Year Zero - Alternative Business Models for Architecture


Right then,

During such financial crises as we are experiencing now, there is an opportunity to reinvent and revitalise the ways in which architectural practices operate - if we agree that there is opportunities to improve or that we shoud improve [to be discussed].

Over my [rather short 7 year] professional career I have worked as a freelance architectural designer [and still do], worked in property development, construction and within a design/build company. I am not a registered architect as for most of my career I have worked for myself or outside of traditional practice by choice.

The key issues I have experienced from all of these perspectives in relation to the weaknesses of architectural practice and the general consultant team are the following:

1. Lack of surety over scope of work and final fees for architectural work. Will the architects deliver what is required, and what are the fees going to be. Where are the shortfalls, overlaps etc.

2. Coordination between consultants. Often comes down to multiple consultants, differing opinions, different software platforms, time wasting due to trying to coordinate key people in a project.

3. Disconnection and lack of understanding between client and designer. What the client needs is often delivered in convoluted terms, specialist language and deliverables that relate well to construction phasing, but may not be fully understood by the client.

4. All Architects are not equal - lack of promotion of specialties or weaknesses/lack of knowledge leading to faults and problems

5. Everyone recognises the power of BIM, but it is not being used - often because of the coordination issue above, as well as lack of resources, time, and skilled staff.

6. General lack of acknowledgement of the 'value' of design. Often this can only be measured after construction.

7. General lack of thought and knowledge of construction process - especially in terms of junctions of materials, clashing of systems, phasing etc.

8. Perception of underpayment or undervaluing of architectural services by architects.

9. Add stuff here...

To remedy the above, and to transform the way buildings are produced I advocate the following principles:

1. Customer oriented focus - reframe everything to the particular type of customer you serve or want to serve. Marketing, language, fee structure, responsibility and advocacy, everything...

2. Attracting customers through your designs and principles - allowing for the talents and interests of the practice to be its main selling point. Sell your strengths.

3. Focusing on getting paid for production and deliverables, to getting paid for management of production and deliverables.

4. Switch to a preconstruction services focus - the first half of a design/build firm. Structure your fees as management fees, not hourly, tied to dleiverables etc. A fixed cost per month. Allow for expansion into a full design/build/development firm if the opportunity arises.

5. Front end planning - take responsibility for the management of the consultants, client, process from the beginning.

6. Ramp up technology and knowledge - especially of BIM and green building

7. Strategic alliances and relationships with manufacturers and suppliers. Look at yearly peformance guarantees with key suppliers and use their knowledge to help you and your client out. Embrace the potentials of modulation and prefabrication where it exists.

8. Strategic alliances with builders and other consultants. Assemble teams, sell strengths to clients. Reciprocate work and network.

9. As much as possible, market value not cost. This weeds out low quality clients anyway.

10. Advocate a holistic design philosophy to the entire practice. Practice what you preach. Endorse flexible working arrangements, innovate workplace standards, allow for freedom and creativity. Be lean and mean. Look at employee equity/profit share. Experiment, develop and build.

I would be interested in your thoughts...


Mar 19, 09 8:02 pm


Mar 19, 09 8:07 pm  · 

Add to point 10. above, wear black ;)

Also, as much as you can, factor in printing and local travel disbursements into your fees. Clients and developers hate the unknown...

Mar 19, 09 8:12 pm  · 

I'd like kickbacks for placing products. Theres nothing un-ethical about it.

Mar 19, 09 10:39 pm  · 

Well it could be kickbacks, I was more thinking of signing exclusive use agreements in exchange for top service, fixed prices [either passed on to the client, shared, or provided to the builder partner/architect as developer], access to knowledge, marketing and after completion service...

I have worked on similar endeavours and it has been really well recieved...

Mar 19, 09 10:46 pm  · 

dia - great list. one adage you have proven, so far, is that people like to respond to bitching more than actual, constructive dialogue...

once i clear a little more time in my schedule, i'll respond with a few more items.

Mar 20, 09 8:04 am  · 

Dia, one item you are missing, which maybe the most important of all:

11. Hire the very best you can possibly afford and manage them as best as you possibly can and create a partnership structure that allows the best access to the very top, especially if going design/build/development. Without an adequate partnership structure, those kinds of ventures tend to fall apart and it is usually best to team up with someone who has strengths were you are weak. There aren't enough hours in a day for one person to be a builder, architect, and developer if they are standing alone at the top of the firm.

Mar 20, 09 9:44 am  · 

: I'd like kickbacks for placing products. Theres nothing un-ethical about it.


From the AIA Code of Ethics:

Ethical Standard 3.2 Conflict of Interest: Members should avoid conflicts of interest in their professional practices and fully disclose all unavoidable conflicts as they arise.

Rule 3.201 A Member shall not render professional services if the Member's professional judgment could be affected by responsibilities to another project or person, or by the Member's own interests, unless all those who rely on the Member's judgment consent after full disclosure.

Commentary: This rule is intended to embrace the full range of situations that may present a Member with a conflict between his interests or responsibilities and the interest of others. Those who are entitled to disclosure may include a client, owner, employer, contractor, or others who rely on or are affected by the Member's professional decisions. A Member who cannot appropriately communicate about a conflict directly with an affected person must take steps to ensure that disclosure is made by other means.

Mar 20, 09 9:45 am  · 

file, I think he was being sarcastic.

Mar 20, 09 9:58 am  · 

My thoughts on strategy 6 -

We are still at an early stage in the life of BIM (maybe not infancy, but at least early childhood) and it is going to take time for the design community to embrace it completely. It has only been in the past few years that BIM use has really started taking off in the profession realm and it will just have to trickle down slowly at a natural pace as more and more people come into the profession and eventually into leadership positions who've never worked in anything but BIM.

Almost no one in the design profession who has more than 5-10 years of experience "grew up" with the software and for those of us who didn't it just takes time and experience to harness some of the capabilities it has beyond 2D drafting (especially for those of us who don't have a natural inclination toward computers and software). BIM also has major weaknesses that need to be recognized and addressed as it moves forward. BIM is simply a tool, not a panacea.

As for green building, it seems with the recent sustainable everything trend a lot of people have learned just enough about green building to be dangerous but not enough to be innovative or even helpful. Rather than everyone becoming a green "expert", I think sustainability is an area where it is useful to have highly specialized firms or teams within firms who can really focus specifically on developing a deep understanding of issues and solutions.

Strategy 7 would never work in any kind of public or competitively bid project.

Mar 20, 09 10:19 am  · 
Schrödinger's cat

I'm interested in what people think about adding non-traditional semi-related design services to architectural practice. more trouble than it's worth? should the focus be on more specialization - not in specific building types but in developing certain kinds of strategies and innovation?

also - why can't we go back to the early 20th century style practice where artisans worked along side architects? has architecture become almost completely about picking stuff out of a catalog?

Mar 20, 09 1:27 pm  · 

mgrt, i think that's a great idea and something i want to work towards...the artisan is extremely valuable.

Mar 20, 09 1:29 pm  · 

Strategy 7 would only really work on residential work I agree.

Strategy 6 - this week I had an introductory meeting with a well known multi disciplinary practice, offering architecture, structural, mechanical and surveying. The arch section was using Revit, the mechanical wasnt. And they were marketing themselves as an effective 'one stop shop'. Thats an example of not taking opportunities...

Please keep going...

Mar 20, 09 2:55 pm  · 

I would not dismiss Strategy 7 quite so quickly for non-residential work ... taken to its logical conclusion, Integrated Project Delivery would embrace just this idea. Some commercial and institution projects already are sticking their toes into these complex waters.

Mar 20, 09 3:59 pm  · 
fine line

Stitching archinect together...

Quillian's essay on critical activism:

So far the discussion has been focused on revitalizing the profession, but not on reinventing. Many of the issues being discussed here are management issues (making more efficient the existing model), as opposed ideas of a new model. Can the new technologies and spirit lead us to create a new practice rather than simply improve on the existing? Is it a process of regaining territory that we have lost, or of creating (or rather recognising) new territories of potential in which we can fill and expand?

Mar 20, 09 6:07 pm  · 

this is an intriguing thread, but I'm inclined to think it's not going to be much more than mental masturbation unless we really start thinking long and hard about what the marketplace wants and is willing to pay for.

the vast majority of what I read above is about what we want -- my view is that self-centeredness is pretty much what got us into this mess (as a profession) in the first place.

doctors and lawyers and accountants (all typically more successful than architects) generally define their services around the health or success of their clients -- realistically, how often do we do that? firms that do pursue a client centered / client service approach tend to be looked down on by the design elite.

IMO client centeredness is the key to changing the profession and the profession's prospects -- designing and delivering services that fully understand and embrace the real needs of the client and the user are the only way we're ever going to reverse the incessant slide that's been happening for us over the past 30-40 years. that understanding requires real hard-nosed investigation, not just a flash of intuition or an assumption about what the client needs or wants.

but, even if we can design and deliver such services, we still must be able to sell those ideas to the marketplace. we've got to make a business case for what we needs to be done and convince the people who hire us that this truly is a better way.

I confess -- about all I've done in this post is reframe the problem -- I really don't have concrete solutions to the issues that I raise -- wish I did.

Mar 20, 09 7:10 pm  · 

apart from efficiency issues, what is really different? many of the ideals are being covered by well-managed firms. my own office back in day did the one-stop shop (because an architect in japan is a licensed structural engineer not a architect and we chose to do HVAC too ). there were some inefficiencies sure...but nowadays the way to get projects of a substantial size has required partnerships with contractors - all public jobs require it. so we already, even in small offices, are doing partnerships with manufacturers, with construction crews, with all kinds of players. and it doesn't make that much of a difference. the reason being that those things are not about quality but streamlining an existing process. and frankly i am convinced that quality of the sort we are interested in as architects is not amenable to massaging.

inefficiency is also important to us and must be protected.

so while i am interested in the idea, the complaints feel a bit tired and the solutions pretty much just business as usual. they are all coming from the same box.

which box would work better? no idea.

Mar 20, 09 7:34 pm  · 

the AIA code of ethics is stupid.

In my bizarre architecture period I've seen both busyness models full tilt.

In big cities with big projects - the fucked up disorganized method above predominates...they charge too much and waste time and money and act like pretentious ass holes along the way (not to offend the pretentious ass-holes). Most energy is expended licking boots or talking about licking boots or looking at expensive boots in the shop window or buying expensive boots you can't afford (and can't afford not to have, by the way).

In small town uh-Merica the latter, holistic approach is more common - generally out of necessity and connection is key and instinctive - as are alternate paths of income and marketing (drinkin' beer and gambling at a local bar, for example). Strategic alliances are common between professions and trades. Most energy is expended getting by anyway possible...innovation is commonplace.

...we should feel free to do whatever we want as business people so far as we don't harm one another...protect the public, yada yada.

Mar 24, 09 1:25 am  · 

wow ... danger is such a DEEP thinker. after that inspirational and authoritative post, I'm defininitely going to see what I can do to get my "pretentious ass hole" out of my way.

Mar 24, 09 8:46 am  · 
wurdan freo

One new model. Two examples of it.

free green

open source

Mar 24, 09 9:51 am  · 

Since most of our clients are in business to make money, or at least (the public sector, usually) interested in saving money, perhaps we could make more money for ourselves by figuring out how to design for them in a way that will make them more profitable.

Mar 24, 09 10:04 am  · 

Response to digger: NAH, I just think its interesting how the more dynamic model outlined above happens naturally in smaller communities...that's all.

And "pretentious ass hole" was a compliment! ..way to read between the lines!

Mar 24, 09 11:35 am  · 

also, I just read what I wrote earlier...

It was profoundly shallow so I don't know why it was even considered at all...chill yo!

Mar 24, 09 11:55 am  · 

I would like to join this discussion by saying that architecture as a business model is different than architecture as a career model. While the above goals are honorable they walk a fine line between a successful business and a successful architectural practice, which are not one and the same. Architecture schools do little to foster or identify the entrepreneurs who would be best guided towards invention in creating new architectural products and service products, while the talented designers would continue to be guided towards better design. Both do not exist within one person.

Mar 26, 09 4:53 pm  · 

re: jump: inefficiency is also important to us and must be protected.

right... this is really tough, though... I wonder at what point does our drive towards efficiency come at the cost of good design?

I understand babs' point... but you also have to be able to challenge the client's assumptions about what they think they need - and do so intelligently and carefully without alienating them. Many clients often think we are talking down to them, or suspect that we really don't understand what we are talking about.

the marketplace doesn't always act in its own best interest (as we've all recently experienced).

Mar 26, 09 5:59 pm  · 

toasteroven -- we're actually on the same wavelength -- client centeredness is not about rolling over and playing dead -- it's all about serving the client's real needs, even when the client doesn't fully understand those needs.

clients aren't interested in our inefficiency -- that's why when a client wants to build a retail project, (s)he wants to choose an architect who's successfully designed many hundreds of thousands of sq. ft. of retail space before. clients really aren't interested in us learning about new project types on their nickel. I can see that point of view.

however, when we become project type experts, I think the main challenge is not losing the ability to look at each new commission with a fresh and innovative eye. too often when we're designing that 15th elementary school, we apply the same predictable thinking that we used on the previous 14 ... dull, stale designs are the result.

for me, client centeredness is all about listening well, knowing a hell of a lot about the problem the clients putting before me (through lots of prior experience with that project type) and then being able to interpret the clients needs and wishes in such a manner as to bring a new and fresh solution to the table each and every time.

IMO, most clients want a project that works and is efficient but they also want a project that has its own distinctive nature. too often what they get is a project that works (maybe) and is efficient (maybe) -- or -- a project that is distinctive (maybe). these are not either-or propositions -- client centeredness embraces both characteristics.

Mar 26, 09 6:29 pm  · 

right - the danger of specialization in project types - I like the idea of developing and selling design strategies rather than specific building type expertise - but you are right about clients seeking firms with extensive experience in what they want to build.

also - can a model like IDEO work for architecture? we don't design products...

Mar 27, 09 9:57 am  · 

Sorry guys,

I have just spent a week relaxing in Fiji in a manner and style that most architects could not afford...

I had a few revelations and I am working on a plan right now - an idea I have been knocking around for a couple of years now. I will keep you posted on that...

There is alot of discussion at my work place [a construction company] about how to innovate. At the end of the day, building can be done by anybody, any company. Essentially, its putting together an assemblage of building materials according to a set of drawings, which in themselves conform to a code. Price is important, but essentially there is nothing inherently intelligent that separates one builder from another. It is about capability, but capabilities can be bought and acquired.

Drawings are pretty much the same. I can design a house, and then subcontract the drawings to any number of draftspersons for a fee.

Its not the production where we can offer a difference, its the ethos, strategies and techniques where we can differentiate.

Mar 31, 09 4:14 pm  · 

hmmm .... how do you get paid your measely sum on freegreen opensource or whatever when pretty large pictures and floor plans are right there to give to your builder?

Apr 1, 09 3:36 am  · 

really, comes down to the management of clients and expectations, dia. I honestly agree with most of your principles, whether you are jesting or not, but if you aren't, there are obvious oversights:

there are true craftsmens, artists, that can be the only ones who build a certain cabinet, door, piece of millwork, metal, ect. of a project in a certain way ... and behind that there is skill, an ethos you say, to detailing out there that only a great architect can perform. You could say that these are capabilities that can be bought, but not always, these transcend cost in many aspects, and depend on the caliber of the site, project and/or team involved.

Apr 1, 09 3:49 am  · 
wurdan freo

I don't know freegreen's exact plan, but I imagine they will get paid through advertisements and referral fees. Open source will get the same income plus the money they receive from the designers who post their plans.

I didn't say that this was a new model for the designers. It is a new model put together by the Architects who started free green and open source. I think it will be a great success for them and probably bad news for residential architects who continue to rely on more traditional business models.

Dia- I too am not sure about your post. Are your contradictions sarcasm? How is capability not a form of intelligence? Capability has a direct impact on production which is the entire basis of construction operations and is exactly what differentiates Bechtel from Mom and Pop Excavating Company.

Apr 1, 09 10:17 am  · 

I was not being sarcastic - I was referring to capability in terms of having the in-house skills and resources to perform work. In some ways, this can be fleeting because the people with capability can be [to put it crudely] bought and sold.

But I agree that people with capability stay with their employers fot other reasons - most of all the company ethos, the people, the vision.

I think that there has to be a strong, focused, underlying mission to an architecture practice, that focuses on a distinct set of values and functions. Its the old adage that if you dont stand for something, you will fall for anything...

Apr 1, 09 4:04 pm  · 
Apr 1, 09 4:34 pm  · 

Own-Design-Develop for yourself. Architects complain about not being 'fairly compensated', yet continue to bend over at any whiff of getting an ego boost.

Control your work.

And, a pre-emptive 'bite me' to the underwhelming masochists who wanna complain about this post.

Apr 8, 09 12:45 am  · 

Yup, I like designing for us, not a client. The efficiency is dramatic and the sense of fulfillment is high.

I, also, don't understand why there aren't more architects in the development world. Risk, I suppose, but still doesn't make tons of sense to me.

Apr 8, 09 8:13 am  · 

I think it's because we don't have all that fancy creative financing in our curriculum. We just kinda learn how to design & hope that the world notices. But Trace, wouldn't it be great if we could start or modify a program that preaches the answer to your last question?

Architects have given away perhaps most of the building process to other disciplines & consultants. rightly so in many regards, but maybe if we were better at (dare I say) 'management', we would own more & control the design more.

In a profession full of control-freaks, you'd figure that we'd aspire to that.

Apr 8, 09 8:47 am  · 

most architects don't like to learn about stuff like finance and taxes and accounting and negotiating and leases ... all the sort of stuff you need to master in order to suceed in real estate development. we'd rather whine about being poor and not being able to design what we want to design.

don't ever expect colleges of architecture to teach you this stuff ... it's not going to happen to any meaningful degree. if you want to know about this stuff you'll either need to educate yourself or pursue an MBA or a degree in real estate.

Apr 8, 09 9:01 am  · 

work in the trades/millwork/shop/etc...this why you can open up your detailing visions a bit

Apr 8, 09 9:09 am  · 

I think it is changing a little. With people like Segal getting a nice spotlight, both from a design/architecture standpoint and a business success, we are seeing that there is glamor in development.

But yeah, most schools coudl care less about practical business. Stupid, imho, taking a bunch of structure classes you'll never use (sizing rebar lately??) or a ton of theory classes you'll forget a week out of school. Both are important, but not a half dozen classes. Business skills is what everyone needs.

You DO NOT need tons of financial experience. Sure, if you want to build a 200 unit mixed use project, but c'mon. For a simple project, duplex, or whatever you just need some basic common sense, ambition and a calculator. And a stomach for risk, patience on getting paid/making money and a lot of luck!

Apr 8, 09 9:43 am  · 
"you just need some basic common sense, ambition and a calculator. And a stomach for risk, patience on getting paid/making money and a lot of luck"

-- sounds just like the requirements for the practice of architecture.

Apr 8, 09 11:25 am  · 
vado retro

i'd argue that the discounted cash flow accounting methodologies used in real estate are pretty fancy.

Apr 8, 09 11:33 am  · 

What's fancy is how them developers & other business-types learn how to lie. We don't study financial flim-flam in Architecture (we've got our own delusions).

Apr 8, 09 11:51 am  · 

vado -- while it does take some study, discounting cash flow is a lot less complex than some of the things we deal with as architects. mostly it takes patience and a good master of Excel.

Apr 8, 09 11:54 am  · 

These were the only things I liked about my planning degree-- government accounting, program accountability and real estate law.

Those three courses will not only make you support the government but lose all faith in humanity.

I'm assuming it gave me really good insight to see how government is actually run (and not according to how it is run in a washington post op-ed piece) and large developers themselves operate almost in governmental terms.

This was basically was and still is the best arguement on density is high-density (over 6,000 people per square mile) has a ROI of 5 years compared to standard suburbanism that has a 50/50 chance of ROI at 20 years.

When I approach architecture, I always try to assume to the costs and returns on both sides and most buildings unnecessarily complicate this with their designs.

Apr 8, 09 12:00 pm  · 

The difference with arch as a business is that there are very few 'leaders'.

Developers, by nature, must be 'leaders' and don't require many employees, depending on the scale of their projects.

Ethics can be questioned at the top of many businesses. I know of plenty developers that have great integrity as I know those that don't.

I think it just becomes more visible because it is all malleable - prices fluctuate, people can be negotiated to different levels, etc. Architecture is more or less one fee, as most services are.

Apr 8, 09 12:40 pm  · 


client centeredness in architecture cannot be compared to doctors and lawyers. Doctors and lawyers goals are completely objective (win cases/stay healthy). Design is far from objective.

Apr 8, 09 12:51 pm  · 

aking - yes, you are correct - however, the vast majority of clients don't look at what we do the way we look at what we do - they're looking for objective, concrete results, mostly tuned to function, cost and schedule. clients are rarely, if ever, tuned to the theoretical solutions and whimsy that we are taught to love in school and in the press.

Apr 8, 09 2:22 pm  · 

Another issue I have been thinking about,

With the increase in the use of BIM and the advantages it has in terms of time, coordination etc, do you think there will be an impetus to drive down production costs for contract documentation?

Of course, there are also labour and time savings for BIM production but also software/training/software expenses.

One exampe of this that I know - a firm using Archicad had their documentation fees challenged because they were essentially charging Autocadesque rates for their drawings, when they alread had done extensive design development drawings using the 3D capabilites of Archicad.

Apr 21, 09 7:30 pm  · 

diabase: "do you think there will be an impetus to drive down production costs for contract documentation -- once the profession understands how to produce building designs efficiently using BIM, then there will be a choice to make: a) do we keep the rewards from higher productivity for ourselves, or b) do we pass along most, if not all, of those savings to the owner in order to compete more effectively for new projects?

cynic that I am and given the performance of the profession in the recent past, I'm betting on b).

Apr 22, 09 10:00 am  · 
wurdan freo

Diabase - i don't know how familiar you are with BIM or IPD, but one of the main marketing points that I keep hearing from those touting the technology and process is that, "it is so efficient and will save the client money". Well pretty soon the client is going to ask, " Ok... how did that save me money"?

I see production of construction documents by all designers as an area that could go away in an integrated or collaborative delivery method. When you think through IPD and other attempts at a lean delivery method, this is a redundency that could be cut out. Similar to how many high design projects have both a design architect and an architect of record, this could translate into architecture firms all being hired as design architects. Then after the job has been awarded to the trades their in house architects and engineers would complete the CD's based on proprietary materials and methods, combining the CD phase with the traditional shop drawing requirement. Now will that result in a shift in fees from the design arch or eng to the trade company? I would say yes, but I would see an argument where the owner would also tell the trade that some of that would be offset because they had to figure something for shop drawings potentially lowering the cost of the project.

I don't know how design liability would shift, but, intuitively, it seems that the sub contractor would be taking on additional liability, but that would depend on the contract. I really don't know why the AIA is becoming a cheerleader for IPD. I don't see how it benefits the Architect in terms of revenue. It's a process that, I see, allows Architects to assume less liability and design more. Maybe someone else has more insight.

Apr 22, 09 10:04 am  · 

in the AIA's vision of full-blown IPD, the architect and the contractor evolve from being hired hands to become true partners with the owner on the project. this puts those parties more at risk, but also provides them more economic opportunity tied to project success.

in the new business model anticipated by IPD, work activities accrue to the party best equipped to complete that activity. BIM is merely an enabler of IPD, not the prime motivation. A prime objective of IPD is to remove the adversarial (and destructive) relationships inherent in D/B/B and D/B project delivery methods.

if you have not already done so, I recommend that you read: Integrated Project Delivery: A Guide. An updated version of the Guide will be published toward the end of 2009 -- watch for that.

this chapter of history has yet to be written ... however, I believe we have a real opportunity here if we don't squander it or give it away.

Apr 22, 09 10:18 am  · 

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