October 8, 2020
Proven Business Strategies Help Architecture Firms Survive Crises
Global AEC Leader Imparts Lessons To Meet Today’s Challenges in New Book
The Architecture Billings Index (ABI) indicates that billings continue to go down due to the Covid-19 pandemic, as has the rate of conversions from proposal to project. A new book offers architecture firms survival strategies gleaned from a practice that was specifically designed to be “depression proof.” In Designing a World-Class Architecture Firm: The People, Stories, and Strategies Behind HOK (Wiley, 2020), Patrick MacLeamy, FAIA, shares lessons HOK learned that can help architecture firms of all sizes thrive during crises, such as the Covid-19 pandemic.
HOK’s founders were scarred by the Great Depression and took several unprecedented steps when establishing the firm so that it would endure long after they were gone. MacLeamy, who served as CEO of HOK from 2003 to 2016, layered on additional tactics to engineer an architecture firm capable of surviving cyclical economic crises. He offers readers a blueprint for mastering architecture firms’ challenges regarding profitability and resilience: project delays, recessions, succession planning, diversification, and unforeseen disasters.
“When I started as an architect, I was passionate about designing buildings,” MacLeamy remembers. “When I became CEO of HOK, I grew equally passionate about designing a firm. I learned some things along the way that I hope will help others design their own recession-proof firms.”
MacLeamy’s most unconventional advice is to “run toward trouble.” Seemingly counter-intuitive, this approach prevents small problems from becoming big problems and big problems from mutating into disasters. “Instead of ignoring problems, hunt them down and resolve them,” writes MacLeamy. “By running toward trouble, instead of away from it, you end up clearing up controversies earlier.” This philosophy led to the thought leadership for which MacLeamy is best known—the “MacLeamy Curve,” which advocates front-loading effort and resources during a project’s design phase to catch errors early. “After all, it’s easier and cheaper to fix mistakes when they’re on paper or in a computer than when they’ve already been built of concrete and steel,” notes the architect.
Other key survival advice from the 263-page book:
- If possible, expand into multiple cities, diversify into multiple services, and embrace multiple building types to recession proof your firm.
- Structure your firm around specialized leaders—design, production, marketing, management—to maximize efficiency and minimize power struggles.
- Protect your hard-earned reputation in a building type. Insist firm-wide experts be included in each new project regardless of which branch won the contract.
- Lead, don’t manage, your people so they will be unshackled from following orders and will start putting their own ideas into practice.
- Publicly name the next design leader. Architecture firms need to communicate this successor very clearly, since design is the heart of the firm.
- Invite non-designers to join your inner management circle if you often rely on them for important decisions.
- Engage in full-time marketing and PR efforts to ensure that you secure your next projects before the current ones end.
- Create “unbroken chains,” where you parlay one specialty design project into another and then another.
- Stay positioned to seize opportunities—some people call this “luck.”
- Adopt financial metrics that are beautifully clear and simple so they’re easy to understand and use to gauge your firm’s health.
- Limit total annual salaries at your firm to X percent of annual fees to assure profitability. At HOK, X equaled 50 percent. You must earn more fees or lay people off if you don’t meet this percentage.
- Have a backlog equal to X months of work to maintain your current staff. At HOK, X equaled 10 months.
- Emphasize that “Collaboration inside is the best way to compete outside.”
- Seek the best ideas, regardless of their source.
- Put clients first, your firm second, your office third, and yourself last when prioritizing work loyalties.
- Know that there are no bad projects and every one is an audition for the next.
- Understand that quality of work is more important than quantity of work. Doing a superior job is the best marketing.
- Balance design and business. Too much structure will smother creativity, but too little structure leads to chaos.
- Create a virtual firm, rather than having a central headquarters, and use technology to glue people together.
- Invest in the best, most up-to-date technology. Think of it as an investment, not an expense.
- Go paperless to clear the clutter, clear your mind, and be truly organized and liberated.
- Consider carefully before you lay people off, because you lose not only staff members, but also their reservoir of knowledge.
- Prioritize employee diversity to broaden the company’s perspective and help it better understand diverse clients—and because it’s the right thing to do.
- Maintain strong support services, such as accounting, HR, legal, and IT. Well-oiled non-design departments will help your firm persevere.
“I want to introduce readers—especially young architects—to the people behind the HOK initials,” says MacLeamy. HOK’s three founders each possessed specialized strengths that, combined, contributed to the firm’s long-term survival. George F. Hellmuth, FAIA, brought in the work as the firm’s marketer, possibly the first full-time sales executive in the architecture industry. The son of an architect, Hellmuth was determined not to suffer the fate of his father’s firm, which closed due to lack of business foresight and succession planning. Gyo Obata, FAIA, served as HOK’s lead designer, creating such high-profile projects as the National Air and Space Museum, Dallas-Ft. Worth International Airport, and the Houston Galleria. Obata advocated setting egos aside and really listening to clients’ needs to achieve the best possible design. George E. Kassabaum, FAIA, excelled as both a project architect and a project manager, ensuring on-time/on-budget delivery of HOK projects. Kassabaum also enhanced the firm’s prestige in the industry by serving as National President of the American Institute of Architects (AIA). His credo: “Do the right thing, always.”
Designing a World-Class Architecture Firm: The People, Stories, and Strategies Behind HOK is available in print and e-book editions from Wiley.com and major book retailers.
About the Author
Patrick MacLeamy, FAIA, worked his way up from junior designer to CEO of HOK, a global architecture, engineering, and planning firm, where he spent 50 years. Early in his career, he was the project manager for the Moscone Center in San Francisco and King Khalid International Airport in Saudi Arabia. A self-taught executive, MacLeamy transformed HOK from a firm that designed good buildings to one that was well-designed itself. He is best known in the architecture/engineering/construction industry for the “MacLeamy Curve.” A pioneer in leveraging technology to support design quality, today MacLeamy is chairman of buildingSMART International (bSI) and works tirelessly to advance the global implementation of open software standards that have the potential to transform the design industry. MacLeamy earned his Bachelor of Architecture and Master of Architecture in Urban Design degrees at the University of Illinois at Urbana. In 1965, he won the coveted Paris Prize, awarded to one student architect per year. For more information, please visit MacLeamy.com.
Available materials: review copies (hardcopy and e-book), cover art, author portrait, project photos, author interviews, and book excerpts.
Author available for speaking and panel participation.