Five years after the tragic passing of its eponymous founder, Zaha Hadid Architects has announced its transition to an employee-owned firm in a surprising move that could have implications for large firms industry-wide.
The announcement was made Tuesday via a statement published on ZHA’s website and detailed the decision to reorganize into a new employee benefit trust in addition to the reasoning and business philosophies that lead to the move.
“As the Trust has no external shareholders, we can now reinvest all profits back into the business, into our people, equipment and facilities to the benefit all our employees; allowing us to prioritize our work with visionary clients, communities and industry experts around the world to advance the quality of the built environment,” the group statement read.
“Younger generations of architects are demanding our profession become more accessible and egalitarian,” the declaration continued. “Supported by independent and transparent organizational systems and structures, employee ownership of ZHA will cultivate the skills and diversity that drives our decision-making and give every member of our team a voice in shaping our future.”
Relisten to Archinect's 2016 podcast conversation with Patrik Schumacher: ZHA after Zaha: Patrik Schumacher on Zaha and what's next for the firm
The reorganization provides some insight into a growing trend within architecture to move away from hierarchical management models and toward a more democratic form of profit-sharing and business ownership that mirrors similar pushes in tech, ecommerce, and other kinds of high-profile global industries.
ZHA has seen some growth in the past year and is now employing more than 500 staff across two offices in China and the UK. The firm reported gross revenues totaling £53 million ($70 million) in the fiscal year 2019–2020 and has rebounded to a total £3.3 million ($4.4 million) in profit in the same period after reporting £1.9 million ($2.5 million) the year before.
How do you think the changes will affect ZHA’s creative direction and the trajectory of similar firms within the industry as a whole? Sound off in our comments section below.
18 Comments
Wow. I’m definitely no expert on the intricacies of corporate law but this seems entirely unpredictable for a firm headed by Patrik. I would think he would want to hold all the power he could. I’m very curious what the requirements are to actually become an employee/owner.
Stay tuned, we'll be publishing a feature on employee-owned architecture firms soon.
I don't think it means he will give up any power.
"Non Voting Shares" perhaps?
I worked there and it's quite predictable in terms of what the firm has done. In terms of structure and relative financial performance it's probably harder since Zaha departed (Respect Intelligence Peace) to win those projects that pay the bills. But in my time in comparison to similar sized firms it was the outsourcing of IT, Printing and other vital elements to third parties that should be first to bring inhouse as an employee owner to make life easier.
Maybe things have changed but internal communication was very compartmentalised.
^ interesting. Looking at the numbers in the article, $70m across 500 staff seems a little low, no?
Last I read in terms of fee income per person was to aim for £100,000 per employee, this was Design Council advice for general design services in 2008, (£136k in 2020). What's RIBA's/AIA's profitable baseline for fee income per employee in 2021? £70m / 500 is £140,000.
$, not £. But I see your point. I hadn't seen that aim before. Good to know!
Thinking about it more, I also wonder if their Chinese offices pay wages (& charge fees) closer to Chinese averages than British, which would deflate the numbers and inflate profitability.
It would be a terrible detriment to Zaha Hadid's architectural legacy if profitability above the baseline relied on staff whom could afford AA fees from their parents to outsource work.
Wonderful news, power to the people!
I'd love to read more about different forms of organization - the employee owned model, the open collaboratives like Assemble, giants like Gensler, partnerships like most blue blood firms etc.
Assemble who did the hideous depressing institutional blue and bleak yellow tiled coffeeshop kiosk at Seven Sister's station? It's walking out to an ugly edifice, it is probably one of the most bizarrely lauded architectural interventions of recent times. It screams austerity.
I used to work an employee-owned firm, its all just bogus talk. Everyone gets a vote, but what they do not tell you upfront is that the weightage of the votes depends on the position in the company. So, no, its not :democratic" at all.
And for the stuff that matters (compensation and bonus), it again depends on your position in the firm, and they would also have "performance bonuses". Hence, the management would pretty much give what they feel like.
makes kind of sense to me that the votes are weighed according to ones position in the firm, no?
So, in essence the higher ups effectively make all the decisions on hiring/firing, compensation and bonuses - you know, the important stuff....
I mean, that's a given isn't it. Employee ownership doesn't mean every employee has equal say. Would you want the interns to do the hiring and firing?
Hence its pretty much just a joke.
At the end of the day it's mostly about dividends.
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