Understanding Client Relationships

July 15, 2000 · by Robin Ellerthorpe

This article discusses client-architect relationships from the perspective of a long view and provides opportunities for architects to develop firm strategies in this area.

If you asked an architectural firm principal how their firm is driven, he or she would espouse the benefits of being client relationship driven. Current relationship metaphors include project teaming and partnering that often results in closer personal ties between clients, firm principals, consultants and contractors. These relationships often benefit clients and architects by resulting in additional work for the firm during periods of expansion. However, over time they wither when design or project opportunities diminish. This article discusses client-architect relationships from the perspective of a long view and provides opportunities for architects to develop firm strategies in this area.

Outsourced Design Services
During my tenure at Tennessee Valley Authority, a multidiscipline team of just under 200 professionals and support staff met the Agency’s needs for Class “B” projects and plant modifications designing support structures for fossil, hydro and nuclear facilities. We worked on some of the most complex small projects in the industry ranging from switchgear enclosures to quarter-mile long coal conveyors to nuclear containment buildings. The breadth of materials and their uses were immense and the captive knowledge within the Architectural Design Branch where I worked was inspiring. When it came time to disassemble the team and outsource design services, the task of translating our work into standards and guidelines for outside firms to follow became a thesis on what the relationship between the outsourced design firms and TVA should be.

We quickly discovered that interested firms were focused almost exclusively upon new design opportunities. Successful proposal respondents were contracted to perform the less than glorious tasks that included TVA’s roofing program, various temporary accommodations for nuclear site staff, and space planning and implementation of interior space standards across the Valley. There were few new facilities along the way and those were conceptually designed by the small number of remaining architects still working for TVA. Several years went by before a consistent set of service providers emerged performing day-to-day facilities planning, change and operations management tasks. The winners were those firms that looked out for the long-term relationship, those who performed every task as an opportunity to excel in working with their client. The losers were those that perceived themselves as design firms that disdained the mundane work of upkeep and minor modifications. The winners are still working for TVA, 11 years after my departure.

Use of ‘Down Time’ to Serve Client Needs
CRS Sirrine, a former behemoth in the AE industry, had instituted a “bench” concept for architects and engineers who were project-less for brief periods of time. Profess-ionals without projects became itinerant workers on internal projects ranging from QA work on active projects to updating design standards and supplementing resource libraries. During a particularly slow period in the manufacturing sectors that Sirrine focused upon, a senior business developer named Bob Goforth came up with the idea of using bench resources for responding to the continuous stream of client facility issues needing attention. Considering the typical Sirrine project at the time was $5 to $50 million in fee, these tasks were quite small, but in most cases complex. Bob would travel to the textile and paper mills throughout the southeast and develop client needs lists for “benched” project architects and engineers to call. The effort became Sirrine’s Special Projects Team.

The strategy was successful on many levels. Clients were happy because they had the attention of a world-class firm performing their plant modifications and knew when a particularly tricky task came up, Sirrine could respond in-depth with a discipline-specific expert. They also received a consistent quality of work and benefited from consistent invoicing and business management practices. Sirrine benefited because Special Projects became a training ground for project managers and new architects and engineers.

The tasks made Sirrine more aware of their client’s business by simply being there and observing response strategies to problems. That helped later on when their industry began changing and Sirrine was again there to help lead changes to their facilities development and operations strategies. Relationships developed between the professionals and clients so that when the industries began cycling through their boom times again, Sirrine was there to receive the major projects, also assuring that they would be there during the lean times as well. Once the idea became ingrained in the Sirrine culture, processes were developed to assure profitable gain for Special Projects efforts. Projects were contracted either on a Lump Sum or Task Order basis and typically achieved profitable status shortly after program implementation.

Project Driven Perils
While a business developer in Minneapolis, one of my responsibilities was to help establish another AEC firm in the corporate marketplace. One of my strategies included interviewing past clients to find out why they were clients for so long and why the relationship had ended. My thinking was that if issues could be discovered, the firm could commit to resolving them and thereby re-establish the relationship. What emerged was the project driven or “a bird in the hand is worth two in the bush” problem. During my research, one long-term client stood out, becoming the standard for lost relationships for that firm.

The client-architect relationship began in 1914 with the design of an office building for a relatively new company in the raw materials business and continued somewhat steadily until approximately 1992. The 78-year relationship unraveled as a result of an extended contraction in the client’s industries resulting in little corporate campus work. Other firms had begun development of lab and officing in areas outside Minneapolis. Since no major local projects were hitting, main contacts dwindled to a lone project architect who had been with the firm for decades. His work was decidedly unglamorous. Site manholes and handholes were relocated, roofs were replaced and day-to-day officing and code issues were resolved. In short, he was there to do the grunt work no one else wanted to do or recognized was important. The organization tolerated his devotion to this client but barely, thinking he would have been more valuable on a real project. When he retired, no one picked up the relationship or continued to serve the client’s day-to-day needs.

Then a new local headquarters campus project emerged. All of a sudden, firm principals began pounding on the client’s door, demanding attention. They wondered why this long-term client had considered putting out an RFP for design services for the new facility. They appeared hurt and indignant when they discovered that a rival in-town firm had won the coveted prize.

What firm principals had forgotten, perhaps a generation or two earlier, was that clients had completed their unprecedented expansion that had begun in the late 1940s and continued through the 1980s and were now changing their buying habits. They were, in effect, returning to a model that had been in use prior to our industry’s turn to a strategy of focusing solely on optimizing the design and construction processes for K-12 schools, manufacturing facilities, offices and hospitals. Clients were again looking for someone to trust their facilities to, someone that was an expert on the materials that make up buildings and on optimizing their functional uses.

Long-Term Relationships
Today’s firms are big on client relationships. We speak at and attend conferences, play golf, dine with potential clients and seek out any number of ways to get close to decision-makers for the purpose of snagging the all-important project. What we refuse to do is get involved in the seemingly inconsequential but tough day-to-day work. Corporate clients desire architects to understand and handle their space and facility related problems on a consistent basis, many times on a nationwide or worldwide basis. One reason may be that clients are realizing their investment in the RFP and selection process for facility change projects becomes debilitating to their budgets and bottom line.

This becomes a dilemma for our industry. On the one hand, if we continually perform the client’s day-to-day facility work, we become known for that. On the other hand, if we wish to be known as a “design” firm, we cannot expect to expend valuable resources to solve uninspiring space planning problems for yet another inter- or intra-department move. The solution requires a deeper commitment than the partnering cocktail parties and facilitated off-site get-to-know-you sessions.

True client service requires investment in core competencies and firm structures that establish the importance of continued client service and responds to the different fee earning capability that goes along with those services. Although clients will pay a premium for continued care and the potential for instant access to experts within an architect’s staff, they will balk at the full rate structure established for high profile design opportunities. The reason: it costs less to market, organize and perform multi-task work in a long-term relationship. To be successful, employees must see obvious firm career opportunities available to them when working for long-term clients. In addition, clients must be able to see the intent and business response—as well as project response to their needs.

Bottom Line Considerations
Client service is a choice; so are client relationships and both require commitment. Perhaps it is time for firms to consider growth scenarios that include long-term client relationships meeting facility planning, change, and management needs. Firms should develop business models that include fair to moderate profitability for day-to-day activities and moderate to high profits for value added strategic services that directly affect the client’s bottom line.

Recognizing that long-term relationships actually cost the firm less, firm overhead expenses should reflect a reasonable reduction in marketing and management costs. In addition, clients should be given alternatives to monthly invoices against a lump sum. Retainer based fees that a client can budget for better reflect ongoing relationship terms. Who knows? This may not only return many of us to our roots, but may also reestablish our organizations as those that are truly built to last.

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