Principal's Report

Nearly one in five principals said their training and preparation for their job was "exemplary." More than two-thirds deemed it "adequate." And fewer than one in seven considered their training "poor."

Buying a used company? If you are committed to growth by merger or acquisition, that’s exactly what you’re doing. And buying a used company can be a minefield of hidden surprises. If not handled properly, it can add significant costs to the acquisition or scuttle it altogether. In a merger or acquisition you are often buying someone else’s problems. What’s more, the merger event itself creates a host of new challenges.

Principals of A/E firms of all shapes and sizes are bombarded day in and day out by advice urging them to differentiate themselves from their competitors as it’s the only way they’ll catch the client prospect’s attention long enough to win the job. The fallacy in the case for differentiation is that the concept is so well embedded in everyone’s thinking that in the end what counts is what it is you do to differentiate your…

A regulation that allows Federal agencies to withhold in advance 10 percent of an A/E’s fee on projects is especially hard on smaller firms that lack the cash flow to absorb the up-front deduction.

A/E firms have a reputation for lacking toughness in demanding fees that accurately reflect their effort and risk. But there is recourse in the way you charge for time, for reimbursables, controls over your multiplier, and more.

After a three-month stretch showing an increase in demand for design services, the Architecture Billings Index, a leading indicator of construction activity, dropped sharply in January—from 55 in December to 50.7. Any score above 50 indicates a surge in billings; any score below 50 marks a decline.

It typically takes four months to fill a senior position in an A/E firm, according to Jeff Simeone, a project operations manager with the design business management consulting firm SullivanKreiss. During that time, you are left either with a slot unfilled or an employee who is on the way out and not especially motivated to produce. This is a sizable gap in today’s A/E practice climate, where many mid- to upper-level jobs go begging through lack of qualified candidates.

These are not terms commonly used by A/E principals, yet they describe scenarios that are not unusual in a firm’s practice. They define what happens to a firm when a lack of strategy and goals, weak leadership and execution, a reward system out of sync with goals, weak marketing and business development, and a host of other perils befall a firm when it’s not on its professional toes.

Shamed by the fact that law firms on average contributed 2 percent of their income in pro bono services while A/E lagged far behind, San Francisco architect John Peterson in 2002 founded Public Architecture, an organization committed to making the benefits of building, one of the most expensive of pastimes, affordable to nonprofit organizations, which could not otherwise afford the architect’s fee.

With diversity efforts gaining momentum and with global practice flourishing, what language is spoken in your office can become a major issue.