531: Business Strategy for Architectural Practices with Enoch Sears

Enoch Sears17min

Enoch Sears

00:00

What happens in an architectural practice is oftentimes, we ignore the things that are important, but they're not urgent. Hello, architect nation. And welcome back to this episode on business strategy for architectural practices. This is the Business of Architecture podcast where you'll discover tips, strategies and secrets for running an impactful, powerful architectural practice that lets you do your best work more often. And now a message from today's sponsor our cat. As design and architecture demand increases towards pre pandemic levels and beyond. How are you in your firm keeping up? Well, our cats here to help our cat.com offers several free tools to help architecture and design firms like yours, get work done faster. Use our cats powerful search engine to find the right products for your projects and download BIM, CAD and specifications right there on the same page without having to pay or register. Our cat.com also offers product videos, catalogs, green reports, product certification information, outline and short form specification generation and more are a cat.com is your one stop solution to help increase your productivity and get more projects done. That's our cat.com a rcat.com. So let's jump right into today's episode. What is business strategy? Let's start there. The Oxford Dictionary says that strategy is a plan or policy designed to achieve a major overall aim strategy, something that we talk a lot about in business however, really getting the nuances of strategy can be very difficult. In this episode, we're going to go over a basic understanding of what is strategy. So you can try to figure out yourself whether you're actually implementing strategy in your practice or not. Here's some of the problems that you may be facing. If you're not currently employing strategy in effective way in your business. Number one, you feel like you're constantly overwhelmed as a practice owner. Number two, your profits are anemic, your cash flow is up and down, you feel like you're working all the time, you're dealing with overwhelming stress. And your best work you feel is still inside of you. You're taking on lots of small projects, instead of larger projects, you feel like you may be the best kept secret, you're doing great work delivering excellent client results, but you just feel like you're not getting the referrals, you're not getting the momentum that you feel you should for all the hard work that you're doing, and certainly not getting the financial reward that you deserve. You may find that as difficult to hire, you may find that other practices seem to be growing while your practice remains stagnant. All of these indicate a lack of business strategy. Now for our for an architecture practice, let's talk about what is business strategy. But before we do that, let's jump into some other problems. Number one, problem number one is that you have no strategy, you don't understand what strategy is. No one ever told you about strategy, you were not taught about strategy. And so you simply don't have a strategy. Problem number two you may be facing is you don't actually know what strategy is you may have done like I did just now and looked it up on the internet. And you can see oh strategy is creating a plan with an overall aim. But you're not quite sure about how to apply that to an architectural practice. Even if even if you were, you're then not sure about how to actually implement that plan to go about achieving that aim. And problem number three is that even if you knew what strategy was, and even if you had a strategy, you feel like you don't have time to implement a strategy. As a matter of fact, earlier today, as I'm recording this episode, I got off a call with a firm owner. And his firm owner was telling me that for 15 years, he'd been running his practice just on autopilot, which is this is the default way that we run practices that we've run businesses, meaning that he was just he had got referrals. And so he would get the referral issue proposal, do the work. And as a practice owner, he was always putting out fires running from thing to thing. He explained it this way to me, he said it was like I had my blinders on, like those horses that are in the races. And they put those blinders on either side, your head, yeah, I just had my head down. I was doing the work. And then the pandemic hit. And suddenly, when the pandemic hit, all my work disappeared. And what I realized is that I became exposed, I realized that I had no strategy, I never set a time aside the time to focus on strategy. So let's talk about what is business strategy for an architectural practice. Principle number one, with strategy is that strategy is not just about the long term, it's about the short term. So you must think short term and you must think long term, you need to make any decisions right now to make sure that you're delivering good work to your clients. You're taking care of every pressing need that needs to happen right now in the moment. However, the most important part of strategy, and this is where most small firm owners never get to is focusing on the long term, making the decisions today taking the actions today that are going to matter a year from now. They're going to matter five years from now. So principle number one is think both long term and short term. Principle number two, is to be ruthless about making sure you set aside time for the important and not urgent The tasks. Let me illustrate with a story. About six years ago, my wife and I, we moved into our dream house here where we live in California. And it's a beautiful mid century modern house. It has glass surrounding this beautiful courtyard. There's an awesome pool in the backyard, fantastic landscaping. It's just a really beautiful home. People love coming here, they always compliment us on the home. However, right after we moved in, we discovered that the previous homeowner had not disclosed to us that there was a gigantic tree root, they had blocked up the main sewage line leading out of the house. And so here we are moving to the house a month later, we're getting repeated. I call him crap explosions. Like literally I remember one time we flushed the toilet, and the poop was so backed up that it literally sprayed all over the bathroom. I was a nightmare. So my wife and I, we brought in plumbers, we had people roto Rooter, we just couldn't figure out what the problem was until finally someone had a camera they brought the camera in. And they discovered that right underneath our kitchen was where a large root from our oak tree had passed underneath the sewage line, and was pressing up against it so hard. As a matter of fact, it was it was it pressing up against it, or was it I believe was pressing down from the top. And what had happened is it made a low spot in the pipe and it has also crushed the pipe. Use your imagination. So what ended up happening is, the guys came into our house, they busted up our beautiful Italian terrazzo it was it's a it's a limestone floor, natural limestone floor, and then they had to go in there. And they had to pull up the fix that they got the tree root out, they connected the plumbing pipe, etc. Now what ended up happening is because they ended up just jackhammering our beautiful floor, I was I didn't think about at the time and as an architect, shame on me, right? I should have thought about this. But I was like, we can't now we can't match the tile. So this happened six years ago. And there's no match for the towel. So we have this little spot, it's probably about a four, four by four by six spot that is like it's just concrete. It's like bare concrete. If you can imagine in our kitchen, I feel embarrassed just saying this. But it's true. And it's frustrating. Because, you know, I'm like, Oh, I looked into what are we going to do? Now we need to the options or we can retail the whole area. But you know, if you're going to retail the area, why not just retail? The whole house. And now if you're going to retail the whole house, why not just remodel the whole house, if you're going to remodel the whole house, why not add on an addition. So basically, because of all these ideas about difficulty finding the tile and then wanting to remodel we've I put this project off again and again and again. Now what's happened unfortunately is like my wife is resentful of this. And justifiably so, because I take on the responsibility of kind of figuring out the house projects and moving ahead with them. And she really wants to have we have this huge like kind of mat. It's it's a rug, basically that we put over this area of our kitchen. It's not the food prep area, because our kitchen is very large. But there's like this rug on the floor. They're just covering up this hole. So now it's causing marriage difficulty in my marriage, right? My wife is like, How much longer are we going to you keep on saying we're going to remodel our house? When is this going to happen? You know, date nights turn into arguments, I feel guilty, because now it's like, my wife's blaming me like it's my fault. And I already have 1,000,001 things to do. It's not fun. Now, this is an example of what happens when we don't focus on the not urgent but important things. So fixing the hole in our kitchen is not urgent, no one's going to die. But it is important. And what happens in an architectural practice is oftentimes we ignore the things that are important, but they're not urgent. So we just focus on all the things that are pressing. Stephen R. Covey talks about this in his book The Seven Habits of Highly Effective People. He says you can divide tasks up into by a kind of if you imagine a matrix of a two by two matrix, which equals four, four quadrants. And, and two variables. So the variable number one is, Is it urgent? Or is it not urgent? The second variable, is it important or is it not important? So when we put these we can find that there's tasks that are urgent and important, or there's tasks that are urgent and not important. There's tasks that are not urgent and important. And there's tasks that are not urgent and not important. What can sap your strategy and get in the way of your production get in the way of you having a solid strategy is focusing on the not urgent, not important things. This would be like I need to find my office, I need to clean my desk, right? These are not that important. And they're certainly not usually not urgent. Another area that we focus on a lot of times is the the urgent and not important category. So like there's something that's urgent, like there's this email, someone's need something right away, but it's really it's not that important. someone on my team could do that I could delegate that, right. So we end up filling up our time with these things that are urgent and not important or not urgent and not important.

Enoch Sears

09:49

If we don't focus on those, then we're focused on things that are urgent and important and certainly this is an important area to focus on. But the most strategic place to focus on is those things that are not urgent meaning they don't need to happen now. I'll but they're important. So what would this look like for an architectural practice? It would look like taking a really close look at the kind of projects that you're accepting, creating a go no go plan. So you can determine which projects you're going to say no to and what projects you're going to say yes to. It looks like identifying what's the target market that we're actually going after right now? What kind of what kind of clients would be the best fit for us? How can we attract more of those clients? What's a marketing plan that we can put into place to be able to start to build relationships with these kinds of clients? What do we want our team to look like three years from now? What roles do we need in the practice? And then what do we need to do today to start hiring, to be able to have that team two years from now, these are all things that would be considered not urgent, and yet, they're important. Principle number three, and strategy is to be patient. It's tempting to want to see change happen overnight, it's tempting to want to, you know, scale that mountain to achieve those ends when those kinds of projects tomorrow, this is where it you need to have patience, you need to have faith in your vision, understand that, hey, we made a plan. It's going to work out, there's going to be bumps along the way. We're going to have to readjust as we move. This is why it's important to have planning meetings every single month, where we review how are we doing on these targets? Where are we headed right now? Where are our finances happening? Because strategy is not just about setting that future target. This is where we want to get to, and then creating a plan, we can do that. But as Mike Tyson said, everyone has a plan until they get punched in the mouth, meaning your plan is going to look beautiful on paper. But when you actually put it out there into practice, it's going to fall to pieces, meaning that planning is necessary, but plans are worthless. Planning is necessary, but plans are worthless, your plan is going to have to be continually readjusted. So principle number three is Have patience. This is important terms of strategy is going to help you take a long term view of your practice, make sure you understand that the seeds you plant today, you're going to reap these in 2345 years. Having said this, don't confuse patients with ignorance and complacency and apathy. Oftentimes, in the architectural practice, we have a cancer people just hoping that things will get better, just saying, Well, you know, my strategy, so we're just going to keep on doing good work, and people hear about us, but not taking any time and effort to learn marketing, to learn sales to learn solid business principles to run a profitable practice. That is the death knell for your dreams and what you have available to you as an architect. Principle number four, is, as you're looking on a strategy to approach the marketplace, you need to figure out what your selling strategy. Now there's two primary ones that I'll mention here, there's more, but you could either go higher meaning price yourself as the premium on the market, one of my business mentors, once taught me something that was very, very, very profound. He said, Inuk, there's no advantage in being the second lead the second most expensive person in the market. Consider that there's no strategic advantage in being the second most expensive person on the market. Why is that? Because typically, clients are either going to go for the cheapest, because they're price focused, or they're gonna go for the most expensive because they're value focused. Now, there's gonna be a lot of people in the middle, obviously, right. However, the strategic advantage of being on the upper end is that now you're charging premium prices, meaning that you have more money available to do everything regarding your business, you have more money available to hire people, you have more money available to invest in good marketing, good advertising, good word of mouth, good business development, you have more money available to invest in innovation, you have more money available to pay yourself. So you actually feel motivated to continue to run and grow your practice. Those are the strategic advantages of placing yourself in what we call the premium fee area of the market. Now, there's another strategy there, you know, certainly being on the low end is a strategy, you can say, Look, we want to be the McDonald's, we want to be the Walmart of architecture firms. We want to be the sausage factory, we just want to be all about efficiency, and we're going to be the cheapest, we're going to be everyone out we're going to provide good service. Well, I don't recommend that we don't recommend that here as a business strategy. Because it's it's just it's very, very difficult. It's very difficult to win at that game. There's so many firms who try to play that game, that that that game is saturated. And it means that ultimately, you're going to have to be, you know, you're working on efficiency projects. It's going to be difficult because these projects might not be the most interesting projects. It's just a very, very difficult slog. I don't know many architects who actually want to go that route. This is why when we look at strategy, principle number four is determine your positioning in the market. Are you going to be the premium luxury brand? Or are you going to be the sausage factory? Okay, you know, that sounds a bit bit derogatory. Well, I get it. Look, it is a solid business strategy to be the Walmart of architecture. I don't recommend it because we see too many architects who try to compete on price. So Don't join the race to the bottom be the one firm who decides to charge your value, set your fees high. And then learn marketing, learn selling, do everything about learning, being a great, excellent business person, so you can then support that strategic vision. So, in summary, we've talked about some of the problems that small architectural practices face when it comes to business strategy. Number one, you have no business strategy number two, you don't know what business strategy is. And number three, you even if you knew what business strategy is, perhaps you do, you have no time to implement it. Now, when we look at the possibility here, the possibility is you have a business strategy. Number two, you know what business strategy is because you've developed one and number three, you're setting aside the right amount of time to actually implement this strategy. Hold your team accountable, so that you move powerfully towards that strategy. The principles that we discussed today in summary are the following. Number one, as you develop a strategic plan for your architectural practice, make sure that you think long term, as well as short term, both these things need to happen concurrently. Number two, be ruthless about things that are in the important and not urgent category. If you're just focused on doing the things that are fires immediately, you'll always be on that hamster wheel, and never find the business growth, the freedom that you need to have and that you probably want to have as a business owner. Number three, have patients understand that this is a marathon, not a sprint, and that the people who will win are the people who just do the actions day by day by day by day. Number four, choose your positioning strategy, preferably go high in the market, choose to be the premium brand, learn how to sell and market and support that premium brand. So you have agency and options. And that's a wrap. Oh yeah, one more thing. If you haven't already, head on over to iTunes and leave a review. We'd love to read your name out here on the show. And now a message from today's sponsor our cat. As design and architecture demand increases towards pre pandemic levels and beyond. How are you in your firm keeping up? Well, our cats here to help our cat.com offers several free tools to help architecture and design firms like yours, get work done faster. Use our cats powerful search engine to find the right products for your projects and download BIM, CAD and specifications right there on the same page without having to pay or register. Our cat.com also offers product videos, catalogs, green reports, product certification information, outline and short form specification generation and more. Our cat.com is your one stop solution to help increase your productivity and get more projects done. That's our cat.com a rcat.com. The views expressed on the show by my guests do not represent those of the hosts and I make no representation promise guarantee pledge warranty contract, bond or commitment except to help you conquer the world. QRP DM

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