Practice Management 101

In a professional design practice, there are 6 main management facets, discussed under the corresponding hexagonal links above right:

Practice, Client Relationships, Risk, Quality, Design, and Projects.

Although many design firm managers make no distinction between the first 5, it is very difficult to rethink the firm without separating them. Some designers also make no distinction between quality, design and project management; blurring the edges of these functions also makes change and improvement difficult.

There are, obviously, strong links between all of these. In particular, both risk and quality management are operative in all of the other 5, even though they vary significantly from facet to facet.

Managing the Practice

There are 7 main Practice Management functions:

  1. Leadership, Coaching & Mentoring
  2. Practice Communication
  3. Strategic Planning
  4. Financial Planning
  5. Managing Resources
  6. Managing Change
  7. Ownership Transition

Leadership, Coaching & Mentoring

A design practice is a business, and the leaders run the business. This business can legally take many forms depending on the legal structures of the government where it is located: A sole practitioner, a limited liability company, a corporation, a company, a partnership, or a trust. Sometimes we see combinations of these; for example a partnership where each partner is legally represented by a company.

Firm leaders are usually, but not necessarily, also firm owners. However structured, leaders are responsible for governance.

Leaders must govern their business in accordance with applicable state and federal laws, and with professional licensure requirements.

In a large business, the leadership role gets divided up: There may be a board of directors, a president or chief executive officer (CEO), a chief operating officer (COO), a chief financial officer (CFO). In small practices, these various responsibilities still exist; they are just combined and divided as suits the leaders.

Below these “officer” roles, there are a variety of management roles, often even in quite small practices: Practice manager, human resources manager, training manager, HS&W manager, etc.

Common in many practices, there is also a business development or marketing function reporting to the principals (and often lead by a principal). When it comes to rethinking how to improve a design practice, this structure creates a problem: it gets in the way of involving project managers in marketing efforts to “grow” projects as well as capture new business. For this reason, I treat the BD/marketing role as part of CRM – Client Relationship Management.

Coaching & Mentoring

Coaching and mentoring is a special kind of communication, deserving its own space and its own place on the timesheets of firm leaders.

Coaching and mentoring happens in most design practices, but usually in an ad hoc, unplanned way, that more often suits the whim of the leader rather than the needs of the “followers”.

If rethinking coaching and mentoring is a candidate for rethinking in your practice, start by planning for it, and by allocating real time in your busy schedule for it. Then follow the plan; don’t put it off because other issues get in the way.

Coaching and mentoring is a learned art-form. It is not an activity that the half of practice leaders who are Intuitive, Thinkers and Judgers come by naturally. If you are an ENTJ or an INTJ, you’ll have to work hard to become an effective coach/mentor.

Communication is integral to the leadership role: Successful practice leaders ensure that all staff understand and appreciate the questions firm leaders address and the decisions they make. Successful practice leaders also understand and practice two-way communication, and they listen more than they talk.

Strategic Planning

A good metaphor for thinking about this core planning is that your practice is a yacht, and your financial plan is the sail that powers it forward, and the strategic plan is the rudder that guides the course.

In my own experience, the number of practices that have any formal strategic planning is well below half. Those practices without these essential drivers and guidance systems are basically ships without a sail, without a rudder, going whatever direction the prevailing currents are blowing them.

Strategic planning is a critical function in any design practice that wants to have a future.

Financial Planning

The 2010 RIBA The Future for Architects? Report found that only 50% of UK architectural practices have a business plan (which includes financial planning).

A lot of smart people have written excellent books and chapters in books on this topic, and I’m not going to re-plow well-tilled ground. I’ve referenced some of these sources under Practice Resources, and included some particularly good papers under Practice Knowledge Node.

My core point on rethinking this topic: If you don’t have a business plan / financial plan, and you don’t do formal strategic planning on a regular basis, START NOW. Otherwise, the future of your practice is bleak.

Managing Resources 

Whereas Planning for the resources your firm will need is a leadership role, managing these resources is a management role – including hiring (and deciding who to hire), training, firing, conducting exit interviews, listening to and hearing staff, and all the record-keeping that entails. Principals may be brought in to make the offer of employment, do the retrenching, etc., but it is usually the Practice Manager that guides the action.

Some larger firms also employ a Resource Manager – often a part-time role for a senior associate – whose specific job it is to juggle project staff assignments and deal with the ever-changing needs of projects.

Most commonly in small firms, senior staff get together once a week (usually Monday morning) and discuss staff allocations for the week. This works OK for practices up to 40 or so staff; beyond that it gets sufficiently complex to require formal planning.

Managing Change

(Section to follow)

Ownership Transition

Ownership transition is a complex topic, even to describe in outline. I will put that in a separate page (yet to be written).