The Architect's Guide to Small Firm Management: Making Chaos Work for Your Small Firm

234 Pages·2010·5.98 MB·English

by  Rena M. Klein

Architecture/Professional Practice
The defi nitive guide to management success for
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sole practitioners and leaders of small design fi rms
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Owning and operating a small architectural design fi rm can be challenging, with tight H
project deadlines, on-the-fl y meetings, rush proposals, and fl uctuating workloads as E

part of the fi rm’s day-to-day activities. To help small fi rm owners cope with the chaos A
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and prepare for the unexpected, here is The Architect’s Guide to Small Firm
C THE ARCHITECT’S GUIDE TO
Management, a no-nonsense guide to repurposing daily demands into workable, H
goal-directed solutions. IT Small Firm
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Crucial topics such as self-aware leadership, people management, technolo- C
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gy, fi nancial health, scenario planning, sustainable practice, and future trends ’
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are examined using real-life case studies and business model paradigms. This
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defi nitive text explores the whole system experience of a small fi rm practice to
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deliver organizational strategies proven to keep a fi rm’s creative mission on a I Management
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steady, productive path. E

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The Architect’s Guide to Small Firm Management addresses how small fi rm owners can: O

• Deal effectively with unexpected circumstances and shifting work requirements
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• Meet the demands of the marketplace while creating a satisfying workplace m
• Set and achieve goals in an environment of constant change
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Making Chaos Work for Your Small Firm
This book is a must-have for those facing the often harsh reality of managing small l
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design fi rms in a diffi cult and changing economy. Entrepreneurial architects and
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designers will discover how to defi ne their own personal and professional mean-
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ings of success, as well as how to refocus their business approach to replace long, r (cid:129) Discover organizational
unrewarding hours with manageable, satisfying ones. m
strategies proven for

RENA M. KLEIN, FAIA, is principal of RM Klein Consulting, a Seattle-based fi rm M
offering business planning services, meeting facilitation, and management educa-
small fi rms in any economy
tion to leaders of small design fi rms. Building on her graduate degree in manage- a
ment and her twenty years of experience as the owner of a small architectural fi rm, n
(cid:129)
Rena regularly presents seminars on small fi rm practice. Her innovative work in this a Learn to meet
area has appeared in print and Web publications, including AIA’s online Architects’ g
Knowledge Resource. e the demands of an
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evolving marketplace
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Cover Photograph: José Carlos Luso/iStockphoto
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t
RENA M. KLEIN,
FAIA
ISBN: 978-0-470-46648-3 GLOSS 2-COLOR Pantone 032 Pantone 2955
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ind JWBT272-Klein March29,2010 8:16 PrinterName:SheridanBooks
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THEARCHITECT’SGUIDETO
Small Firm
Management
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FM JWBT272-Klein March25,2010 17:49 PrinterName:SheridanBooks
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FM JWBT272-Klein March25,2010 17:49 PrinterName:SheridanBooks
THE ARCHITECT’S GUIDE TO
Small Firm
Management
RENA M. KLEIN,
FAIA
JohnWiley&Sons,Inc.
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FM JWBT272-Klein March25,2010 17:49 PrinterName:SheridanBooks
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LibraryofCongressCataloging-in-PublicationData:
Klein,RenaM.
Thearchitect’sguidetosmallfirmmanagement/byRenaM.Klein.
p.cm.
Includesindex.
ISBN978-0-470-46648-3(cloth:alk.paper)
1.Architecturalpractice–UnitedStates–Management. I.Title.
NA1996.K55 2010
720.68–dc22 2009041799
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
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CONTENTS
ACKNOWLEDGMENTS xi
INTRODUCTION xiii
PARTI:MANAGING IN AN UNPREDICTABLE
ENVIRONMENT 1
CHAPTER 1:BRINGING ORDER OUT OF CHAOS 3
PROFIT AND SATISFACTION 4
DESIGN FIRM BUSINESS MODELS 6
EFFICIENCY-BASEDFIRMS 6
EXPERIENCE-BASEDFIRMS 8
EXPERTISE-BASEDFIRMS 10
ANY PROJECT THAT COMES THROUGH THE DOOR 13
SMALL FIRM ARCHETYPES 14
ARCHETYPEONE:EVERYONEISDISSATISFIED 14
ARCHETYPETWO:ADMINISTRATIVEBREAKDOWN 16
ARCHETYPETHREE:UNINTENTIONALENMITY 18
CHAPTER 2:WHOLE FIRM SYSTEM 21
LINEAR THINKING AND SYSTEMS THINKING 22
RECOGNIZING PATTERNS 24
TRACKINGTRENDS 25
SYMPTOMATICANDFUNDAMENTALSOLUTIONS 26
SUMMARY 28
CORE INCOMPETENCE 28
WHOLE FIRM SYSTEM DIAGRAM 29
TIMEMANAGEMENT 31
COMMUNICATIONEFFECTIVENESS 32
JOBSATISFACTION 33
CHAPTER 3:ROUTINIZE THE ROUTINE 35
OPERATIONAL EFFECTIVENESS 35
THE TYPOLOGY OF WORK 37
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vi CONTENTS
ANALYZABILITYANDVARIETY 38
SITUATIONALLEADERSHIP 39
MATCHMANAGEMENTSTYLE,STAFFING,ANDWORKTYPES 40
HOW TO ROUTINIZE 41
PROJECTMANAGEMENT/ACCOUNTINGSOFTWARE 42
PROJECTSTARTUPPROCESS 47
CAPACITYUTILIZATION 50
CHAPTER 4:LEADERSHIP MATTERS 53
FIRM CULTURE 53
FIELDTHEORY 55
SELF-AWARELEADERSHIP 55
CONTROLVERSUSTRUST 56
CAREERCONTENTMENT 58
WORKING WITH CREATIVE PEOPLE 61
EFFECTIVEFIRMRETREATS 62
PLANNONBILLABLEHOURS 64
PARTNERSHIPS 65
WHYPARTNER? 65
WHATMAKESPARTNERSHIPSWORK 66
RULESOFTHEROAD 67
WHATMAKESPARTNERSHIPSFAIL 68
“UNINTENTIONALENMITY”REVISITED 69
SUCCESSINGROUPWORK 70
PARTII:BEST LAID PLANS 73
CHAPTER 5:LIFECYCLE OF A SMALL FIRM 75
WEALTH OR CONTROL 75
THEPRINCIPALS’DILEMMA 76
GETTING TO THE NEXT LEVEL 78
BEWHATYOUWANTTOBECOME 79
THEPYRAMIDPROBLEM 79
THEMATRIXSOLUTION 79
TRANSFORMINGMENTALMODELS 81
EVERYONEISDISSATISFIEDREVISITED 81
CHAPTER 6:TRANSITION TIMES 83
THE 10-YEAR ITCH 83
WHENPARTNERSGROWAPART:J/HARCHITECTS 84
ACAUTIONARYTALE 86
APPROACHING RETIREMENT 87
10-YEARRULE 88
EXPANDEDCHOICES 89
NARROWCHOICES 89
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CONTENTS vii
OWNERSHIP TRANSITION OPTIONS 92
INTERNALSALEATRETIREMENT 92
TAKINGONAMINORITYPARTNER 97
CHAPTER 7:FINANCIAL MANAGEMENT: BEYOND
INTUITION 99
MACROECONOMIC INFLUENCES 100
ECONOMICINDICATORS 100
THECONSTRUCTIONBUSINESSCYCLE 101
HOWSMALLFIRMSSURVIVEANECONOMICSLOWDOWN 103
FINANCIAL TERMINOLOGY 107
FINANCIAL PERFORMANCE INDICATORS AND BENCHMARKS 108
FINANCIAL MANAGEMENT TASKS 109
TRACKFIRMPROFITABILITY 110
TRACKCHARGEABLERATIOANDDIRECTLABOREXPENSE 110
TRACKBREAK-EVENMULTIPLIERANDMULTIPLIERACHIEVED 111
TRACKOVERHEADEXPENSEANDBUDGETVARIANCE 112
TRACKBACKLOGANDOUTSTANDINGPROPOSALS 114
YEAR-ENDFINANCIALCHECKUP 114
ADDITIONALFINANCIALCHECKS 117
CHAPTER 8:SCENARIO PLANNING 121
INFLUENCES ON PROFITABILITY 122
CLIENTEXPECTATIONS 123
OVERHEADEXPENSE 125
STRATEGIES FOR INCREASING PROFITABILITY 125
REALIZABLEREVENUE 126
INCREASEHOURS? 127
INCREASEBILLINGRATES(FEES)? 128
INCREASEBILLABLEHOURS? 128
ADDINTERNTOSTAFF? 129
ADDSKILLEDSTAFF? 130
SCENARIO PLANNING STORY PROBLEM 131
STORYPROBLEMCHALLENGE 132
MOVETOALARGEROFFICE? 133
PLANNING FIRM GROWTH 134
PARTIII:LOOKING TOWARD THE FUTURE 137
CHAPTER 9:STRATEGIC THINKING 139
BUSINESS PLANNING FOR SMALL DESIGN FIRMS 139
MARKETINGPLANS 142
VALUEOFPARTICIPATORYPROCESS 144
SAMPLEBUSINESSPLANTEMPLATE 145
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viii CONTENTS
LEARNING IS JOB ONE 155
LEARNINGBYDESIGN 155
LEARNINGASCOMPETITIVEADVANTAGE 157
CHAPTER 10:SMALL DESIGN FIRM PRACTICE MODELS 159
SOLO PRACTICE 159
ECONOMIESOFSMALLSCALE 160
CHALLENGES AND OPPORTUNITIES FOR SOLO PRACTITIONERS 162
FIRMS OWNED BY MARRIED COUPLES 164
COMPLEMENTARYSKILLS 164
EASEOFCOMMUNICATION 165
LESSONSLEARNED 165
SMALL FIRMS IN INTERNATIONAL PRACTICE 166
FIRMSIZEISNOBARRIER 167
ANOTHERCALLING 168
THE VIRTUAL OFFICE OPTION 169
TWENTY-FIRSTCENTURYOPPORTUNITY 170
CONSIDERTHEPOSSIBILITIES 171
CHAPTER 11:TECHNOLOGY AND INTEGRATED PRACTICE
IN SMALL FIRMS 173
ADOPTING BUILDING INFORMATION MODELING 173
INTEGRATED PRACTICE AND INTEGRATED PROJECT DELIVERY 177
ARCHITECT-LED DESIGN-BUILD 178
ARCHITECT DEVELOPER 181
CREATINGPOCKETNEIGHBORHOODS:ROSSCHAPIN,AIA 181
GREENDEVELOPMENT:TONYCASE,AIA 183
CHAPTER 12:BIG-PICTURE TRENDS 187
DIVERSITY IN PRACTICE 188
GENERATION GAPS 189
BOOMERSOUT,MILLENNIALSIN 190
TECHNOLOGICALTETHERING 190
AMIXEDBAG 191
HOWTOMANAGEMILLENNIALS 192
WOMEN IN DESIGN FIRM LEADERSHIP 193
“BRAINDRAIN”REVEALED 194
LABYRINTHTOTHETOP 195
TWENTY-FIRST-CENTURY WORKPLACE 197
THETELEWORKINGOPTION 197