Five Essential Skills of Highly Effective Design Leaders

It is not easy to be the best. It requires hard work and a boldness of action that defies normal practice.

For 40 years, PSMJ has studied leading-edge architectural and engineering firms of all sizes, advising and consulting on all areas of business operations. We have discovered something that is both profound and apparent—that the most successful firms, those firms with the best practices, are fundamentally different from the average performers.

Every year, at least half of the top 10 percent of firms in our PSMJ surveys were also top performers in preceding years. This gives us the opportunity to study them and identify what makes them so successful, and size is not a criterion.

Following are the characteristics we see in the best firms, which we call our “benchmark firms.” While no firm does all the things we describe, our benchmark firms do many of them. These firms:

1.    Have a purpose with a vengeanceThe best firms have strong and visionary leadership, sometimes even dictatorial leadership. Although innovative and creative, these firms don’t place a particularly high value on design awards. They let their clients define quality. And they exceed promises made to clients. These firms have flat organizations with lean project teams and highly billable principals.

2.    Use guerilla marketing

The top firms are proactive in their marketing: They don’t wait for RFPs. They identify the clients they want to work for and develop tough strategies to capture them.
Benchmark firms know that nothing else matters if the firm is not financially successful. Lump-sum contracts and incentive clauses are the way they do business. They manage cash. They keep on top of their receivables. They charge according to value provided, not cost incurred. They control costs, sacrificing neither the long term for the short, nor the short term for the long.

Once they have clients, they don’t let them go. Principals stay very close to their clients and endeavor to know their business better than the clients themselves. Their goal is to establish such a strong relationship with clients that they get 100 percent of their clients’ work wherever in the world it occurs.

3.    Build kick butt project managers

The best firms push authority down to the lowest level. The project manager’s job is to make sure the client is ecstatic—and the firm makes at least the expected profit. These PMs stay on top of their jobs’ financials.

The PMs that rise to leadership positions at benchmark firms are not just very good at managing projects—they also excel at selling all the services the firm has to offer to the client. They know their clients and exceed promises all along the way.

When problems arise, these project managers don’t hide behind their desks. They take responsibility and communicate with their clients. They do not allow for surprises later on in the project.

4.    Value their people

Firms that deliver services live or die by their people. Benchmark firms recruit only the best people to work for them. And they keep these best people motivated by giving them room to grow—these firms’ leaders are most often developed from within.

These firms have lower than average turnover, though not the lowest. These firms invest in their top people—they really understand that people are their most important asset, and they act like it. And they don’t tolerate non-performance.

5.    Are highly profitable
Benchmark firms know that nothing else matters if the firm is not financially successful. Lump-sum contracts and incentive clauses are the way they do business. They manage cash. They keep on top of their receivables. They charge according to value provided, not cost incurred. They control costs, sacrificing neither the long term for the short, nor the short term for the long.