Oculus - Winter 2010/2011 - (Page 17)
James P. Cramer, Hon. AIA, Hon. IIDA, is founding editor of DesignIntelligence and co-chair of the Design Futures Council. He is chairman of the Greenway Group, a foresight management consultancy. Jane Gaboury is the editor and associate publisher of DesignIntelligence. She is Greenway Group’s principal for publishing and editorial as well as a senior consultant.
When Small Firms Venture Abroad 26 Division of Labor 28 Infrastructure Abroad 30 Out of Africa 34 Thinking Globally, Acting Humbly 36
OCULUS WINTER 10/11
How Cities Learn from Each Other 18 Why Isn’t Architecture a U.S. Export Priority? 22 Outward Bound 24
By James P. Cramer, Hon. AIA, Hon. IIDA, and Jane Gaboury
Taking a Global Track
H.G. ESCH, COURTESY KOHN PEDERSEN FOX
ncertainty continues to hang over U.S. markets regardless of economists’ declaration that the great recession ended in mid-2009. Many architects, however, aren’t simply ducking their heads and waiting for things to change. Firms large and small are basing
growth plans on an international strategy that banks on the encouraging investments being made in South America, Africa, Asia, India, pockets of Europe, and other emerging outliers. Research on changing marketplaces and global practices has been conducted by DesignIntelligence and Greenway Group for more than a decade. What we foresee is that firms taking a global tack in business development – by actively seeking to export professional services – will be moving into the front seats of our industry. The Multinational Design Firm Fee survey published in the September/October 2010 issue of DesignIntelligence identified the top 30 U.S.-based firms exporting architecture services. Of these, 14 have significant offices in New York City and account for a majority of non-U.S. billings. Projections made in mid-2010 for year-end billings found that total non-U.S. fees generated by the top 30 in 2010 were expected to be more than $1.5 billion, with $1.1 billion of that coming from firms with noteworthy New York City practices. For instance, Skidmore, Owings & Merrill anticipated billing $173 million for work outside the U.S. and $118 million for work within. Kohn Pedersen Fox projected $55 million in foreign fees in addition to $75 million in U.S. fees. And Cannon Design projected $45 million in foreign fees on top of $160 million from U.S. work. While firms of any size can experience success through a global vision, international practice itself won’t ensure success. Seven trends we’ve identified may offer some strategic assistance: 1. Global professionals will experience persistent downward fee pressure. New commissions and their resultant contracts often involve newer competitive business models, new structures in service delivery, new productivity benchmarks, free market economy philosophies, and prevailing currency valuations. 2. You can become irrelevant overnight. The power of the Internet is awesome, and some of it is disruptive to professional services. It’s now used in designer selection processes, for example. The electronic frontier will trip up firms slow to change. 3. You will be expected to achieve and sustain world-class service levels. Because global practices must be passionate about achieving superior results, it’s more necessary than ever to weed out under-performers and set free the sacred cows. Take care of your high performers. 4. Entrepreneurial zeal will be rewarded. There is a definite chain of cause and effect that extends from design entrepreneurship to bottom-line success. Nothing is more inspirational than the energy of the entrepreneur. 5. China and Asia are powerful forces driving the global economy. China has traditionally borrowed many of its ideas from the West, but this is changing. Chinese architects have a youthful enthusiasm, and U.S. architects can learn much from their vigor and lack of cynicism. 6. Global marketing success is increasingly dependent on relationships, but it’s difficult to become a trusted advisor in some countries due to anti-American views. Exporters of professional services must reevaluate their relationships with clients and reset their sails as necessary. 7. Seismic shifts will come out of nowhere. Changes in the A/E/C economy have accelerated during the recession, so resilient strategy is more important than ever. Investment in innovation (including cheaper services for frugal clients) is essential. Borderless capital and populations in needy urban environments are wild cards that could trigger enormous shifts. Constructing a successful global practice is not easy, but as you’ll see throughout this issue, it’s being done well and in exciting ways. Not only can an international mindset portend business success, it can also help make a positive impact on the global community.
Table of Contents for the Digital Edition of Oculus - Winter 2010/2011
Oculus - Winter 2010/2011
A Word from the Editor
Center for Architecture
One Block Over
So Says...Craig Dykers, AIA, LEED AP
How Cities Learn from Each Other
Why Isn’t Architecture a U.S. Export Priority?
When Small Firms Venture Abroad
Division of Labor
Out of Africa
Thinking Globally, Acting Humbly
Index to Advertisers
Oculus - Winter 2010/2011
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