AEBL events offer incredible learning experiences. But for those who can’t make every event—and others just looking for more information—we offer this collection of insights from our faculty, board, and members. Look here for the latest thinking on industry trends, essential leadership skills, and more.
Christopher Parsons is Founder of Knowledge Architecture, a knowledge management and information systems consultancy that leverages technology to transform business processes and create strategic insights for architects and engineers. The firm delivers consulting services through packaged solutions and a unique subscription model designed to enable small and mid-size architecture and engineering firms to have access to strategic and technical resources similar to large firms.
Christopher has been a technology leader in the AEC industry since 2002, including serving as Chief Information Officer for Steinberg Architects and the Information Technology Director for SMWM (now Perkins+Will). He is a former board member for the AEC IT Leaders Roundtable and the founder of San Francisco Digital Design (SFDD). He will present “Knowledge-driven Architecture: How architects and engineers can transform their practices through knowledge management” at an AEBL management roundtable in San Francisco on November 4th and in Orange County on December 10th.
Q: What do you mean by “knowledge assets?”
A: Knowledge assets encapsulate knowledge into discrete chunks. An example of a knowledge asset could be a checklist for taking projects from schematic design development. That process has been honed and refined over the years. A firm has this culture of doing this process, but is it explicit? Has the firm taken the time to capture that knowledge? How do new employees learn about this asset and how to leverage it? KM is not a project, but requires ongoing commitment. We should give KM the same level of rigor and commitment as we do financial management.
Q: How well is the A/E industry doing KM?
A: There is a lot already going on. The AIA has a knowledge committee, for example. In most cases, people are doing stuff within their firm, but there usually isn’t a formal framework for KM.
Q: How does KM impact bottom line?
A: A good example is any kind of fixed-fee project such as programming or EIRs. Let’s say you’re a housing architect and part of a feasibility study is to determine how many units you can build on a given project-a quick pro forma for the developer. I’ve seen firms reinvent the wheel on things every time they do one. They have expertise in this area, but they haven’t been able to get that knowledge out of people’s heads and put into an asset that other people can leverage.
Instead, imagine you had a database of floor plans and made it easy and quick for people to find them. Or, if you had a written process, something as simple as a checklist, showing how the firm does a feasibility study. You could then speed up the process and have more junior people working on these studies. You’d be able to do more with these projects, back up your marketing claims of expertise with a demonstrable process, and make your projects more profitable.
Q: Does this change how a firm is run?
A: When processes are always getting updated so that it’s easier to leverage your knowledge assets, junior people can take on more projects. You now have the ability to become experts on an exponential scale, and your firm’s output can increase. This has been done very well in other industries such as business management consulting. Firms like McKinsey and Accenture do this very well.
Q: How do you implement a KM plan and get people to stick with it?
A: It starts with the culture. There are a couple of triggers. One is the fundamental buy-in that isn’t a project, it’s an ongoing process. You’re going to build a library and staff it and continually update it.
Another trigger is executive leadership here the leaders manage their own knowledge. Your president, in some ways, has to be your chief librarian. The leaders have to set the model and the rest of the organization follows their lead. The reality is that they have more of this knowledge than anyone else in the firm. They know who the key people are, and what their expertises are.
They have the structural knowledge, like what type of databases the firm has and what time of documented processes it has. They know how the brand is perceived out in the marketplace, who the most trusted partners are, and the history of the firm’s marketing initiatives.
Q: So, top management has to be out front?
A: I’m not saying that it’s impossible to do KM without their buy-in, but if that’s your starting point, it’s much easier. KM could be just a departmental program. Take marketing. It could have internal librarians responsible for images, data points, articles, etc. This way, people aren’t running around looking for things every time there’s a new proposal.
To get started, you need to have an inventory of your assets. We have these little caches of knowledge all over the place. We just need a blueprint to bring it all together-a plan for creating, capturing, and sharing knowledge assets. The composition of the blueprint, or “knowledge architecture,” should be balance of people, process, and technology. KM can and should be as simple as weekly brown bag seminars where you talk about one lesson learned or how you won a particular client.
Q: Are A/E leaders receptive to KM?
A: Everybody agrees that we should be doing this. It’s not a controversial thing. It’s something that everybody thinks is good. Where it breaks down is in the execution. I founded Knowledge Architecture to move knowledge management forward in our industry. Moving the ball forward is why I am doing the AEBL knowledge management workshops in A/E. There are plenty of folks already working on this issue in our industry and they have been for years. My hope is that we can bring them together and have a big impact.
Steve Isaacs, PE, Associate AIA, Division Manager, FMI
Steve has 40 years of experience leading design and construction firms and major engineering, architecture and planning projects globally. He is one of the most highly regarded teachers of negotiations skills within the A/E/C industry. His new book, Negotiate with Confidence, brings a fresh and very practical methodology to negotiations.
Q: Can you share one essential to take away from the session?
Steve: Kay to the session is a new way to approach negotiations and the similarities to the methods we use in design. The applicability of this new method is a substantial addition to the toolbox of any professional in the A/E/C industry.
Q: How are contract and fee negotiations a way to establish client relationships?
Steve: The negotiations set the tone for the client relationship for the project. If a professional argues vehemently during the negotiations, the expectation is established for a conflict-filled relationship. However, if the professional searches for creative solutions in the negotiations, it sets a tone for a new relationship built on the common goal of creative solutions to all future issues.
Q: What is a common pitfall for A/E/C and environmental consulting firms when negotiating contracts and fees?
Steve: Entering negotiations without fully understanding all of the things that would be in their best interest to achieve. Most negotiations require a multi-aspect solution. Many A/E/C professionals focus on the financials issue and miss many other opportunities for creative solutions.
Why Does the A/E Industry Need AEBL?
If you are an architect or engineer and you need training of any kind, myriad sources of information are available. Architects can look first to the American Institute of Architects (AIA). If not there, they can always turn to one of the for-profit A/E industry consulting firms such as PSMJ or ZweigWhite.
Engineers may have even more choices. Depending on their specialty within the profession, they could consult the American Society of Civil Engineers (ASCE), American Council of Engineering Companies (ACEC), Structural Engineers Institute (SEI), and so on.
Industry marketers have the Society for Marketing Professional Services (SMPS). Technical staff can contact one of the big software providers – Autodesk or Bentley. Even organizations with a broader audience, such as the Society for Human Resources Management (SHRM) or Construction Financial Managers Association (CFMA), offer resources for A/E staff in their specific areas of expertise.
With all these training and information sources (and more) out there, who needs another? What does the Association of A/E Business Leaders (AEBL) offer the industry that all these sources can’t provide?
The answer lies in a few key words in AEBL’s mission statement – “AEBL is an unbiased, not-for-profit, member-supported organization that exists to strengthen and support the A/E industry by promoting best practices, corporate stewardship, effective leadership and free exchange of ideas.”
“Unbiased, not-for-profit, member-supported.” Every group and company dedicated to any aspect of business management or the A/E industry has an agenda. This is not a criticism; it is a fact. Each group’s agenda makes it what it is. For example, the AIA exists to promote the best interests of its member architects, a job it does well. For-profit companies exist to make money. For each organization, there is an undertone to everything they do that helps drive their agenda.
AEBL is not agenda-free; it wants to gain members and improve its offerings. It wants events to draw well, primarily because the sessions are better for everyone when they do. Financially, its minimum goal is to break even so it can survive and grow.
But AEBL has no bias toward any profession, role or discipline. It is not trying to make anyone rich and it isn’t preoccupied with cross selling or product pushing. Board member John Cowdery, who moderates a session called Key Operations Metrics for AEBL’s flagship training program “Step Up to Leadership (SUTL),” says, “This is the only forum where they’re not trying to sell you something.”
“Strengthen and support the A/E industry.” The key term is “A/E.” AEBL is the only not-for-profit group that targets the full breadth and depth of the A/E industry – all disciplines, sizes, management levels and roles.
Christopher Parsons, founder and president of technology consulting firm Knowledge Architecture, Inc., wrote on his blog, “I’ve consistently seen a great mix of CEOs, COOs, CFOs, marketing and human resources directors, project managers, architects and engineers from A/E firms of all sizes at AEBL events. The cross-functional, cross-discipline discussion is what makes the roundtables so compelling. Attending the events is a great way to network with your peers, partners and competition.”
By encompassing the entire A/E industry, AEBL offers a comprehensive range of viewpoints, while reducing the likelihood of competitive pressure inherent in the professional societies.
“Best practices, corporate stewardship, effective leadership and free exchange of ideas.” AEBL is all about improving the ability to manage, lead and succeed through effective business practice. But the “free exchange of ideas” is what makes this possible. AEBL’s focus on honest, open dialogue truly differentiates the organization.
Matt Henry, CEO of transportation consulting firm Fehr & Peers and moderator of the SUTL session Developing a Vision, says, “The unique aspect of AEBL is that it is industry practitioners sharing real stories of what they are actually doing in their organizations.”
AEBL’s predecessor, the Professional Services Management Association (PSMA), flourished in the 1990s and early 2000s before losing its way and contracting significantly. Pockets of PSMA chapters continued to thrive, however, illustrating that the industry’s need for a broad, unbiased organization never waned.
At its core, AEBL is people from all corners of the A/E industry fearlessly sharing ideas with the singular goal of helping to improve the management abilities of its members, its session participants and the industry as a whole. It is a unique resource that offers industry leaders and future leaders the greatest opportunity to gain practical knowledge and insight through proven management techniques, without the distraction of high-pressure sales, professional prejudice or ulterior motive.
No other professional organization or company can honestly make this claim – there is simply nothing else out there like AEBL.
And while this asset would be welcome in any industry, it is absolutely essential for architects and engineers (and planners, environmental scientists, etc.) who so often struggle with the business aspects of running a business. For all these reasons, AEBL more than validates its existence within the spectrum of A/E industry groups and resources.
AEBL’s Step Up To Leadership is ongoing in Orange County – the next session is June 3 (2pm – 4pm) at Harris Associates in Irvine, where Laurie Dreyer will moderate a session on workplace trends – and scheduled for a two-day session June 17-18 at the office of Merrick & Company in Aurora, Colorado. For more information, contact Kathryn Sprankle at
firstname.lastname@example.org@aebl.org or 415.307.9799.
How to Be(come) a Principal
Everyone knows what a Principal is: a strong performer in a firm leadership and stewardship role. Typically, it refers to a stock ownership level, but not always. How we define “strong performer,” and “leadership role,” however, has evolved over the years. Many architects who became principals 15 or more years ago are finding they have to prove themselves all over again and, in some cases, are being passed up by younger up-and-comers for new opportunities
What’s different today? For one, transparency is a leading trend in business. Our increasingly business-savvy employees and shareholders want to know the “why’s” about everything. Why did the Board make that decision? Why are we opening a new office? Why is there no bonus pool for the third year in a row? And, Why is that person a principal? Transparency requires clarification and communication about everything we do, including articulating specifically what a company expects of its principals and how it intends to gage their performance.
Second, the world at large, including the world of business, has undergone a sea change in just 15 years, and the pace of change is ever-increasing. What companies needed from their lead performers and stewards then has upticked with the corporate need to stay current with and relevant to its stakeholders: employees, clients, consultants, and actual shareholders.
While every company has its own prioritized criteria, there are commonly recognizable hallmarks of “principalship,” often considered synonymous with “leadership.” Whether you’re currently a principal, want to be a principal, or aren’t thinking about it at all, here are some suggestions worthy of pursuit by any professional wanting to be perceived as “principal material”:
Own the company line.
It should go without saying that being a firm principal requires personal, even passionate, belief in the corporate core ideology: mission (who we are and why we’re in business) and vision (what our business will look like in the future). While we’d like all employees to be passionate about our work together, it’s a critical foundation for current or would-be principals. Being an effective leader in an environment with which you’re at philosophical odds is simply not possible.
Embrace the business of the business.
As one corporate buyer of AEC services remarked recently, “Architects were all trained and mentored the same way—as technical professionals. Lessons in business didn’t seem to make it into the mix.” That rap isn’t entirely fair, given the significant rise in A/E professionals pursing business-related instruction and, in many cases, getting advanced degrees in business. Still, the image persists. Architecture Consulting is a business, and now more than ever, companies need smart business thinking around the big table. You don’t have to get an MBA to understand and apply the metrics your firm uses to measure company performance, read and digest corporate financial statements, or to manage the heck out of a project. The most important factor—and what will differentiate you from (still) a majority of A/E professionals who’d rather keep their heads down—is actually being interested in and actively learning about best business practices. Taking it a step further, we are more valuable and relevant as consultants if we understand how our clients’ businesses work. If your clients believe you care about their business—not just the project at hand—and you can discuss business matters important to them, they’re more likely to trust and return routinely to you.
Put the company first.
Especially in difficult times like the current recession, we have to make decisions that touch us personally, not just professionally: Who takes a cut in pay? Who do we let go? Which office should close? Even in good times, decisions regarding pay raises, promotions, market diversification, moving to new office locations, etc., are naturally viewed through the personal lens of the decision-maker. Taking the role of corporate steward seriously, however, means considering the decision through the company lens instead: which decision most benefits the company, regardless of its effect on you or your team?
We splash the word “innovation” on our websites and throughout our proposals, yet how truly innovative are we? From what some clients have told me, they gloss right over that written information, because as a facilities director remarked recently, “You guys just write a bunch of BS about innovation.” If you want to be a true innovator, create something new. For example, identify a new service line, production process, or product aimed at improving your business and perhaps in turn your clients’ businesses. Recently I heard from a structural design firm CEO who reported that someone on the firm’s CADD team created a new software program that solves some issues they were having with Revit. Or, make an existing service or practice better—whether it’s how you structure your fees, coordinate project teams, track employee performance, or invoice clients. Innovation happens at every level.
Get your E.Q. on.
Emotional Intelligence (E.Q.) is the capacity to understand and manage your emotions, as well as to perceive and respond to others’ emotions. Removing the science and scoring, “high E.Q.” is just another word for “has superior interpersonal and relationship management skills.” This is a critical characteristic, since, in the end, it is a popularity contest. With the exception of the Brilliant Minority, most professionals can’t get away with being routinely unpleasant to work with. People want to work with people who get along with other people. After accommodating prima donnas for decades, firms understand that dealing with difficult people yields a low return on the time and money investment. Removing barriers such as moodiness, rudeness, big ego syndrome, disrespect, and overriding self-interest allows people to see what you’re really capable of.
Be a great boss.
“Supervising” employees has given way to “developing” employees, and companies are increasingly careful about who manages their valuable talent. (see E.Q.) Some professionals consider their responsibilities overseeing staff as an add-on to the “real job” of working with clients on projects. They proudly call themselves “hands-off” managers and hope their staff swims rather than sinks. Few firms today can afford the sink-or-swim model. Most expect the company’s bosses to be actively involved in their staffs’ career goals, progress, and professional development. It means re-examining how you allocate your time and re-arranging to accommodate paying close attention to the success curve of each person who reports to you. As years of employee surveys across all industries reveal, the number one reason for staff malaise and voluntary departure is “the bad boss.”
Build sustainable relationships.
“Networking” is an 80’s word many of us loathe, so let’s forget that term. Instead, consider your inventory of industry contacts—friends, college roommates, past co-workers, clients, consultants, and so forth. If you’re just starting out in the industry, keep in mind that a good number of the people you know now will be key players down the road—heading consulting firms, working for Fortune 500 companies, heading public works departments, developing new projects. In other words, they’ll be in positions of influence that could benefit you and your company. If you’ve been around the career block a few times, do the same inventory, and ask yourself whether you’ve made the most of your personal database (okay, rolodex for some of you). Every time one of your contacts makes a career move, you have a new sphere of relationships to make. Business opportunities—new work, new hires, new partner relationships—come from showing interest in what your contacts are up to and updating them on your and your company’s activities. Move from project marketing to relationship building. Become a regular fixture in your clients’ lives, whether or not there’s a project on the boards or in the pipeline.
Within multiple office organizations, it’s not unusual for an employee, especially a new one, to be an unknown outside of his/her office. Whether your company has strong inter-office communication and work-sharing practices or not, go out of your way to have contact with your peers and superiors in other offices—even it means chairing the annual party committee. Having a broad-based, internal (good) reputation creates more opportunities to get on that huge project, be considered to open a new office, or get invited to join the principal group. Having a (good) reputation outside of the company is key to building professional credibility. This doesn’t mean being everywhere all the time. For technical professionals, publishing articles and speaking on technical issues are excellent vehicles for showcasing your company’s and your individual capabilities. In this business, you’re only as good as what people know about you—so, without bloviating, you need to be your own P.R. team. Good work simply doesn’t speak for itself. For the more extroverted, being involved in client industry organizations—not just attending meetings, but participating meaningfully—is a good way to keep in front of clients and influencers.
While “being visible,” remembering that you’re visible can be a challenge. People—especially clients—form opinions about a firm’s culture and business practices based on the behaviors and personal presentation of the people who work there. What you say or do, even off-the-cuff, in-house in front of employees, or out in the world, can shift others’ perceptions of the firm. Principals are lead firm representatives, and their words and deeds reflect immediately, and sometimes indelibly, on their companies.
Don’t get comfortable.
“Grow or go,” as one CEO likes to remind his staff. The accomplishments and contributions that got you to where you are today are important—but time to move on! Though our economy will rebound one day, this recession shone a bright light on less productive employees, including the “muddle in the middle,” as another executive calls those folks who haven’t moved up or over in years. Be mindful of your own career; does it expand every year? Are there new accomplishments and contributions you can add to your resume, or does it look pretty much the same way it did five years ago, give or take a few projects? Ask yourself, “If I had to apply for my job today, would I get it?”
Or, “How to Remain a Principal.” A downside of longevity with a single firm is the potential of going stale. Professionals who’ve spent most of their careers with the same company stay fresh by circulating in several arenas: professional associations, client and industry organizations, and ongoing technical and business refresher courses. Staying fresh is especially a challenge for Boomers and the Silent Generation, as we continue our careers well beyond the traditional retirement age—whether driven by passion or need. We’re challenged to learn new technology, adapt to new project delivery methods, adopt best business practices, adjust to four-generation workplace dynamics, and meet increasingly more sophisticated client demands. Sorry to say, no rest for the weary.
Don’t count on tenure.
Tenure is dead.
This article was first published on the AIA website, click here to view the original article.
M&A Trend Reshaping AEC Industry
As Baby Boomer owners of agriculture, engineering and construction (AEC) companies near retirement, many are finding that the second tier of leaders may not be the best option for transitioning ownership. Instead, an increasing number of owners are selling externally to ensure that they receive peak value for their investment.
The buyers are typically larger firms seeking to grow by adding services, market specialization or even simply staff.
“In some ways, this acquisition trend is the issue having the greatest effect on the industry as a whole,” says Kathryn Sprankle, executive director of Association of A/E Business Leaders (AEBL), an organization based in San Francisco and dedicated to strengthening and supporting the consulting professions that serve the build environment.
In Sprankle’s view, the constant stream of AEC firm acquisitions is not only reshaping how the industry looks, but also how it functions. “With consolidation comes change of a nature and at a pace our industry isn’t accustomed to,” she says.
“It has changed the dynamic of ownership transition in the industry,” says Sprankle. “Instead of selling to the next generation of leaders inside the company, more firms are using mergers and acquisitions to effect ownership transition—or, finding outside investors for a capital boost.”
She says firm ownership as a professional goal, which has traditionally been a huge motivator in the AEC industry, has significantly waned in the past several years. Current owners should be aware of these shifts so they can determine years in advance which exit strategies they want to engineer for themselves— whether it’s working harder at fostering an internal ownership culture or preparing for a strategic external sale.
This principle worked both ways for John Cowdery. As president of San Francisco-based environmental consulting firm Jones & Stokes, Cowdery oversaw the purchase of six firms in six years. Combined with its own organic growth, the acquisitions helped Jones & Stokes grow from $22 million in net revenue to $75 million and from 4 branch offices to 23. In 2008, publicly traded high-end consulting company ICF International acquired Jones & Stokes for approximately $50 million. Cowdery now heads the firm’s environmental division.
The Jones & Stokes story is a case study in why many firm owners find that an external transition makes more financial sense. “I didn’t know either of the two founders, but I understand that when they exited the firm [in an internal transition], they didn’t feel that they got the value they wanted out of the firm. The second generation was very concerned about ending up in the same boat…about not getting the value through an internal sale that they would get from an external sale.”
Cowdery saw the same dynamic in the six firms Jones & Stokes acquired. “The owners in each of those firms found that the next in line weren’t willing to step up,’ he says. “The next generation of leaders wasn’t going to mortgage their homes to buy in or invest their own funds. They were looking to get it through sweat equity, which is not usually a very attractive way to go for the existing owners.”
Sprankle says it is a key responsibility of company leaders and directors to be aware of and well versed in all the ownership transition options available to the firm.
Cowdery agrees. “Every CEO should be thinking about ownership transition, whether it’s an [Employee Stock Ownership Plan], an internal transition or selling the firm. They should also be thinking about ways to increase the value of the firm, which may be through expansion by buying other firms.”