The Architect's Guide to Small Firm Management

The definitive guide to management success for sole practitioners and leaders of small design firms Owning and operating a small architectural design firm can be challenging, with tight project deadlines, on-the-fly meetings, rush proposals, and fluctuating workloads as part of the firm’s day-to-day activities. To help small firm owners cope with the chaos and prepare for the unexpected, here is The Architect’s Guide to Small Firm Management, a no-nonsense guide to repurposing daily demands into workable, goal-directed solutions.Crucial topics such as self-aware leadership, people management, technology, financial health, scenario planning, sustainable practice, and future trends are examined using real-life case studies and business model paradigms. This definitive text explores the whole system experience of a small firm practice to deliver organizational strategies proven to keep a firm’s creative mission on a steady, productive path. The Architect’s Guide to Small Firm Management addresses how small firm owners can: Deal effectively with unexpected circumstances and shifting work requirements Meet the demands of the marketplace while creating a satisfying workplace Set and achieve goals in an environment of constant change This book is a must-have for those facing the often harsh reality of managing small design firms in a difficult and changing economy. Entrepreneurial architects and designers will discover how to define their own personal and professional meanings of success, as well as how to refocus their business approach to replace long, unrewarding hours with manageable, satisfying ones.

Acknowledgments xi Introduction xiii Part I: Managing In An Unpredictable Environment 1 Chapter 1: Bringing Order Out of Chaos 3 Profit and Satisfaction 4 Design Firm Business Models 6 Efficiency-Based Firms 6 Experience-Based Firms 8 Expertise-Based Firms 10 Any Project That Comes Through The Door 13 Small Firm Archetypes 14 Archetype One: Everyone is Dissatisfied 14 Archetype Two: Administrative Breakdown 16 Archetype Three: Unintentional Enmity 18 Chapter 2: Whole Firm System 21 Linear Thinking and Systems Thinking 22 Recognizing Patterns 24 Tracking Trends 25 Symptomatic and Fundamental Solutions 26 Summary 28 Core Incompetence 28 Whole Firm System Diagram 29 Time Management 31 Communication Effectiveness 32 Job Satisfaction 33 Chapter 3: Routinize The Routine 35 Operational Effectiveness 35 The Typology of Work 37 Analyzability and Variety 38 Situational Leadership 39 Match Management Style, Staffing, and Work Types 40 How To Routinize 41 Project Management/Accounting Software 42 Project Startup Process 47 Capacity Utilization 50 Chapter 4: Leadership Matters 53 Firm Culture 53 Field Theory 55 Self-Aware Leadership 55 Control Versus Trust 56 Career Contentment 58 Working With Creative People 61 Effective Firm Retreats 62 Plan Nonbillable Hours 64 Partnerships 65 Why Partner? 65 What Makes Partnerships Work 66 Rules of The Road 67 What Makes Partnerships Fail 68 “Unintentional Enmity” Revisited 69 Success In Group Work 70 Part II: Best Laid Plans 73 Chapter 5: Lifecycle of A Small Firm 75 Wealth or Control 75 The Principals’ Dilemma 76 Getting To The Next Level 78 Be What You Want To Become 79 The Pyramid Problem 79 The Matrix Solution 79 Transforming Mental Models 81 Everyone is Dissatisfied Revisited 81 Chapter 6: Transition Times 83 The 10-Year Itch 83 When Partners Grow Apart: J/H Architects 84 A Cautionary Tale 86 Approaching Retirement 87 10-Year Rule 88 Expanded Choices 89 Narrow Choices 89 Ownership Transition Options 92 Internal Sale At Retirement 92 Taking On A Minority Partner 97 Chapter 7: Financial Management: Beyond Intuition 99 Macroeconomic Influences 100 Economic Indicators 100 The Construction Business Cycle 101 How Small Firms Survive An Economic Slowdown 103 Financial Terminology 107 Financial Performance Indicators and Benchmarks 108 Financial Management Tasks 109 Track Firm Profitability 110 Track Chargeable Ratio and Direct Labor Expense 110 Track Break-Even Multiplier and Multiplier Achieved 111 Track Overhead Expense and Budget Variance 112 Track Backlog and Outstanding Proposals 114 Year-End Financial Checkup 114 Additional Financial Checks 117 Chapter 8: Scenario Planning 121 Influences On Profitability 122 Client Expectations 123 Overhead Expense 125 Strategies For Increasing Profitability 125 Realizable Revenue 126 Increase Hours? 127 Increase Billing Rates (Fees)? 128 Increase Billable Hours? 128 Add Intern To Staff? 129 Add Skilled Staff? 130 Scenario Planning Story Problem 131 Story Problem Challenge 132 Move To A Larger Office? 133 Planning Firm Growth 134 Part III: Looking Toward The Future 137 Chapter 9: Strategic Thinking 139 Business Planning For Small Design Firms 139 Marketing Plans 142 Value of Participatory Process 144 Sample Business Plan Template 145 Learning is Job One 155 Learning By Design 155 Learning As Competitive Advantage 157 Chapter 10: Small Design Firm Practice Models 159 Solo Practice 159 Economies of Small Scale 160 Challenges and Opportunities For Solo Practitioners 162 Firms Owned By Married Couples 164 Complementary Skills 164 Ease of Communication 165 Lessons Learned 165 Small Firms In International Practice 166 Firm Size is No Barrier 167 Another Calling 168 The Virtual Office Option 169 Twenty-First Century Opportunity 170 Consider The Possibilities 171 Chapter 11: Technology and Integrated Practice In Small Firms 173 Adopting Building Information Modeling 173 Integrated Practice and Integrated Project Delivery 177 Architect-Led Design-Build 178 Architect Developer 181 Creating Pocket Neighborhoods: Ross Chapin, Aia 181 Green Development: Tony Case, Aia 183 Chapter 12: Big-Picture Trends 187 Diversity In Practice 188 Generation Gaps 189 Boomers Out, Millennials In 190 Technological Tethering 190 A Mixed Bag 191 How To Manage Millennials 192 Women In Design Firm Leadership 193 “Brain Drain” Revealed 194 Labyrinth To The Top 195 Twenty-First-Century Workplace 197 The Teleworking Option 197 Chapter 13: Sustainable Economics 203 Triple Bottom Line 204 Sustainable Design Firm Practice 206 Greening The Workplace 206 Values-Based Practice 207 Another Point of View 208 Sustainable Economics Applied 208 Construction Industry Impact 209 Turn Red Business Blue 209 Final Words 210 Index 213