Knowing when to say no

12 04 2011

I was fortunate enough to have dinner with a close friend from my MBA program who was in Cleveland for corporate training.  As he is a consultant for business development. we began discussing the intricacies of the architecture industry.   It wasn’t until our discussion over a few hot dogs at the Happy Dog that I truly realized how interesting the architecture business model is.  I have been recently reading the book by Eric Cesal titled Down Detour Road which describes the author’s view of architecture threw various business models.  Mr. Cesal and I were classmates both at the Olin School of Business and the Sam Fox School of Design and Visual Arts at Washington University in St. Louis.

 

The interesting thing about both my conversation and the  reading that I have been doing both call into question the way in which we as designers value and provide value to our clients.  One of the reasons I found it imperative that I earn my MBA is the understanding that designers, as a profession, are taught to design.  However there is more to our profession than simple design.  There is politics, there is marketing, and there is business decisions all of which impact the way in which a designer is seen in the eyes of the public.  As a result, the understanding of business is as important to profession as is the quality of design.  While talking to my friend, we discussed how a firm “wins” a job based on their qualifications and then must uphold their contractual obligations while simultaneously trying to earn a profit on the pro-forma done on the firm’s behalf.  At times a firm will undertake a job with very tight financial constraints in order to create a dialogue with a new client that can create a new relationship between the firm and the client.

 

No matter why a firm takes a new job, the important aspect from a business perspective is to create a profit.  Without a profit, a company, no matter in what industry can not sustain itself.  As a result, I must remember one of the earliest lessons that I learned in my Intro to Economics course that I was taught.  A company can not be successful by taking on a loss.  The design profession is so intent on earning a job that we often lose sight of profitability.  I would much rather pass on a job that I know I can’t make money on than taking the job and then try to cut my design talent short in order to sustain profitability.  As Eric describes in his book, there is a difference between “the paid architect” and “the idea architect”.  My goal as a designer is to blur the line between the two and bring the value to my client through great design.  However, it’s as important that I as an individual take on this responsibility as it is that we as a profession understand that we can not low ball each other to drive the margins down to zero.  By doing so, we force our clients to understand that our design is not a commodity, but instead can be based on just the dollar figure we submit in our proposal, but we can also be judged on the quality of our work!  As a commodity, we must base our proposal based on the other firms that we know are also submitting for the job.  However, we must at the same time submit our qualifications that differentiate us as designers and resultingly separate a firm based on quality.  Our industry is am interesting one that combines commodity economics and that of differentiation.  It’s a fine line between being a high end designer and a value designer.  Between the two is where a majority of our industry sits.

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