Editorial: Smooth Transitions
With many baby boomer architects on the threshold of retirement, there’s never been a better moment to think about succession planning. The topic was addressed head-on in a panel discussion at the recent joint AIBC-AIA Northwest Chapter conference in Vancouver. The panel included Darryl Condon of Hughes Condon Marler Architects (HCMA), Becca Cavell of THA Architecture, and Ron Rochon of the Miller Hull Partnership. All three are second-generation principals of their firms, and have been involved in planning for a third generation of firm leaders.
The alternatives to succession planning are stark: the death of a firm with the retirement of its founder, its buy-out by a larger conglomerate, or the continued dominance of a first-generation leader who may at some point go past her prime. A more predictable planned succession continues the legacy and repute of the firm by offering shares to young leaders as the firm’s original owners step back. “Owners are selling the past, and new owners are buying the future,” explains Cavell.
Despite geographic disparity (HCMA is based in Vancouver, THA in Portland, and Miller Hull in Seattle), the trio found remarkable similarities in the challenges that their firms face in succession planning. The key is finding the right partners–people who have chemistry with the company’s culture and who share its core values. In most cases, these individuals are chosen from longtime employees, although one of THA’s current design principals was recruited from outside the firm. Choosing the right partners is crucial not only for the continued success of the firm, but also in navigating the inevitable impact on other staff. Says Rochon, promotions at Miller Hull must pass an “unassailability test.” To avoid professional envy, it must be clear to all staff why someone’s skills and experience qualify them for advancement.
In keeping their practices relevant for the next generation of owners, two of the three firms have recently gone through name changes. This helped prepare clients for a shift in leadership within the firms: clients got used to trusting the firm’s expertise rather than expecting to see its founding principals on every project. As marketing expert Mark Busse elaborates in this month’s issue (see page 57), rethinking a firm’s brand creates value at many levels, with an added benefit of helping to attract talented staff. “Think about your name very carefully and don’t let your egos get in the way,” advises Cavell.
Many firms can do more to identify and nourish future leaders. The most direct method, Condon says, is to tap promising individuals on the shoulder and tell them, “We want you to be a future leader in this firm.” This kind of statement must be followed up with concrete support. THA participates in AIA Portland’s Path Leadership Forum, a series of workshops that helps prepare architects for increased responsibility in their firms and communities. HCMA has undertaken in-house leadership training.
Later in the conference, a separate interns’ forum discussed the challenges of licencing, suggesting other practical measures firms might adopt to encourage young designers. A little goes a long way in supporting the licencing of staff–a crucial step on the road to leadership. Young architects-to-be remarked on the significant incentive presented by time off for exams and prep courses, employer-defrayed licencing fees, and promotions and bonuses keyed to licencing. The cost of complacency can be more than a few days of pay: many bright interns leave firms after going through the licencing process and failing to gain acknowledgement for this milestone.
Many resources exist to help firms structure a succession plan. The RAIC offers guides on firm valuation and ownership transition, and Peter Piven’s Architect’s Essentials of Ownership Transition (John Wiley, 2002) was also recommended by the panellists. For readers of this magazine, Elaine Pantel and Maj-Lis Vettoretti’s articles published a year ago (see CA, September and October 2012) provide a primer.
Thinking 10 years out is not too early for succession planning, Condon noted. One young principal in the audience piped up with his story: a few years back he’d been offered a buy-in from a firm looking for succession, did the math, and made a calculated decision to start his own practice instead. He wanted to be in a financially more secure place with his firm when it came time to share his leadership role. He was starting succession planning for his firm 20 years in the future.
Elsa Lam [email protected]