Life in a medium sized Architects Practice

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Life in a medium sized Architects Practice
Stewart Grant RIBAPartner
www.pozzoni.co.uk
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Contents

• Does size matter?
• About Pozzoni
• Economic Cycles
• - Previous Recessions
• - Current Downturn
• The business of Architecture
• - Designing / Managing projects
• - Managing the Business
• - Highs and Lows
• Summary
• Questions?

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Does Size Matter? RIBA Practice Definition

• Small up to 5 staff in total
• Medium 6 to 49 staff in total
• Large 50 staff in total

• Pozzoni in AJ 100 2009 (last 4 years)
• 64 staff currently
• Largest Independent Architect in NW

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Stewart Grant RIBA
Qualified in 1984 (Manchester)
Practices Kitson and PartnersDavid Dewhurst
ArchitectsLeslie JonesBDG McCollHodder
AssociatesPozzoni President Manchester
Society of Architects (1995-1996) RIBA
Examiner (since 2000)
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Practice Profile
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Services
Pozzoni
Architecture
Graphic Design and Visualisation
Master planning
Interior Design
Pozzoni Management Services
Project Management
Quantity Surveying
Employers Agent
CDM Coordinator
Code for Sustainable Homes Assessor
Other Environmental Services
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Capabilities
Working throughout the UK
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Our Resources
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Economic Cycles Previous Recessions 1990s
1990 1994 Worst since WW2 1991 31 of
practices saw 10-20 drop in fee levels
1992 8 of Architects unemployed Average
earnings for full time Architects fell to 23K
(2 fall) Sole principals average earnings
fell by 16 Central Government Architects
average earnings rose by 8 ! 24 of full
time Archtiects UNDERemployed (Majority in
private practice)
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What do we learn from previous recessions
They come in 10-15 year cycles Invest in
your systems, keep moving, innovating You need
variety diversity of workload Repeat
business is key client relationships Create
financial contingencies, be pessimistic in
your forecasting Raise the value of what you
do, market Develop peripheral vision!
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Current downturn Key issues

• Credit crunch Influenced rather than inflation
• Global banking crisis, lack of liquidity
• 40-50 drop in property values in the last 2
  years
• Number of major property developers in
  administration
• Client risk profile

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Current downturn Key issues

• Looming public sector funding issues
• Longer gestation
• Lower fee rates
• More speculative work
• Clients take longer to pay

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Current downturn Key Opportunities

• Market, Market, Market
• Diversity Across Sectors (public and private)
• Improving Efficiency
• Invest in Training
• Follow Key Markets (BSF, Healthcare)
• Work Abroad?

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Current downturn Current Situation

• Signs of market bottoming out
• Property yields steadying, prime values at same
  level for 3rd month running
• Raising of equity by key developers/investors to
  snap up bargains
• Improving housing market (mortgage approvals,
  S.E. mini boom, 1st time buyers difficult)
• Lending conditions best for 6 years property
  UK survey sustainable?
• Emphasis on improving, refurbishing, asset
  managing existing stock rather than new build

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Highs and Lows (A personal view)
Lows Losing a job Dropping a Bck! Having
to make people redundant Being made
redundant Seeing Architects undervalue
themselves Unhappy clients When someone
leaves Seeing D B affect quality Not being in
control
Highs Winning a Commission or Award Doing a
great presentation Seeing the building take
place Seeing happy clients Making a
profit! Hiring good people Getting good
feedback Productive meetings Seeing the
benefit of Revit Seeing the practice grow
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Is this a good time to be an architect?
Yes!
Yes!
Yes!
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Designing Managing Projects
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Managing the Business
PESTEL Analysis
Profit and Loss
Market Intelligence
Sector Plans
SWOT Analysis
Work in Progress
Cashflow
Customer Care
Practice Finance
Marketing Strategy
Objectives
Credit Control
Reputation
Job Cost Control
Recruitment
Recruitment
Agreeing a Fee
Key Performance Indicators
Business Plan
Project Finance
Human Resources
Invoicing
Retention
Investors in People
Best Practice
Training Development
Organisational Structure
IT
Administration
Premises
Office Environment
Quality Management
Professional Indemnity/other Insurances
Maintenance
Computers Equipment
Health Safety
Environmental Polices
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Business Plan

• Clear Aims and Objectives
• Strategies and Action Plans linked to
  Objectives (SMART)
• Request staff Ideas/Input
• Communicate Plan Share Vision
• Collective Understanding Ownership
• Shared responsibilities for implementing
• Feedback on progress

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Marketing Strategy

• Monitor Repeat Business
• Client Staff Feedback
• Reputation Building
• Sector Market Analysis
• Internal Performance
• (SWOT PESTEL)
• Financial Analysis
• Marketing Events Initiatives
• Targets

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Customer Care

• Major Business Issue Why?
• Doing the job v. style of delivery
• Everyone is the customer
• Training Development
• People Skills Communication
• Individual Collective awareness
• continuous improvement

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Client Feedback Survey 2007

• 56 companies invited to complete questionnaire
• 30 companies returned responses i.e. 54
• 19 questions under 6 headings
• understanding your needs
• the design process
• managing your risk
• value
• environment and sustainability
• overall performance
• Lowest satisfaction 74 (keeping to programme and
  budget)
• Highest satisfaction 86 (perception of staff)
• 100 said would definitely work with us again (of
  which 7 yes but..)
• Definite improvements noted since 05 survey (see
  overall scores)
• Only area where score reduced since 05 is
  keeping to programme/budget
• Most satisfied customer...........?

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Client Feedback 2007 Survey
2005 86 82 81 77 76 80 78 7373 7278
78 73 77

• 2007
• Perception of Staff 86
• Quality of Service 83
• Technical Abilities 83
• Design Abilities 82
• Communication Skills 81
• Briefing Process 81
• Appointing Criteria 81
• Team Working Ability 81
• Creative/Innovative Solutions 80
• Managing Process and Team 79
• Business Knowledge 78
• Value for Money 78
• Managing Risk 75
• Keeping to Programme/Budget 74

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Why satisfied customers are so vital to us

• We need repeat business - satisfied customers
  come back
• We cannot run a business without them!
• We need to enhance our reputation in everything
  we do
• The grapevine works for and against us
• Competition - There is always someone else for
  them to buy from!
• Customers are becoming more sophisticated and
  demanding more

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Human Resources

• Investor in People
• Recruitment Retention
• Training Development
• Customer Care
• Equality Diversity

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Recruitment
Hire the right people Capability, Attitude,
Ethic, Culture Equal Opportunities employer
Clear documentation Job Definitions Role
Profile Contracts of Employment Staff
Handbooks Career Path
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Retention
RESPECT TEAMWORK ENTHUSIASM INNOVATION CREATIVE PA
SSIONATE COMMUNICATE

• Shared Values
• Career Progression
• Recognition, Responsibility Reward
• Variety and Challenge
• 4 ½ day working week
• Work hard play hard

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Training and Development
Induction training Part 1 3 RIBA
Mentoring Mentor Training Cad IT
Training Customer Care Training
Management Development Stand Alone skills
workshops CPD Seminars Conferences
Seminars Day release / sponsorship
Pozzoni Academy
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Personal Development Reviews

• 3, 6, 12 monthly Informal reviews
• Annual Formal reviews (Nov-Feb)
• Strengths, achievements, development areas
• Personal action plans
• Track career path Role Profiles
• We all need a plan!

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What's the most important thing?
COMMUNICATION
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Communication
Daily Verbal reporting Intranet Weekly
Programme/Resourcing meetings Communication
meetings Team meetings Monthly Partners
Meetings Director Meetings Finance
Meetings Marketing Meetings Open
Forums Special Focus Group Meetings Quarterly
Business Plan Review Meetings Annual Business
Strategy Meetings
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Finance
Annual Budgets forecasts year end
accounts 6 Monthly Meetings with Accountants and
Bank Monthly Accounts (Profit and loss, balance
sheet, cashflow) Team reports (KPIs, Income
Expenditure, WIP, Debtors) Fortnightly Cashfl
ow updates Daily/Weekly Resource Programmes
(Linked to job costing system) Involve project
leaders in fee proposals job costing
control
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Resource programming

• Managing Projects
• Staff Utilisation
• Right Projects Right People Right Time
• Juggling Act!

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Key Performance Indicators Time Money
Admin 28 Over budget jobs 5 Completed
Archived jobs 1 Speculative jobs 10 Full
fee jobs 57
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Practice Administration
Organisational Structure IT Insurances
Health Safety Environmental Management ISO
14001 Quality Management ISO 9001 Best
Practice
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Quality Management

• ISO 9001 Accreditation
• Quality Management System
• Annual External Audit Lloyds
• Internal Audits (project back checks)
• Design Technical reviews
• Continuous improvements

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Organisation Structure - October 2009
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Best Practice

• Chartered Practice
• IIP (Actions speak louder than words)
• Pozzoni Academy
• Sector Champions
• Deltek Accounts, HR Project Management
  Software
• Intranet Share knowledge
• Constructing Excellence
• M4I

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Summary
Hope Ive not put you off? 7 Years to
qualify as an architect Free to design
buildings Just as you get good at it you get
promoted Dilemna????!!!!.. What do you
do? Creative management underpins good design
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Is this a good time to be an architect?
Yes!!!