PSF management and accord them status equal to their top-ranking professors and practitioners of architecture?

This writer is not inclined to bet on an imminent appearance of the required consensus for curriculum rebalancing that would include intellectually and emotionally demanding courses on strategic, organizational and financial management centered on architecture firms. That said, one could assume that Randy Peterson is not alone among the leaders of architecture firms who would value such rebalancing. One can also visualize different ways in which schools can effectively achieve what these leaders are looking for in graduates joining their firms to shorten the “long waiting period” before these graduates are “qualified for many crucial aspects of the architectural profession.” One of the very first steps would be to determine just exactly what, from the perspective of the leaders of firms, the graduates should have in their travel bags by way of management knowledge and know-how when they arrive for work.

On-the-job Management Learning: Sink or Swim

Returning to the point that high-performing practitioners in large firms are typically promoted to lead or manage total operating subunits of their firms, it is at this stage when their preparedness for such positions becomes an issue “next Monday morning” for the promoted individual and for the firm. Staying with our assumption that these practitioners tend to have little or no management education or experience relevant to these positions, the question arises: How do they, and their firms, handle this issue?

One frequent answer we have been encountering — and still are — is that firms tend to rely on what Bryson called the “formidable problem-solving skills formally trained architects have developed” to figure out what is required of them to lead or manage the organizational units now under their care and command. “Sink-or-swim” is the naked term for this approach to management development. It is one of the oldest educational methods. It is rooted in the belief that, as Morgan W. McCall said, “the school of hard knocks teaches lessons in how to manage for which there are no substitutes”[2] and that, therefore, “on-the-job management learning is the best teacher of all.” The incontrovertible fact is, of course, that, unlike architects, who require formal education for the mastery of a complex and exacting profession, general managers of business firms require no such education. This fact lends support to an encountered view among professionals who have achieved mastery in their expert domains that management isn’t all that complicated or difficult to learn by just doing it. And, one might add, on-the-job management learning is aided if practicing architects who find themselves in general management positions are keen readers, astute observers and intensive listeners; put differently, if they are auto-didactically inclined, they have self-help resources to augment their on-the-job management learning.

If the sink-or-swim approach to turning high-performing architects into successful general managers has merits on the reasoning that, to cite celebrity auto industry CEO C. Ghosn[3], “managers are best formed in the fire of experience,” what are its demerits (at least in the context of management in architecture firms)? One key answer is economics; the total combined cash and opportunity costs accruing to an architecture firm as a consequence of the firm’s successful professionals sinking at some point after their elevation to GM positions. Still more troublesome is when they do not sink, but just barely swim.

Frequently in such situations, there is great reluctance by the leadership to remove such half-drowning swimmers from their newly conferred posts, partly because of their professional accomplishments and high standing in the firm, and partly out of hope that “the school of hard knocks” will kick in at some point and rectify the just-barely-swimming problem. Meanwhile, the costs of “barely swimming” as a leader or manager of a studio, practice, geographic office or other operating unit continue to accrue to the firm. Reluctance to reverse placements of high-performing and highly regarded architects in large firms to general management positions is unfortunately abetted by the absence of financial or managerial accounting data that would capture for the firms’ leaders in regular reporting form the total costs associated with poorly performing of architects as heads of operating units; traditional financial and managerial accounting systems in PSFs (or any other types of business firms) are not capable of capturing these costs. [4] And there is yet another troublesome cost: if “barely swimming” situations are not rectified one way or another within a reasonable time, younger professionals with career ambitions within their firms perceive unwarranted management “softness” or, worse, “old boy” management cronyism emanating from the top. Ensuing corrosive effects on organizational morale can be substantial, and a rise in unwanted defections in the ranks of up-and-coming professionals can almost invariably be observed, especially when demand for architectural talent outstrips supply.

Thus, notwithstanding the power inherent in “on-the-job” management learning and the virtues of “the management school of hard knocks,” the totality of economic and organizational costs associated with a “sink-or-swim” approach to management education and development for practicing architects can be exceedingly and sometime devastatingly high — for both individual and company. This last observation leads to the subject of executive education courses offered by business schools and other institutions of higher learning.

University-based Executive Education Programs

Formal general management education programs for executives in higher echelons in industrial corporations have been in existence since the 1950s.[5]

Programs of different business schools are remarkably similar in stated purpose; they are designed either to assist executives in performing more effectively in their present positions or help them prepare for greater or different management responsibilities. Common to nearly all are the following characteristics:

  • Open-enrollment
  • Attendance by company executives from a wide spectrum of industries;
  • Nomination by each participating company of one or a few executives as delegates to attend;
  • Programs are geared to individual learning, in contrast to organizational-collective learning;
  • Teaching curricula and materials are faculty-chosen without input from participating companies — a necessity for open-enrollment courses;
  • Teaching faculty for the programs of top-ranking business schools typically comprises their top-ranking professors experienced with executive-students;
  • Ample opportunities for attending executives to interact with and learn from executives with management experiences in other companies and industries;

The aforementioned HBS study established that, on the whole, executives view the programs of leading business schools they attend as a high-value personal learning experience. But later studies also established that executives returning from business school campus to their firms would often discover that their new learning was little appreciated or understood by their superiors and/or peers. These findings revealed the limitations of university-based open-enrollment executive education programs: geared to individual learning for executives from many different firms, and not to collective learning of cadres of executives from one firm, they revealed that delegates attending programs singly or with just a few colleagues could not achieve diffusion of their new learnings throughout their firms’ management ranks. In other words, their new learnings failed to reach “critical mass” within their firms. This limitation changed the cost-benefit assessments of (open-enrollment) university-based programs in industry, and contributed significantly to the rise of company-internal formal management education programs, which we take up below.

Professional service firms have made relatively little use of university-based programs. Explanations vary. One is that, while similarities exist between managing in an industrial firm and managing in a PSF, the dissimilarities are substantial, and university-based programs are principally designed for practicing managers in industrial firms, not for practicing professionals in PSFs. Hence, limited relevance of these programs to PSFs is surely one explanation.[6] The already-referred-to notion encountered in PSFs that management-isn’t-all that-complicated-to-learn-by-doing-it, might be another one. And a third explanation for sparse program attendance by delegates from PSFs might be the primacy of billability deeply ingrained in nearly all PSFs. This primacy says that time spent in management education programs is professional time not available for billable client work.

Developing Company-Internal Executive Education Programs

Beginning in the mid-1980s and continuing into the 1990s, interest in custom-designed company-internal management education initiatives rose dramatically in industry. It was estimated that by the mid-1990s approximately two-thirds of the total expense for executive education in U.S. industry was for in-company programs.[7] Commenting on this development, professor Jay Conger of Clairmont McKenna College wrote that “the idea of sending one or two managers to a university program to study cases written about other industries appeared to be a poor choice [that] could not deliver more tangible and immediate returns.”[8]

One of the earliest and best known in-company formal management education and training initiatives in industry was undertaken by General Electric. In 1956, the company established an in-house management education center in Crotonville, N.Y. GE had been a regular user of university-based executive education programs. At the time, Harvard Business School was a leader in the field, offering a Program for Management Development (PMD) and an Advanced Management Program (AMP). GE used these two programs as well as similar programs of other schools.

A key reason for GE leadership to form its own institute was the realization that sending GE managers “in ones and twos” to open-enrollment business school courses would not generate enough general management capability and capacity in GE to implement a transition from a relatively centralized to a highly divisionalized structure across all of GE’s business sectors. Professor Andrews wrote in the HBS study: “The General Electric Crotonville programs were, initially at least, prompted by the impossibility of sending to Harvard, Columbia, and Stanford more than a handful of men who were considered eligible for the training.”[9] According to Andrews, each of the GE executives attending the initial advanced management course series at Crotonville “was eligible, at least in position, experience, and status, for the Harvard course.”[10] GE engaged HBS faculty to design and teach this first program series, which “bore a striking resemblance to the programs of [the] leading business schools — to convey the latest knowledge to up-and-coming managers — and most courses were straightforward and conventional, a combination of lectures, case studies, and in-depth technical discussions.”[11]

It was not until the early ’80s, after Jack Welsh had succeeded Reginald Jones as CEO, when this “striking resemblance” of the Crotonville executive education programs to those offered by top-ranking business schools, and especially to Harvard’s, began to fade. In assessing the Crotonville institute, Welch saw weakness in the connections between management learning at the institute and management behavior in the organization. He also concluded that the management learning was insufficiently connected to the business challenges facing the corporation. Major changes in the institute’s programming ensued: management teaching and learning became much more tightly coupled to management “doing,” with project work on key business and management issues playing a prominent role.

Projects for inclusion in Crotonville programs were carefully selected, required active sponsorship from senior executives and had to show promise of measurable results. They were begun at the institute and continued by the same teams after a program had ended. Completed projects were reported out, with action recommendations, to senior executives who had authority to act. Active involvement by the program facilitators to unlock the experiential learning in these projects was as crucial as the active involvement of the sponsoring or reviewing senior executives.

Project work conceived as action learning culminated in 1989-90 with a program series concentrated entirely on changes in company-wide management practices. In addition to placing the attending executives in “team-based experiential exercises aimed at solving real-life problems of immediate relevance to the company,”[12] Crotonville programs were used to advance GE’s strategic and cultural objectives; that is to say, the CEO’s change agenda for the company. It is noteworthy that the entire top-echelon management group attended the first program in the series.

Another published example of a professional service company-internal “closed-enrollment” approach to formal management education is provided by Buro Happold (BH), the British engineering firm. As detailed in a 2009 HBS case study,[13] this firm’s rapid growth was at risk of coming to a halt by a severe shortage of management talent. The firm’s leadership, at the time headed by Gavin Thompson, set out to cope with this risk by hiring management talent from outside BH. The approach failed. The case study quotes an unnamed BH executive: “Our culture is quite unique, and outsiders who had not grown up in the organization did not mesh well.”

In the wake of this failed approach, the firm started to send engineers to open-enrollment executive education programs of prominent business schools. The study quoted Thompson: “These [courses] were typically off-the-shelf programs not well geared to engineers working in the construction industry.” Thompson’s predecessor, Padraic Kelly, added to Thompson’s observation: “The people delivering the training were not very clued into what Buro Happold’s needs were. We had to once again rethink our approach.” This “rethink” led to the establishment of a formal “in-house management academy” (named “Archimedes”) to provide “educational opportunities that would develop leadership qualities and skills in management, marketing, finance & control…[all] in the contextual knowledge of our industry.” Kelly noted that “management was not something the firm valued particularly highly,” but that “the academy changed this undervaluation and put the firm back on its growth path.” He went on to say that the firm’s “younger engineers” were particularly “antipathetic to management,” because they believed that management “would mean imposing a set of processes that would stifle their creativity.” Kelly continued, “They benefited well from the management education/training programs of the academy.”

These two examples of in-company formal management education and training speak persuasively to the strengths of this approach. What are its weaknesses? They lie not in the concept itself but in the difficulties of designing programs that achieve simultaneously multiple objectives: i) teaching content that is responsive to the specific management learning needs of the “executive-students,” ii) addressing and solving real-life business, management or organization problems of immediate relevance to the firm, and iii) instilling, reinforcing or changing the firm’s strategy and cultural values towards a deeper understanding of, and commitment to, the purpose of the organization and how it should function.

Designing programs to achieve these three objectives is complicated and demanding, whether the designers are from inside or outside the firm. Conducting such programs is equally complicated and demanding, whether the faculty is from inside or outside the firm. These designing and conducting tasks are complicated and demanding because they require much insight into the firm and simultaneously much experience working as seminar leaders or facilitators with seasoned executives. Neither successful business school academics nor successful company executives are necessarily successful in leading such programs. The former might not bring to the task insights into the organization, and the latter might not be able to adjust their behavior from executive to teacher or facilitator. Thus, the weaknesses of firm-internal “closed-enrollment” executive education are primarily the pitfalls inherent in implementing this approach. Cases of extraordinary success with this approach are lining up next to cases of dismal failures.

Other Approaches

Let’s assume that leaders of architecture firms recognize the value of formal in-house management education that prepares practicing architects for general management roles and responsibilities. Let us also postulate, however, that these leaders are hesitant — for whatever reasons — to embrace the commitment of resources that such undertakings require. If so, and they are not willing to rely on the sink-or-swim approach and also recognize the limitations of university-based executive education programs to effectively achieve this development, what else can they do?

One proven approach might be for a small group of, say, three to six firms, to create a consortium for management education exclusively for the members of that consortium. This approach i) entitles and commits each firm to a specified number of delegates to each program, ii) allows each firm to work with the consortium faculty on the development of program content, iii) gives the executives of each firm opportunities to study with and learn from executives of other firms, iv) allows the delegates of each firm to engage in collective learning, and v) provides, in the privacy of each firm’s delegation, opportunities to undertake, in GE/ Crotonville style, project work on current business, management or organization issues facing the firms.

This consortium-based approach stands halfway between university-based open-enrollment and in-company-based closed-enrollment. It is an approach designed to avoid the weaknesses of university-based programs discussed earlier. At the same time, limitation of consortium membership to three to six firms enables each member firm to capitalize on the strengths of “intra-mural” programs, as set out in the preceding paragraph. Granted, opportunities for “action-learning” in the form of work projects are not as ample in this approach as they are in firm-internal-only programs. Granted, the transfer of management learning from consortium program to each firm and subsequent diffusion within that firm are more effective in a firm-internal program attended by executives only from that firm (as contrasted with six to eight delegates from one firm). Is this a case, then, of half a loaf being better than none? If advantageous economics relative to strictly company-internal programs are extant, the consortium approach warrants consideration by leaders of architecture firms sensitive to the subject of when practicing architects must manage.

A unique version of the consortium approach is mixing architecture firms with engineering firms that collaborate on major construction projects. When six or eight executives from each of three to six firms, who know or know of each other through professional collaboration, come together for an intellectually and emotionally absorbing management seminar/workshop, I know they are able to fuse rapidly into a “learning community” from the opening bell. In seminars built on case-based interactive discussion teaching this rapidity is a major contributor to the learnings the delegates take back to their firms, especially in events of short duration. A further benefit of this version of the consortium approach is a deepening of the collaborative inter-firm relationships among the consortium members, generally, and on major construction projects in which they work together, specifically.

Another approach to preparing practicing architects for GMPs is through their professional associations, provided these associations are able and willing to organize executive education programs. Such programs would have to be open to all members, and thereby would be subject to limitations similar to university-based programs — except that all program participants would be associated with architecture firms. This attendee composition would allow designing program content with a concentration on managing in architecture firms.

Action Recommendations

In my consultative work with architecture firms as well as with firms in other professional service domains, I encounter with surprising regularity the paradox that these firms, composed of well-schooled women and men, people steeped in formal professional learning and appreciative of the value of such learning in pursuit of their chosen careers, have not also in their culture the same value rating for formal management learning. I would consider changing this strand in a professional service firm’s belief system to be a prelude to actions aimed at establishing continuous formal management education in these firms. The pivotal role of the CEO in this change cannot be overemphasized; too many senior executives in or near C-suites in PSFs still regard time spent by professionals on formal management learning as time away from client work and therefore loss of billable hours.

Earlier I referred to the director of architecture at HMC, Pasqual Guiterrez, who addressed the problem of young architects entering his firm without much, if any, management knowledge and who are therefore not ready “for many crucial aspects of the architectural profession.” Assuming that his is not a lone voice, I take his commentary as prima facie evidence for the need of formal management education for these newly minted practitioners from early on in their association with a firm. But there is another reason for CEOs not to live with the long waiting period of which Guiterrez speaks: many, if not most, architects join architecture firms not just for a job in the firm, but for a career with the firm. Their expectations are that they will rise in due course to become principal or partner and perhaps further to lead the firm. It might also be argued that they attach to high-quality continuous management education programs within their firms value in non-monetary units. In other words, such formal management learning is perceived and, over time, is expected to be a component of their career development; it becomes part of their total compensation. Leaving this expectation unfulfilled for too long is a contributor to unwanted defections.

The tenets of psychological contract management[14] between each architect and the firm must be well understood by leaders of architectural firms because they come heavily into play here. There is evidence that when professionals know they have potential for advancement in their firm, continuous management education — in parallel to continuous professional education — can play a significant role in their (explicit and implicit) expectations of the firm’s fulfillment of the psychological contract. The point here is that many, if not most, PSFs, including A/E firms, strike budget line items for formal management education the minute the flow of new client engagements decelerates. The signal such actions send to professional staff is clear: management doesn’t really view management learning programs as a continuous investment in high-performing members of the firm or as part of the career planning for them, but as a discretionary expense to be dropped when business conditions toughen.

Connected to the concept of continuing in-house management learning programs for practicing architects is the issue of determining their specific management learning needs. Essential for this determination is data from three sources: i) from the architects currently in GM positions, ii) those who expect and are expected to move into such positions, and iii) top leaders of the firm who have a keen awareness of what management capabilities need to be developed when recent graduates from schools of architecture embark on their careers in the firm. Leaders of architecture firms must take a strong personal hand in seeing to it that the required empirical work for need assessment is sufficiently comprehensive for designing programs; this work is too important to be left only in the hands of HR personnel.

The action recommendations to leaders of architecture firms can be summed up in five points:

  • Ensure that the organization’s “habits of thinking” include the thinking habit that management education and training is on a par with professional education and training;
  • Ensure that there exists at the firm’s apex an in-depth understanding of the fundamental differences among the three major approaches to developing management capability in their firm: i) university-based programs, ii) on-the-job learning, and iii) in-house-based programs.
  • Ensure that management education and training for practicing architects begins early in their careers with their firm and not after transitions into general management positions have taken place;
  • Ensure that resource allocations to management talent development are conceived and perceived as asset investments in the firm’s high-performing professionals — as well as investments in the firm’s future — and not as discretionary or avoidable expenses;
  • Ensure that, as a solid foundation for the design of in-company formal programs, the management learning needs are empirically determined with as much specific input as can be extracted from the practicing architects to be attending these programs, from the current leaders and managers of operating units, and from top management.

Concluding Thoughts

My former colleague at Harvard, professor Jay Lorsch, and his co-author Tom Tierney, wrote in a volume titled Aligning the Stars, that “the basic fact of life in professional service [is that] the people you pay are more important over time than the people who pay you” (p. 64). The question of whether, in an architecture firm, professional staff or clients are “more important over time” may always elude a definitive answer. However, when an architecture firm with plenty of clients and plenty of professional talent does not have an internal engine for developing general management talent at operating unit levels, and the question arises whether this firm can survive and prosper over time, the answer, from the perspective of this writer, is definitive: it cannot. That is the crux of the argument in behalf of continuous, career-spanning management education for practicing architects who must manage.

1    Randy Peterson, “The Future Starts at Home,” DesignIntelligence, Volume 17, No. 6, November-December 2011.
2    Morgan W. McCall, “The Experience Conundrum,” paper delivered at the Colloquium held at the Centennial Celebrations of Harvard Business School, 2010.
3    Ghosn, C., and P. Ries, Shift: Inside Nissan’s Historic Revival.  New York, Currency Doubleday, 2005.
4    Standard systems in PSFs typically operate with responsibility cost centers.  Collecting costs by such centers gives little visibility to the costs of performing activities when these activities use resources from different cost centers. The resulting lack of information about the full cost of all activities tends to impede the elimination of process inefficiencies.  Activity-based accounting systems, such as developed by Professor Robert S. Kaplan of Harvard and Robin Cooper, generate this information (Cost & Effect, HBS Press, 1998).  Such systems are still not often encountered in PSFs, including A/E firms.
5    The first comprehensive study of these programs was undertaken by Professor Kenneth Andrews and published by the Division of Research of the Harvard Business School in 1966 under the title The Effectiveness of University Management Development Programs. The sample for the study included 39 general management programs varying in length from one to 13 weeks. It did not include management programs dealing with functions such as marketing, finance, manufacturing and supply logistics.
6    In recognition of these dissimilarities, Harvard Business School has developed a one-week program titled “Leading Professional Service Firms.” It is an open-enrollment program “developed for senior executives from a wide range of professional service firms, such as consulting, legal, accounting, architecture and engineering, marketing and advertising, venture capital, investment banking, computer software development and technology systems integration” (HBS brochure, 2012).
7    R. M Fulmer and A. A. Vicere, Executive Education and Leadership Development: The State of the Praxis, Penn State Institute for the Study of Organizational Effectiveness, University Park, PA, 1995.
8    Jay Conger, “Leadership Development Interventions: Ensuring a Return on Investment,” paper delivered at a Colloquium held as part of the Centennial Celebrations of Harvard Business School in 2010. Conger made this point: “The economics of customized, in-company programs quickly became more attractive. After all, bringing four university professors to teach fifty managers was a significantly less expensive proposition than sending fifty managers to open-enrollment programs.” In a comparative analysis of the economics of the two categories of programs there is more to be said than Conger’s statement suggests.
9     Andrews, op. cit.
10     Ibid.
11      David Garvin, Learning in Action, HBR Publishing, 2000.
12    J. L. Noel and R. Charan, “Leadership Development at GE’s Crotonville,” Human Resource Management, 27 November, No. 4, (1988).
13    Buro Happold, case No. 9-409-021, Dec. 1, 2009, Harvard Business School.
14     “Psychological contract” (between a PSF and each professional) is not a term used in everyday PSF management language. But it is a phenomenon that executives in architecture firms should understand for managing professionals. As is the case with many concepts in the organizational psychology discipline, there is no agreed definition for it. According to professor Schein of MIT, “The notion of a psychological contract implies that there is an unwritten set of expectations operating at all times between each member of an organization and the various managers … in that organization” (Organizational Psychology, 1980: 22). Dr. Harry Levinson of the Menninger Foundation defined the term as “a series of mutual expectations of which the parties to the relationship may not themselves be only dimly aware, but which nonetheless govern their relationship to each other” (H. Levinson, “Reciprocation, the Relationship between Man and Organization,” Administrative Science Quarterly, 9:370-90, 1965). Professor John Kotter of Harvard Business School emphasizes that the psychological contract is “an implicit contract between an individual and his organization which specifies what each other expects to give and receive from each other in the relationship” (J. P. Kotter, “The Psychological Contract: Managing the Joining Up Process,” California Management Review, 15:91-9, 1973).


Jürgen Ladendorf is President of Ladendorf & Co., a group specializing in management consultation with B2B professional service firms. He is Chairman of A-N-D Group plc, a UK marine engineering and communications firm. He was a professor at Harvard Business School, where he received his doctoral degree, and he is a graduate of Yale School of Engineering and Science. He serves on the faculty of Greenway Group’s Global Leadership Certificate Program.