Getting Back on Your Horse: The Evolving Professional Practice

PETER KUTTNER FAIA BUILD PITTSBURGH 2015 23 APRIL 2015

KEYNOTE


Getting Back on Your Horse: The Evolving Professional Practice

Presented by:

Peter Kuttner, FAIA, Cambridge Seven Associates

Sponsored by:

Wells Fargo Insurance Services USA, Inc.


2008 – Architects are Thrown …


Simple Structure for this Conversation

Cambridge Seven’s Story

Depressing Things

Optimistic Things


Who We Are

Cambridge Seven Associates


Project We Didn’t Get

Transit


What We Do…a Diverse Practice

Aquariums and Museums

Transit

Education and Colleges

Commercial


Growing into New Markets

Aquariums and Museums

Transit

Education and Colleges

Commercial


First Project and Exposure

New England Aquarium


Focus on the Experience

New England Aquarium

Ear to the Ground and

Chutzpah


US Pavilion at EXPO ‘67

Interpreting American Culture


US Pavilion at EXPO ‘67

Circulation as Experience

Working Other Connections


Transportation Guidelines


MBTA

Transportation Facilities

Reference from the AIA/BSA


Williams College Alumni Center

Academic Architecture


Williams College Alumni Center

Interiors in Academic Settings

Focus on Repeat

Business


Charles Square Mixed-Use

Hospitality as a New Market


Charles Square Mixed-Use

Hospitality and Mixed-Use

Private Client Own Backyard

Speculate


Effort Required to Manage Our Markets

Transit

Museum

Academic

Hospitality New Growth


Aquarium in Portugal

KAFD Geo-Sci Building Type

Oceanaria de Lisboa


Academic Laboratory in Florida

Cross-Field Expertise University of Miami RSMAS


Hotel Mixed-Use in Boston

Long-term Client 4 Seasons Hotel and Residences, Boston


Science Center in Saudi Arabia

KAFD Geo-Sci

Content Expertise Geo-Science Center in Riyadh, SA


Children’s Museum in China

User/Audience Understanding La Nui Children’s Museum, Hohhot, China


Economic Cycles


The Economic Cycle in the last 55 years …

8 Recessions since 1960


Good First Moves

Start firm at the beginning of 9-year expansion • Lots of time to work out the kinks • If you can’t get it right in 9 years then …


Bad Personal Moves – Stagflation!

Graduate from Architecture School in Oil Crisis • Quadrupling of oil prices by OPEC • High government spending on Vietnam War • 1973 oil crisis • 1973–1974 stock market crash • Rising unemployment along with rising inflation


The last three decades …

1 2 3 4 5


National Bureau of Economic Research

Brought to us by NBER

C7A Studio


1980 Recession – Begin the Double-Dip

• Short recession in 1980 • Followed by short period of growth • Followed by deep recession. • Unemployment stayed high between recessions • Recession began as Fed raised interest rates to fight inflation of the 1970’s • Known as the "double-dip" or "W-shaped”


Early 1980’s Recession – Cater Inflation

• Iranian Revolution increased price of oil causing 1979 energy crisis. • New regime exported oil at inconsistent intervals and lower volume • US tight monetary policy to control inflation led to another recession


Early 1990’s Recession – Greed is Good

• After peacetime expansion of the 1980s the Federal Reserve responded to growing inflation by raising interest rates from 1986 to 1989 • Subsequent 1990 oil price shock • Massive debt accumulation of the 1980s • Growing consumer pessimism with the weakened economy • JUNK BONDS

Gordon Gecko


Early 1990’s Recession – Greed is Good

• After peacetime expansion of the 1980s the Federal Reserve responded to growing inflation by raising interest rates from 1986 to 1989 • Subsequent 1990 oil price shock • Massive debt accumulation of the 1980s • Growing consumer pessimism with the weakened economy • JUNK BONDS

MA Arch 7,000 ➔ 4,000 Lost Generation of Archs


Learning from the 90’s

• 1990s were the longest period of growth in American history • Greed slowly returned along with deregulation and a new technology revolution


Early 2000’s Recession – the Dot-Com

• Collapse of the speculative dot-com bubble • Fall in business outlays and investments • The September 11th attacks on the World Trade Center


2007 - 2009 - Great Recession

• Subprime mortgage crisis • Collapse of the United States housing bubble • Oil and food prices soared • Failure or collapse of many of the United States' largest financial institutions • Crisis in the automobile industry • $700 billion bank bailout and $787 billion fiscal stimulus package


2007 - 2009 - Great Recession

• Slow Recovery and Political Gridlock • Fascination with “Shovel Ready” • Another Generation at Risk • Aging Boomer Architects


Forbes Worst Master’s Degrees


No. 9 Worst Master’s Degree for Jobs - Architecture


Tied with HR for No. 9


… and with Political Science


$94,100 over $77,800


No. 7 Most Overrated Jobs


Architect Compensation Growth


Forbes Most Prestigious Professions


Unemployment was the Real Issue


Architects – the Canary in the Coal Mine


What Did We Learn?


What Did We Discover

Questions to Ask Ourselves

After the last recovery we had become spoiled again

Marketing happened only when projects were complete

We were out of less lucrative market … public work

We had no work in Boston … infatuated with distant work

… we needed to identify what to be done and who to do it


What Kind of Firm Do We Want to Be?


What kind of firm are we?

Is there a best size?

Do we want to grow?

How do we handle our markets?

Who will deal with these markets?

What do we do with this crop of projects?


Defining a Vision

1+1=3 Josef Albers (1888-1976)

Bauhaus ……..…. 1925 -1933 Black Mountain … 1934 -1949 Yale University …. 1950 -1958


What Kind of Firm are We?


Core Business Values

1. Breakthrough Ideas 2. Product Leadership 3. Client Intimacy 4.  Love of Community 5. Organizing the Complex 6. Elegant Efficiency


What Kind of Firm are We?


Core Business Values

1. Breakthrough Ideas Einstein Gehry 2. Product Leadership Niche Specialist, Green, 3. Client Intimacy Market Partner Gensler 4.  Love of Community Gatekeeper Chamber, Planning Bd 5. Organizing the Complex Orchestrators NBBJ, Proj Mgr 6. Elegant Efficiency Builders Repeat Prototypes


Is There a Best Size?


Levels 1 2 3 4 5 6 7 8 9

1 2 4 8 16 32 64 128 256 No. of Staff

C7A at 7th level and 7 staff levels

PIC

Sr Assoc

Assoc/PM

PA

Arch

Design

Support


Do We Want to Grow?


Advantages •  Revenue •  Opportunities •  Variety •  Exposure •  Fame •  Impact

Disadvantages •  High Cost •  Quality Control •  Need for People •  Management Focus


Do We Want to Grow?


Advantages •  Revenue •  Opportunities •  Variety •  Exposure •  Fame •  Impact

Disadvantages •  High Cost •  Quality Control •  Need for People •  Management Focus

Growth other than SIZE •  Quality •  Services Offered •  Variety •  Better Clients •  Better Projects


How Do We Manage Our Markets?

Transit

Museum

Academic

Hospitality New Growth



Adding New Services in Core Markets

Transit

Museum

Academic

Hospitality Exhibit Design



Exhibits as Immersive Educational Interiors

Maymont Nature Center

Basketball Hall of Fame

New England Sports Museum

USS Nautilus Submarine Museum


Where is the market?

How to uncover work?

Is there a network?

Who are the clients?

Where to advertise?

What to send them?

What conferences?

What publicity?

What award programs?

Can we write articles?

Who should do this?

Transit Museum Academic Hospitality Exhibits

How do We Deal With Our Markets?


Questions


Academic Transit

Hotel

Museum

Target for National Projects


NEA NAIB

Tennessee Seward

Lisbon Genoa Kuwait

Osaka

WOW

Target for International Projects

Seoul Hohhot

Riyadh

Calgary Montreal

Taiwan

Calgary


Reacting to the Great Recession


Staff and Salary

Reacting to Recession

Balancing immediate:

• Reductions in Force … senior, junior, last in …

• Salary Reductions … across the board, senior only …


Subletting Studio Space



Space Efficiency – Renovating for Density



Renovation– Working in the Hallways






Renovation – More Casual Interaction






Efficiencies - Outsourcing


• Public Relations

• Library and Vendor

• Human Resources

… Partners take new responsibilities

• CAD Support

• Print Service Plan

• Network Maintenance


Efficiencies – Using US Global Services


US Department of Commerce

• Country Offices

• Boston Office Services

• Online Information

AIA Trade Mission to Saudi Arabia and Qatar


Programs to retain staff & young people in the profession

• Within the firm

• Through the AIA

Commitment to the Next Generation



• Cope with missing generation

• Important to millennials

• Identify future leadership


Many Aspects of Mentoring


Set Ownership transition in place in mid-90’s:

• Maximum ownership of 15%

• Fixed amount of corporate stock

• Agreed upon formula for valuation

• Bonus new shareholders for purchase

• Buyout starts at 60 and ends at 69


Ownership Transition


Trends in Architecture’s Future


Non-Traditional Practices


Computing and New Technologies


Reaching out to the Public


Women and Minorities in the Profession


Energy Conservation and Standards


Kermit Baker Outlook


Kermit Baker - Growth


Kermit Baker – Aging Architects


Kermit Baker – Young Firms


Kermit Baker - Firm Concerns


Mergers and Acquisitions

A Changing Profession


The Vanishing Mid-Sized Firm



Balancing


Boutiques and Bohemouths


AIA Foresight



Firm Strategies – More Sophisticated Clients


Firm Strategies – New Technologies + Old Fees


Firm Strategies – Flexible Collaborative Workspace


Firm Strategies – Virtual Firm


Design Intelligence Transforming Trends

Collaboration


Grapple With Our Own Inconsistencies


This concludes The American Institute of Architects Continuing Education Systems Course

Peter Kuttner Cambridge Seven Associates, Inc. 1050 Massachusetts Avenue Cambridge, MA 02138 617.492.7000 [email protected] www.c7a.com

Getting Back on Your Horse: The Evolving Professional Practice

Education

Transcript of Getting Back on Your Horse: The Evolving Professional Practice