Designing a great business

The business of running an architectural practice requires ongoing focus from business leaders, yet is often neglected in the process of servicing clients and delivering projects. Management for Design is addressing these issues in a series of monthly webinars for the Association of Consulting Architects. In the September and October ACAs – Insight National Webinar, Rob Peake investigates the main elements that make up an architectural business. Looking at people, strategy, business and financial management, legal, brand, systems and delivery, Rob simplified the complexities of business management.

The 10 foundations to building a successful architecture practice are:

1. Purpose and Plan

2. Leadership

3. Team 4. Management

5. Systems

6. Financial Control and Profitability

7. Managing Risk

8. Marketing, Communications and Brand

9. Design and Delivery

10. Succession

“ People buy why you do it, not what you do"

Rob covered the first two of these, Purpose and Plan and Leadership in the September Seminar. For those who missed it, here’s a recap of those first two foundations:

1. Purpose and Plan

A business is the vehicle that enables you to shape and control your destiny, both in life and in your career. As such, running a business has the potential to be incredibly empowering if you have a strong sense of purpose and a clear plan and direction. There are a number of questions that business leaders should ask themselves and get clarity on to create a truly successful architecture business:

• Why do you do what you do? As Simon Simek said in his widelyshared TED talk (https://www.youtube.com/watch?v=IPYeCltXpxw), “people buy why you do it, not what you do”. If you can convey your purpose and what really drives your business, those elements will infuse the how and the what of what you do to build a stronger and more engaged company.

• What is your vision? Consider what type of work and architecture you want to do. What type of clients do you want to work with? What are the places you want to be and the people you want to work with? What do you want your work–life balance to look like?

• Does your business match with a gap in the market? Your business needs to fill a need that your clients are demanding.

• What sort of business are you building? Is it sustainable or reliant? How will you balance creativity and profitability, and where do you sit on the spectrum?

Not all businesses need a business plan, a strategic plan, strategic objectives, or even a clear direction. In fact, 95% of design businesses don’t have any of these. It is important to understand that there is a difference between a business plan and a strategic plan. Leaping straight to a strategic plan can help to clarify your business goals. Our research shows that 70% of design businesses do minimal or no strategic planning. Yet a strategic plan takes the core objectives of your business and is the roadmap that will enable you to reach your vision and achieve your goals. Five critical elements need to be in place to make strategy happen:

• Leadership needs to drive the process

• A level of excitement

• It has to be concise with definitive timeframes

• It needs to be flexible

• Consider execution before you the start

Develop measurable objectives — typically over 3–4 years — and specific milestones to achieve these strategic objectives, for example steps to develop a global presence, and assign responsibility from within your team to make these objectives happen. Objectives should be strongly linked to a tangible result, for example receiving unsolicited CVs as an indication that you have achieved the objective of being a great place to work. Have a look at the slides from this session for examples of the sorts of objectives that you might want to set: http://bit.ly/1F5L9w3.

Arguably, the leading cause of business failure is the lack of a well-executed strategy. If you are committed to true business success then you need to dedicate the resources to make your strategy a reality. In our experience, execution is what matters, with a focus on the following points:

• Involve the key people

• How will you reward them?

• How will you track progress?

• How will you keep people up to date?

• Where will you find the time?

• Will you share your strategy with everyone?

• How often will you review?

• What support/resources will you need?

How much are you prepared to invest?

2. Leadership

Leaders establish the culture of the business. How important are sound business principles in your business? How do you demonstrate and drive this? Do you have a culture of empowerment? Culture filters down from the top and it is up the business leaders to set the tone. Enthusiasm for your vision, clear strategic objectives that filter through to every aspect of the business and empowered staff will drive your business forward. What are the priorities for your business and how do you communicate these to your team? Talk about what you believe, and address those values in phrases that are inclusive of the collective whole of your staff, using the tone ‘this is important to us’. Great leaders exhibit the following qualities:

• Knowing and challenging your people

• Being realistic (self assessment)

• Keeping to clear and actionable goals and priorities

• Rewarding those that contribute

• Knowing yourself and setting the example

• Focus on what will make a difference

Typically leaders are in charge of getting things done by running the three core business processes:

1. Setting the direction and priorities

2. Engaging the right people

3. Regularly monitoring progress

In most architectural businesses leaders are in charge of generating work, client relationships and design — and they should be great at this. But what about all the areas of the business? For a design business to be successful, contribution is needed across strategy; rainmaking; design, delivery and Innovation; operations; human resources; and financial control. None of this comes to you overnight. It comes through time and experience, a well-constructed plan and your team. To get to a point where all of the areas of the business are covered, you need to balance the time you spend ‘in the business’ and ‘on the business’, often with a split of time across the leadership team to enable this. Business leaders need time out from project-related activities to make this happen.

Leaders need to be aligned with where the business is heading and have the ability to communicate this to staff. The most successful leaders will be able to empower their staff, hand over control and give some of the responsibility for fulfilling objectives to others. Your project managers are leaders. Set them up to succeed and push authority ‘down’. The following questions should be asked of your project managers:

• Are they trained?

• How much responsibility and accountability do they have?

• Are they responsible for performance (project deliverables)

• Do they have the information and tools they need

• Are they financially literate?

• Do they embrace technology?

Refer to a copy of the seminar slides for examples of contribution criteria aligned with business objectives.

The latest ACA webinar was held on Wednesday 14 October 2015. You can view or download the slides from this session, from the Management for Design website: http://bit.ly/1KBLTED.

You can also view or download the slides from session 1, held on 2 September 2015, from the Management for Design website: http://bit.ly/1F5L9w3.

The next ACA Business of Architecture webinar series will be held on Wednesday 11 November 2015. For more details about this next event, keep an eye out on the ACA website: http://bit.ly/1P1zznx.