The Economist has some really interesting articles on doing business. The latest are on the 100th anniversary of IBM and another which measures the success of multinational business vs. philanthropy in changing society for the better. IBM came out the winner in the latter one. Not, however, because it is a multinational corporation but because of the way it does business. IBM treats its employees well which directly shapes its influence on the larger, now global, community. Moreover, while many think of IBM as a “tech” company and its stock is often listed as such, IBM actually categorizes itself as a service company. There are five major strategies that have ensured IBM’s ability to withstand the vicissitudes of a dynamic business sector, three of which directly apply to architecture firms. First, IBM puts its customers first and foremost. They do this by using a significant number of their employees to foster and maintain client relationships. That makes it more difficult for other companies to poach their customers. Why? Because those other companies don’t think developing and keeping clients happy is a good use of their resources, i.e. employees. IBM knows better. Clients trust them precisely because of their long relationship. So when clients need something, they turn to IBM. That means a steady client-base of loyal customers who in turn recommend IBM to their clients and friends.
The applicability to architecture is obvious. The other day, an acquaintance revealed he had been laid off. For this particular L.A. firm, it is something on the order of 10 in the last two years. Why? First the deplorable state of their client relations. Specifically, they never get any repeat business. And they can’t seem to get any new contracts either. Both factors can be attributed to their employees’ states of mind. Demoralized employees do not interact well with clients. That leads to IBM’s next strategy: a very open and primarily non-hierarchical corporate environment. Happy employees are productive ones. So IBM encourages openness, not the least of which is in informal brainstorming sessions that promote creativity on everything from new services to how to do business. In fact, the sharing extends to other corporations. Even family members are invited to participate. This in turn promotes employees’ investment in the company. Again, there obvious applications to architecture firms. The more you encourage open-ness and creativity, not just in design but all areas of business, the more comfortable your employees are. They feel trusted and are more likely to work harder to help the firm succeed. They are more invested because its success ensures their own. And as for the corporate sharing, this can be done in the form of co-operatives. Especially for smaller or just-starting-out firms, sharing employees with different expertise seems sensible and can help minimize layoffs during recessions. This is already done, but on an informal basis and usually with friends. What we’re discussing is a formal co-op.
Next is the “globally integrated company.” In short, certain key operations are centralized like accounting and IT structure. However, “virtual” teams work together from different locations, based on their expertise. New innovations are always shared throughout the corporation, which is succeeded by training in those innovations. There is the right balance of creative independence combined with collectivity. In architecture, cross-location teams can tap people’s talents wherever they are located. That cohesion engenders an investment in the entire firm, rather just one’s own specific office. Moreover, it can be combined with an open leadership, another approach successfully deployed by several architecture firms. As to the accounting, one L.A. firm actually allows all its employees access to its payroll website. No matter what office one is in (and they are an international firm), anyone can view how much time anyone else spends on different projects. The transparency keeps everyone honest while minimizing the sense of secrecy and resultant stress. Managers also sign off on timesheets electronically, thereby streamlining the process. Here’s some additional suggestions on how to do business better from the inside out. One successful L.A. firm pays all its employees a good wage. Not just a living one, but a good one. Fostering good will and good work from employees comes from paying them what they are worth and not exploiting them.
Two, encourage volunteer work. Not the kind that simply aggrandizes the firm (which is what a lot of architecture firms do and then pass it off as “volunteering”), but in any area that interests individual employees and is of genuine social benefit. And pay your employees for it. Many successful architecture firms do this, as does IBM—in fact, IBM believes this is an important component to its status as a good global citizen. On the other hand, if employees don’t want to, they don’t have to. There’s no judgment. Benefits is another key signifier of positively valuing employees. Another L.A. firm actually pays their employees’ entire insurance premium. No co-pay from the paycheck, only when one visits the doctor. So the gross and net pay are much closer. It’s unheard of in this day. But it makes re-doing a Revit drawing for the fifth time a lot more palatable. Then there’s the issue of overtime. Most working in the architecture industry don’t get any. They don’t even get “comp” time. But one way to keep them happier about doing overtime? Feed them. There is nothing worse than staying until ten three nights in a row knowing that you have to buy or bring your own dinner. Or bothering management to do it. The struggling firm made it’s employees beg and plead for dinner and then grumbled about it. Here’s a different approach: “Well, we’re thinking of this or that kind of food—what do you think?” The response? “Sure, I’ll work overtime and hey, can I have a steak?” To which they replied, “Yes.” That, along with the really nice, six-choice coffee/hot chocolate maker, makes employees feel appreciated. Which translates into motivation and high productivity. Now, I can hear the protestations now. “But we can’t afford that.” And here’s the response. Perhaps not all these things can be implemented immediately or to the utmost extent. But then again, given the severity of this economic depression, firms can’t afford doing business the old way, either. Building successful firms depends on relationships with clients. That relies on happy employees. Disgruntled, verbally abused, overworked, underpaid, tired, and underfed employees are not in the proper mental and emotional mind-frame to relate successfully to clients.