Improving the Value of Architectural Services

It is an all too common belief that our profession is undervalued, overshadowed by specialists, and constrained by contractors. Construction Workers, Masons and Carpenters earn MORE than young architects!

Architects often voice their grievances about their wages and workplace issues, which unfortunately only reflect the reality of how architecture is perceived as a profession , even from within. Despite the current robust economy, architects continue to be paid significantly less than other professionals with similar education and importance. 

This discrepancy is exacerbated by outdated delivery systems where clients prioritize obtaining the lowest fee from architects, reducing their role to that of a commodity. Fees too are predominantly paid as commodities, such as lump sums or fixed percentages based on the construction cost. Unfortunately, when compensation is treated as a commodity, the true value of architectural services is rarely reflected, and this undermines the economics of the profession. Indeed then as a profession, we need to explore alternative methods of value creation, and propose new business model for architects.

Leaner and Meaner Architecture Profession

The architecture profession today is leaner and more efficient compared to its previous state in say before 2000, thanks in part to advancements in technology using computational and mechanical tools to create at least better architectural services if not a better architecture. At firms today, fewer and fewer staff members are handling roughly the same amount of work. Although salaries have seen modest increases, fee percentages likely lag behind pre-crisis levels. Given that employees haven't witnessed significant increase in their pay checks, the productivity gains may be even higher. However, in a market where efficiency drives prices down, time spent on a project is not directly linked to the value delivered. 

Selling Time or Results?

While architectural productivity lacks well-defined measures, there is a strong correlation between increased productivity and the adoption of advanced technologies like Building Information Modelling (BIM), Computational and Parametric Design, Energy simulation and Green Building Standardisation in the field. 

Buildings are crucial to civilization and are essential for progress and survival. However, the business risks associated with architectural practice, such as financial constraints, are not directly correlated with liability risks, unlike in most other industries where assuming higher risks leads to higher rewards. And of course, with commoditized fee structures, salary pressures, and low profit margins are symptoms of a larger problem: architects don't fully realize the financial value they create. The prevailing economic models for designing and building prioritize obtaining the lowest price, disregarding the desired outcome. This approach results in significant waste in construction costs, ineffectiveness with projects exceeding budgets and schedules, and environmentally unsustainable construction contributing to carbon emissions and causing climate change. Clearly, there is ample room for improvement. Designing and building remain risky, marginally profitable, unpredictable, and often lacking enjoyment.

Driving Results and Innovating Practice with Digital Tools

Various project delivery models, such as construction management, design-build, "early contractor involvement," and design assist, have been attempted to enhance industry effectiveness. Each of these models aimed to improve outcomes without thoroughly re-examining the means. Unfortunately, none of these techniques, despite occasional successes, have significantly improved productivity, profit margins, results, or the overall satisfaction of working in the building industry.
Focusing solely on productivity and cost/schedule conformity misses the true potential for change. It's akin to evaluating the success of a surgical procedure solely based on its speed, rather than the patient's recovery. There is another approach: shifting the value propositions of architectural practice from selling time to delivering results for clients. Evolving technologies, such as cloud computing, digital modelling, and simulation software, already enable designers to predict various building aspects more accurately. These technologies allow for more precise cost estimating, energy consumption forecasts based on usage patterns, as well as assessments of embodied energy and carbon emissions. With time, these technologies will expand architects' predictive capabilities to encompass occupant behavior, building life cycle performance, and even usage outcomes like employee satisfaction or operational efficiencies.

Implementing this strategy would go beyond merely introducing new contracts, fee structures, or sophisticated digital simulation tools. The predictive power of these new digital tools can enhance designers' abilities to address complex problems and create valuable solutions for clients willing to pay for them. The practical context has become increasingly determinate in our modern era. Embracing outcome-based design practice, enabled by new mindsets, business models, and technology, empowers us to deliver the true value of architecture to clients. Our compensation models could be based on the outcomes achieved throughout the building process, including the performance of the finished structure. This is not just wishful thinking.