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November 16, 2000

NW architects prosper…and the community benefits

  • Heightened public awareness of good design and its value elevates the design community
    The Coxe Group

    One year ago the Northwest design community enjoyed unparalleled vitality, with increasing visibility and appreciation, a strong backlog, and an economy that squeezed its own decline into the future.

    In the ensuing year, not a lot is changed. The downturn is still ahead, public appreciation of the value of good design continues to grow, and noteworthy projects continue to sprout.

    The recently completed Experience Music Project by Frank Gehry with LMN Architects continues to earn strong credits in the local, national, and international media.

    Noteworthy homes have received national recognition, and the community awaits the arrival of Seattle’s Central Library (Rem Koolhaas with LMN Architects) and new football stadium and exhibition hall (HOK and LMN Architects), Tacoma’s Glass Museum (Arthur Erickson with Thomas Cook Reed Reinvald), Art Museum (Antoine Predock), and privately endowed and still evolving automobile museum (Thompson/Vaivoda).

    As was the case a year ago, the emphasis on design has not lowered clients’ and customers’ expectations for functionality, service, and price/value, and recent surveys confirm general satisfaction with the response of the design community.

    Geographic expansion, in-cluding international expansion, is still a common strategy, but the last year has brought additional and at times sobering reality about the challenges of practicing internationally.

    Perhaps the prime operational issue continues to be the staffing shortage, with compensation continuing to escalate. Even with graduates of programs with professional degrees receiving starting salaries that average $33,000, the shortage remains. (Interestingly, during the past 30 years, when adjusted for inflation, starting salaries for architectural graduates remain un-changed.)

    Most firms have experienced incremental growth during the past year, and the rate of growth on average has slowed, at least in part due to shortages of people in the marketplace.

    Perhaps even more so than a year ago, firms are struggling with issues of quality control and the need to train and develop personnel. This is a double hit, with firms having both an absolute shortage of staff and a deficiency in staff with 8 to 10 years of experience, those best suited to train the more junior colleagues. When coupled with clients’ expectations for fast delivery, there is little opportunity to devote to training.

    This inadequacy of training may well lead to serious problems in the ongoing leadership and management transition in which many firms will be — or will want to be — immersed in the next decade.

    Leaders of design firms continue to become more aware of and committed to the notion of carefully selecting the clients they will serve and the projects they will undertake. With strong backlogs and staff shortages, firms are taking to heart the concept that they can best serve the clients whose values most parallel their own.

    Most firms give more talk than action to advancing women to leadership and senior management roles. This is less a knock on the profession and individual practitioners and more a statement of reality. Able and experienced women architects are simply in short supply.

    The positive aspect, however, is that there are young women practitioners with the intelligence, skill, and drive to lead practices, and these same people are getting the experience that will advance them to very significant roles in the current practices. And those who believe that their firm limits their opportunities may well become part of the growing number of new—and prospering—firms in the Northwest.

    On the subject of new firms, several that are less than two years old have won significant commissions, some in competition with the firms they left. Strong econ-omies often motivate the entrepreneurial to strike out on their own.

    Note here that weak economies also spawn new firms, with the significant difference that some who start firms in a weak economy do so out of necessity—they lost their jobs in other practices—and many who start firms in such circumstances will fold their firms and rejoin others when the economy allows them to do so.

    The appeal of the Northwest around the rest of the country continues, reinforced by the media, by word of mouth, and perhaps—but not likely—by the realization that it rains on average a few inches less a year in Seattle than New York.

    When linked with the phenomenon that many clients in the Northwest encourage out-of-state and out-of-country designers to undertake work in the region, the Northwest can expect to continue to see the designs of some of its buildings—particularly some of its most significant ones—authored by distant firms.

    In some cases, this could lead to permanent affiliations (that is, mergers and acquisitions) with local firms. Merger and acquisition activity, which typically and historically has happened in waves, is happening again.

    There are differences, the primary one being that firms are looking more carefully at key factors that can contribute to success, including “softer” things like compatibility of values and “harder” things like financial realities. The strategies that drive much of this interest are based on increasing visibility and presence in specific market sectors, defined by client type, project type, and/or geography.

    The profitability of design, which has risen incrementally in the past year and is at a new high, adds to the appeal from buyers’ viewpoints. From sellers’ perspective, the increased profitability and confidence in their current and continuing success leads to higher prices. Higher prices, in turn, require strong, steady focus by leaders in both firms of a merger or acquisition, and the real beneficiary may be the clients and communities they serve.

    The signs of a weakening economy, notably in the high technology sectors in the stock markets, warrant attention, as do numerous international situations tied to economic, social, and political unrest. Add to these the unknowns that a new president will bring to the United States.

    The result suggests the wisdom of capitalizing on current marketplace and internal strengths to align one’s practice with the “right” clients and projects, to maintain an aggressive recruitment posture, to invest in the firm’s technology, and to increase attention to training and development throughout the firm.

    All in all, the Northwest remains a good place to practice, with the large number of good firms spurring all firms to reach loftier heights in quality of product and service, thereby continuing to satisfy an increasingly appreciative clientele and communities.

    Hugh Hochberg is a Seattle-based partner in The Coxe Group Inc., management and marketing consultants to the design and construction professions.

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