Marketplace Research | |||||||||||||
Who Is the Client's "Trusted
Advisor?" Are architects willing to compete with management consultants? |
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by Richard W. Hobbs, FAIA AIA Resident Fellow, Marketplace Research |
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Who provides the best client service? Management consulting firms will tell you they doyou can't read a magazine or turn on the TV without seeing an ad for ACCENTUREthe new name for Andersen Consultingtheir Institute for Strategic Change, and their Strategy and Business Architecture branch. On the other hand, more and more architects find that the further they move from the "commodity" of design (that is, the strict design of a building), the greater the value they hold in the eyes of the client-and the greater the fees they generate. These firmsarchitecture and management consultingdescribe themselves as the client's "trusted advisor," a term coined by the big five management consulting firms to describe the role they play in relation to the client. With Zen-like fervor, they perceive themselves being "one with the client." Description of this trend is widespread; it pervades today's popular management texts, which talk a lot about creating value, not forbut rather withthe client. Looking at the "consulting community," many architects see other professionals entering "their" territory, especially in preproject country (programming and predesign) as well as in implementation-services land (construction, project, and facilities management). Has the architect's
role diminished? While the architect focused on the building and saidmore often than not"we don't do that," other professionals seized the opportunity to fill a void (or, some say, invented a need and fulfilled it for the client). In Clients for Life: How Great Professionals Develop Breakthrough Relationships (Simon & Schuster, September 2000), authors Jagdish Sheth and Andrew Sobel tell us that one becomes a trusted advisor "when one consistently develops collaborative relationships that allow one to have a major impact on the clients and their decisions." Have we hesitated to move "beyond the building" out of fear of risk involved, or because we are stuck in a closed definition of the practice of architecture? We must face the fact that today's business world is "blurred"; professional boundaries constantly and quickly change shape. In the business world, everyone makes a contribution to the client's business, be it through consulting, design, architecture, construction, or project management. Some play very focused positions; others work to integrate the whole. What does the trusted
advisor do? The architect is qualified to take on this role by virtue of the skills and talents he or she develops through learning and using the creative design process. The role of "trusted advisor" simply entails expanding those skills and talents in a broader application. Expanding the skills can also bring with it expanding fees. Ever wonder how the "consultant" bills $200-$300, compared to a principal architect, who usually bills in the $100-$125 range? Architect-led consulting firms tell us they bill
in the ranges of: For the traditional architecture firm, the numbers
range from It's true that the consultant's clients tend to be large firms who don't blink an eye at what they're paying for their services. More important, however, the consultants' clients are convinced they are receiving value that will help them fulfill their business strategy. Architecture firms are beginning to take on this type of role, and those architects who have evolved into "design consultants" are seeing the same financial results as the "management consultants." The AIA Firm Survey 20002002 indicates that 2 percent of traditional firms, and 13 percent of "nontraditional" firms characterize themselves as "consulting firms. " This is beyond the fact that many more firms are now offering a broader range of services in-house, compared to three years ago. Firms such as these believe that an architect working with a client creates value for the economy, society, and community. They also realize that the buildingthe object to which architects traditionally are so deeply committedhas no value unless it directly connects to the strategy, economics, and context it serves. These are the architects who are in a position to seize the market opportunity that many management consultants have already seen. The management consultant's
value proposition The architectural
consultant's value proposition Firms such as OP-X, RNL Design, Little & Associates, OWP&P, and HOK are enjoying great success through consulting businesses that allow them to work in areas beyondyet related tothe facility. OP-X considers design as the "connector" bridging the gap between client strategy and implementation. As a consultant, the firm provides organizational strategy to many clients, giving them heightened awareness of their mission and value. This can lead to OPX providing additional services, such as designing or reinventing an organizational structure, which in turn leads to implementation, which may be the design of a building. In short, OPX integrates staff expertise in organizational strategy into the services they provide to clients, which include Ernst and Young. RNL Design takes a different approach. The firm develops strategic alliances with other professionals while they assume the role of trusted advisor to the client. They have instituted in-house training to help their architecture staff understand the cultural shifts and behavioral changes that will enable them to excel in their new role. Management consulting
firms are the competition And architecture graduates will return to architecture firms! It's been said that Arthur Andersen Consultants in 1999 hired more architecture graduates than did any one architecture firm. Management consultants know the value of the architect's education and thought process and are willing to hire architecture graduates, often at salaries 2030 percent higher than in the typical architecture office. (The consultants' fee rates allow them to absorb the difference easily.) Yet they talk of working with architects and interior design firms for the "design" portion of the client's project, reinforcing the categorization of design as "only" a commodity. My informal research shows that more than 50 percent of graduating architecture students were searching outside the field for ways to express their design values. Architecture firms should take note: if they themselves form consulting entities with associated values, salaries, and billingthey can recapture a great amount of the market and attendant job applicants. If they do not, management consultants will take over this area of practice. Overall, we can see that the traditional architecture firm is evolving, and the greatest change will be in those firms that choose to include or establish separate consulting groups, thus partnering with clients to build greater value. However, this change to bring the consulting arena within the broader architectural community needs to be fostered by the profession's desire to meet the needs of the client, user, and broader community. This, in turn, will allow architects who participate to leverage and grow. Copyright 2001 The American Institute of Architects. All rights reserved. |
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