Monday, August 31, 2009

How 'bout that Cowboys scoreboard?

Here's how you know you are talking about work too much at home...my wife (who is in the financial software industry) and I were talking about the problem of punts hitting the giant overhead scoreboard in the new Cowboys Stadium. Her first reaction: Would using BIM to design the stadium have stopped that from happening?

I am not 100% sure about this, but given that the stadium's designer, Dallas, TX-based HKS Inc. is one of the truly outstanding pioneers in delivering projects using BIM I would think that they probably used it. But that's not the point. The point is that HKS Inc. could have designed the building in crayon on brown paper bags - some punts are still going to hit that scoreboard.

The next question, this one from my 16 year old son: Isn't this the architect's fault? And the answer is no and yes. No because the scoreboard was built to the client's specification - it's 90 feet above the field of play (the NFL requires 85 feet). Yes because all it would have taken is for the designer to have an out-of-work NFL-caliber kicker start jacking balls into the air and figuring out how high the scoreboard really needs to be. Maybe this happened...but I have not heard.

Ultimately, the scoreboard will be raised (I hear the cost of permanently moving the structure will be around $2 million). But what is the real cost? How much does a "do-over" of an NFL play cost - when there is a possibility every time that a player could be severely injured? What about the potential negative press to the Cowboys and to HKS Inc.?

Saving your client these costs and headaches is what separates you from the pack. It gets you repeat work and attracts new clients to you (particularly if you can quantify the savings). Sometimes it's as simple as kicking a few balls into the air.

Until next time,

Bruce

Wednesday, August 19, 2009

ABI shows dramatic turnaround in July

The American Institute of Architects' Architecture Billings Index leaped nearly six points in July to 43.1, signaling an improvement in business conditions.

In fact, the increase more than offset the nearly five-point dip in June. The index was 43.1 in July, 37.7 in June, and 42.9 in May, so the numbers are the best they have been in a long time. Any score above 50 indicates an increase in billings.

The new projects score fell from 53.8 in June to 50.3 in July.

AIA Chief Economist Kermit Baker cautions against getting overly optimistic about the July numbers. "In addition to a very competitive marketplace, architects continue to report that lenders have still not yet fully opened credit lines and that the stimulus funding has so far provided limited project activity for the design community overall," he said.

Regional averages were as follows: South (43.4, up sharply from 40.5 in June), West (39.7, down slightly from 39.9 in June and remaining remarkably consistent over the past several months with 39.4 in May, 39.2 in April, and 36.1 in March), Northeast (37.8, down again from 42.8 in June, 48.3 in May and 47.1 in April), and Midwest (36.9).

The July ABI breaks down by sector as follows: mixed practice (42.9, down from 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March), commercial/industrial (42.9, up from 39.5 in June, but down from 43.1 in May), multi-family residential (40.7, down from 42.7 in June, 45.5 in May and 43.2 in April), and institutional (37.1, up slightly from 37.0 in June, but down from 38.0 in May and 43.2 in April).

Ed

Friday, August 14, 2009

Happy Friday!

We've got some good news to report on a summer Friday afternoon.

Our friend and former SMPS National President Donna Corlew landed a job earlier this week as Southeast Regional Marketing Manager with environmental engineering and consulting firm Brown and Caldwell. Donna checked in with us earlier this week to let us know of the good news.

Brown and Caldwell is a 60-year-old firm headquartered in Walnut Creek, California with offices across the country and more than 1,500 employees.

Corlew had been out of work for almost a year after her previous employer closed its Nashville office, forcing her out of a job.

Congratulations, Donna!

Ed

Wednesday, August 12, 2009

HOW TO GROW YOUR FIRM IN THIS “SUDDENLY BETTER” ECONOMY

In a survey this week to 284 CEO members of the DESIGN PROFESSIONALS LEADERSHIP ROUNDTABLE (LinkedIn Group), 39% said things will be BETTER by 12/31, 48% said things will be ABOUT THE SAME, and unlike 3 months ago only 11% think things will be WORSE by year end (2% no opinion)….This is a dramatic POSITIVE shift in sentiment likely based on the suddenly rapid increase in the number of PROPOSAL opportunities seen across the US in the past 3-4 months by most AEC firms. Whatever you think things will be like in 5 months, here is some PSMJ advice to ponder right now as you approach year end STRATEGIC PLANNING for your firm.

If you think things will be BETTER by 12/31 you should:

1. Upgrade your staff IMMEDIATELY stealing every great person you can from everywhere BEFORE the industry gets going again. Including PARTNERS and PRINCIPALS from other firms
2. Make that ACQUISITION you’ve been debating about….do it NOW while prices are still low
3. Lock in a 5-10 year commitment from your bank on your Line of Credit INTEREST RATE before rates goes through the roof
4. Lock in your space lease rate for 10 years
5. TRAIN all your people NOW on Project Management while things are still somewhat slow so EVERYONE is in prime form as things get busier

If you think things will be ABOUT THE SAME by 12/31 you should:

1. Get even more PERSONAL with past clients being certain that you PERSONALLY telephone them just to stay in touch
2. INVENT new consulting ‘products’ to help your clients with other aspects of their business
3. Expand GEOGRAPHICALLY but slowly….taking what you do locally very well to a new place….pay attention to your HIT RATE as you expand
4. Focus on CHARGEABILITY and YOUR MULTIPLIER making everyone chargeable….get rid of non-chargeable people
5. Enhance your proposals even more adding MORE VALUE to each proposed task…Do NOT cut price…ADD VALUE…

If you think that things will get WORSE by 12/31

1. Go immediately to a 4 day work week cutting compensation by 20% and rotating to teams days off on Monday and Friday so your office is ALWAYS open
2. Contract out all non-billable activities like accounting and eliminate staff in those categories saving all fringe benefit costs
3. SELL the company now before things get worse
4. Increase your bank Line of Credit now using historically better financials than you’ll have at year end
5. Terminate ALL non billable PRINCIPALS….after all…they cost the firm the most to keep…

Whatever you think the industry condition will be by 12/31/09, there is one CERTAINTY….Things will probably NEVER be like they were in 2007 again….Our whole AEC industry is about to be re-invented with new and younger people at the controls, with new technology emerging to the forefront like BIM and use of SOCIAL NETWORKS, and constant BLACKBERRY communications 24/7 ….all shaping an industry going through MASSIVE baby boomer driven re-capitalization over the next decade.

What will emerge will be a leaner and completely different profession made up of global joint ventures, huge consolidators (AECOM and STANTEC), tiny specialists able to deliver all over the world, linked experts working at home, private/public partnerships, new players, and younger more agile clients eager to embrace everything new……all of this at a time that America faces insurmountable deficits, crumbling infrastructure and an exploding non English population growth….

Who will emerge as the NEW FIRMS and NEW LEADERS in our industry ??? BOLD RISK TAKING will be needed and historically that does not come from older more mature firms or owners….Try to remember the names of the top design firms of the 1980’s that no longer exist if you can….Real change comes from the na├»ve boundless energy of younger more energetic entrepreneurs who know no better than to take a risk and start up….

The biggest challenge facing CEO’s right now is to UNLEASH the young…..and SHED the old…..at a time when business is down…..but the world has always faced this dilemma …hasn’t it ???

Do you have the courage to do it in your firm ???

FAS

Monday, August 3, 2009

How scary is this?

Checked out the AIA's Twitter page this morning and found that they are on furlough this week.

Scary stuff.

Given that AIA exists on the strength of its members, this means that some combination of membership fees, educational programming, or product sales are insufficient to keep the lights on and the doors open this week.

Apparently, the AIA's Architectural Billings Index is not just a measure of how well architecture firms are doing. It's also a function of how well the AIA itself is doing.

How about you? Has your firm taken any cost-cutting measures this summer to keep things operating as we head into the fall?

Let us know!

Ed
 
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