What We’re Seeing

For several years, the demand for experienced design talent across the U.S. has accelerated. A Building Design +Construction survey of AEC recruitment found that more than 81.5% of survey respondents experienced recruiting challenges in 2016. Of that total:

With new administrations at the Federal and State levels throughout the country, 2017 will see an added layer of complexity:  market sector activity may shift, but organizations will continue to struggle to find skilled, experienced talent. Design firm leaders are not alone:  executives across the country, reports ADP Research Institute and The Economist Intelligence Unit, believe that “skilled talent in all sectors will continue to tighten in 2017.”  If there is a bright spot, it is in the realm of opportunity. Skilled, experienced leaders are evaluating their options and are more willing to consider making a change than we have seen in several years.  (See our report, “Why Leaders Leave”)

 

Because Breuer Consulting Group works with design organizations across the country to find leaders, some of the trends we see might be helpful. So we will be sharing our thoughts through periodic editions of “WHAT WE’RE SEEING”. This inaugural issue cites four big observations driving recruiting today. We eagerly look forward to reporting what we see as 2017 plays out.

Principal
Breuer Consulting Group

 

 

SPEED:

PACE SENDS SIGNALS

 

A persistent “recession hangover” appears to afflict some firms. They learned the hard way to be more cautious and analytical about the decisions they made during the economic downturn. This is prudent, but the context of hiring today is different.

 

There are three big reasons why speed in the recruiting process is essential:

 

1. Competition for talent has greatly expanded.

The demand for qualified, experienced professionals is intense. Potential leaders who have distinguished themselves are fielding inquiries from many sources, both inside and outside the design professions. This is especially the case in healthcare, higher education and—for now—commercial/mixed-use sectors. An experienced Senior Designer or Sector Leader who has proven the ability to develop business and build a practice is one of the most in-demand skillset combinations we see. It is not unusual for a professional with 20 years of experience, intimate familiarity with trends affecting his/her clients, and a healthy network of industry contacts to receive 4-5 contacts a month from organizations looking to augment their leadership group.

 

2. The recruiting process sends signals.

In the recruiting process, both the hiring organization and the potential candidate demonstrate what it will be like to work together. If candidates perceive a process which is protracted beyond what they feel is appropriate, their zeal for the opportunity gradually wanes—sometimes to the point of withdrawing from consideration. We’ve seen several firms lose candidates because the process stretched over 4-6 months from initial contact. To potential leaders, the recruiting process is an indication of what all decision-making might be like within the hiring firm.

 

Thoughtful due diligence does not have to translate into a protracted process that frustrates candidates and potentially harms a hiring firm’s reputation. One East Coast firm with a strong past but a design profile that needed bolstering sought an additional Design Principal. They identified a talented individual from a top-tier design firm who initially considered the opportunity to be intriguing but potentially risky. From the onset of the interviewing process, the firm’s Managing Principal knew this was a project that demanded full attention from the firm’s leaders. An interview team was organized internally to create a memorable candidate experience. The candidate was flown to another office to meet additional senior staff.  Detailed agendas were prepared in advance of all meetings and resumes of those who would be attending were included in the candidate’s briefing package. Recognizing that finding strong, highly collaborative design talent is challenging at best, the firm and candidate mutually agreed to a schedule that allowed the candidate to “phase in”, working part-time at their existing firm and part-time at the new. This allowed the individual to complete their current project responsibilities; a key consideration in recruiting candidates at this level. Even the candidate’s skeptical wife was sold when the Managing Principal met her separately over dinner to provide personal context and address any concerns.

 

In the end, this firm successfully recruited the candidate they needed to advance their design profile by providing frequent personalized attention… establishing the candidate’s trust that ongoing interactions would continue to be well-organized and thoughtful. The elapsed time from identifying the candidate to a signed offer was just 65 days.

 

3. Candidates’ attitudes shift.

While design leaders are contacted frequently about new positions, they actually pursue few opportunities:  they are busy professionals with a big, personal investment. But once they enter into discussion, it is common for candidates who may not have even been thinking about making a change to become intrigued with the idea of a new firm and set of responsibilities. (Our recent survey on Why Leaders Leave, reports that fewer than 17% of leaders who recently made a change were even considering it when they were contacted). We often see mental shift take place once the possibility of professional growth is planted, and candidates become much more receptive to being contacted … sometimes launching an active search for a new position. Acting quickly enables firms to capture talent that might soon go elsewhere.

 

 

LOCATION:

OLD THINKING?

 

Five – ten years ago, we routinely observed firms attempt to fill roles to which perhaps only 20 people in the country could qualify and be a good fit. Candidates who were not willing to relocate were rejected … even though the candidates themselves suggested creative solutions. But today’s workplace portability creates hiring options. We’re seeing more firms think differently about how to attract the talent they want and location does not necessarily disqualify good candidates.

 

The design community may be slower than other businesses to rethink employment arrangements, but things are changing. Recognizing that there are many legitimate reasons why a talented individual may not wish to relocate his/her family, some firms have begun to consider options which would have been off the table in the past. If the need is great, there should be another solution than taking 12-18 months or more to locate one qualified person who is willing to move. This is especially true in hard-to-recruit locations. Here are solutions three firms have designed in the past year:

 

  • A large Midwest-based firm practicing globally recently identified an exceptional candidate for a very specific requirement in a location where the firm did not have an office. This position would have a firmwide mandate focused, so the headquarters was an obvious location. But the candidate could not relocate. This firm quickly recognized the rare combination of attributes the candidate offered and within six weeks, he was hired, arrangements were made for frequent, planned communication and in-person visits, office space was established in the candidate’s city and he was on-board and listed on their website as new office location.
  • In seeking a Marketing Director, Eskew Dumez + Ripple, the New Orleans-based 2014 Firm of the Year had a very high bar. After an exhaustive national search, EDR identified an experienced, accomplished, adventurous individual with a family of three children (and a very supportive husband!) in a city that is four states and a two-hour flight from their office. The EDR team had learned that the kind of person they wanted and needed is in short supply and developed a creative work arrangement. Through open-minded discussion on both sides, EDR’s new Marketing Director now commutes every 2-3 weeks with a schedule that allows for the right mix of at-home working and in-office presence.
  • A progressive Mid-Atlantic firm identified a Design Director whose family could not leave the Northeast. The candidate offered to live in the firm’s city during the week if a modest apartment and weekend travel could be part of the compensation package.  It took some thinking and discussion, but the firm ultimately believed that the candidate’s strengths far outweighed the opportunity cost of not hiring him:   the unorthodox offer was made and accepted.


 

 

MARKETING THINKING:

SAME PROCESS. DIFFERENT TARGET

 

Most firms have evolved in their thinking about marketing and understand the rigorous homework and strategic thinking involved. The same techniques firms use to identify potential clients, build relationships, and obtain new projects apply directly to recruiting. Yet many firms don’t make the connection between the two.
Here are some examples of how firms apply marketing thinking to improve the recruiting outcome:

  • Targeting: To find new leaders, surprisingly, some of the best firms in the country still rely primarily on passive recruiting (e.g., careful evaluation of candidates who contact them as a result of general brand awareness or a posting). That technique had always worked in the past. Today, it makes sense to define what is necessary to enhance a team, seek specific individuals who offer these qualities and get strategic.
  • Clear, intriguing language: Many firms have difficulty describing what they are looking for (“we need a 15-year person with a strong design background”). We see the same adjectives to describe the qualities they seek (“self-starter”; “team player”; “collaborator”; “entrepreneurial attitude” … and most recently “thought leader’). These words have lost meaning due to overuse. We see that candidates are more attracted to firms that are specific about reflecting their culture and core values with a sense of personality and jargon-free attributes. Here are some words and phrases we’ve encountered lately that have piqued the interest of candidates: “scrappy,” “comfort with ambiguity,” “lively,” “appropriately ambitious”; “humble confidence.” Word choices tell candidates a lot about a firm.
  • Capture strategy: Good candidates for leadership positions are rarely seeking to make a change. Yet our research shows that a message tailored to individual candidates can intrigue even the most sought-after talent. Generic approaches to professionals who have distinguished themselves are not only unsuccessful, but can be a real turn-off. Leaders are generally visible: with a little homework, it is possible to tailor “pitches” aimed at candidates’ strengths.
  • Focused effort over time: Recruiting is an ongoing effort, not just energy aimed at a specific requirement. Just as in business development, most external activities are opportunities for recruiting.
  • Brand development and management: Branding is a big subject and—now—online presence plays a big role in recruiting. We see healthy, established practices that have been built over time with websites that lack personality, differentiation, or are just plain out of date. What is clearly a marketing issue could be an even bigger recruiting issue. In recruiting, a website that authentically depicts a firm’s culture is more important than most firms know. Lastly, firms that tend to attract top talent know that brand experience is more than just a first impression. One Engineering Consulting firm recognized this before many other firms and now has an “Experience Director” whose role is to ensure the qualities that define their brand infuse the entire employee experience from on-boarding, to reviews, to exit interviews.


 

 

DIVERSE PRACTICE

CANDIDATE APPEAL

 

Consciously or not, we all have a tendency to hire “people like us.” We’re not just talking about gender, age and race. We see how implicit biases disadvantage some firms, from the trivial (“He’s too quiet.’ “Look at that LinkedIn photo!”; “What an odd name.”) to those which could verge on illegal. Some of the best hires we’ve seen result from a welcoming attitude toward people with backgrounds unlike current firm owners and leaders.

 

Here are some traditional red flags which we’ve seen cause initial concern but could deserve a rethink:

 

  • Relatively short tenures at previous positions: The average job tenure for workers aged 25-34, the demographic where most employed millennials fall, is just three years. Design firms will be facing this fact as these individuals are considered for leadership positions. The disruption of the Great Recession that caused many professionals at all levels to make unanticipated changes is another reason resumes are different than they were prior to 2008.
  • Limited hand-drawing capability: All firms depend on digital finesse: hand drawing has become less common, and not a focus of design training. Still, many owners responsible for hiring are dismayed by the inability of some candidates to create images and explore design by hand.
  • Office presence: Some candidates have important reasons to request working at home at least some of the time. Some firms have been willing to accommodate these requests without compromising work output or quality, but others remain intransigent.
  • Unorthodox background: We often see skepticism about candidates who began their career in a field unrelated to design. But more and more design firms embrace what these professionals can add to their firms. Many firms have enjoyed the benefit of graduates of business and real estate programs throughout the country who have no design-training at all. Profitably incorporating these individuals into traditional practice takes work, but broadening what a firm can offer its clients provides a competitive distinctiveness and a richer product. Unorthodox backgrounds can be defined at a more granular level: some firms focus primarily on candidates who have been trained by a small group of schools—a bias that cuts both ways. We’ve seen firms exclude candidates with an Ivy League background, for example, because they might not fit their more “down-to-earth” culture.
  • A portfolio of work primarily outside the U.S. The recession caused many firms to turn to non-US-based clients, particularly in Asia and the Middle East, to help keep their firms engaged and busy. As a result, some senior-level candidates have been unable to develop the local portfolio and contacts that firms often want to see.
  • The “culture defense”: It is common for firms to employ individuals who are like-minded in the name of “cultural fit.” The result might be a homogeneous staff that is a red flag for both clients and potential candidates who want to see a broader range of personality types, countries of origin, ages, and genders. We have often witnessed negative reactions from candidates when they see leadership headshots on websites comprised of people who look like each other.

 

This year, more than 3.6 million executive leaders are set to retire as younger professionals move into leadership roles. Millennials’ preferences are expected to bring striking changes to business in the U.S., with a focus on collaboration and transparency. The growth of companies like Glassdoor and InHerSight, the latter of which is a website where employees rate how female- and family-friend their workplace is, underscores this trend. Traditional top-down organizational structure and behavior are unappealing to millennials who tend toward a flatter structure with fewer titled roles and a more democratic merit-based management approach.

 

It is safe to say that professionals in each generation feel most comfortable with candidates like themselves, i.e., those with similar life experiences. But in an environment that is both in flux demographically and highly competitive for leadership talent, there is a general understanding among most firms that it is prudent to broaden the view of who might succeed within their culture. (McKinsey & Company’s report “Why Diversity Matters” is just one example of research that suggests that a diverse workforce tends to perform better financially.) Unfortunately, fewer design firms act on this general awareness and proactively seek candidates who may not reflect the gender, age and experience levels of leaders in the past.

 

But we have seen some proactive initiatives: one large firm has recently created a new leadership position in each of its offices specifically to enable less-experienced professionals assume practice leadership roles (with support from Senior Leaders) at an earlier date than the traditional work-your-way-up scenario would allow. Another firm proudly proclaims the specifics of its demographic diversity prominently on its website…in full knowledge that diversity is, in itself,  a recruiting and marketing tool. A third example is the intentional involvement of professionals with diverse backgrounds in the recruiting process.

 

BREUER CONSULTING GROUP FINDS LEADERS

Our practice focuses on the needs, challenges, and idiosyncrasies specific to organizations that are passionate about design for the built environment. We work with some of the best design firms in the country to find leaders that make an impact in the organizations where they work. They recognize that we have a perspective gained by touching many practices and because of this often ask us: What We’re Seeing.

Why Leaders Leave

Few things in business are as costly and disruptive as departure of leadership talent, especially in an environment of constrained supply of qualified professionals. As an executive search practice working to find leaders for design firms throughout the United States and beyond, Breuer Consulting Group deals daily with the factors that influence talent acquisition. Occasionally, we also conduct informal, non-scientific research on issues that design firms consider important in the process of building their leadership team.

 

We recently spoke with 20 leaders and executives whom we helped place in new positions since the beginning of 2015 and had frank conversations with them about their decision to leave. One of the key findings was that most leaders we spoke with were not actively seeking new opportunities. In fact, fewer than 20% of the respondents were looking for a change when we first contacted them. The reasons these leaders decided to make a move are varied, but there are some common themes that could benefit all firm owners in their relationships with their leaders.

 

To learn more about other key findings and obtain a complimentary copy of the report, please email Albertha Bradley at albertha@breuerconsulting.com.

Why Mid-Sized Design Firms Should Hire a Director of Operations

The distinction between practice management and project management seems obvious, but in our experience, it is not often articulated. While project management is the subject of much attention and a popular training topic in larger firms, practice management is hardly mentioned. Most schools offer one course in a curriculum of two or three years at the graduate level. The well-managed practice is usually a lucky convergence of senior leaders who have embraced the operations of the firm and tackled them as seriously as they would a design problem. But good business management can also be the result of the efforts of a Director of Operations (DOO).

 

What is “Operations”?

“Operations” is what practice management is all about … the business of the business. By operations, we mean all the functions that support the technical design work of an entire firm and could be considered the backbone of a successful business: it is the sum of IT, legal, financial, risk management, marketing, and all other non-design functions. All of these functions require significant experience, if not specialized training.

 

Firms typically hire individuals for each function and expect them to perform their individual roles well. Less common, especially in mid-sized firms, is the Director of Operations. This is an individual who is responsible for all of the business functions of the firm in aggregate. The skills required to be a successful DOO are broad and inclusive. The DOO is not an added layer of management: he/she is both an experienced professional in business operations and an advocate for the individuals responsible for the backbone functions of the firm and oversees them all to ensure the highest level of efficiency and effectiveness as they work collectively to support the purpose of the practice: design and documentation.

 

Managing Without Experience

Who performs these functions in firms that don’t have a DOO? Typically, oversight of the operational functions of the firm is split among the partners/principals: one will assume responsibility for overseeing the accounting staff; another will be the contracts guru for the firm; another will guide HR functions; and there will often be a Principal-in-Charge of Marketing who has responsibility for the marketing department. What is wrong with this model?

  • Revenue production is compromised: Depending on firm size, market sector focus, the general economy and other variables, previously revenue-producing principals will devote up to ¼ of their time managing these functions. Every hour that a principal is not “doing” or “selling” is a lost hour of potential revenue or business development. The DOO is less expensive on an hourly basis than a principal.
  • Job satisfaction is compromised: Generally, the principals who assume these functions would rather be doing design, project and client management. They recognize the importance of senior-level oversight, and often-begrudgingly “take one for the team” by assuming these roles. An unhappy individual will not make as strong a contribution as someone in the same role who is excited by the challenges. Further, leaders unhappy about assuming duties they’d rather not perform can adversely impact those whom they might cultivate and mentor.
  • Performance is compromised: The various functions overseen by design firm principals may be executed, but how well are they performing? How business-savvy can an individual be expected to be if his or her main role in the firm is design or project management and not operations? It is a false dichotomy to consider a firm as either a practice-oriented business or a business-oriented practice. Why can’t a firm be as good at managing itself as it is in solving clients’ problems with a high level of design innovation? These “backbone” roles at design firms are all increasingly complex functions which require specialized knowledge. Without current knowledge of these functions, a firm may not be effectively or efficiently managing its assets (primarily human resources) to achieve the goals the principals have embraced.

 

Not Just for Large Practices

Why are some firms “well-run” while others forge ahead with small margins and overworked project leaders? Our contention is that at every stage of growth, “well-run” firms recognize the necessity for expertise other than design and project management.

 

Large firms

Most large firms have recognized this and appointed Directors of Operations or Chief Operating Officers. As the title implies, COO’s are typically found in the larger design firms: Gensler, Perkins + Will, HOK, and SWA are just some of the larger firms who have understood the importance of including in their senior-most leadership structure an individual with the skills necessary to oversee the backbone functions of the enterprise with a high level of authority and responsibility.

 

Figure 1: Responsibility and authority of the operations position in relation to firm maturity

130807_Figure1

 

Mid-sized firms

Here are two observations we believe are important for mid-sized firms to consider:

  • At all stages of evolution of a design firm, considerable benefits result if a dedicated individual is responsible for the non-design-related functions of the firm. What that individual is called (from office manager to COO) depends on the culture and maturity of the firm and level of authority and responsibility that the principals want to invest in that individual.
  • As a firm matures, the DOO position requires more experience and/or training in the operations of a firm, as well as seniority and influence.

 

We think that firms that stand the best chance of benefitting from a DOO are Design-First firms—firms that are widely recognized for their design excellence. Among this group of mid-sized firms in particular, there are very few Directors of Operations. Because they have distinguished themselves through design, the demand for the services of these firms is generally higher than for most firms, so they have potential to significantly increase their revenues while creating an environment where designers design, not manage!

 

Here is a great example: The acclaimed Seattle firm, LMN Architects, winner of three 2013 AIA National Honor Awards and the Sustainable Building of the Year award for the Vancouver Convention Center, initially worked with a director of operations as a part-time position, but last year, the firm hired full-time Director of Operations Scott Lelieur. George Shaw, who is LMN’s managing partner cites the benefits of having such a senior-level individual in the leadership structure of the firm: “Scott is able to focus on the business functions that hold the firm together so the Partners don’t have to. He is an active voice in our ongoing leadership dialogue and involves us when the big decisions need to be made or when he has ideas that need our review. Scott brings new perspective to organizational processes, and by virtue of having a comprehensive view of how the operational functions knit together as a business whole, provides insights that may be missed were the functions shared part-time amongst multiple firm leaders. Most importantly, having Scott completely immersed in the culture of the firm and strategic decision-making enables the optimization of operational processes in ways that maximize business effectiveness while reinforcing the essence of our design-focused culture. That Scott is an experienced architect with an MBA helps impart the balanced perspective that we believe is important for this role.”

 

Small firms

Where the cost of a full-time DOO might be prohibitive, outsourcing this function on a part-time basis can be an excellent solution. For a monthly expenditure of about $3,500 to $5,000 and a tightly-defined scope, a firm of 25 people could obtain the services of a DOO for 30 to 40 hrs per month. (The cost would rise as the firm size increases, but decreases as a percentage of operating revenue).

 

Figure 2: Cost implications of a part-time operations position as firms grow

130807_Figure2

 

Why So Few Directors of Operations?

There are two common reasons why firms resist having a Director of Operations:

  • Too expensive. Some firms may think a Director of Operations would be too costly. At what point in a firm’s evolution can a firm financially justify bringing on a full-time DOO? The San Francisco firm, Lundberg Design, a 20-person diversified practice retains a consulting Director of Operations. This arrangement allows the principal and associates to focus on design-related tasks. This “divide and conquer” strategy has helped clarify and reinforce the firm’s focus on design excellence and documentation. The DOO is responsible for such fundamental tasks as preparing contracts, project schedules, staffing projections, and performance reviews (with the Principal). These critical tasks are not ignored or added to the “to-do” lists of leaders who are already overloaded. This arrangement is particularly valuable for single-owner firms.
  • “It’s too corporate for us; we’re not that kind of firm.” We hear it all the time, but w. ill focusing on business really change a firm’s culture? “Focus” does not mean “override.” A DOO/COO can operate well within a design-focused environment. SWA, a 200-person landscape architecture firm with a laser focus on design has had a COO for 30 years. Scott Cooper is a Principal who functions as their COO and CFO. Kevin Shanley, the CEO, would be the first to say that SWA is definitely not a “corporate’ firm, but has extraordinarily benefited from entrusting the business functions of the firm to Scott: Having a COO has enabled SWA to create a design-focused culture which has produced one of the most celebrated landscape design firms practicing today. (The firm’s margins are also in the top quartile for design firms, nationally.)
    Another less-articulated concern: reluctance to let go/trust and delegate. This is a hard one. Most principals in mid-sized firms have been with their firms for a decade or more. Much sweat equity has been invested in the process and there is a natural ownership of firm operations—not to mention fear that it either will not be done properly or that the principals will no longer be involved/kept informed.

 

What a Director of Operations Can Do for the Mid-Sized Design Firm

There are some immediate, easily quantifiable, tangible contributions a DOO can make:

  • Increase billable hours among the principals
  • Increase principal time in business development and client maintenance
  • Introduce cost-saving systems and processes

 

But the less immediately-obvious benefits can pay off even more than the cost-saving/revenue-enhancing gains that are so obvious:

  • Advocacy for those performing the functions to surface problems, sort out conflicting priorities, introduce new ideas
  • Critical thinking on the whole firm’s behalf (a new project management system; a new CRM system; the addition of a new service; exploration of the financial and operational implications of new location)
  • Focusing previously dispersed critical firm-wide functions into one person who has a stake in the outcomes over time: strategic planning; retreats; new systems and processes, etc.

 

Finding a Qualified DOO

Because there are few design firms with designated individuals performing operations functions, there aren’t (yet) many people qualified to assume the role. What is the optimum profile?

 

In general, we think that the individuals who perform best in this role are design-trained. The people we have seen in DOO roles performing well typically recognized somewhere between 5 and 10 years into their careers that they could be effective at the business of the business. They may have naturally gravitated toward marketing or IT and specifically sought a role in their firm that called on their latent skills in these areas. We advocate design training for two reasons:

  • Knowledge of the design process.
  • Credibility among the rest of the staff

 

We began this article by mentioning the practice of promoting effective project managers to the role of DOO. While some good PM’s will certainly succeed as DOO’s, we feel that the skills of project management are not sufficient to guarantee success as a DOO. Similarly, embedding these functions in the CFO responsibilities can create a potentially adversarial relationship, obscuring the benefits of a COO who embraces the multiple backbone functions of a design firm with no particular bias. There must be an appreciation for all functions working in concert. In addition, the acumen necessary to manage a business – especially in finance, marketing and IT – is not part of the role of PM.

 

The New Role of the Principals

With an effective, experienced DOO on board, the Principals should assume new responsibilities to help the DOO be successful.

  • Provide oversight, guidance, and direction of DOO role.
  • Assign one or more technical advisor to the DOO to specific operations functions like IT and Marketing where the DOO may not have technical depth.
  • Generate awareness of and respect for the DOO.

 

Because there are not many DOO’s and because the function can be removed from the everyday work of design firms, staff may be unfamiliar with what a DOO does or with the role’s importance to the firm’s success. To help him or her succeed, the entire firm should be informed about the role and how they can expect to interface with the position. Marginalization of the DOO – a prospect that is not difficult to imagine among designers and project managers who are unfamiliar with the position – will defeat the purpose of having hired him or her.

 

Achievements of the DOO should be acknowledged and celebrated by the Principals; staff at all levels will follow suit. It is easy to fall into the trap of designating a DOO, only to find subsequently that the Principals continue to be inappropriately involved. To allow this to happen is to undermine the role of the DOO.

 

Results

The firms that we have seen embrace this strategy have increased the amount of time that principals can devote to design, project review, business development, and public relations. These firms enjoy above-average profitability: integrating a part- or full-time DOO consistently results in improved financial performance in a very short period of time. No formula is a universal panacea. But principals who bring a DOO on board have experienced both personal and firm-wide revenue growth ranging from 150% to 300% within 2 to 5 years. Any architect would argue the importance of hiring a design-trained professional for a new building. So why is it so foreign to architects to hire an experienced operations professional to run their business?

Hiring Leaders Without Design Experience

My clients — architecture, landscape architecture, planning and design firms — often ask me whether they should seek leaders from outside the design community for senior, non-design positions. It’s a good question: infusion of new skills and experiences could enrich design firms’ perspective and business strategy. As Kathryn Sprankle, owner of Sprankle Leadership observes, design for the built environment is “still an insular industry”: she says that “overall, we’re too slow to embrace the business of the business”.

 

Can a leader without design-industry experience succeed in a design firm?

I know of examples where “outsiders” have been very effective, and situations where they have been problematic. There is probably not one answer to the question my clients pose, but I’d like to be able to communicate the nuances as they consider taking this step. If you are considering bringing someone from outside the design community into your firm, you might want to reflect on these issues:

 

What motivates design firms to consider hiring from outside the design community?

Many design practice leaders yearn for the same kind of innovation in running their business as they do in solving their clients’ design problems. They suspect that individuals from other design firms would be subject to similar cultural influences that promote the methods and practices common to the industry. In addition to seeking a fresh perspective on old problems, they hope that leaders outside the design community would have more advanced technical experience in HR, Marketing, Financial management or whatever relevant function than their counterparts in design firms. Sometimes, design firm leaders claim that they just want to “shake things up”.

 

Are design firms different?

Most industries consider themselves to be unique, and the design community is hardly an exception. There are some legitimate differences between design firms and other — particularly non-professional service –businesses, that could take some getting used to and would provide a challenge to someone from outside the design community. These won’t seem particularly unusual to you, but to someone without design firm experience, they can seem hard to understand, causing them to lose patience. For example:

  • Compensation: Compared to other professions, average compensation for senior design leaders is considerably lower. Yet liability is high and design firm employees work notoriously long hours. “Outsiders” may find motivation under these circumstances puzzling and discover that financial incentives are not necessarily effective inside design firms.
  • Margins: Average profitability in design firms is lower than many other industries: leaders new to the industry may find themselves with fewer resources to do the same job they just left. Investment in R&D geared toward process improvement or enhanced design products is made by only a handful of firms. Aggressive attempts to address profitability by cutting costs don’t necessarily translate to radically improved profitability in this industry and run a high risk of employee alienation.
  • Language: The language of business is not considered appropriate by many design firm leaders. (I have seen many react badly to the use of words and phrases like “sales”, “brand”, “reports to…”). Learning a new vocabulary to avoid negative associations with a “corporate mentality” is mandatory for someone outside the business to avoid instant alienation.
  • Bottom-line orientation: Profitability is only one factor in most decision-making processes within design firms. It can be difficult for some “outsiders” to justify an unprofitable project. Most design firm employees see a robust bottom line as only one aspect of a successful practice: too much focus on profitability can be destabilizing.
  • Non-replicability: By definition, design tends to be a “one-off” activity and doesn’t easily lend itself to standardization or other efficiency-driven techniques. “Outsiders” may see “obvious” opportunities for streamlining that are repugnant to their design-trained peers. ­­­­­­­­­­­­­
  • Social good: Many design firms are highly motivated by, and place great value on, making a contribution to the well-being of society in general. This is a motivator and a design firm decision-making criterion in itself, but may be unfamiliar territory to “outsiders” as a business driver.
  • Culture: All businesses have a culture, but in design firms, culture is almost a palpable presence. Many firms even hide behind their culture … invoking it as a reason not to embark upon new paths or activities. To some outsiders, “culture” will always be the elephant in the room.

 

I asked the new CFO of one of the largest design firms in the country what surprised him when he joined the firm. He said, “The top leadership is way more involved with the day-to-day operations of the firm than I expected. Some feel that they can independently take on direct executive participation in various areas and issues.” He added that he didn’t anticipate “the general rarity of good business/practice leadership/operations in addition to the presence of great design capability.”

 

Do some industries provide a better background than others for transferring to a design firm environment?

If you want to look outside the design community, consider its close allies. Moving from products to services is a giant conceptual leap. Industries that sell services rather than products would prepare a leader better than those which focus on issues like inventory control or supply chain management. Industries like consulting or advertising which share common traits of design firms would make for an easier transition. Issues like the billable hour, the requirement for most professionals to participate in business development, the criticality of client management… all these are common to service businesses. Advertising or branding in particular are businesses that also require creative input, so experience managing “creatives” would seem familiar. Someone experienced in professional services (e.g. law, management consulting, accounting) could also make a transition seem like familiar territory.

 

What positions can best benefit from “outside” leadership?

CFO and CIO strike me as two positions that would be the easiest to transition into from outside the design industry. CMO is a position that could benefit tremendously from “out-of-the box” thinking, but low budgets, a tendency in some firms to devalue the contribution that marketing can make, and a lower level in the design firm hierarchy than in other industries might derail even the most creative marketing leader. Likewise, HR leaders could make huge contributions in the strategic aspects of their jobs such as organizational development, non-technical training like leadership development, employee engagement and diversity but the cultural appetite for these aspects of human resource management may not yet be present in design firms.

 

Under what conditions is a non-design firm person most likely to succeed?

If a firm works hard to sensitize both its existing leadership team and the “outsider” before he/she begins work to some of the issues that make design firms different, an environment for early success can be created. “Prepare to be surprised, caught off-guard, or even offended” might be good advice to the design firm leadership team in persuading them to be consciously open to “outsider” opinion. Someone experienced in professional services (e.g. law, management consulting, accounting) could make a transition seem like familiar territory. Superb communication skills are arguably more important in hiring from “outside” than inside the design community: after all, the “outsider” will have to persuade others to do something that could be unfamiliar. Giving the candidate lots of opportunity to discuss business issues with his/her peers inside the firm before taking the job will also minimize surprises.

 

Go outside or not?

My recommendation would be a cautious thumbs-up. Certainly the design firm environment could stand to benefit from what other businesses have learned. There is an incestuous quality to design firm hiring. The thoughtful addition of a leader who has been sensitized to the eccentricities of the design firm environment but is eager to apply new thinking could be a key factor in helping to create the distinctiveness all design firms seek. Not taking the extra time to ensure potential fit could be both highly disruptive and potentially sour an entire firm on the idea of hiring from outside the design “industry”.

What Good Consultants Know: 13 Basic Competencies Beyond Your Discipline

Many people offering services in the design community – regardless of discipline — may be excellent technical professionals but often fail to demonstrate two competencies simultaneously:

  1. Technical expertise: Proficiency in your discipline — architecture, landscape architecture, urban design, graphic design, planning, etc. — that transcends “adequate” is a given: you won’t be successful without it. But success as a technical expert is not enough to be remarkable or memorable. It may not even be enough to get the project implemented!
  2. Excellent consulting skills: You’ll also need to be a great consultant… able to transfer technical knowledge to clients in a compelling and actionable way to compliment your technical expertise.

 

Consulting skills can be learned and must be practiced. This is a big subject, worthy of more discussion. For now, here are 13 basic must-dos that I think all consultants – regardless of field – need to remember:

  1. Leave yourself out of the equation: Spending time talking about you or your firm makes clients think they are not your priority. They need and deserve your full attention. By definition, this is not a reciprocal relationship.
  2. Listen like you are fascinated: Don’t stop asking questions. Write everything down. Feed it back to your client in many different ways. Ask for clarification and examples.
  3. Synthesize and summarize on the fly: Periodically play back what you just heard. Find the essence of what your client is saying. Discard irrelevant material and organize the elements of your message into a coherent group of thoughts to focus discussion.
  4. Build Consensus: If you want your client to take action on your recommendations, find a way to embed your ideas in your client’s organization. It can’t be just between you and the CEO. Either convince stakeholders yourself or coach the CEO to spread the thinking to key leaders.
  5. Keep the contact constant: Take the initiative to contact your clients; don’t let periods of time elapse without contact. Don’t wait for them to call you. Let them know that they are on your mind.
  6. Structure each interaction: Clients want you to provide a context for your interaction with them. Lay out the process and guide them through it beforehand and while you are in the middle of executing it.
  7. Routinely provide extra service: Providing assistance outside the scope of your engagement doesn’t need to be costly. Perform some research to answer a problem your client mentions. Construct a relevant reading list. Connect your client with a resource they need. Be alert to small things that will be helpful.
  8. Bill carefully and don’t talk about it: Clearly indicate exactly what you have done in exchange for the invoice you are sending. Once you establish your compensation contractually, avoid discussion about it. If you need to track down a payment, do it with the accounting people, not the executive you work with.
  9. Keep your other clients confidential: Make constructive comparisons with other firms, but don’t name your other clients when using them to make a point. In fact, don’t name them at all.
  10. Create experiences: Your client will look forward to your encounters if they are upbeat, well-organized, well-led, shorter than they had anticipated, and content-rich. A good experience stimulates creativity and motivates clients to do their part with enthusiasm.
  11. Police the meetings: Assume the role of moderator from the beginning. Create agendas. Keep track of time. Follow-up with to-do lists. Ensure the relevant people are heard from, especially the silent ones. Do all of this in a cordial, non-intrusive manner that keeps the meeting well-oiled.
  12. Communicate economically: Say what you want to say in few words. Organize your points into groups: (“I have three thoughts about that”). Unless you are making a presentation, don’t ever talk more than your clients do. Stop talking at the end of the sentence that makes your point. Use silence to stimulate a response.
  13. Provide the solution in pieces: Dumping a fully-realized solution to your client’s problem in their lap is risky: it can be overwhelming and it is your solution, not theirs. By breaking the project into pieces and engaging them in the solution, they’ll take ownership and be an advocate during implementation.

Why Marketing People Fail

In many firms, the marketing function is like a revolving door: a new director comes in; the coordinator resigns; the director stays for six months only to leave the AE industry. Two coordinators later, a new director is hired, doesn’t work well with the market sector leaders, and is asked to leave the firm. Pick up any “People on the Move” section in your local Business Times and there will inevitably be the smiling face of a new Marketing Manager or Director for some design firm in your town.

 

Why does the marketing role experience such a high churn rate in design firms?

Over the past three decades, the marketing departments of many firms have been simmering away in maintenance mode based on some unsound thinking:

  1. Begrudging acceptance of an unclear concept: In the ‘70s and early ‘80s, principals slowly… and often begrudgingly… bought into the idea that design firms needed marketing specialists. (My favorite aphorism on this subject is this: most designers regard marketing as the price they have to pay for not being famous). Once they realized that they could benefit from greater exposure and that a big load would be taken off their technical professionals, most firms over 20 people recognized that they needed help. But they didn’t know exactly what they needed. Was it publicity? Lead identification? Proposal preparation? Client development and maintenance? Strategy? Collateral material preparation? All of the above?
  2. Fitting the job to the person: Because they were unfamiliar with exactly what marketing could do for their firm, many principals let the strengths and the interests of the individuals they hired dictate the direction of the marketing function. If the Marketing Manager wanted to represent the firm at events, that became the focus of marketing for that firm. If the person didn’t like cold calling, then prospecting focused on publicly-announced project opportunities or the person’s own established network. Often other important functions like public relations, database management, or presentation training received limited attention.
  3. Accepting enthusiasm as a substitute for competence: The combination of an uncertain job description and relief that some odious tasks were removed from the shoulders of technical professionals caused many principals to think that an outgoing personality and a perky attitude nicely complemented the firm’s other staff. Satisfied that they their marketing needs were covered, design firm principals allowed their firms to evolve organically (rather than in response to a clear vision), looking to the marketing person to be the firm’s external voice.

 

This sequence is all the more interesting because there was so much promise in the ‘80s when the profession began to embrace marketing. Nationally recognized marketing leaders like Sandy D’Elia, Margaret Spaulding, Laurin McCracken and others paved the way for marketing to become an integral part of the practice of architecture. They were serious professionals, offering well organized, strategic and business-based ideas for creatively building the bridge between design professionals and a receptive client population. But the promise of a cadre of smart, tough, creative business people helping to drive the direction of the business never quite materialized for most firms.

 

What happened?

Meanwhile, businesses other than professional services increasingly depended on their marketing departments to position their brand in the minds of potential customers. They expected their sales departments to introduce their products and services to their customers in a compelling manner resulting in an advantageous financial exchange. Working in tandem, marketing and sales departments with significant budgets demonstrated that they could be instrumental in building a valuable enterprise. But in many design firms, the slim group of people known as “the marketing department” was expected to do it all.

 

To varying degrees, principals looked to their marketing groups to identify projects, create publicity, win awards, monitor client satisfaction, prepare proposals, develop new approaches to saturated markets, get speaking engagements, assemble teams of consultants, and know, somehow, exactly what the firm needed to do, be, and say to win each project as it surfaced. In design firms, the distinction between marketing and sales, two very different activities requiring different competencies, was never made clear.

 

To this confusion between marketing and sales, add very tight budgets and the nearly impossible task of learning multiple market sectors and the relentless pressure of recurring deadlines. And, to be honest, many firms still begrudgingly accept marketing, can’t diagnose and specify exactly what they need and rely on enthusiasm to carry them forward. As a result, many firms set up the marketing department to fail.

 

There are two ways to look at it.

 

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In the eyes of the technical professionals, marketing people are chronic underperformers. They don’t bring in enough work, can’t seem to get the firm on the front page of the Wall Street Journal, never quite capture the essence of the firm in collateral, can’t provide the right images when they’re needed, always seem harried and, regardless of what their budgets are, to them, it is never enough.

 

But viewing the complex set of responsibilities from the inside captures a different picture. Many marketing people feel unsupported and undervalued. They often feel that they were hired to do something they didn’t sign up for or that is outside their realm of expertise. They know that their marketing colleagues outside professional services make more money, are relied on as vital members of their enterprise, and have sizable budgets to work with.

 

The result

 

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Increasingly, design firm executives, like John Atkins, Scott Kelsey and Gerdo Aquino, are embracing the sales side of running their business.

 

What happened in the last couple of decades among marketing professionals has been a process of slow demoralization, disintegration and defection of the people who take marketing seriously from the industry. The initial awakening of many firms to the promise of a well-executed marketing strategy and marketing participation in firm-wide direction has not materialized. There are some wonderful exceptions: anyone who has worked at HOK in the past 15 years can tell you that the firm “gets” marketing and incorporates it into the fabric of the firm. Other good news is that many technical professionals got the message (or innately understood the need) and focused their efforts on client development. Today, many firms are flourishing under the leadership of design-trained executives who have happily embraced the sales side of the business as one of their responsibilities. John Atkins, Chairman and CEO of O’Brien Atkins; Scott Kelsey, Managing Principal at CO Architects; and Gerdo Aquino, President of SWA all lead their firms and have established superior examples of Marketing leadership … along with all of their other responsibilities.

 

This is a good thing, but it is not sufficient.

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Allison Held’s energy and focused leadership knits together the various parts of Perkins+Will.

 

Firms need marketing leadership outside of the CEO’s office… the kind of energy and focused leadership provided by serious, executive-level marketing professionals like Allison Held at Perkins+Will who knits the various parts of a complex and thriving large firm together as CMO; Amy Aponte, Principal with Hanbury Evans Wright Vlattas who has helped lead the firm from a regional player to a nationally-recognized specialist in higher education ; or David Koren, shepherding Perkins Eastman’s marketing activities globally. These are senior contributors who are depended-on by their firms for the facet of marketing they do best. They are excellent industry beacons integral to their firm’s futures.

 

Moral of the story

As a steward of your firm, you need to dig deeper into that gap between what your marketing professionals should be and what they actually are doing today. It may be that you don’t have the resources of Perkins+Will or Perkins Eastman: maybe your firm is a 50-person practice with a Marketing Director and a Coordinator. By knowing what your firm needs, clarifying that for all involved, hiring right, and then developing an ongoing process that expects the highest level of leadership from those who perform these functions, you’ll see a substantial return on your investment. Don’t hamper them by marginalizing them. If you’re embarrassed to bring them to the management table, you’ve succumbed to the “personality” school of marketing. Hire substantive, smart people to represent you, strategize with them about your firm, and then trust them enough to let them succeed.