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

Acknowledgments xi

Introduction xiii

Part I: Managing In An Unpredictable Environment 1

Chapter 1: Bringing Order Out of Chaos 3

Profit and Satisfaction 4

Design Firm Business Models 6

Efficiency-Based Firms 6

Experience-Based Firms 8

Expertise-Based Firms 10

Any Project That Comes Through The Door 13

Small Firm Archetypes 14

Archetype One: Everyone is Dissatisfied 14

Archetype Two: Administrative Breakdown 16

Archetype Three: Unintentional Enmity 18

Chapter 2: Whole Firm System 21

Linear Thinking and Systems Thinking 22

Recognizing Patterns 24

Tracking Trends 25

Symptomatic and Fundamental Solutions 26

Summary 28

Core Incompetence 28

Whole Firm System Diagram 29

Time Management 31

Communication Effectiveness 32

Job Satisfaction 33

Chapter 3: Routinize The Routine 35

Operational Effectiveness 35

The Typology of Work 37

Analyzability and Variety 38

Situational Leadership 39

Match Management Style, Staffing, and Work Types 40

How To Routinize 41

Project Management/Accounting Software 42

Project Startup Process 47

Capacity Utilization 50

Chapter 4: Leadership Matters 53

Firm Culture 53

Field Theory 55

Self-Aware Leadership 55

Control Versus Trust 56

Career Contentment 58

Working With Creative People 61

Effective Firm Retreats 62

Plan Nonbillable Hours 64

Partnerships 65

Why Partner? 65

What Makes Partnerships Work 66

Rules of The Road 67

What Makes Partnerships Fail 68

“Unintentional Enmity” Revisited 69

Success In Group Work 70

Part II: Best Laid Plans 73

Chapter 5: Lifecycle of A Small Firm 75

Wealth or Control 75

The Principals’ Dilemma 76

Getting To The Next Level 78

Be What You Want To Become 79

The Pyramid Problem 79

The Matrix Solution 79

Transforming Mental Models 81

Everyone is Dissatisfied Revisited 81

Chapter 6: Transition Times 83

The 10-Year Itch 83

When Partners Grow Apart: J/H Architects 84

A Cautionary Tale 86

Approaching Retirement 87

10-Year Rule 88

Expanded Choices 89

Narrow Choices 89

Ownership Transition Options 92

Internal Sale At Retirement 92

Taking On A Minority Partner 97

Chapter 7: Financial Management: Beyond Intuition 99

Macroeconomic Influences 100

Economic Indicators 100

The Construction Business Cycle 101

How Small Firms Survive An Economic Slowdown 103

Financial Terminology 107

Financial Performance Indicators and Benchmarks 108

Financial Management Tasks 109

Track Firm Profitability 110

Track Chargeable Ratio and Direct Labor Expense 110

Track Break-Even Multiplier and Multiplier Achieved 111

Track Overhead Expense and Budget Variance 112

Track Backlog and Outstanding Proposals 114

Year-End Financial Checkup 114

Additional Financial Checks 117

Chapter 8: Scenario Planning 121

Influences On Profitability 122

Client Expectations 123

Overhead Expense 125

Strategies For Increasing Profitability 125

Realizable Revenue 126

Increase Hours? 127

Increase Billing Rates (Fees)? 128

Increase Billable Hours? 128

Add Intern To Staff? 129

Add Skilled Staff? 130

Scenario Planning Story Problem 131

Story Problem Challenge 132

Move To A Larger Office? 133

Planning Firm Growth 134

Part III: Looking Toward The Future 137

Chapter 9: Strategic Thinking 139

Business Planning For Small Design Firms 139

Marketing Plans 142

Value of Participatory Process 144

Sample Business Plan Template 145

Learning is Job One 155

Learning By Design 155

Learning As Competitive Advantage 157

Chapter 10: Small Design Firm Practice Models 159

Solo Practice 159

Economies of Small Scale 160

Challenges and Opportunities For Solo Practitioners 162

Firms Owned By Married Couples 164

Complementary Skills 164

Ease of Communication 165

Lessons Learned 165

Small Firms In International Practice 166

Firm Size is No Barrier 167

Another Calling 168

The Virtual Office Option 169

Twenty-First Century Opportunity 170

Consider The Possibilities 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

Creating Pocket Neighborhoods: Ross Chapin, Aia 181

Green Development: Tony Case, Aia 183

Chapter 12: Big-Picture Trends 187

Diversity In Practice 188

Generation Gaps 189

Boomers Out, Millennials In 190

Technological Tethering 190

A Mixed Bag 191

How To Manage Millennials 192

Women In Design Firm Leadership 193

“Brain Drain” Revealed 194

Labyrinth To The Top 195

Twenty-First-Century Workplace 197

The Teleworking Option 197

Chapter 13: Sustainable Economics 203

Triple Bottom Line 204

Sustainable Design Firm Practice 206

Greening The Workplace 206

Values-Based Practice 207

Another Point of View 208

Sustainable Economics Applied 208

Construction Industry Impact 209

Turn Red Business Blue 209

Final Words 210

Index 213