I AM [actually] AN ARCHITECT

You can’t improve what you don’t measure.  If you want your firm to be the best it can be, figure out how to measure each of these things.  Take the time to set up systems which will automatically measure these and create reports, whenever possible.

Marketing: 

• Size of your market segment.  In other words, if your firm targets high-end single-family residential work in Northern California, you should do the research to know how much remodeling and new construction occurs in that market.  Then you know how much of that you are capturing.
• Size of other market segments.  Research the sizes of other segments you don’t currently target.
• Rate of growth or decline.  Find out at what rate each of these market segments has been growing or shrinking.
• Number of competitors for each market segment.

Business Development:

• Hours and cost to sale.  Keep track of every hour and every dollar spent in pursuit of each project.  Then measure the return.
• Repeat business and referral business.  As discussed in my last post, repeat clients should make up at least 60% of your revenue.
• Sources of business.  Know exactly how many projects resulted from which types of advertising and which referrals.  Parse this in several ways, including by building type.  According to the Pareto Principle, about 80% of your business will come from 20% of your business development efforts.  If you’re tracking this stuff, you’ll see that you may be able to drop the less effective advertising efforts and focus entirely on the most productive.

Contract Negotiations:

• Types of contracts.  Keep track of which contract types clients are requesting.
• Length of time to negotiate.  Measure how many hours and how many days it typically takes to get a signed contract.
• Sticky points.  Learn which contract issues are typically sticking points with clients.  If there is a pattern, you’ll be ready for it.

Programming/scoping phase:

• Missing information.  Keep track of (and not just in your head) the items that your clients are forgetting to include in the program that later becomes an issue.  Then you can be sure to ask about those items up front the next time.
• Your time.  Just because you aren’t being paid to help the owner with the programming phase doesn’t mean you don’t end up helping the owner with the programming phase.  Keep track of every hour so that you’ll know next time to budget that into your project estimate.

Schematic and Design Development phases:

• Time, by task.  Your timecard system really must allow you to track your staff’s time by task, not by total hours each day.  This enables accurate future workplans, but also allows you to keep track of additional services correctly.  You need to know how long it takes to configure and detail a stair, to incorporate the medical equipment, to review the mechanical engineer’s model or drawings, etc.
• Total person-hours for the phase.
• Consultants’ hours, by type of consultant.
• Time spent for owner approvals.  You may find that you want to ask for a clause requiring additional service funds if owner approvals take more than a certain amount of time.
• Changes in owner decisions.  Document each time the owner changed their minds after giving sign-off or direction.

Documentation phase:

• Time, by task.  Adding and coordinating tags and notes, dimensioning, setting up sheet views, cross-checking specifications, etc.
• Total person-hours for the phase.  Cross-reference this with how many hours are spent in the design phases, permitting, and construction contract administration so you can make judgments about what break-down of effort is most cost-effective.

Permitting:

• Agency comments requiring re-submittal.  You need to find a way to communicate “lessons learned” back to the rest of the firm somehow.  If there are errors or omissions in the set that cause the Authority Having Jurisdiction to reject the set, make sure you don’t waste everyone’s time by producing the set the same way on the next project.
• Time.  Track both person-hours and number of days required to obtain agency approval.

Bidding/negotiations:

• Time.  Track both person-hours and number of days it takes to get a signed contract with the builder.

Construction contract administration: 

• RFI’s: Frivolous/legitimate/owner.  Code each RFI to show whether it was a legitimate question or “frivolous.”  Frivolous RFI’s are questions that have already been answered in a previous RFI or questions whose answers already exist in the documents but someone didn’t know where to find them or didn’t bother looking.  ”Owner” RFI’s are RFI’s that result from owner-requested changes.  Time spent on these should be billed as an additional service.  
• RFI’s: Time spent answering.  Both person-hours and number of days should be tracked.
• Document changes: Owner/E&O/Contractor error/Unforeseen.  I am shocked at how often firms don’t track this.  Know exactly how many changes there were for each of these categories, how many hours it took your staff to complete them, and how much construction cost was attached to them.  This has got to be one of the most important things to track for a million reasons that I can’t get into without turning this blog entry into a book.  Remember to cross-reference these with how much time you spent in the design phases so you can see the correlation over several projects.

Other:

• Staff turnover.  Track your rate of staff turnover both on the project and at the firm.  Cross-reference rate of staff turnover with number of E&O document changes and claims.  Also cross-reference staff turnover with professional education costs so you can see the relative costs of retaining staff versus hiring.
• Claims.  Know the metrics on which types of projects lead to claims.  Cross-reference claims with number of E&O document changes, staff turnover, contract type, and client type.  Also, keep track of the hours and legal costs associated with dealing with claims.

Are there any other metrics you have found particularly insightful that you would recommend observing?