“Architects don’t manufacture nails, assemble windows, or chop down trees,” wrote marketing guru Seth Godin in a recent blog post. “Instead, they take existing components and assemble them in interesting and important ways.” He went on to compare such skills to those of “organizational architects,” business-savvy people who know how to find suppliers, tie together disparate resources, and weave them into a venture that scales. “You either need to become one or hire one,” he wrote. It’s an intriguing analogy. If entrepreneurs think like architects, why don’t more architects think like entrepreneurs? Probably because running a business is primarily a left-brain function. It’s one thing to use design tools to solve programming and aesthetic challenges, and another to dream up an innovative business model and make it fly.
Nonetheless, it seems everyone must be an entrepreneur nowadays as traditional paths of doing business disintegrate across professions. The challenges of the past five years have been especially daunting for architects, from new technologies and processes to a basic shift in client attitudes. More firms are stepping out of their comfort zone to reconsider how they run their business, how projects are delivered, and who they might collaborate with to land new work.
James P. Cramer, Hon. AIA, and Scott Simpson, FAIA, LEED AP, foresaw this sea change in The Next Architect: A New Twist on the Future of Design (Greenway Communications, 2007). They point out that architecture is focused on aesthetics, as it should be. But the truth is a great-looking building is only one measure of an architect’s worth. The rest is about creating value in other ways. When competition is fierce, how well architects define and communicate the full spectrum of that value can mean the difference between a business that thrives and one that struggles.
“Clients care about a great many things in addition to appearance: capital cost, speed, efficiency, productivity, operating cost, maintenance cost, the approvals process, and so forth,” the authors write. “All of them can be expressed as value propositions by using the proper metrics. If you want to know what’s really important to your client, all you have to do is ask. Only then will you—and they—know how valuable great design can be.”
building teams
Architects tend to live in an insular world, and clients may be looking for different things from what architects are programmed to provide, agrees Raymond F. Kogan, AIA, principal of Kogan & Co., a consultancy for architecture and engineering firms in Arlington, Va. “The biggest challenge for architects is to resist the temptation to be everything to everyone,” he says. “Clients want to hire architects with very focused areas of expertise who can help them in specific ways.”
For example, builders usually are looking for smart housing solutions that appeal to a narrow demographic group. Whether it’s empty-nesters moving back to the city or parents raising small children, architects need to know more about that market than their builder clients. “Wouldn’t it be great if your architect came to you with something you didn’t know? ‘Here’s a concept of a way to serve your market. We can help because we understand it so well,’” Kogan says.
Entrepreneurs know how to recognize and exploit opportunities, but they also have strong team-building skills. In 2006, Jared Della Valle, AIA, president of Alloy Development in Brooklyn, N.Y., parlayed his working relationship with a client into a partnership that today finances the firm’s development projects. “The CEO of our company does more than $1 billion a year in business,” Della Valle says. “We use her financial strength to support our company.”
Patient relationship-building is at the heart of its project acquisitions, too. One building recently landed in Alloy’s lap four years after the firm lost a bid to buy it. Della Valle befriended the buyer of a 100-year-old landmarked warehouse at 192 Water Street, Brooklyn. When the developer ran into financial trouble on the project, Alloy offered to be a surrogate, raising new equity while taking on the existing debt. Title on the building, which now contains nine condo units, was subsequently transferred to Alloy.
“You try to make acquisitions through business relationships, where people have made offers on things and couldn’t solve the problem,” he says. “That’s our core skill, and when we design for ourselves it’s very profitable. The process is faster, we don’t have to make presentations, and we’re determining the value.”
Della Valle, who has master’s degrees in architecture and construction management, says Alloy held its own during the recession because its business model is based on seeking large returns over a long period, not waiting for clients or making monthly overhead. Tellingly, traditional skills such as designing and documenting represent only one-fifth of his time. The rest is spent creating pro formas to analyze projects’ financial strength and convincing contractors, buyers, and investors to participate in the process.
It’s not for everyone. “A lot can happen between the start of a project and the end more than three years later,” he says. “You’re forced into difficult decisions and have to keep your promises. I’m at risk for more than I’m worth, and every day, dollar, and decision matters. You either thrive on that level of stress, or not.”
Nevertheless, Della Valle doesn’t buy into the myth that business and creative mindsets don’t mix. He and the firm’s two other architects are all “rainmakers” who have a spirit of achievement, he says. “They aggressively pursue a task and get it done. That’s the personality trait we’re interested in, and is a skill set in itself.”
Another critical test of the next architect, according to Cramer and Simpson, is the ability to streamline design and construction. Excess is out as clients are increasingly focused on budgets, sustainability, and speed. They want architects who have vision, but also take responsibility. That means inviting contractors to the table before budgets are set to advise on how design decisions affect the schedule, logistics, and cost. It also presents the opportunity for leadership, as architects have “the most influence over the size, shape, appearance, function, cost, and ultimate value of a project,” the authors write. They should be the ones organizing and managing the team.
