What are We Doing to Ourselves?

Nic MacCormac , 31 July 2014

Nic MacCormac reports on a vibrant discussion in Perth on architectural business issues, changes in the industry and how we can adapt to them.

There was a full house at JCY’s office for ACA – WA’s recent event “What are we doing to ourselves”. The evening saw a frank and open discussion between members and special guests Steve Goddard and Rob Bentley (Acuity Business Coaching) and Basil Georgiou (Jackson McDonald). The topic seemed to have struck a chord with many of us. 

ACA – WA Chapter president Richard Young got the ball rolling by fleshing out the key problems we face and this was then put into context by our guests, who have seen the worst of our industry, albeit from a safe distance. The issues raised ranged from increased competition and fee cutting, to (uninsurable) bespoke contracts, trends toward D+C contracts and PPPs, free BIM, the public perception of the profession, government project award systems, proportionate liability and sub-consultant agreements … to name a few.

Basil commented that over his many years in construction law he “has seen architects do things that would make your hair stand on end!” Basil urged us to:

  • Negotiate when things are going well
  • Clearly define scope and use this as a basis for agreeing contracts and fees
  • Be clear on what you will do and – just as importantly – what you will not be doing
  • Understand what your contracts actually require from you and clarify what clients really want
  • Understand that compromised fees will result in compromised services, and this exposes risk
  • Do not do speculative work, but if you have skin in the game, demand an adequate reward for the risk
  • Build into your contracts mechanisms for dealing with early termination
  • Allow for delay or disruption to your timeline of service
  • Consider alternatives to a percentage-of-the-contract-sum approach for work on elastic timelines

Acuity provides business coaching to a variety of clients in many different industries; however they believe that all businesses are essentially the same. They provided their top five ingredients for a successful, sustainable business: 

Establish a clear market position: Know what it is you want to be known for, establish what you do (and don’t do) and frame your business around that

  • Distribution: Know where your business comes from; identify key sources and new sources
  • Structure: Have the right mix of skills and resources
  • Management Tools: Know how to track your business’s key performance indicators
  • Succession Plan: Have a plan to build your business over generations

During the discussion that followed, analogies were made to other professions, such as surgeons and doctors however, our work is somewhat different in that we bridge aspects of art with science. We tend to be distracted by the art and lose focus on the overall performance of our businesses. We need to understand resourcing requirements throughout a project’s lifecycle and structure our scope and fees accordingly. We need to retain adequate fees for contract administration – where many of our troubles can arise. If we understand what our baseline fees are required to be for sustainability, there should be no need for undercutting of arbitrary figures. 

It is clear that change in occurring in the industry and we must adapt to those changes if we are to be successful. Stay tuned to the ACA website to find out more about the next upcoming event on the calendar and we look forward to seeing you there!

 

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Nic MacCormac is a member of the ACA – WA committee and a senior project architect at Cox Howlett + Bailey Woodland. 

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