In this interview business consultant Mariana Idiarte talks a little more about contracts and shares thoughts about breaking into new markets.
In today's episode we discuss:
- The value of being a partner of your client vs being just a service provider in understanding your client and his/her motivations.
- Different strategies to survive in global and competitive markets.
- The importance of knowing your motivations before you move in to a new market.
- An important element that makes or breaks your firm's success in another country: flexibility.
- Establishing your reputation and growing your business by building networks.
- Why should potential clients hire your firm? What differentiates you from everyone else?
- Show it. How to effectively communicate what makes your firm special.
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Interview Transcript and Members Only Resources:
Enoch: Welcome back, Architect Nation. This is Enoch Bartlett Sears, AIA. This is the show where we talk about the business side of architecture.
Today’s show is sponsored by the Business of Architecture Conference which will be coming to the Internet near you in early October.
Today, we’re joined with, once again, business consultant Mariana Idiarte. She’s a strategic business consultant that helps creative industry professionals including architects.
So, Mariana, once again, welcome back to the show.
Mariana: Hi, Enoch. Great to be back.
Enoch: One of my listeners, Architect Randy [Inaudible] asked a question. He said that he recently saw Joshua Prince-Ramus who used to work at OMA.
Enoch: He talked about some interesting stipulations in the contract that he uses. Basically, saying that once the design and the budget is approved by the client, it can’t be changed and that the architect has the right to, basically- if there’s any sort of redesign happening, then the architect has the right to a new contract and 100% new fees.
Is that something that he got from the contract that OMA uses? Do you know anything about it?
Mariana: No. I think that is his own way of putting it, as far as I know. I mean, I left OMA already five years ago [Inaudible] Well, in fact, what he’s saying is not new. It’s actually the case in most standard contracts. It’s another… If you want, it’s a [Inaudible] that is given to most standard clauses and contracts. He’s just putting it in a more direct way.
Most standard terms and conditions from architectural organizations say that. From the law point of view, they say, you know, the architect keeps the rights, the author rights, the intellectual property rights, the copyrights which implies that, yes, that no one can change the design without you approving on that. That’s kind of implicit in the law.
So, I guess what Joshua is doing is just translating it and showing what the implication is. This is, again, generalizing because I haven’t seen… I’m just reflecting on what you just mentioned it is. But, it may be important for his firm to make that very clear. If that is one of the firm policies that he’s strong about, that’s good.
Enoch: Okay. You talked a little bit about the financial condition of these contracts, Mariana. Have you ever been involved in helping architects determine the fees? If so, do you have any suggestions for, you know, typical pitfalls to avoid and how they should be thinking about that?
Mariana: Well, it is very, very broad. Again, this varies. I don’t have one, single formula that works. What I think is worth mentioning is that there are always possibilities to consider an alternative to the way you are building your fees.
Something that I think I mentioned even before, you know, in our previous talk about putting yourself in the role as a partner of your client rather than just a service provider and try, again, talking about getting to know and understand your client and his motivations. You may understand how he sees the financials of the project – what is his position, what are his worries or what are his resources – and you can play along with that.
I’ve seen cases of people agreeing on working on the design phases for a rather low fee but becoming a partner once the houses they designed got sold and be rewarded later on for actually a larger amount because they could afford, also the waiting until the project was sold and realized.
Enoch: Now, under that scenario there’s a lot of risk that the architect is taking on.
Mariana: Of course.
Enoch: How do they mitigate that risk? Is there any upfront? Do they charge a higher fee for that initial design concept? How do they mitigate the risk of leaving some of the fees until the end of the successful project?
Mariana: Well, this particular case I mentioned about was a small development. It was only six villas that were in a premium location. The architect did a good job in, what I mentioned before, doing a due diligence in checking the solvency and the reliability of the client/the developer that was there including someone who has experience enough and a portfolio with a marketing machinery working properly so that they could feel very comfortable that the villas they designed were going to be sold.
Mariana: So, that is, again, assessing the risks and simply managing. So, they didn’t have problems. The client, also, they asked for an estimation of how long does it take until the villas were sold?
They did this due diligence in to checking what are the terms exactly we’re talking about? How long does it take until we actually get paid? Is it until they’re built or actually the buyers make a deposit at some point before the villas are built and you’re getting paid already from that part, for instance? So, there’s, again, like I said, take your time to learn about the situation, to understand, to check on the financial capabilities of your client before you put yourself in a risky position, for sure.
Enoch: Mariana, now one of the things that you specialize in is helping architects with international work. I was just curious, is this something that you think that we should talk about with my audience being primarily… We do have quite a few listeners in the UK, but then also Australia, New Zealand, and the U.S.
Mariana: Great. I think you should for different reasons. I work a lot, obviously, being in Europe, with European firms, but I do work occasionally as well with firms outside of Europe and are those working internationally or wanting to work internationally.
Even if you’re not considering working internationally, I think the world is developing in way that people move around and so are professionals. You are going to be competing, probably, with foreigner architects going to your country as well. That’s happening more and more. So, it’s in your interest, you know, to at least to consider the possibilities or to understand what motivates someone to go and work somewhere else. So, I hope it is of interest to your audience.
Enoch: Absolutely. You know, here in the States the states are so large that they represent a pretty similar landmass to Europe, for instance. So, if an architect is even thinking about moving in another state or working in another state, do you have any good pointers for how to break in to a new market? When you’re the new face in the block, people don’t know you, how do you penetrate that market? What are some strategies for doing that?
Mariana: I’m glad that you made that comparison because, indeed, when you’re in very large countries, you don’t need to go international to experience the same situation that if you were moving countries. The approach to changing locations of working and the principles of it apply in any case.
I could say the answer is to tackle that in a strategic way. With “strategy,” I mean that you have to start you have to follow some steps. The first one is asking yourself what your motivation is to go and work abroad or in another geography:
- Whether that is purely financial because the area where you are working is in trouble or the market is not moving and therefore you need to find somewhere else your commissions,
- Or whether it’s a professional motivation because there are some markets that because they are in development, they may allow you to grow and learn as a professional,
- Or just simple personal motivations because you enjoy a particular culture. You may fall in love with someone else from a different country that wants you to move where they live. Whatever your motivation is, that may determine, very much, which location you’re going to choose to move aboard.
That is the first step.
The second and very important is something that some people don’t take seriously enough or with delicacy enough is to spend time and energy in doing proper research.
For instance, I don’t know about architects in the U.S., but many architect firms in Europe, small and big, are looking in to emerging markets like China, or India, or Brazil to work in. Yes, they are large markets, yes there is a lot happening. That doesn’t mean that you have success guaranteed by going there.
On the other hand, it doesn’t mean that you… Even if you hear negative voices about an experience people had in some markets that you may not succeed, because you may particularly may have what it takes to make it your place somewhere else.
So, with doing research I mean doing a thorough and, again, strategic research. Looking in to not only whether there’s work for architects, but looking as a whole such economical situation of a country or a geography, and with other things have to do or may affect now, in the near future, or longer term, the work of architects.
Secondly, getting to know or, at least, question yourself: Do you know the culture of that country, or even if from one state to the other in the United States, or regions in large countries enough? Do you know that culture enough? Are you familiar enough to think that you can make business there? That is one of the most underestimated matters when it comes to working abroad.
It’s like you have to deal… I give always the example of when you have cultural differences within a city. You have cultural differences within a sector as well. When moving countries, you have extreme cultural differences sometimes.
On the other hand there may be cultures in other countries that closer to what you are familiar with, and that may be a better match. For instance, people here in the Netherlands, although the culture is much different from other northern European countries, the differences are a lot less than the south of Europe or with South America for instance, if you compare regions. So, there’s a lot of things to consider in terms of how much you know the language, how much you know about their working culture as well, how flexible you are.
Flexibility is another thing that is essential if you’re considering working somewhere else. Flexibility comes in to how well you adjust to the local conditions and different ways of working up to how flexible you are to be having Skype calls at extreme hour differences, or catching flights that may get delayed and therefore miss a lot of things abroad. So, flexibility is another key element.
Enoch: Yeah. I was just wondering, do you have any tactical examples, on a tactical level, of things, interesting things you’ve seen architects doing to break in to a market segment?
Mariana: Well, one tactical element that is key to success is building networks, building relevant networks in whatever location you want to work. So, if you’ve done your homework, and you think, “Yes, I’m prepared to tackle this,” you have to start looking in to, okay, “What people I know there?” “What organizations?” “What kind of [Inaudible] do I need to succeed there?”
That goes from not only… It’s much broader than saying, “Oh, who wants to hire me?” like a client or, “What markets would work for me?” If you’re going to work abroad, you most likely need some partners. Work with a local architect that is familiar with the local regulations, of course, as you are not. Working with [Inaudible] locally. Having people in your network that will help you create the reputation that you don’t have somewhere else. So, it goes in so many, many levels or government levels, embassy, etc., etc.,
Enoch: Yeah. Do you have any examples that you can give us of people or circumstances you’ve seen where people have… When they want to think about starting networking, can you give us some tactical examples of how they might approach that?
Mariana: Certainly. Again, this comes to the first point that I mentioned. It’s seeing what your motivation is.
The easiest way is if you have a personal motivation – it’s something that you want. Maybe you have a background from one of your parents or your grandparents come from a different country, therefore you may have some affinities through the people you know and need to pursue potential clients within a market. Start with where you feel comfortable with, what you know.
If you’re going to go in to in a more professional, say, government organizations, many countries have… From their Ministry of Foreign Affairs, for instance, they have agencies or commissions that help entrepreneurs and business people working abroad, and facilitate their access to some markets. There are even business trips organized by your government organizations to link a network with people.
Your architect organization, locally, may have even a chapter or department dedicated to that as well. So, it may vary and, again, part of the field research. Look at the other architects that are working abroad and also ask them. Talking to peers is a very useful tool to learn from each other.
Enoch: Thank you, Mariana. Well, there’s just one last question I’d like to ask you because you also mentioned that you have an expertise with helping architects with their presentations, and communication, and presenting ideas. Could you share with us two or three main – you know, the advice you would present when they’re thinking about communicating who they are and what they represent?
Mariana: Well, it’s difficult to summarize that in a very single question, but I’ll try. I think if you… Let me first finish one more thinking about working internationally, if you don’t mind, Enoch.
Enoch: Yeah, sure.
Mariana: Because one of the things that I wanted to mention very much is that no matter what motivation or what strategy you choose to work internationally, you have to think that it takes a long time before you succeed in a market. Even getting a project or getting a commission, that doesn’t mean that you have penetrated the market.
So, you have to be thinking of a long term strategy and you have to check whether you have the resources to afford that, to continue working for years, and to also, if you continue working also in your local region, to have that in mind. That is the last thing I wanted to mention about that.
Coming back to your question, I will start with an example. A while ago at a session with young architects organized by the Dutch Association of Architects here I was invited to give feedback to young architects about their portfolios. So, there were some senior architects for larger firms, developers, and potential clients, and me as an expert in a, kind of, speed date setting to give feedback to this young professionals.
That was very interesting because I spoke to almost ten of those young architects. The moment they came and sit in front of me, they just put their portfolios and they start showing me all the projects they have done.
I said, “Forget your project. Tell me who you are, and what are you good at, and why I should hire you and not the architect sitting next to you.” That was a mind-blowing question for absolutely all of them. They were like, “Oh, I never thought about this,” or, “Wow. What a difficult question.” So, that is the key for architects to do, again, some homework and think about what is your differentiation potential. What do you have to offer to a potential client or to anyone for that matter that the others can’t?
Enoch: What do you think would be a good or interesting response? I’m just going to flip it around because that’s a very good question you made there, Mariana, and I would like to know, you know, give us some ammunition. Tell us what would be a good response to that question.
Mariana: Well, the good response to this question is one that provides a solution for someone’s problem.
Enoch: Can you give me a specific example of…
Mariana: Of course. For instance, when I talk about myself and my own business, when someone asks, “What do you do?” I don’t say, “I am a business consultant working for the architecture industry.” I say, “I help architects in doing better business. That is what I hope to do at least.” So, people say, “Oh, interesting. How do you do that?” When you get that response back and therefore a second question, you know you’re in track.
So, think again from the perspective of your client and think about what it is that you do best that rest can’t. To give you an example of those young architects that I spoke to that day, even some very young ones, when you start… I took the time – obviously, because there was an opportunity to coach them and help them develop that presentation skills – I took the time to ask the right questions. With no exceptions, after five minutes of talking, we can extract at least one particular thing that they were particularly good at.
Even the most shy of them, for instance, this was a young architect who was an extremely shy person that you would say at first, “Ooh, you’re not going to sell your business that easily.” But, what happens is this young man he has seen his family history- a lot of people who need special attention for some disabilities or special healthcare. So, he’s very familiar with the needs of people that, for health reasons, need that special care. He knows very well what they’re need in a living or working environment. So, he knows also the health system. He knows the people working there. That is something where… He was considering working in that sector, helping in health and renovating houses for people that need special care.
That is much perfect with his story and even his personality – not being, maybe, too commercial or outspoken person, but someone who understands and have the empathy with people within the health system because he knows it very well from the inside, and that is what he can, that many architects won’t be able to provide, for instance.
Enoch: Excellent. Well, I’d like to give some homework to our listeners, Mariana. I’d like them to answer that question for themselves. Take a minute, think about what is it that you do that’s different than everyone else. What do you bring to the table that’s unique? Then, go to the show notes of this particular episode and put that in to the comments, Mariana. How about that?
Enoch: Then, you and I can touch bases later and then take a look at those just through email or whatever, and maybe give some feedback on those comments?
Mariana: Sounds Great.
Enoch: Alright. Well, Mariana, I know that you have to run because you do have an appointment to run to and our previous episode went a little bit over, but thank you for joining us.
Did you have any other thoughts that you wanted to leave us with on communication or anything else we talked about today?
Mariana: Well, communication is definitely a very, very broad subject. Something else that when I teach students as well is one of the difficult things to bring across are that of how to phrase your specialty or your differentiation not only from the thinking point of view. But, I always use the example: Google architects and avoid using standard words. I always look up for the young and dynamic architecture office and you get millions of hits.
What does that actually mean – “young and dynamic?” Whatever you want to use to describe your firm or describe yourself as an architect, make sure that it makes sense. That it means something. If you say, “I’m a very experienced architect,” show it. Say, “Because I’ve worked in more than a hundred projects.” You have to prove what you state. [Inaudible] You don’t need to win a Pulitzer prize for great writing. It’s about using the right language, straight and clear, and someone that your clients will understand.
Enoch: Excellent. Thank you.
Mariana: You’re welcome.
Enoch: I appreciate that. Great point, Mariana. Once again I encourage everyone to listen to this episode wherever you’re at, whether you’re working out, driving in the car, or working on some drawings right now.
When you get a chance, go to www.BusinessOfArchitecture.com. This is the second episode with Mariana Idiarte. Put in there your differentiator, what you think your differentiator is. We look forward to seeing that.
Well, Mariana, thank you, once again, for joining us and have a good evening.
Mariana: You’re welcome, Enoch. It was great to talk to you again.[/DAP]