MANAGEMENT FOR DESIGN SPRING RELEASE 2019
Presenting 2030: An uncertain future for our industry? Thank you to everyone who was able to make it to our recent networking event. Frank A. Stasiowski, FAIA from PSMJ Resources, Inc. gave a truly engaging presentation on the future of our industry.
With bold predictions like the end of time recording and retirement; changing the structure of fees; the impact artificial intelligence will have on the way we work; generation shifts in leadership; and business succession—there was a lot to consider. It was a pleasure to host everyone in our offices, and we’re looking forward to seeing you all again soon at our next event. If you would like a copy of the presentation slides from this event, or if you didn’t receive an invitation and would like to receive invitations in the future, please contact events@m4d.com.au.
How you Market How you Growth
Embracing Disruptive CHANGE in…
Project Delivery Human Resources IT/AI How you Get Paid Leadership How You Capitalize How you Make Acquisitions Your Business Model
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Effective Design Management Effective design management should be one of the core values of your architecture and design practice. However, when Management for Design delves into this subject and asks business leaders to explain and articulate their processes, they tend to struggle with their response. Consistent and effective design management across the studio is not common in our profession. Why is that? Is it because, as architects and designers, we are inherently creatives—and creatives consider management as somewhat counter-intuitive to design innovation? Creativity and management don’t fit neatly together! Creatives don’t necessarily embrace management, even design management. But the key thing is, you need to find a balance between creative freedom, innovation, and business management. Innovation needs to flow throughout the business and be actively encouraged and resourced. But strong and consistent business performance also requires business management and systems. Typically, the larger your business is or becomes, the more you will rely on a way of working that is consistent, methodical, and aligned with your studio culture— that’s business. Effective design management finds a balance between creative freedom and management systems.
Why is Design Management Important? Clients don’t choose you for your design talent, they choose you for your ability to deliver high-quality design through an exceptional experience. Your design approach, outputs, and the ability to “capture” your intellectual property provides you with the opportunity to innovate and to truly differentiate your business from competitors. Effective design management should be one of the core values of a successful architectural and design practice—the controlling mechanisms that allow the creative process to be transformed into fee-generating activities. Management includes the management of people, technologies, information, and resources. The essence of design management is to maximise these resources and outputs, alongside promoting creativity and innovation within your business.
Effective design management—a consistent approach that is understood and applied throughout the studio—allows your business to: • Ensure consistent processes (and to improve them) • Capture and deliver the design intent • Maximise value to the stakeholders • Improve your relationship with your clients • Build your brand and marketing efforts • Improve your financial performance
Leadership & Culture Project Brief
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Capture Central Idea
Design Development
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Current Status Design is central to the tertiary education of architects, engineers, and designers, but graduates receive little or no training in design management and designers are having to learn this on the job. The challenge for architecture and design businesses is to provide a stimulating and creative studio environment that allows the space for creativity within an organised environment. Like any other business system, design requires monitoring and control mechanisms. Consistent processes ensure that design outputs are consistent, design-intent is maintained, and quality work is produced and delivered. Having said that, ineffective design management is one of the major causes of rework and loss of productivity in the studio. And quite often it’s the leaders that are creating this. Unresolved design work and design changes at the wrong time can be one of the biggest challenges for most studios. Quite often, design reviews occur too late in the process and documentation and production has moved ahead of the design decision-making process. Design management requires focus and commitment from the leaders. The unique value architects add to people’s lives and communities is grounded in an ability to deliver something their competitors cannot: design vision. But being a creative auteur doesn’t always translate to business success—design needs to be a professionally managed service—effective and responsive. With the move towards integrated project delivery and the uptake of the “design manager” role by contractors, no longer is design or the management of design the exclusive domain of architects in a collaborative, digital marketplace. To be successful, what’s required is to ensure projects are managed professionally and are conceived and delivered within a professionally managed studio. Read more here, to find out what’s required to start implementing effective design management in your business.
Business Conditions Survey 2019 Each year Management for Design conducts our Business Conditions Survey. The aim is to accurately assess the prevailing economic and business climate and to drive thinking and decision making to assist businesses to work through the current circumstances and deliver sustainable growth.
So, what’s happened to confidence in the economy and business conditions compared to the same time 12 months ago? We asked over 700 business leaders, directors, and executives from the architecture, engineering, consulting, and design industries. The results indicate a noticeable reduction in confidence levels from 12 months ago. Accompanying this is an increased level of uncertainty (and pessimism?) as our respondents are faced with uncertain economic and industry conditions! Only 10% of our respondents are very optimistic about their business performance over the next 12 months (compared with 33% this time last year). This is a level of uncertainty not seen over the past 10 years of conducting the survey. The Business Conditions Survey aims to accurately assess the prevailing economic and business climate and to drive thinking and decision making to assist businesses to work through the current circumstances and deliver sustainable growth.
Key points from our business conditions survey are: •
fter years of increasing revenues there is a noticeable tapering in growth A expectations for businesses in our industry
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nly 15 % of respondents expect improved economic conditions over the O next 12 months
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ver two thirds of our respondents expect their profit margin to stay the O same or decrease (25% expect their profit margin to decrease!)
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0% of respondents do not expect to have a skills shortage moving 7 forward – significantly increased from past years
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nly 5% of our respondents expect to significantly increase their O revenues over the next 3 years
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L eading indicators, including forward revenue projections, point to softening in the year ahead
So, certainly not optimism! Not surprisingly one third of our respondents don’t expect to increase their fees (compared to 10% last year) and salary levels will only increase moderately (if at all) The full Business Conditions Survey Report will be released in December 2019. If you would like to purchase a copy of the report, please contact Rob Peake at Management for Design via rpeake@m4d.com.au.
CPA Congress 2019 In November, Management for Design Director and Co-founder, Gordana Milosevska, was invited to chair two sessions at the CPA Congress in Melbourne. The sessions chaired were “Finance Transformation—make it real, make it happen, make it last!”, presented by Stephannie Jonovska, and “Reinventing your business and teams when change happens”, presented by Helen Mac. Stephannie, Manager Finance Transformation, BlueScope Australia and New Zealand, focused on finance transformation as a buzz word with a high element of FOMO. She talked about how BlueScope is integrating process improvement with technology optimisation while importantly keeping people at the centre.
In the second session, Helen introduced seven keys to reinventing our way through “storms” in our business and with our teams, to make sure that we all arrive safely at our ultimate destination—business success. With a strong focus on the transformation that technology is having on the industry, congress delegates were asked to immerse themselves in technology and develop a greater understanding of the digital world. Some of the most significant challenges for finance and accounting professionals are: • Accounting for the Robots, how the accounting industry is changing in the face of rapidly developing artificial intelligence technology • The Future of Digital Money, where the increasing digitisation of money will blur the distinction between money and data Overall, the congress was very insightful and demonstrated an exciting and dynamic future for the industry.
M4D launches partnership with ACA UK at London Build 2019
Management for Design (M4D) has recently partnered with the Association of Consultant Architects UK (ACA) to provide financial and business management services and systems to their members. The partnership was launched in November at London Build 2019, where ACA President, Andrew Catto, invited M4D Finance Director, Carla Dexheimer, to speak about the “Business Foundations” necessary for running and growing a successful architecture practice. Click here to access a copy of the presentation. A component of this partnership is that ACA members will have on-line access to the “M4D Business Foundations Starter Kit” that is used and recommended for establishing and sustaining business success. As well as access to a help-desk and advisory service. This partnership - based in London - reinforces our commitment to our international expansion and our desire to assist a larger number of architecture, engineering, design, and consulting studios and leaders worldwide If you’re in the UK and are interested in talking to us to about helping your business perform better, contact Finance and Business Director, Sim Thirunesan directly: sthirunesan@m4d.com.au.
M4D Business Systems Selector Management for Design is excited to announce the launch of our Business Systems Selector. With this unique tool, architects, engineers, designers, planners, and consultants are able to enter information about their business practice, processes, and priorities, to find out which system software will be best suited to their business. To find out more and find out how to access the Business System Selector, please contact Callum Bruce cbruce@m4d.com.au.
Reading List What Would Google Do? Jeff Jarvis What Would Google Do? is an indispensable manual for survival and success in today’s internet-driven marketplace. By “reverse engineering the fastest growing company in the history of the world,” this book offers indispensable strategies for solving the toughest new problems facing businesses today.
Impact 2030 Frank Stasiowski Impact 2030 outlines how demographics, globalization, government expansion, and technology advances can benefit firms that plan ahead — and be devastating for those that don’t prepare. Frank made bold yet accurate predictions about A/E/C practice management and strategic shifts in the ‘80s, ‘90s, and ‘00s. Nearly all have come true. Those who integrated his prognostications have reaped the rewards.
Business Growth Manifesto Louis Dharma Do you want to create exponential growth in your business & leave your competition in your dust? This book includes the “magic” ratio you can use to grow ANY Business, the six policies to growth hack your business and explains how to double your business & crush your competition in the fastest time humanely possible.
Why Architects Matter Flora Samuel Why Architects Matter examines the key role of research- led, ethical architects in promoting wellbeing, sustainability and innovation. It argues that the profession needs to be clear about what it knows and the value of what it knows if it is to work successfully with others. Without this clarity, the marginalization of architects from the production of the built environment will continue, preventing clients, businesses and society from getting the buildings that they need.
