Yesterday, we published The WA100, Building Design’s ranking of the world’s largest architecture firms’ physical and financial growth for 2013. The ranking is – although not by any fault of its own – inherently misleading.
Why? Because we’re wired to read a ranking subjectively, looking to #1 as the best in some capacity, and then to compare other entries, with higher or lower rankings, as somehow better/worse than their neighbors.
But this list is objectively ordered by size (a.k.a the number of employees). Not by the amount of money earned. Not by the number of projects completed. Not by the prestige of those projects, or even the quality of the work.
So what does it mean to be in the Top 5 of this ranking? Qualitatively, not very much.
Which is not to say that the list isn’t worth a longer look…
Check out the Top 5 Most Admired Firms of 2012 (and other ways we should be evaluating the world’s largest firms), after the break…
To begin, I’d like to show a list that also appeared in Building Design’s compendium (a small one quite separate from the rankings): The Most Admired Firms of 2012
As you can see, 3/5 firms just weren’t large enough to make the list, despite the extraordinary quality of the work they’ve accomplished this year. Only Gensler and, most notably, Foster & Partners – who are currently working on Masterplans in France and China as well as a plethora of work in New York City (including the controversial renovation of the New York Public Library) - were able to marry both commercial and professional success.
Of course, a Top 100 list of the “Most Admired” Architecture firms would be incredibly subjective, and thus difficult to rank. And Building Design clearly states upfront that their ranking is only a resource outlining data on the world’s 100 largest firms. Nothing more. However, if this Ranking can’t be a measure of professional success, then surely it should at least be an accurate reflection of commercial success?
With that in mind, let’s take a look at the Top 5 firms – as they appear in the WA 100 ranking:
- Aecom (USA. 1,370 architects employed. Over $400m Fee Income)
- Gensler (USA. 1,346. Over $400m)
- IBI Group (Canada. 1,129. $160-169m)
- Nikken Sekkei (Japan. 1,109. Over $400m)
- Aedas (China/UK. 1, 078. $200-209m)
Let’s start with the obvious: Aecom (#1), Gensler (#2), and Nikken Sekkei (#4) are making lots and lots of money. Far more than any other firm in the world. However, what does that say about IBI Group (#3) and Aedas (#5)? Although they’re among the largest firms in the world, they’re also making significantly less money than their almost equally large competitors. Despite the positive sheen of their high rankings, their positions actually reflect something rather negative: inefficiency.
So let’s arrange the Top 5 in a different way – the Top 5 Income Earners:
- Aecom (Ranked #1. USA. 1,370 architects employed. Over $400m Fee Income)
- Gensler (#2. USA. 1,346. Over $400m)
- Nikken Sekkei (#4. Japan. 1,109. Over $400m)
- Samoo Architects & Engineers (#14. South Korea. 712. $250-259m)
- HDR Architecture (#12. USA. 640. $280-289m)
Suddenly, we have a different sense of the most commercially successful firms of 2012. Gone are IBI Group (#3) and Aedas (#5), and in are the comparatively lowly ranked Samoo Architects & Engineers (#14) and HDR Architecture (#17).
And yet – the list still doesn’t ring true. Surely, the #1 spot should not go to the largest company making the most money, but rather the company best utilizing its resources? The company making the most money per employee? The Most Efficient Among the Top 5 Money Makers? If we look at it that way, the list restructures:
- HDR Architecture (Ranked #12. USA. 640 architects employed. $280-289m Fee Income) - About $445,313 earned per employee
- Nikken Sekkei (#4. Japan. 1,109. Over $400m) - $360, 685
- Samoo Architects & Engineers (#14. South Korea. 712. $250-259m) - $358,146
- Gensler (#2. USA. 1,346. Over $400m) - $297,177
- Aecom (#1. USA. 1,370. Over $400m) - $291,971
This Top 5 gives us a sense of the major players in the architectural world, but with the subjective ranking of their efficiency (and I’ll admit, it’s not rigorously accurate – especially since employees only counts architects, not total staff, and since I’ve used income here rather than revenue). Per employee, HDR Architecture (#12) made 150% more than Aecom, the #1 ranking firm.
But we can take this even one step further. To: The Top 5 Most Efficient Firms Overall.
- GHD (Ranked #65. Australia. 160 architects employed. $140-149m Fee Income) — About $906,250 earned per employee
- RTKL Associates (#43. USA. 269. $200-209m) - $762,082
- PageSoutherlandPage (#83. USA. 125. $90-99m) - $760,000
- Mitsubishi Jisho Sekkei (#34. Japan. 320. $210-219m) - $671,875
- HKS (#37. USA. 300. $150-159m) - $516,667
Not one of these firms, due to their smaller size, are even close to the top 5 in the WA 100 Ranking. However, GHD (#65), despite its small size, made an extraordinary amount of money this year – about 3 times more, per employee, than Aecom (#1).
These are the firms that most interest me, that I feel deserve a second look (and far more attention that their lowly rankings will probably afford them).
In our follow-up article, we will look at how these 5 firms, and the top money makers, did it – and take a closer look at where in the world they’re making their money. Stay tuned!
UPDATE: Follow-up article here.