There is a common misconception amongst non-architect that architects are extremely well paid professionals, but this isn’t the case. In November 2007 the Office of National Statistics published a snapshot of UK Salaries which showed Architects (then earning on average just £38,559 Gross a year) were 30th in the list, behind amongst others, Fire, Ambulance, Prison officers and Police Inspectors, Chartered Surveyors and Town Planners, Construction Managers, Senior Local Government Officers and even Physicists, geologists and meteorologists.
Now £38k a year isn’t to be sniffed at, but it does surprise me none the less. So why don’t architects earn more money? My first theory is
Architects don’t get paid enough money because they don’t make enough money
The diagram above shows the four major ways in which architects make or spend money on commissions. They are also four ways in which architects can lose money.
Lets look at them individually.
The first thing you must get right with Lead Generation is volume. You have to generate enough leads in the first place, and then you can evaluate them quickly and identify the ones which are good for your business.
Many people get leads from advertising, networking and promotional activities. Does your practice measure the effectiveness of these techniques, or do you simply renew your yellow pages box every year?
Do you have a procedure for quickly qualifying leads to confirm they are worth pursuing? As I mentioned in an earlier post, it is all too easy to say yes to any lead which comes through on the phone. This is the first way architects can lose money, by not generating enough leads and then choosing the wrong ones to pursue because they are the only ones that arrive.
Recent discussion about whether the RIBA was right to omit the fee scales from its Guide for Clients suggests that fee quoting is the subject of much heart-wrenching misery in architectural practice. Why is this?
I have a feeling it is because of a rift between the value which architects put on their work and that which clients put on architects work. What is the correct value to put on your work? If you’re not confident about it, then you’re tempted to undervalue, underquote and end up with a job you can’t resource. If you don’t see eye to eye with the client, then you might overbid and lose the job to a competitor.
So do architects charge too much, or is what they deliver not valued? Here we come to number 3.
A few weeks ago I heard the architect Rafael Vinoly guesting on Evan Davis’ BBC Radio 4 show the Bottom Line. The discussion was on managing clients’ expectations, but to kick things off Davis asked Vinoly “lets hear your views on the industry – what’s your favourite building at the moment?” Vinoly answered “The next one, always the next one.”
Now I don’t know about you but rather than filling me with optimistic enthusiasm for new opportunities, this statement fills me with the sense of dread. If my architect is thinking about ‘the next one’ what happened to my project?
Delivering a good project is not simply about managing client’s expectations though, its about understanding them and not delivering something else. You’ve agreed the fee – how do you implement it? Do you manage your staff time to meet the expectations? How often do you fail to do so?
If you’re lacking in confidence about the value of your work, then when the project gets ‘mission creep’ can you manage this too or do you absorb the excess work, and if so why?
And lastly, we have something which might be missed out altogether
Whilst you’re running a project, do you evaluate its performance against plan? Do you calculate projected profit and adjust accordingly? When the project ends to you carry out a full assessment of what went wrong and right, consulting all parties, including your staff?
I think that many practices do not effectively evaluate at the end of the project because they aren’t doing it during the project when something can be done for the project itself.
The benefits of an effective evaluation system are huge. Firstly you can avoid making the same mistakes again. You can learn from your client what is working for them and change things if necessary. You can agree how to promote the project, you can demonstrate why you should get repeat business, you can exceed expectations and receive referrals to similar clients.
Which brings me back to the start.
So which part of this cycle do you think is causing architects most difficulty? For me it is Delivery which is the greatest hazard to profits. When the process of project delivery is carefully attuned to the client’s requirements, all other success can follow. When it isn’t, all that follows is a loss.