The economy is still sluggish and competition is cutthroat—making it a seemingly odd moment for architecture firms to think about growth. But Ray Kogan, AIA, president of Washington, D.C.–area consulting firm Kogan & Company, believes that it’s exactly the right time to craft strategies to anticipate the sweeping transformation of the industry. “The past few years have taught firms the danger of complacency,” he says. “Ongoing change and challenge will likely be the only constants.” With more than 30 years experience advising architecture and engineering firms through good times and bad, Kogan talks to Architect about building a path to sustained growth amid uncertainty.
“Everything has changed—in the world, in the industry, and in your firm,” Kogan says. The clients are different and so is the technology. Markets that once were robust and thriving are in the doldrums with little hope of recovery. New markets are emerging. You have gotten older. Accept these realities and consider where you want the firm to go from here. “Avoid just picking up where you left off.”
Ask questions …
Speak to clients directly about trends and markets, whether publicly or privately. Don’t ask what’s coming down the pike in terms of projects, but ask deeper, probing questions about their business and where it’s going—or not. This will help you structure your firm for the future around clients’ needs and new markets. “Architecture firms need to be positioned to meet the needs of their clients in a proactive, not reactive, way.”
… and then follow the money.
Some firms, burned by the recession, decided they would go after every project they could. But by doing that they lost whatever power they had to be experts in specific areas. Because it’s a leaner, more competitive environment, stay focused on some select target markets to develop expertise and build a leadership position, Kogan says. Say no to what’s not in your desired market. “Diversification is good for a stock portfolio but not a design firm.”
Give up guilt.
If you need new staff, don’t submit to the impulse to consider only former staff, Kogan cautions. That’s a natural and, of course, humane inclination, borne out of a sense of obligation. Yet it might not be in the best interest of the firm. “The real question is what type of people are required to drive revenue and profit growth and new business,” he says. Some former employees might fit the bill, but others might not. New strategic hires can take the firm into new markets.
Make time for a tough talk.
Don’t leave principals and owners out of the hiring discussions. For many of them, their nest eggs and retirement plans were battered by the recession, and they might want to stay on and work longer. That might be welcome in some cases. If not, have that difficult conversation. For the good of the firm, it might be time for a longtime partner to leave. This can be a bitter pill to swallow, but ask yourself what it would mean for the firm for a partner or owner to stay on, with others waiting to come up through the ranks.
Seek new blood.
Leadership transition issues are approaching as baby boomers move on. Besides pruning at the top, “look at the younger generation in the firm and see who has the raw material to be a leader and cultivate that talent,” Kogan says. Be aware of the leadership gap that the younger generation represents. “Who is going to run these firms if nobody is trained to lead?”
Spend some money.
To survive the recession, stinginess made good sense. To get out ahead after the recession, loosen the purse strings a bit. Nothing indulgent—“don’t buy Aeron chairs for everybody”—but invest in marketing and business development, the latest technology, and training younger architects for leadership positions.
Articulate your vision.
Many firms lost their way in the recession. Now winners and losers alike must realize that what worked before doesn’t necessarily work today. Leaders should craft a vision of where they want the firm to be 10 years out. That will tell you what people you need, how to organize the firm, and what direction you must go, Kogan says. “Plotting a new course is more important now than it has been for many years.”