Creativity versus Business? - #Analysis06
The general notion is that design and business don't go hand in hand. We asked architecture practices if there were specific ways in which financials affect design processes. Is this financial health monitored for each project or is it the overall health of the office?
Let’s take a look at what some of them had to say.
We did not let finance govern how much design time / effort goes in, we cross subsidize, have a backup fund which helps to get through bad times, hence safety is always maintained to be able to take risks and design we you wish.
We need to look at it from 2 perspectives, one as fees, the other would be the economics of the project, one is concerning us and the other a team sharing certain resources, over the years, we have taken projects that require a certain amount of research that may not be proportional to the fees we receive, and then projects like houses or hospitals that does not require as much time as it has a lot of standardization, but they contribute and help in the economics of the office. So when we know a small gated community is coming up we can take up two more houses. I don’t see it as a limitation, because there is always something’s you like to do and you have to put efforts to do those, the two are always necessary, in that sense coming to how it affects process- so often, say when I showed you a shop selling building materials, in projects when we are trying to accommodate limited budget, in the shop, we did all the drawings on site visits, so that means the office is not taxed anything. The processes that we are involved in are difficult for sites that are far away. So we have developed a way of drawing for this, with which we can communicate very easily, there are ways where we try to offer in limitations, we don’t see a small fee quotient as a limitation, we try to see what best we can do to offer within this.
A lot of civil contractors come to us saying sir can you make an elevation for us? We don’t hesitate to take these, we go to visit the site and find out what value we can add to give to the users and the builder, it’s just a one day exercise, and now that we know them better, we tell them to come earlier so we can help them better and not over a structure that’s set. So now we do it that way and they take the execution themselves.
You have to be in touch with finances, you can survive without it, like how Louis Kahn was always in debt because he was so obsessed with his work and lost track of finance. We thought we are not the best with it but we manage, we never miss a payment for employees and contractors. No, what we design isn’t affected by money, our approach remains the same, we do try to keep track of how much time and effort each takes with time sheets. But our momentum is so focused on design that it precedes even when it’s causing a loss, we stay conscious but not so much that we let that we let it take over.
So one in turn would be given maybe 50% of the main architect fees would be given that 10% of a senior architect. He would then budget that. There is a cost, although I'm very averse to a large practice, but some basic structure had to be put in place once the scales went up. So there is a standard timesheet and everything that they will fill in. Which is eight hours, but what we say is that if you work 12 hours, you please proportionately fill but the system which only takes eight hours of work. Because you have an attendance system, which is basically a biometric which will tell the reality that you were in for 12 hours a day. Nobody’s saying no to your bonuses, you know, your travels, the way the office tries to incentivize you is based on how many hours you put in. But when we're trying to do a timesheet we want to understand how much energy is going into a project proportionately, so that the projects don't become unreliable, a lot of them do. So we try to do those kinds of broad budgets, which are reviewed by me only once in three months, honestly. But that interface senior team does it pretty much I would say every two weeks. Just make sure that that, the time you go, you can pitch for the project. Very rarely, when there is something like, a chief minister calls up or a super important client calls up, then you try to break those rules, then that works. To put in more energy and time to a project. Otherwise, I just say that this is the best you can do in this much time and energy. And that's what you need to know. To keep projects viable. It's just, it's a difficult thing and we have taken it as an internal booking, when you say that, get an approval from the client, and earn less amount of energy. And we actually tried to put in all our changes, design directions, it's actually a little against what should be done, actually at the working range level. Because you know, once a tender and the working drawings are being done, is the first time you're sure the project is going to get executed.
There is not even 50% chance in our country that public projects get executed, what gets designed, what gets executed, the chance is so low. And the reality is you will only be paid once the project is getting executed, you do not get paid for a good looking report. So we have actually shifted the critical mass of my energy, or the energy of the design team, from the design development to detail design time. What it does is it gives us it's a lot of reworking time, it's a lot of going back to the client for approvals, because we will change size and everything about the building. At that time, we are happier to do that hard work, rather than follow difficult protocol of the right way of doing it. Because that just means it means a lot of wasted energy. Trying to dismantle it. But if you can ask, this is something I only learned out of having been bitten by the system.
After we win the competition, to getting conceptual preliminary approvals from the client. I don't work in that part of the process. For the competition, I work after that till we get to tender stage. I don't work on my projects, I only work after the tender has been awarded. And then I go back to the conceptual change. Also, I fight the bureaucracy or the top from there. But try to minimize or optimize my time. And there is a lot of resistance to that because it means rework. And it also means a lot of times getting delayed. You don't have time, but you end up doing design. In that time as well. It is a bit of a stretch there. But it does two things. It saves me from a lot of hours and the energy of those people who are doing design drawings. And so that whole energy really shows in the product. It's not that don't make a mistake. So that's how a team is kind of structured in the larger structure.
Time is money, if we run out of time we demand more money to put more hours. We get more excited about new projects than working on older ones and thus end up having an overlap in timelines in that thrill. We continue on a project even if we couldn’t finish it for our portfolio as a young practice.
We have tried not to influence input cost to output cost as it's unfair. Because as I mentioned initially that interior design for us has run parallel with architecture and that it is the breadwinner somehow and that both are unfortunately not balanced. Architectural project fees and interior design project fees are not comparable. The effort going in an architectural project is three times more than in an interior project straightaway. An architectural project starts and then it stops and it has sanctions. It has so many other variables. It has so many external agencies that are impacting it.
Once it starts, because sanctions are hard and decisions are made faster. Here we found a problem with our staff. An architect working on the interior project would get work done faster and be more satisfied as compared to the one who is working on an architectural project that is challenging and wouldn't wrap up soon. In this course of the time, the other person is done with 3-4 interior projects where as an architectural project is being completed in the course of 3 years. It is unfair on the pay scale too so we changed the system. At any point in time we have one project that is pro bono- social work, a maidan, some schools, park, libraries etc. The overall studio is working on all of it. How we look at it is that everybody’s salaries are not associated with the projects they do but with the quality of work and amount of time they put in.
Sustainability starts at home, if you fail at sustaining the offices then the rest is a sham, successful ones are always finance + creative sustainability, you don’t have to be financial unstable to be creative. It may be tricky to maintain in Indian context, but having systems is important, we have a man hour system, punch all the hours for specific tasks, to analyze in the background and keep a check and increase efficiency for projects that are taking more effort. Salaries are based on man hour not days. And everyone has the same skills in our studio so it’s possible, that helps us calculate the cost.
We let them know we can’t cut payments that we are not doing any sacrifice, I can convince myself to not eat much or not do fun things, but I need to pay my staff. So we tell our rich clients to pay so that the ones that can’t can also experience good design, example villages, I hate telling my fees there, I just lie, we tell other clients that we aren’t overcharging anyway, but we need this money to run the office. Payment is always against the deliverables.
I never put that angle in deciding the project, I choose it if it will help me grow as a designer, scale is also not critical, like a zoom room – 400sq.feet, it went on for 4 months, even if it doesn’t work out I don’t look at the monetary gain.
In our time we weren’t taught the skills to manage time and money, it happened over time, we still struggle, big project – 5 years, - when we started first – the money is less compared to the time spent– we can’t sustain then, we did a competition submission or a proposal that took a lot of work but didn’t receive feedback or review for 2 months, what does the team do then? We didn’t want to do be identified as an interior practice, but we have to do it for sustaining. Recognizing pitching period when big projects come to an end, not depending only on small projects is important to sustain. The location of the practice affects the finances a lot.
We became finance conscious after we crossed 10 employees. Now it matters and that’s affecting design methods, that’s the crossroads we are at, how to streamline the designing. We are having trouble tracking the hours each project takes, hence we can’t say if a project is making profit or loss, we can only tell if the office is making profit. We don’t put deadlines, the clients do, so we go according to what’s best for design, like the café project made no money, but it was a highly visible project so we gave it all, even for some developers, we just do some the work for the sake as investment. So as such for a small office, the project per basis doesn’t matter, it’s the collective work, for bigger offices it the profit loss of every project matters. You just need to have a tab of metric changes, where expenses need to be capped and where income needs to cross the threshold.
We pay our interns very well and on time, hence the corpus also needs to maintained every month, that effects on who we choose as a client, so finance affects the choice and not project
I find that lacking, because CEPT doesn’t teach finance management, I wish I had that skill too, sometimes I never know if I have grown financially. When you compare with peers of different fields, it’s very disillusioning, when you are disconnected from academics, you start thinking of a lot of things, which is problematic, like why am I not a developer myself? Such late night thoughts.
(What about person hours, how to strategize with multiple projects in context of the studio, design efficiency, we don’t ask this question enough, we take it deadline to deadline.)
You can’t do that in practice, have to sleep before a meeting with client, you need cut off times and dates, you have to allocate in advance, for all steps, also have to be aware of realistic outcomes, also knowing where your time is valuable, which phase, you need to delegate with teams, you can’t do it all, you need a supply chain, you have to have industrial delivery process like a product driven thing at an early stage to a certain extent. In the beginning I was a one person team pitching to developers, I had confidence to pull it off because I had a network of drafting, modelling liasoning firms, outside firms that could help me.
(It’s paradox that the principle is the most expensive resource of the firm, hence the type of resource they are used for has to be carefully picked. But at the same time the principle wants to do what they love, like sketching ideas might be it, but it might be more useful to talk to developers, it’s a paradox)
When we started in 2015, we knew we have to make the practice self-sustaining, in architecture school you learn that practice can’t be sustained, but it’s not true, we were sure to do a self-sustaining practice. We didn’t want to even subsidize, through teaching also, it was an idealistic notion maybe, and we wanted to teach only if we want to but not to support our practice.
Clockify will tell us about time, its live and collecting data, it helps us to figure out appraisals objectively, because there are both permanent and temporary people. We have an idea what project gets what kind of fees, but we aren’t doing it fully through clockify. It’s going to take time to get there fully.
(So as long as cash flow and salary bills are manageable, it’s okay? Do you ever say let’s not work on a project because it’s a loss?)
No because we are oriented towards people, we never end a project like that. Neither have we ever cut or delayed salaries, even in the 2018 crash or Covid. We have set aside a corpus to tide through difficult times, like Covid. We always have a fall back, 3-4 months’ salary. It’s not touched at all. We fortunately didn’t have to break it even during Covid, but it gave us mental peace. We didn’t let anyone go either. So I think finances are taken care of very well.
A pro bono and a paid project are treated the same, the money follows, we just focus on design, we have never charged according to the percentage, we really don’t care if a client will want kota or Italian marble, my job Is to design the tiling layout, so we charge according to design time, why should our fees be based on how much a client will spend. The scale of project gets decided early on and hence the client already knows our fees based on the approximate time, this has worked for us in a way that clients trust us more because they know we are not trying to recover costs but our suggestions are genuine. The trust gain allows us to take further risks in design. Clients have even come and told us that we can spend more, they have even come and paid us more at the end because they think we worked hard. But the bad thing is we do loose clients because our sqfeet cost is higher than the general percentage cost with most architects. Another thing is you can’t accurately tell if the design time will actually play out that way. But that’s okay, we try to look at the good side.
A related question is how you buy yourself more time? We do have a loose timeline at the start. Like you said some things come faster and some take time, but we do try to stay in that timeline. What helps is communicating with the client, sharing with them, sometimes their feedback reinforces a doubt or a risk, the ability to show them something deeply and being transparent about your search has always bought us more time. The clients realize that we are working hard on their project, the minute that understanding exists with the client their whole perception changes with respect to the time.
A few of our students have attempted to simulate a real studio environment to test out their own ideologies and practices by inviting peers as partners and employees. Head over here to see their work and how they dealt with time in their office procedures.