Steven J. Isaacs and John D. Kidd
It's a familiar scenario: A client tells an architect that a favored design element has to be eliminated to stay within budget. The architect, intent on preserving the design integrity of the project, begins to negotiate.
Case in point: When asked at the 2003 AIA convention how he would be able to keep intact his overall design concept for the World Trade Center rebuilding, Daniel Liebeskind commented, "Architecture is about negotiations."
In short, architects know they have to - and many know how to - negotiate on behalf of their buildings' design. Yet when a client says that the design fee has to be cut to stay within budget, many architects fail to negotiate successfully, if at all. How strange. Architects who are skilled at negotiating on behalf of their designs don't negotiate on their own behalf!
The results can be detrimental to even the best firm's income stream, reputation, and staff morale. The client says to the architect, "I have reviewed your request for additional fees, I understand your reasoning, but I have no funding and no chance of acquiring additional money." And the architect replies, "I will see what we can do to reduce our cost."
Architects skilled at negotiating design issues may bring the client back in line by invoking the parameters of the project: "This design element is integral to the overall framework we agreed upon together." Or, they may show the relevance of the design to the successful functioning of the project by stating, "Function is one aspect for the success of this facility. When we established the project's framework for success, we included goals that interrelated budget, function, and design. This element is integral to maintaining those goals."
Creative options used by architects to resolve design conflicts include working with the client to find a way to retain a design element and still maintain the budget. This might entail identifying items that can be eliminated without impairing function, or modifying elements to reduce the cost but keep the intent. We've also seen architects become proactive about helping the client find a funding source or donor whose gift would safeguard the design integrity.
It's clear that architects are fairly successful at negotiating design issues with their own clients, with consultants, and with construction managers; this is demonstrated daily, because it is integral to their definition of quality and to their success. Then why is it that, time and again, these same architects fail to use their effective negotiating strategies when they discuss their fees? Why, when the talk turns from design to money, do architects lose sight of the critical connection between design integrity and reasonable professional compensation?
One answer to these questions lies in a quick survey of possible strategic relationships between the means and ends of negotiations. Ends are the objectives of negotiations; means are the methods used to achieve those objectives. A look at three possible strategic relationships between means and ends will help explain why negotiators deprive themselves of success; a fourth strategy points the way to genuine mutuality.
A brief survey of negotiating strategies
Strategy No. 1.
End: Achieve my interests.
Means: Defeat their interests.
First brought to popularity by Attila the Hun, the take-no-prisoners approach is a primitive negotiating stance. This strategy accomplishes its goal by defeating any perceived threat from those with differing or competing interests. Energy is mainly used to conquer and subjugate the other side. Successful usually when one party is far more powerful or aggressive than the other, this approach makes it tough to maintain working relations - as any designer can testify who has seen design integrity or fair compensation wind up in the bull's eye of his client's target practice.
Strategy No. 2.
End: Achieve my interests.
Means: Focus on my interests only.
The Marie Antoinette let-them-eat-cake approach, a slightly less aggressive strategy, disregards others' interests - not necessarily destructive, but inherently selfish. Whoever uses this strategy is really saying, "I will only consider what I want, and I will reap the full benefit of victory without accommodating anyone else's needs." This strategy ignores anybody and everybody; when successful, it achieves goals without trade-offs. Bluntly put, negotiators who use it have extremely bad manners.
Strategy No. 3.
End: Achieve the interests of both sides.
Means: Focus on the interests of both sides.
A more evolved approach and the first one that is mutual enough to truly be called "negotiation" is the everybody-wins approach. Here, the ends change as negotiators move beyond the single-minded satisfaction of their own interests. This strategy became so popular in the 90's that the very definition of "win/win" degenerated from an effective negotiating stance to something little more than "cutting the baby in two." However, it really is nothing more than compromise: by identifying and satisfying mutual interests, a solution can appear to be a victory for both parties.
But appearance and reality are often different. A lot of times, this compromise leaves everyone feeling short-changed. The point is this: When an attempt to compromise actually does split the difference, no one is really satisfied. We see clients today who, sensing architects' desire to satisfy both sides, react by using it against them. One result is their failure to pay at the rates a highly compensated professional customarily receives.
A better way to negotiate
Strategy No. 4.
End: Achieve my interests.
Means: Focus on their interests.
There is a way to improve the process of strategic compromise. Our fourth - and most effective - negotiating strategy re-establishes the importance of satisfying one's own interests. But the key, the counterintuitive secret, is to stay attuned to client interests while pursuing one's own ends.
This isn't easy, however. Satisfying another person while never losing sight of what is important to you requires effort and preparation, not to mention practice. But the outcome can far surpass what the three previous negotiation strategies generally yield.
To explain this, we need to return to the earlier description of the architects who proactively strategized for the better building. The best outcome came from advocating for their client's interests (budget control) while maintaining the importance of their own interests (protecting the long-term financial viability of the design firm). Persevering architects - those who have become skilled negotiators - put their own interests front and center, indissolubly linked to both design integrity and budget control. Both designer and client achieve their ends without stalemate or compromise.
Strategy No. 4 appears to be the most effective way architects can work in a proactive, hands-on manner to achieve their clients' interests, even when the two sides are at odds over financial considerations.
A typical conversation might go as follows:
Reluctant Client: "I have reviewed your request for additional fees. I just have no funding and no chance of acquiring additional money."
Architect/Negotiator: "We appreciate your funding limitations; however, it is unproductive for you to expect us to perform the services without appropriate compensation. Let's consider the options that you and we have."
Of course, the architect would have a range of options ready. The conversation might start with these questions:
Assessing the benefits of a good fee negotiation
Architects expend enormous effort in design and, in many cases, achieve minimal financial returns. If designers used their negotiating skills to improve contracts and fees, they would greatly improve their income stream - not to mention their reputation and the morale of their staff.
We believe that if architects kept their own interests paramount - and learned to research, understand, and even pursue their client's interests - then everyone would be motivated to search more productively for creative options that really do achieve both parties' ends. We also believe that this would help restore the reasonable distribution of fees and profit between designer and client as an acknowledged cornerstone of the professional project relationship.
About the authors: Steven J. Isaacs is a principal consultant for The Coxe Group, a management consulting firm that has guided design and building professionals for 35 years. He has three decades of experience leading design firms and major engineering, architecture, and planning projects throughout the United States and overseas. John D. Kidd is a mediator for the design and construction industry. For the last 10 years, they have together taught a two-day course in Effective Negotiation at the Advanced Management Institute in San Francisco, which is their home base, and privately around the country. This article is drawn from the course. Steve Isaacs and also John Kidd can be reached directly at sisaacs@coxegroup.com.