Strategic Services as a Tide to Lift All Boats
Upon meeting a new colleague in the design profession, or even reuniting with an old friend to talk shop, I often find myself having a recurring conversation about strategic services. I enjoy the discussion because it is often an opportunity to dispel rumors related to this type of consulting work as well as a chance to explain why I believe more firms should consider adding strategic services as a line of business. In this month’s column, I answer the most common questions and address the subsequent myths, about the applicability of having a strategic group or studio within a firm.
Must a firm be large to be able to deliver strategic services?
In my experience with MKThink, the firm has always provided strategic services to its clients over the past decade and has done so whether the firm size was seven or 40 employees. The ability to offer strategic services is not at all dependent on firm size. Smaller, more nimble firms, without a lot of internal politics, are often able to initiate this line of service quicker than medium or large firms.
Then how does the firm have the necessary overhead to support strategy?
Strategic services are, as the term clearly states, a service that is provided on behalf of clients. While strategy studios are often thought of as the research arm or center of a firm, the profit margin related to the projects provided by the strategic team is consistently larger than the margins associated with the typical architecture and design services that the firm provides. In fact, in strained economic conditions, when actual construction is less, the strategy group and its associated projects may help to carry a firm.
We do not have any workplace clients, so is it beneficial to have a strategy group or studio?
Rather than focusing solely within one project sector or industry, having strategic services within a firm allows that segment of the practice to have a great impact across market sectors. The implementation of strategic services gives a firm the potential to further existing client relationships. It also provides a relatively low-risk opportunity to test the waters in other potential growth markets that the firm may be considering. Within the San Francisco Bay area, where I am located, many large firms have just begun to develop a workplace strategy group or expand upon an existing one. MKThink designs workplace interiors as well, but the majority of the firm’s strategic projects are in the education market, with a unique focus on school districts and higher education. Also, the firm is growing its municipal offering through a strategic project and is currently making scenario recommendations for how a county can better provide health and human services to its constituents. This diversification can serve a firm well when economic fluctuations impact particular market sectors.
Why are you sharing all of this information?
Let me be honest here. I am not necessarily giving away trade secrets. My passion for sharing what I do in strategy, and encouraging other firms to follow suit, stems from the belief that the profession needs to continue to evolve in order to stay relevant. Strategic services, and the wide breadth of different project types that they actually entail, are a means to ensure that we all stay afloat even when our clients are not spending on improving their capital assets.
With that being said, what strategic services can offer is unique and new enough, from an architecture and design firm perspective, that pipeline development for our strategy offerings can take two to three times longer than a typical design and construction project. This is primarily because it takes a few more meetings and discussions to introduce the strategic offerings and to find the right opportunity to engage the client before they even consider whether or not they need to build at all. If more firms offer similar services, and if firms that are currently offering strategic services continue to innovate, the client acquisition costs will be considerably reduced.
In the end, I share this information because, as the saying goes, a rising tide lifts all boats, and I would love to see our profession continue to thrive well into the future.