MANAGEMENT FOR DESIGN
SECOND QUARTER E-MAG 2021
‘Returning from remote - Adapting to the new normal’ The 2020 – 2021 financial year was one defined by unprecedented challenges and changes to almost every industry, and ours was no exception. In a post-pandemic world flexibility and adaptation to the new normal has been the key determinant of success for businesses – small and large alike. From the day-to-day of leading and engaging with your people in isolation while trying to keep motivation high and expectations realistic to creating and keeping meaningful relationships with clients and peers, the past year has been a gordian knot of logistics for many practices. The shift from in-person to remote was a swift and not altogether smooth ride, and the return to the office may not be a seamless transition either. Employees that have gotten a taste for the comfort of working from home may not be so eager to return to commutes and in-office hours, and recent surveys indicate that employers who do not accommodate flexible hours may risk losing talent to organisations that do. Deciding what your post-COVID everyday will look like should bear this in mind, but it will likely not be so simple as just allowing your employees to come and go as they please. Remote working may be beneficial to the worker, but it can have a negative effect on the ability for peers to collaborate in a meaningful manner. PSMJ Resources released an article on the challenges that the Architecture, Engineering, and Construction industry has had regarding project length and productivity that you can read in entirety in this release.
So, what is there to be done? Some firms may find themselves in a situation where compromises will be required – weighing up the potential loss in productive time against the loss of employees who may be lured away to positions that allow for flexibility. Streamlining efficiency through the creation – and successful implementation – of appropriate and considered strategies will be key to navigating some of the costs and benefits of remote, in-person, and hybrid working methodologies. Phil Keil published an article in the Zweig Letter on strategy, value creation, and frameworks for leadership that you can read in its entirety in this release that may give you some useful guidance on that front. To briefly encapsulate the spirit of that article; value is a metric that must be at the forefront of your mind when creating strategy. Value for your employees by making work more appealing – which means flexible, interesting, and motivating. And value for your clients by raising their willingness to pay for your services, which is intertwined with value for employees as engaged and excited workers will by nature create exiting and engaging products.
Resources, Happenings, and What You’ve Missed Leadership and Succession Panel Management for Design is pleased to announce an upcoming invitation-only event focused on Leadership and Succession with a panel of industry leaders who have already put into action their plans for succession, or who are in the process of transitioning. Join our panellists Kavan Applegate, Karl Fender, Piera Murone, and Phil Borelli as they discuss strategies for successful and seamless leadership and ownership succession.
Invitations Invitations and information about the venue will be sent out shortly, and a retrospective of the event will be published in the next quarterly issue. For those who cannot attend, you can use this form to sign-up for an email overview of the evening and a recording of the discussion.
Special Offers Attendees will also be given the opportunity to gain access to our new Management Reporting Platform in an exclusive closed release.
Management Reporting Platform Our Management Reporting Platform will give your business an accessible, efficient portal to view your relevant and required business and financial information, reports and performance measures in the one place. From fees and expenses to project performance and Key Performance Indicators, this application is specifically designed for practices within the Architecture, Design, and Engineering industry. The Management Reporting Platform can help to maximise your efficiency in creating strategic plans for your business – giving you a bird’s eye view of your businesses financial health and performance. • Customise your portal to only show the reports that you want, as you want them. • Create and print collections of relevant reports for business development meetings, stakeholder meetings, and internal strategic planning.
Resources Management for Design in partnership with the ACA UK has released Part I of the Business Foundations for Architects and Designers webinar sessions. The session has been recorded and uploaded to our YouTube channel, and can be viewed in its entirety here. Join Carla Dexheimer and Sim Thirunesan as they discuss: • Purpose and Direction • Leadership • Project and Resource Management • Systems • Financial Control and Profitability Part II will run July 28 and will be available to stream online 2 – 3 business days following the session.
Work from home becomes the latest AEC challenge Is the bloom off the rose for the work-from-home (WFH) movement? Mike Complita thinks so. In the early days of the pandemic, many AEC firms were pleasantly surprised by how well they were handling the disruption caused by WFH policies. They reported that productivity was strong, deadlines were being met, and employees felt safer. But as the summer progressed, questions arose about WFH. In an article headlined “Companies Start to Think Remote Work Isn’t So Great After All,” the Wall Street Journal reported, “Projects take longer. Collaboration is harder. And training new workers is a struggle.”
WFH challenges Complita can relate. Principal in charge at Seattle-based Elliot Bay Design Group and president of SeeSaw Services, he says WFH presents challenges for management and holds pitfalls for workers. “Many employees love working remotely. But I don’t think they see how it can limit their growth,” Complita says. “Over the years I’ve mentored a lot of people and, I hope, helped them advance in their careers. But with people working from home, the mentoring process is much more challenging.”
Collab problem Collaboration in general becomes a problem, he says: “Under normal circumstances, you can turn to colleagues in the cubicles around you and say, ‘I’m struggling with this, what do you think?’ Working remotely, these unplanned interactions are less likely to happen.” He believes these impromptu moments help workers do their jobs better and find new opportunities to apply their skills. He also cites an intangible benefit in the interaction and team building with other employees. For their part, managers are being challenged as more employees take advantage of WFH policies to move even further away from the offices. “A few of our employees were approved to relocate right around the time COVID-19 started, for reasons unrelated to the pandemic that were justifiable to management,” Complita explains “Having seen this but not being aware of the details, many on our staff are strongly considering doing the same for personal reasons. But we don’t necessarily see it as a positive for our company or the individual.” “We always try to support our staff, but experience has proven that living beyond reasonable driving distance to the office and our core working areas can have a negative impact on their careers. It’s a real balancing act.” Complita says one of the biggest issues with WFH is travel expenses: “Someone who used to live near the office and could be on-site at a project in thirty to ninety minutes will now have to spend a day each way travelling. In most cases, management sees the added time and cost of travel as the employee’s responsibility.” If the project is urgent, accommodating the added travel time is often not in the client’s best interest. Complita says his firm is working on guidelines on mentoring, training, and travel expenses, which he calls “one of the biggest issues we are grappling with as we emerge from the pandemic and seek the right balance for the long-term success of our people and our firm.”
Original article written and published online by PSMJ Resources.
A strategy for your strategy Systems, value creation, simplicity, and granting authority to the most local level. The power of a purpose-driven, legacy-building strategy for your organisation is widely recognised. With the myriad of frameworks, processes, and approaches, however, it can feel overwhelming. Have you ever left a strategic planning session feeling overloaded by the sheer multitude of goals and actions you’ve now committed to accomplishing over the next three to five years? Furthermore, you now have talented people working on a long list of urgent initiatives that all seem to have a due date of Q1 in the first year of the plan. After all, as Elbert Hubbard said, “If you want anything done, ask a busy person to do it,” right? It may feel like you need a strategy just to implement your strategic plan. A return to simplicity, an eye on what is truly strategic, a focus on value creation, a system to implement your strategy, and granting authority to the most local level will allow you to select fewer initiatives with the power to have a significantly greater impact. In this article, I will focus primarily on the value creation component of the list above as a framework to evaluate and narrow your strategic initiatives. I will, however, give a brief nod to our partner, OnStrategy, that now enables us to provide a system to our clients in the form of strategic planning performance management software. Now, we also need to at least acknowledge some of the nuance of the space that we compete in.
When you are looking to succeed, you must design strategy that carefully targets a defensible market segment and ensure you have the right business model to dominate there. Certainly, when talking about building a high-profit model, there are only a few choices. You can either increase your client value or lower your cost to serve those clients, perhaps both. Creating the right business model to accomplish these goals is highly dependant on which category your clients fall in across three broad profit segments. According to research done in conjunction with MIT and a SaaS profit analytics firm these three segments are defined as: • Profit Peaks: High-revenue, high-profit clients (20 percent of clients generating 150 percent of profit) • Profit Drains: High-revenue, low-profit/loss clients (30 percent of customers that erode 50 percent of profits) • Profit Deserts: Low-revenue, low-profit customers (minimal profit, but consume about 50 percent of the company’s resources)
In my experience, many firms do not analyse this type of information and rather take a “pursue all RFPs/opportunities” approach, much like they do with the “pursue all ideas for strategic initiatives” leading to a median pre-tax, pre-bonus profit on NSR for AEC firms of 15 percent according to Zweig Group’s 2020 Financial Performance Survey. It is extremely difficult to engage more than one of the three profit segments above, further necessitating a focus on the value creation framework.
If you asked business leaders in general, many would share that they are focused on shareholder/stakeholder value creation, yet they struggle with falling fees and a commoditization of their services while simultaneously struggling in recruiting because, “We can’t compete with what other firms are offering in compensation.” Therefore, when evaluating strategic initiatives, they are only worthwhile if they done one of the following: Create value for clients by raising their willingness to pay (WTP). This shouldn’t be confused with a price or fee. WTP is the most a client would be willing to pay for your services. If we are only focused on revenue growth, you’ll likely ask questions such as, “How can I sell more?” If we are focused on increasing value and WTP, however, the goal is to delight and excite customers with the service provided. We are focused on increasing trust and loyalty at every interaction and stage within the client experience. It has to be every interaction with every client. Additionally, when putting this into action, these firms are not overly concerned on shortterm profitability in sacrifice to the longer term value creation. Create value for employees by making work more appealing. This one has nothing to do with compensation. According to Zweig Group research, people are significantly more concerned with interesting, purpose-driven, motivating, and flexible work than they are industry-leading compensation. Perhaps you feel it is counterintuitive, but pursuing these ideas not only generally leads to the ability for a firm to pay more compensation, but as a best firm to work for, you simultaneously lower the minimum compensation you’ll need to offer to attract talent. As you know, this is not an easy feat and requires leaders to think holistically about the needs of their employees. Create value for suppliers/subcontractors by reducing their operating cost. A relatively simple idea, your suppliers/subs expect a minimum level of compensation for their efforts as well. If you can find ways to increase their productivity, they will often share the increase in profitability with your firm indirectly. In conclusion, leadership that is focused on creating value and using that as a framework in which to narrow their focus on strategic initiatives view everything through the lens of creation of that value.
Anything not creating value for clients, employees, or suppliers/subs isn’t worth doing. Original article written by Phil Keil, published online at the Zweig Letter.
Reading List Leadership Dynamics Edwin Hollander Leadership Dynamics is for leaders and aspiring leaders who want to learn more about the practicalities of the leaderfollower relationship and the concepts of effective leadership.
Surrounded by Idiots Thomas Erikson Do you ever think you’re the only one making any sense? Or tried to reason with your partner with disastrous results? Do long, rambling answers drive you crazy? Or does your colleague’s abrasive manner get your back up? You are not alone.
Architecture As A Global System Peter Raisbeck Since the 1980s the architectural profession across the world has been driven by globalisation. The factors shaping this globalisation include neo-liberal economics, digital transformation and the rise of social media against the background of the profession’s entrenched labour practices.
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.
It Doesn’t Have To Be Crazy At Work Jason Fried & David Heinemeier Hansson In this timely manifesto, the authors of the New York Times bestseller Rework broadly reject the prevailing notion that long hours, aggressive hustle, and “whatever it takes” are required to run a successful business today.