Sunday, January 21, 2007

A top-down view of the architecture industry

This article centers on a survey, but the industry leaders in architecture are all people who share a distaste for numbers. Like many creative people, they'd rather live unfettered by profit ratios, contract complications, and market fluctuations. A building, after all, is really a large, functional, interactive sculpture, and most prefer to think of it that way.

So, needless to say, there is a kindred feeling between writers who are paid per word and sculptors who must contract with the government to get their art approved. This was an interesting article to write, and I enjoyed speaking with most of the presidents of architectual firms--these were men and women who, having reached the pinnacle of their careers, had finally come into their own as creative people, as leaders who would establish the vision and carry the torch for an entire team of sculptors. They knew the industry, but more importantly, they had finally been allowed to come to know themselves.

From the 11/7/06 article:

Profits, salaries and work backlogs were up at Boston-area architectural firms in 2005 amid a shortage of ar-
chitects, rising construction costs and a cutback in new building projects by state and local government, according to DiCicco Gulman and Co. LLP’s annual survey of 22 Boston-area architectural firms.

David Wexler and David Sullivan, architecture and engineering consultants at DiCicco who began the annual survey in 2001, said the picture their data paints this year is a positive one: Profits are up and nonresidential construction promises to stay strong through 2007.

One DiCicco client, Jim Batchelor, president and CEO of Arrowstreet, said technology has been a major force behind increased profitability. Despite an initial learning curve, he said, programs such as AutoCAD and Revit have enabled architects to calculate construction costs more carefully, enabling teams of engineers and contractors to build realistic budgets around their designs.

The largest concern facing architectural firms today, said Wexler, is the dearth of experienced project managers, who ultimately drive this planning process. There is a direct correlation between an experienced manager and a high profit ratio, he said, but “everyone’s looking for the same good people.”

Peter Kuttner, president of Cambridge Seven Associates Inc., agrees. “That’s the lament at all architectural cocktail parties right now,” he said. Lenord Cubellis, founder and CEO of Cubellis Associates Inc., maintains inhouse training programs to groom new architectural grads in the firm’s specialties are the answer.

“It’s about having that experience be managed,” he said. “Otherwise, the experiences that young architects and engineers get are too varied. Our clients want more and more expertise in our market — not all markets.”

Industry leaders say that as small public contracts have given way to large-scale institutional and hospitality building as the most profitable jobs, firms with governmental specialties have had to reassess their niches.

“When we look at the industry, we’re torn between our core competency and where we see the industry going,” said Kuttner.

Batchelor said that while municipal line, their high visibility help cement a firm’s reputation. Most firms said they preferred to maintain a diverse portfolio of private and public work as cushion to soften the inevitable market fluctuations.

Cambridge Seven plans to expand to meet the demands of the new big-building trend, despite the tight labor market. The DiCicco Gulman and Co. survey shows that architectural firms are working harder than ever to retain experienced staff even as salaries and bonuses rise. Wexler said the survey showed “non-monetary” benefits play an ever-increasing more important role in retention.

“A challenging environment where people are treated well and respected, where there are opportunities for growth and advancement — those things have people staying on to help to build the firm, even in the down times,” Wexler said. “The amount of autonomy a person has, the more chance they have to design, is very important to them.”

Despite a climate of national expansion, leaders in the field who got their start here several decades ago still use words like "Mecca” and “think tank” to describe Boston. Kuttner pointed out that the Boston chapter of the American Institute of Architects remains the largest in the country.

“New York still has those firms that do the megamillion-dollar, 30-building development in Dubai,” he said. “But I think we’ve cornered the intelligent, nicely honed building that people come to Boston architects for.”


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