Design Goes Global
by Scott Simpson
Over the next several decades, billions of square feet of new construction and renovations will take place worldwide. Is international practice right for your firm?
A devastating earthquake in Haiti. A disastrous oil spill in the Gulf of Mexico. Plumes of pollution from China migrating across the Pacific courtesy of the jet stream. It seems there’s no shortage of bad news these days. But there is a silver lining: It’s become clearer than ever that the world is an increasingly complex and interconnected place. Issues of politics, economics, technology, and culture are deeply intertwined. Rich or poor, near or far, everybody, everywhere, has a stake in what’s going on. It’s precisely this sense of global connectivity that puts a premium on design.
Whether at the macro scale (clean air, water, and energy) or the micro scale (healthy ventilation and good daylighting in a school classroom), design thinking has become central to addressing the challenges of the age. Over the past decade, as more U.S. architects have ventured abroad, fees generated from international projects have grown at the astounding annualized rate of 30 percent. In return, more foreign-based architects are competing effectively for work in the United States, often getting plum commissions. Technology, especially building information modeling (BIM), makes borders porous. Outsourcing makes overseas collaboration fast and cheap. Huge international projects provide welcome opportunities for design firms as the domestic market continues to struggle with a spotty recovery. In a very real sense, design, like banking and finance, has become an international profession.
IS GLOBAL PRACTICE FOR YOU?
However, international practice is not for everyone. It tends to be expensive and risky, with plenty of potential pitfalls. Some firms have made patient, long-term investments in selected key markets, such as China or the Middle East, and often with mixed results. Others have taken a shot at the occasional high-profile design competition: Nothing ventured, nothing gained. Some architects are solicited by foreign clients because they have particular expertise in a specific project type, such as health care or biotech. Still others are taken abroad by their U.S.-based clients, who are expanding operations overseas and want to make sure that U.S. standards are followed. In each country or culture, there are variables to consider. Here are a few things to keep in mind.
Marketing. When soliciting business overseas, every firm needs a convincing value proposition. Think long and hard about what would cause a client to reach halfway around the globe to hire your firm. What can you offer that a local firm cannot? You need to be absolutely clear about this and make a compelling business case. When marketing work overseas, personal relationships are more important than ever. Business customs and tax laws differ, decision-making and approvals processes may seem opaque, and construction practices vary widely.
All of these factors should be reflected in your approach to marketing and business development. Pay especially close attention to local language and culture. It helps greatly to have people from foreign countries on your staff who can explain the subtleties. Above all, remain patient. International practice requires staying power; it is neither for the faint of heart nor for those without reasonably deep pockets.
Fees and finances. Fees will vary greatly, as will expectations about scope of work and the quality of deliverables. Very few foreign clients expect or need full SD/DD/CD/CA services as defined by standard AIA documents, so collaboration with local firms is most often the norm. When discussing business arrangements with foreign clients, make sure you understand specifically what will be expected of your firm as well as how the decision-making process will be handled. Bear in mind that the notion of additional services is generally resisted and that clients will frequently request multiple modifications to scope and schedule without offering any adjustment fee.
Speaking of fees, rule No. 1 is to get paid up front. Retainers are standard practice and absolutely essential if you expect to make any kind of a profit. It’s not uncommon for the last invoice to go unpaid (and in fact, it’s almost assumed in some cultures). You need to know your tolerance for risk, and you need to be willing to cut bait and walk away if invoices are not paid in a timely manner. Too many firms have been seduced by the glamour of international work only to lose out in the end: The projects do not get built (or the design is greatly modified along the way), and the final invoice is never collected. When doing work overseas, there is essentially no means to enforce payment other than trust and goodwill. Consider this carefully and proceed accordingly.
Staffing and travel. Obviously, long-distance travel is part of the deal. For many assignments, more time is spent on airplanes than in face-to-face client contact. Travel is time consuming, exhausting, and expensive. It also represents a considerable opportunity cost at home because when you’re having a beer and watching a movie at 40,000 feet, you’re not completing billable work at the office. Staff assigned to international projects need to have the personality, passion, and stamina to go the distance. Working across time zones often means keeping crazy hours, which can take a toll on personal and family life. Technology helps to a degree, but international projects cannot be handled effectively at arm’s length; you have to invest face time.
Don’t forget that the expense of constant travel — plane fares, hotels, meals, and Internet connections — add up in a hurry. In response, some firms have opened satellite offices. When doing so, pay attention to local regulations, licensing laws, and tax regulations. Above all, keep a close watch on cash flow. Once you get behind, it’s difficult to catch up.
Outsourcing. Outsourcing has become increasingly common over the past decade. High-quality 3-D models and excellent computer-generated renderings can be had quickly and for a fraction of domestic prices. Some firms have experimented with outsourcing routine engineering and drafting, and others have gone so far as to subcontract construction documents entirely. Outsourcing is one way to keep fees competitive, but it requires extra scrutiny in quality control, particularly with regard to issues of code compliance. Remember that you are responsible for the quality of your documentation no matter where or by whom it is prepared.
When dealing with outsourcers, it’s essential to be clear about what’s expected in terms of deliverables. Allow plenty of time to review, edit, and finalize documents, and anticipate multiple revisions along the way. Make sure that any notes, instructions, or specifications prepared in a foreign language are carefully translated and double-checked for nuance and accuracy. That said, outsourcing can be an effective way of expanding staff capabilities without making a direct investment in hiring and training. Average blended billing rates can also make your firm far more competitive on both sides of the ocean.
Local associations. Construction practices can vary widely from country to country, and for this reason it is highly likely that an international project will include several local partners. Many clients desire their projects to be built according to U.S. standards, but desire alone is not sufficient. Access to quality materials, sophisticated technical equipment, and skilled labor should never be taken for granted. Specifications mean little if the local CM firm cannot deliver. Local codes and approvals processes are likely to seem Byzantine; it’s best to have them handled by local experts.
When working with local firms, be prepared to stay flexible. Construction documents are not always adhered to rigidly. Modifications to the design can be made midstream, sometimes without your knowledge or consent. The authority of the architect may be questioned or even ignored altogether.
The best way to achieve desired results is to have a clear understanding about what is expected, from whom, how the work will be produced and checked, and who will have the final say. When working overseas, all too often the architect’s only real clout is the power of persuasion. That said, associating with quality local architects can be an enriching experience for your office staff, who will be exposed to new ways of thinking.
Technology. When practicing across different time zones, it’s critical that all key team members share the same technology platform. Set protocols and procedures up front so that everyone will know how to create, store, and retrieve information in an orderly fashion. Establishing a project Web site can be a great help. Using a common BIM platform is even better. Setting up teleconferencing capability is relatively inexpensive; it will likely pay for itself many times over in travel savings alone. Foreign firms tend to be tech-savvy. However, technology by itself cannot create quality results, and it’s no substitute for well-defined QA/QC procedures. At the end of the day, what gets done is more important than how it gets done.
CHANGES IN STORE
As design goes global, it will change the profession in fundamental ways. For example, if a domestic firm provides SD/DD services but not CD/CA, the staffing profile will begin to reflect this. More designers will be required and fewer technicians. Eventually, if a firm lives on a diet of 100 percent overseas work, it will essentially morph into a rendering firm. This is not necessarily a bad thing, as the design concept will still be at the core of the firm’s value proposition, but it does make for a very different office environment and work process.
Another thing to consider is the notion of responsible control as required by most licensing laws. If the designer lives in Los Angeles, the structural engineer is in London, the working drawings are done in Manila, and the CA is handled locally in Dubai, who’s really in charge in both a legal and professional sense? If the notion of responsible control begins to fade as a professional value, it will have a profound effect on how the next generation of designers is educated, trained, and licensed. In that scenario, design will likely be perceived as much more of a commodity service; anybody can provide it from any location. The implications are huge.
In addition, as international practice continues to increase, relationships with construction managers will change. Overseas projects require a far more collaborative mindset than is common in the United States. Major CMs are often in a position to take on much of the technical documentation that is normally prepared by the architect. Once again, focus on your value proposition.
At the end of the day, whether your firm practices globally or locally, it’s results that matter most. In today’s complex world, designers have a great deal to offer. The built environment accounts for more than a third of all energy use and nearly half of all carbon emissions. Over the next several decades, billions of square feet of new construction and renovations will take place worldwide. The design profession is in a unique position to have a positive effect. Think big.
Scott Simpson is a senior fellow of the Design Futures Council and a member of its executive board. He is a Richard Upjohn Fellow of the American Institute of Architects. With James P. Cramer, he co-authored the books How Firms Succeed and The Next Architect.
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