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Year Zero - Alternative Business Models for Architecture

wurdan freo

I've read the IPD guide put out by the AIA a while back, but I still don't see many owner's who are going to be willing to share their cash savings. Or on the contrary many owners who aren't going to want some one's ass when a huge mistake happens. I know there are several success stories about this fledgling process, but I can't think of one developer or owner who would be interested in this. What is the value that it brings to the project?

Apr 22, 09 10:25 am  · 
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stone

wurdan: the concerns (objections) you raise are widely held and will not be easily erased. right now, in those sectors of the industry where IPD has made a foothold, the impetus is not coming either from the design team or from the contractor side -- it's coming from the owner. Some owners -- mostly public agencies and large institutional organizations -- are quite unhappy with the conflict and delay and inefficiency inherent in the current D/B/B and D/B process.

Through such organizations as CURT and COAA some owners are putting a lot of time and resources into looking for a better way to deliver projects -- right now, IPD is receiving a lot of positive attention among such owners. If the owner derives sufficient benefits from a new approach, they are willing to invest some of those savings in their contractor and design team, as a motivating factor.

Private sector owners with a commercial orientation traditionally maintain a "if it ain't broke, don't fix it" mentality and, quite frankly, don't understand where, and why, the current process is broken. That sector is not likely to become early adopters of IPD. Among such owners, the same was true with respect to sustainability. They may eventually come along - or, they may not.

I don't minimize your reservations ... but, an open mind to the changes possible and a willingness to advocate such process changes to our clients is the first step in a possible better future for us all.

Apr 22, 09 11:12 am  · 
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med.

Alternative business model for architecture?

You know that firm SOM (and many like it) ?

Just don't do that.

Apr 22, 09 12:29 pm  · 
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toasteroven

I've been thinking about this a lot more lately -

my current question is: what/where are our markets? Have we started thinking about how to provide services for a non-traditional client base? Our profession is completely reliant on a very small base of wealthy clients (individuals and large organizations), and I think we should be asking how to expand who we reach and serve - and what services/goods we could possibly supply that other industries cannot. should we be creating a completely new market? we keep talking about ways to better serve our current market (through things like IPD, BIM) but is this something that can expand who we do business with?

I think there are several people who have already attempted to explore these non-traditional areas (i.e. design for underserved communities) - however, are these areas sustainable for the entire industry or profitable enough to weather the cyclical nature of our profession?

also - We keep lamenting the lack of traditional skills our recent grads are coming into the field with, but do we really know how to utilize their other skills? and are recent grads well equipped to be able to change or expand our profession through their non-traditional skill set?

Apr 28, 09 5:50 pm  · 
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stone
"It's not the strongest or most intelligent species that survives; it is the one most adaptable to change"

- Charles Darwin

I believe we're living through a very interesting (and exciting) chapter in the history of our profession. There is great opportunity for those who don't wait around for someone else to tell them what the "rules" are, or to describe the path we must follow. This is a time for entrepreneurship -- this is a time for each of us to invent our own future.

As we go forward, a herd mentality is not going to serve us well. I see a profession currently populated by a hugely diverse group of talented - and stubborn - and fearful - people. Potentially, that diversity could lead us off in wildly diverse directions.

Some of us will be spectacular successes -- some of us will be spectacular failures. Those who walk this path according to the staus quo are doomed - I believe - to live the frustration that is, today, architecture.

What's your vision?

What are you prepared to do?

What are you prepared to ignore?

Apr 28, 09 7:40 pm  · 
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dia

I totally believe in the value of entrepreneurship in architecture, and would argue that by and large, architectural practice as a business model is not particularly creative.

I remember seeing an article on TV in Melbourne some years ago about a practice that was selling the idea of an apartment building on land they owned in the same way as you might sell a financial instrument.

They were the client. The weren't selling necessarily to prospective apartment buyers, but basically selling a building wholesale, and making a cut on the design and project management.

A small shift in thinking, but a successful one.

Apr 28, 09 11:51 pm  · 
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GAWD

Toasteroven.
I agree w/ your premises in general, but the facts are:
1) Compainies & Wealthy people do the most projects. That will always be a fact.

2) Underserved communities means what? Low-Income Areas? or does it mean Low Intelligence areas? Low Income areas have bigger problems than worrying about Architecture. They need funding or desire to save their community...if they have developed an actual 'community'. And if they have, they are just fine because that is an elusive foundation that they have set. That is your best hope to do Architecture.

Low Intelligence, or better yet, High Ignorance Areas are Architecture's greatest enemy. Indeed, they are enemies to anything or any ideas of value. As long as the majority of America, the hayseeds, greasers, rednecks, welfare grizzerds, 'libertarians', and generally people who think that metal bldgs/drywall/Williamsburg = Architecture, & they are the majority, Architecture is unimportant in this country.

My bottom line: Architecture should be thought of as a hobby. I am trying to Tailor my life (not just career) to get independent (& GAWD-willin' wealthy) enough to think of it that way - then it will be much more enjoyable.

Apr 29, 09 9:08 am  · 
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toasteroven

GAWD -

1. Yes, this group currently comprises most of our projects, but is there another "consumer architecture" that could be developed as a viable client alternative? There is not enough of this wealthy client work to support the current number of people in the field - I'm thinking of ways to keep talented people from leaving the profession (the "weeding out" mentality to me is mostly protectionist of the status quo).

2. I simply meant people who would normally not enlist the help of designers. I've worked with non-profit community organizations and schools on projects that range from design education and workshops to stuff that actually gets built. All of this work has been pro-bono, but I've seen a lot of potential in design education at the primary, secondary, and community levels which could have a huge impact on the perception of our profession and could potentially expand the kinds of work that we do.

I was recently involved on a local parent's committee for an elementary school's redesign of their school yard. The school district actually hired someone to help facilitate communication between the committee and the landscape architect. In my mind, our ability to communicate why design is important and and how we work is where we've been failing - all of our current "solutions" (i.e. BIM, IPD) are centered around ways to help us communicate better (albeit with people who already have some idea of how we work). i think our future success as a profession hinges on our ability to communicate with a wider range of people outside of the AEC industry.

and there are some skills that are very unique to our profession that could be put to use elsewhere. I think we could learn a great deal from the alternative career paths that people from architecture backgrounds have taken.

Apr 29, 09 11:53 am  · 
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Yumtoder

go non-profit.

May 23, 09 8:22 pm  · 
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babs
"go non-profit"

I think a lot of us already have done that - but not intentionally !

May 23, 09 11:02 pm  · 
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xacto

if the world prefers to pay specialists mulitples of what it is willing to pay creative artists, shouldn't the profession simply market itself as a group of building technology experts and tack on "design" as another line-item in their billing expenses?

May 25, 09 7:02 pm  · 
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trace™

I'd argue the opposite - label design as the specialty. There are no shortages of function buildings, but there is certainly a lack of quality design.

I still believe architecture will continue to segregate this way.

May 25, 09 7:08 pm  · 
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xacto

isn't design already the labeled specialty?

May 25, 09 7:52 pm  · 
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xacto

*as a note...i don't really advocate this, i just find this to be an interesting discussion.

May 25, 09 7:53 pm  · 
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file
"shouldn't the profession simply market itself as a group of building technology experts and tack on "design" as another line-item in their billing expenses?"

I think we make a huge mistake trying to get our head around these issues as "a profession".

Those design firms that do well do it one firm at a time. They do it by connecting consistently with one or two sectors of the marketplace, providing services valued by those sectors, and delivering the needed services efficiently and effectively.

In our profession, one size doesn't fit all - and never has. We each must find our own way - there is no formula or standardized approach to success.

May 25, 09 9:55 pm  · 
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xacto

how do larger corporate firms fit into your framework? i would argue that they all have relatively similar business models. and if they are successful at attracting lucrative projects, what elements can/should "the profession" adopt at a smaller scale?

May 27, 09 12:41 pm  · 
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trace™

Many larger businesses segregate the chores - ie designers, business managers, construction docs, etc., etc. This isn't just architecture big business, but any bigger business.

By isolating the skillsets you can optimize the knowledge, further the talent and form efficient strategies.

It is the "Jack of all trades, Master of none" that architect's tend to lean towards.

May 27, 09 6:11 pm  · 
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xacto

right - i understand this. however, the implication of this thread's title (as well as those of many other threads) is that this model does not seem to be compensating architects appropriately or facilitate better design practices (see points 1-9).

May 28, 09 12:16 am  · 
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file

there's an old saying - attributed to Warren Buffet, I think -- that goes: "when a manager with a reputation for brilliance takes on an industry with a reputation for poor economics, it's usually the industry that emerges with its reputation intact."

I'll say it again - there are no 'easy buttons' for individual firms that magically provide those firms with immunity from the basic economics of our industry. the basic economics of our industry suck.

while individual firms might implement tailored strategies that allow them to be reasonably successful, overall the broad spectrum of firms in the industry will be subject to the basic economics of the industry.

if you want to be successful in this industry, be prepared to go your own way - with all the risks that entails. looking for a 'magic bullet' template that any firm can apply won't get you very far.

May 28, 09 7:36 am  · 
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trace™

xacto - I was answering your question about what smaller firms could adopt. Most small firms do it all - design, documentation, etc., etc. And often times it is the same time person taking it from design through documentation.

My point was that there is very little segregation of skills and talents - everyone wants to design, then everyone works on CDs, etc.


The only way I see design being brought to the forefront and compensation higher is if you can sell design as a 'we are better than them' strategy. As it is now, there are a handful of firms that are known for design that can charge more, other than that the public perceives things as equal.

Other professions, from Lawyers to Graphic Artists, distinguish themselves (and charge more) due to their talents. Architecture is one of the few businesses that charge an almost flat fee, regardless of design talent.

That's my point - that you need to distinguish yourself/firm by highlighting your talents. This could be amazing design, strict budget concerns, etc., etc. But it has to be great and easily seen and understood.



But as file points out, the industry isn't exactly a model for efficiency, business wise. It'll take a field-wide transformation (which most don't want) to elevate things.

Lastly, this is like a see-saw - if people can distinguish themselves and charge more, then there will be those that have to charge less to compete.

May 28, 09 8:21 am  · 
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stone

a "business model" is not some simplistic structure. it's a combination of elements, including a) strategy, b) operating plans to execute that strategy, and c) administrative and technical services.

in the field of design, organizations like AIA, ASID, etc. are quite adept at helping to develop and distribute tools in support of both administrative and technical services. these are the most "standardizable" aspects of our profession and can be transferred from one firm to another with a fair degree of ease. often these aspects of a firm can be "templatized".

operating plans generally respond to what's taking place in the realm of administrative and technical services but really need to tailored around the firm's basic long-range strategy. a common mistake design firms make is to establish operating plans primarily around what the firm is doing administatively and technically -- this often proves to be limiting -- it's akin to the "tail wagging the dog".

what I think file's getting at above is the idea of "strategy" -- strategy needs to emerge from a) a realistic assessment of opportunities in the marketplace; b) the special skills and abilities of the individuals within the company; and c) the long-range aspirations of the firm. this is the most individualistic aspect of any business model and can only be established by careful planning and considerable thought. only rarely can strategy be transferred from one firm to another -- when it comes to strategy, emulation is pretty dangerous territory.

for these reasons, I agree with file -- each firm is pretty much on its own when it comes to strategy. we each have to figure this out for ourselves and should not look for the profession to define the business model that's right for us.

May 28, 09 9:22 am  · 
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BlueGoose

I remember reading this essay a while back and thought it might be useful to provide the link here: Discovering New Design Firm Models

May 28, 09 5:09 pm  · 
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xacto

well then, good luck!

May 28, 09 6:08 pm  · 
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dsc_arch

wow,

this was one of the best threads i have read in a long time. We are doing our bi-annual business review and we have been dancing around these themes for months / years.

I love

<<
What's your vision?

What are you prepared to do?

What are you prepared to ignore?

>>

Probably we will be ignoring new construction. Our niche is the analysis, design, and construction of adaptive reuse projects.

I still don't quite get how BIM will help us on sub 10,000 sqft buildings. maybe I am getting old.

Jul 18, 09 4:28 pm  · 
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anonnyc10003

Here's the advice one wise old sage from New York once gave to me:

"Volunteer your ass off doing stuff for your community 80 hours per week, and make friends with everyone in your city. If you have any basic communications skills, you will find a great job in two or three months, most likely even in the field you want to be in. Finding a job is as much about networking and drive as it is about specific skills."

This advice seems to work. I know an architect in Ohio who got really involved in health issues - she found a high paying epidemiology planning job, even though she had no real training in the field. She has time on the side to continue her architectural work until the economy gets better or she starts her own firm.

Aug 27, 09 9:30 pm  · 
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