The RIBA Linkedin group has been hosting an interesting discussion thread called ‘Re-Educating Clients’ over the last few months in which I have been participating. You can see it by clicking the link above (but you need to join the group and be a member of Linkedin).

It is a fascinating discussion with a great deal of consensus around the positions ‘They don’t understand what we can do’ and ‘we should understand them better’. Then at the weekend Mark Raymond, an architect in Trinidad and Tobago, posted a link to one of the profane but amusing satirical conversations between a graphic designer and his client which is doing the rounds on Youtube at the moment.

NOTE: Please don’t watch it if you don’t like swearing.

The plot in essence is a conversation between the client who is asking for a huge amount of ill-defined work, delivered yesterday in exchange for a pittance, and a graphic designer whose response is to descend into more and more hideous insults. Its funny, and sad.

I find these videos telling. If the graphic designer can only insult the client he clearly hasn’t got a reply to the case for ‘free’ or ‘low cost’ graphic design. His response is a desparate, pointless exercise akin to gnawing your own arm off or banging your head against a (polished plaster) wall. It is madness.

Do architects really feel this way? How much pain is there in this industry?

If you really feel like this then you must stop injuring yourself and your firm and take stock. Now.

]]> http://www.justpractising.com/its-about-money-stupid/architects-my-client-doesn%e2%80%99t-understand-me/feed/ 9 http://www.justpractising.com/its-about-money-stupid/architects-low-pay-%e2%80%93-what-to-do-about-it/ http://www.justpractising.com/its-about-money-stupid/architects-low-pay-%e2%80%93-what-to-do-about-it/#comments Tue, 10 Aug 2010 20:37:36 +0000 su http://www.justpractising.com/?p=1170

Low Pay is a subject of some discussion amongst architects, not least in the UK, where Keith Tomlinson has set up a Facebook Page ‘Architects Against Low Pay’ to campaign for change. When I wrote about this in June I made the point that tackling Low Pay in Architecture also means

“teaching people who have architectural practice how to run them on a profitable basis, and not to resort to exploitative employment practices as a substitute for business ethics, just because ‘its what we did when I was a Part II’.’

So when Dominic Kos of World Architecture News asked me to help support their new survey of architects pay, I jumped a the chance to make some suggestions as to how architects might improve their business profitability, so that they can pay their staff a good wage, and get some real income themselves.
The article was published in the World Architecture News Review today – you can read it here:

How to pay your staff (and yourself) well

Do let me know what you think of it. And if you’d like to know more about what architects are paid all over the world, why not get your practice signed up to the WAN Survey of Salary, Benefits and Diversity 2010 this week, and in the autumn you’ll be able to access the results of the survey.

On Thursday the RIBA issued a press release, RIBA President Ruth Reed takes action to tackle student hardship and low pay, which set out proposals to deal with financial hardship amongst architecture students, graduates and young practitioners.

The proposals include:

1. an increase in the student hardship fund (to help ‘at least another 100 students’);
2. a review group to improve pay and employment conditions (and in particular ‘rigorous minimum pay requirements’) for implementation in 2011;
3. a ‘campaign’ to remove exemption from minimum wage for practical training over six months;
4. research into alternative careers for the 50% of graduates who don’t become architects.

Back in March the low pay issue hit the headlines with allegations that a London Architect Practice was offering a part-qualified architect a job at £400 for a 70 hour week, and I responded that these situations arise because either architects are either bad at business or they are willing to abuse employees (or both).

Looking at these new steps, which have been championed by RIBA President Ruth Reed, I’m encouraged by the review group because on the face of it the intention is to make a genuine effort to change the low pay culture of practice. The press release states that the review group will be comprised of representatives from small practice, ARCHAOS and APSAA, in other words small firms, students and professional studies advisors. Whilst it is a shame that there is no mention of large firms (who are surely not innocent of bad practice), at least this is encouraging.

On the other hand, the campaign to remove exemption from minimum wage for practical training over six months in effect means that a graduate or post graduate masters qualified architecture student can be employed for nothing at all for up to six months. Surely this isn’t acceptable? On the other hand, you might be shocked to learn that students in practical training are not entitled to the minimum wage, if their placement doesn’t exceed one year. (Thanks Malcolm Stroud)

Don’t moan, get stuck in!

The difficulty of course, will be in the effective implementation of these actions so that they produce real productive change where it is needed, i.e. graduates are paid a fair wage for a fair days work. This means any action must also tackle the long hours/unpaid overtime culture, or higher salaries will be meaningless.

It also means teaching people who have architectural practice how to run them on a profitable basis, and not to resort to exploitative employment practices as a substitute for business ethics, just because ‘its what we did when I was a Part II’.

If you’d like to get involved in this debate you should definitely join Keith Tomlinson’s Facebook Group ‘Architects against Low Pay’ which has over 2800 members. Ruth Reed has joined the group and is responding to forum discussions. Lets use our social tools to help her push ahead and make some real changes.

In September of 2009 there were 4.9% more RIBA Chartered Practices than at the same time in 2008, according to RIBA Director of Practice Adrian Dobson.

Figures released by the RIBA show a change in distribution of practice size which has penalised one man bands and larger firms in favour of small and ‘micro’ firms of 2-10 staff.

Last year I wrote about the breakdown of practice sizes recorded by the RIBA in 2008 which showed that 76% of chartered firms (about half of all UK architects practices) had fewer than 10 staff. A year later this proportion has risen to 79%, with medium sized practices (11-49 staff) falling to 18% and large (50+ staff) dropping from 4% to 3% of chartered practices.

The chart above shows the subtle changes and the figures are reproduced in the table below. Thanks to Adrian for letting me publish these latest figures for you in response to my previous post.

Most of you charge according to your costs. Charging what you are worth to you. That keeps you in your comfort zone, but it is not how successful businesses charge. Apple, Nike, Unilever, Tesco, etc. all charge what they are worth to their customers.

This article is about showing you how to charge what you are worth to your client. You will need to do two things; make the client want your service, then make them pay their top price.

1. Make them want your service

This is selling. You might not believe it, but you are probably good at selling. Well, at least the main bit about understanding what your client wants and putting a proposal together in line with that. The bits you probably find daunting are pricing and closing (which we’ll come back to).

To understand needs you have to know your client’s business, so question and listen well. I know very little about your business, except that your clients’ needs will be more complex than just cost. On most occasions, they’ll include variations of quality, innovation, time to completion, on-time delivery, flexibility or cash flow.

If these needs aren’t present, then you have no chance to add value. In the short-term you will only be able to compete on price, which means in the long-term you can only survive by managing out cost (probably reducing your salary/dividend).

So, think with your client. Think for them. Ensure your proposal focuses on what is important to them. For example, if cash flow is their concern, construct a deal where you get paid when they do. If it is time to completion, guarantee the completion of the time critical work within so many days of the handshake.

Ensure the client realises that the success of their project depends on your contribution.

2. Make them pay their top price

Great, they want your solution. Though, you’ve yet to talk about price. If they have asked you, you would have avoided giving a price by explaining that you can’t until you know what they want? The real reason is because you first need to know how much they are willing to pay!

The price they pay will depend on:

1. The choices they have. The less complex their needs, the easier it will be for them to create choice. Are they talking to other architects?
2. How much they think you will accept. Why would your client pay 10,100 when they think you’ll accept 10,000? So, hide this fact, be very aware of the signals you give off. Also, make it difficult for them to break down and compare your costs. Always quote for a completed service, if your quote includes hours or day rates, these might be challenged. If they survive this challenge, then they are too low!

You are now about to talk price. To do this, ask them again whether they are happy with the proposal? Then re-state your proposal, emphasising the key benefits. Finally, introduce the price, saying “we can do all that for you for X.”

But go for a high price. They’ll probably pay it, especially if cost is not the key driver, you nailed the proposal and they have no idea that you would accept less. Be courageous. Just go for it. And be reassured, it gets easier every time…

Now for the final close, “would you like to place the order?” “If not, what is stopping you?” “So, if we resolve that, would you be ready to place the order?”

They may very well try to negotiate the price down. Hold your nerve. Re-sell the benefits. Be friendly and understanding, but say sorry and emphasise the work involved and that your offer is market competitive. Then re-sell the benefits, again. Pause and keep pausing and see what happens.

If they continue on price, ask them, “other than price, have they got any issues with the proposal?” If you think that they really do need something from you, go on give them something (you should now have plenty to give!). This will seal the deal and help them go away with a positive feeling.

So, if you want to transform your practice from a busy one into a highly profitable one, then start charging what you are worth…

Sean Sidney, Negotiation Specialist

Su writes: Sean has kindly offered a free chat if you mention my blog, Just Practising. Call him on 07816 072339

Image: From the Building Article: Low-Paid architect jobs: An offer you can refuse

The construction press is hyperventilating at the moment about an email that a London firm of Architects allegedly sent an unemployed ‘Part II architect’ (i.e. a part qualified masters level applicant). You can read the email on Building’s Website here and also in BD.

The articles I have read so far have focused on the outrage, the potential illegality and the loss of talent that may result from such practices as asking a highly qualified employee to work a 70 hour week for £400.

But I think there’s something more important at stake here, if we’re going to get rid of the long hours, low paid culture that has blighted our profession for so long. And it’s not to do with the employee either; it’s to do with the employer.

Here’s what I wrote in response to the building article:

I run a practice of architects that does not subscribe to the long working hours culture, but it is prevalent in the profession. I remember on graduating with Part I in 1989 (when the last recession was well on the way) I was offered a year out post in London which only paid travel expenses.

The reason why architects stoop to such crass and sometimes illegal tactics such as those set out above is that they are either 1) not in control of their finances or 2) willing to abuse empoyees.

As most architects in the UK are more poorly paid than most other construction professionals, I believe that the likely answer is 1).

If architects were able to

• identify the service they provide and the value of it;
• price it appropriately and negotiate a good deal;
• work efficiently and manage ‘mission creep’; and
• recover fees efficiently,

then they wouldn’t have to decend to abusing their employees like this.

Don’t blame the recession, look at what you can do to make more money.

Here is a breakdown of the size of RIBA Chartered architects practices by size (no. of employees). It shows that over three quarters of the 2800 chartered architects practices in the UK have fewer than 10 staff, and more than half have fewer than five.

Why is this important?

Firstly it is interesting to consider why it might be that architects practices are generally so small. As you know I am of the opinion that many architects are not confident about being businessmen and women. Running a business has not been a subject of much consideration traditionally, and from discussions on this blog I’m of the impression that having an interest in business matters, in particular profit, is considered rather distasteful to some.

Nevertheless there is some logic in larger practices being more profitable, especially if they are organised in a way that tasks not required to be performed by a registered architect are done by others, be they part qualified staff, juniors or administrators.

In a small practice however, its much more likely that the partners/architects do everything, including composing and preparing their own documents, processing post, answering the telephone, writing cheques and sticking on stamps. And even more difficult is the delegation of ‘real work’ as it was recently described to me on twitter – the design of buildings. If delegation is difficult for you, then you’re going to be unable to closely supervise more than a couple of people, and even if you’re confident in that, no-one can manage more than 7 people without an additional layer of supervision, at which point the partners have to consider stepping away from the day to day management of projects altogether and get on with building a business, a full time task in itself.

So maybe architects practices are small because their owners don’t want an organisational structure like that. Maybe they are small because their owners want them to be. Or maybe there is another reason.

What do you think?

Before I got involved in the architectural world I’m not sure what I really gave it much thought. When I was given these figures, for which I am grateful to RIBA Director of Practice Adrian Dobson, I was interested to know whether the small size of architects practices would come as a surprise to people. Is it a surprise to you?

Notes: These figures are from July 2008, the height of the boom, and only represent RIBA chartered practices. The RIBA estimated that the 2797 Chartered practices make up about half of all Architects practices in the UK.

Around of third of RIBA chartered architects work in practices under 10 people, a third work in those with 11-50 people and a third in large practices (50+ staff).

Guest Blog post by Philippa Bowen

Life is full of coincidences.

Su Butcher and I met for a chat over lunch a couple of weeks ago and one of the conversations we had struck a real chord with me. I had had the same conversation with 2 businesses I work with in the last month; what is the difference between working in a business and on a business?

For me the biggest challenge is the mindset of the owners/ directors of the company. If they are happy to be part of a team, paying their bills and “getting on with it” there is probably a limit to how successful their business can be. They spend their time in the “now” of a business, looking very short term – perhaps the next month at most, to make sure that they and their employees have work to keep them busy once the immediate job has finished. This doesn’t mean that these businesses make no money; they can be multimillion GBP turnovers, with very decent profit margins, depending on their industry. BUT they will always be considered small by the leaders in their industry because actually they have the potential to increase their turn over by 10 or more times if they start to work on their business not in it.

Working on a business means taking a fundamental leap and developing and nurturing a whole new mindset, often called a helicopter vision. Your work will no longer be a direct income generator for the business, you will be out making strategic business connections, spending your time clarifying the vision for the business for the long term future and developing a plan to get it there. Hovering above your own business and the market as a whole to see what you could be doing better, where savings in your organisation could be made, where investment is needed and importantly where your customers and competitors are moving to. You then also have to ensure that you have the right people in place to deliver this plan and ensure that it happens. You have to develop trust in the people that you have working with you and who are still in the business delivering services to your customers. You have to learn to delegate and communicate your vision and passion for your business to your employees.

For some business owners the first step in learning to delegate can be as small a thing as allowing someone to type up letters or invoices, employing an answering service for when they are busy, getting their day to day bookkeeping done. For some this is a more fundamental shift in how they have always done business, handing over a client to someone else and allowing them to deliver your product or service can be scary, but with the right systems and procedures in place and if you have hired the right person in the first place this should be an asset for your firm and not an obstacle, after all who wants a business that falls apart if they go on holiday, or have to take some time off for personal reasons.

There are some industries where it is noticeable that businesses fall into 2 categories – the small, intimate up to 4/5 person business, or the large and very large 25 plus employees. Architects, accountants, solicitors are the ones that immediately come to mind.

I think the reason is this: the small ones are where a few like minded people are actually working as sole traders but under a singe banner. They may think they are a business but actually they are unable, or even unwilling to take the necessary step to move to the next level, where they can’t work full time as they have in the past, but have to hand some or all of their work load to someone else and trust that they will deliver it to the client. I am certainly not suggesting that anyone would do this without some sort of check on what the other person is doing, but there does have to be an element of trust and of letting go. This then allows you to concentrate on going and getting a string of new clients which then means you need several new employees who you can trust to service this new income stream.

Business needs to be a collaboration. Build a really good team around you, create a good infrastructure and communicate your vision – this will allow any business to grow and thrive.

Or you can carry on working in your business for as long as you like.

Philippa Bowen has a wealth of experience working with larger companies, now she works with SME business owners to grow their businesses.Find out more about her here.

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