Project Delivery

With all due respect, I think that this sentiment is right at the core of the issue that many Owners and builders have with Architects.  The idea that value is somehow independant from cost, it is not.  Cost is a part of value.  Value is a ratio, a relationship between the product (and all that entails to the consumer) and the cost (and all that entails to the consumer).

Value is no different when considering the design/purchase of a building than it is when assessing the purchase of a head of lettuce.  The product that represents the greatest value is the one that makes the best ballance between cost and benefit, from the consumer's perspective.

Why so many Architects continue try to convince the world that this is not the case, I do not understand.  As a group, Architects have had a surpising amount of success shifting the perspective of the consumers of architecture away from making informed value-based decisions about architecture and toward instant gratification and fiscal irresponsibility, but things are now swinging back the other way.  The "super-consumer economy" is transforming into the "super-informed-consumer economy."

Too many of us have "drank the cool-aid" I'm affraid.  We cannot see beyond our own out dated sales mantra.

 

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Alan Burcope AIA
VP Project Development
HBE Corporation
Saint Louis MO
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Mr. Burcope:

I attended an online webinar last October that dealt with the topic of "Risk Drivers".  The seminar generated a number of questions which the presenter supplied answers to a few days later.  Below are a couple related to the topic of value:

>>Q: We don't value our services enough.
A: I'm not sure that we don't value our services enough as we don't really understand our value to the clients in their own terms. It is that definition that allows us to price our services appropriately.

Q: Architects are being replaced by non-architects.
A: This is sometimes true. But you need to ask, "Why?" Owners have found that the old design-bid-build system doesn't work for them. It doesn't do any good to complain, but to get to the root of why owners want an alternative. It isn't that they necessarily want projects cheaper, they want value and that value is usually predictability of outcomes on their projects.<<

If a client see value in the work of an architect, he will be much more willing to pay higher fees for that work.  "Predictability of outcomes" is what clients value, according to XL Insurance. 

Some years back I asked a project principal if the firm would meet with the client at the end of the project and ask for feedback as how we performed as a firm.  You can't fix anything if you first don't know it's broke - but the principal just shuddered and said no, he'd rather not know.  You also can't tell if you're improving if you don't measure things.  If we listened to clients more we'd better understand what they value. 

Here in LV the casino owners value meeting their aggressive schedules for opening their venues.  Work starts without all the drawings being complete, and contractors often make field errors because of the speed of the work.  If at all possible, the work does not get torn out and replaced per the plans - we adapt and go on.  Added costs above the GMP are expected because of this, but meeting the opening date is the criteria that has the highest value.

This is a different cost/benefit formula than for most building types and locations, but it responds to the clients need to get his facility open in order to generate revenue.

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Klaus Steinke AIA
Las Vegas NV
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Dear Mr. Burcope,

you see it correctly, and at risk of repeating myself from a previous post:

Money, in my experience, has been the most frequently discussed topic with owners. No matter how architects may philosophize about the meaning of "value," to an owner it means the best performance for the lowest price, often an owner decision upon having been presented with various reliable and well documented short and long term options.

 

That owners are turning away from architects and toward contractors is largely the result of architects' inability to deal with hard facts head on. Increasing numbers of architects are working for contractors and unless architectural education addresses this issue, the trend will continue until the profession is dead.

 

The great designers to which architects are educated to aspire represent only a handful of the profession. The rest must learn to work with the realities, or perish.

 
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Karl Hartnack AIA
Component Past President
Hartnack Architecture
40213 Dusseldorf

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Any commodity is priced according to perceived value. A box of Cheerio's cost more than Kroger-o's. Armani is more than Armada. The problem is in the valuation of housing in particular. As far as buildings go, single family homes are one of the cheapest and most numerous. By itself, housing generates more GDP than commercial. The real estate market handles infinitely more transactions for this one building type that we hardly design a fraction of. The cheapest built builder box is often "priced" the same as a custom designed house by an Architect, mostly because there are very few in comparison to houses with "unknown" designers. There has been little in the appraisal system to distinguish the difference between houses of the same size and location. 

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George Hideg
Owner
Design ' Apparatus
Spokane WA
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Eric has pretty much "nailed the issue on the head" so to speak. I have another aspect to add to the topic of "value" and it is that more of us truly need to understand "building". I have to say that getting out there and building the occasional project has gone a long way to adding to my understanding of building, which in turn my clients have perceived as "value". Our profession suffers from the Ivory Tower label, and until we get out there and get our hands dirty, the clients in the residential sector will continue to just see us as a club of suits.
I participated in design-build studios in school and found that experience invaluable and instructive; my clients view it as "value".

George Hideg
Owner
Design ' Apparatus
Spokane WA

Eric:  That ship has sailed long time ago. 

The reason why most housebuyers do not value the architect's contribution is because, in general, builders do a very good job at satisfying that housebuyers needs, and the differential value of hiring an architect to design your a house, for most people, is very close to nil.  In fact, one runs the risk of ending with a "designer" house, completely different from anything else in the neighborhood, which will make it impossible to unload.

Your analogy to Armani is completely incorrect.  A better analogy is to compare Levi's jeans with couture jeans.  Check your own wardrobe and tell me what you wear, and you'll see what I mean:  the difference that a couture pair of jeans, done by Versace just for you, makes to you, as a user, is not worth the difference in cost (for most of us).  Same with a house.  Now, if you are Lindsay Lohan, you don't wear ANYTHING other than Versace couture.  Same with designer houses.

House design is a commodity, not unlike car design.  Yes, if you are Pininfarina your name is on the side of the new Ferrari P4/5, and a hotshot Wall St. banker will pay dearly for it.  The rest of us, however, don't find that design so immensely valuable so as to compensate for the higher price, and get a Camry instead.  Perfectly nice car, functional, low insurance cost, better mileage, easy to sell, etc.  Same with a house.

So, from a societal point of view, longing for the time when we, the almighty architects, designed each house, and each house was individually made, at a higher cost than what is afforded by the mass-customization that is so common today, is like longing for the time of the Pierce Arrow, when each car was made by hand to the specifications of its customer.  That time is long gone.  And housing is no different.

And if you think that a builder makes so much money, you can get into that business yourself.  It should be easy, as an architect, right?  Unless you are afraid of ending up with an endless supply of unsellable houses that only you yourself like, while your prospective clients despise them.

As for Real Estate brokers, they are going the way of the Travel Agent.  The internet is quickly killing them.  But you can get into that business too, if you like.  all it takes is a short course in your neighboring community college.

Instead of forcing the public to have to buy our product, we should produce a product that the public wants to buy.  That's the secret to financial success in a capitalist economy.  Otherwise, you are just like Jules Mansard, designing Versailles for Louis XIV.  And now the French Revolution is here.
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Gustavo Lima AIA
Director Of Construction Administration
Cannon Design
Grand Island NY
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Original Message:
Sent: 12-30-2010 08:09
From: Eric Rawlings
Subject: What is "Value?"

Any commodity is priced according to perceived value. A box of Cheerio's cost more than Kroger-o's. Armani is more than Armada. The problem is in the valuation of housing in particular. As far as buildings go, single family homes are one of the cheapest and most numerous. By itself, housing generates more GDP than commercial. The real estate market handles infinitely more transactions for this one building type that we hardly design a fraction of. The cheapest built builder box is often "priced" the same as a custom designed house by an Architect, mostly because there are very few in comparison to houses with "unknown" designers. There has been little in the appraisal system to distinguish the difference between houses of the same size and location. 

Because houses designed by professionals are not valued differently, the general public does not see us as valuable. Design is not valuable unless it's a pair of shoes or a purse. This perception is the problem. People don't care how unfair it is for us if they're saving money, so why pay us when the builder claims to do just as good of a job? The argument always drifts to comparing the best amateur to the worst professional when trying to justify giving the consumer some fiscal incentive to use Architects. Rather we penalize people for using us by making them pay out of pocket for our fees as they give them the same value as a house designed by an unknown hack. 

It's disturbing how self defeatist we are. We argue against our own worth. I watch builders get six figures, the agents get five figures, and I get 4 figures on the same spec house project. Everyone in the transaction knows it's unfair to me, but that's the cut we get according to the current system. It's not personal, it's just business. We need to quit arguing for the status quo and start talking about changing things!

- We should start convincing large jurisdictions to require Architect's stamps on single family homes.

- We should convince banks that there is added value and less risk for them when a local, licensed professional with an insurance policy has stamped a set of house plans as opposed the the napkin sketches still accepted in certain areas.

- We don't have the numbers to even compete with the most pathetic of builder trades when it comes to lobbying. We need to grow our numbers and who would be dumb enough to enter this profession now after what's happened? We need to acquire a larger sector of work. We need to get much more involved in the residential sector and quit leaving it all to the builders. We are missing out on the largest piece of the pie! The amount of Architects we could employ by taking over residential would be HUGE! See where I'm going with this AIA???

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Eric Rawlings AIA
Owner
Rawlings Design, Inc.
Decatur GA
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Gustavo,