Blueprints For Business
Want to save $250 million over 10 years? Boost employee creativity? Reinvent an old company? Conceptualize a new one? Recycle a factory into offices? Rework how you work? Discover your true corporate soul?
Call an architect. Smart managers already have their number. The folks who used to build monuments to executive egos are now in the business of redesigning businesses. If you want to work in a dynamic, creative company trying to embrace out-of-the-box thinking--and who doesn't?--then you want your culture to be embodied in your architecture. Architecture can be a powerful transformative agent that helps solve two key problems facing today's businesses: cutting costs and boosting productivity and innovation.
The new BUSINESS WEEK/Architectural Record Awards, sponsored by the American Institute of Architects (AIA), celebrate those who do it right. They highlight architecture's new problem-solving ability and bottom-line prowess. While most architectural contests tend to reward pretty facades, BUSINESS WEEK and Architectural Record, both of which are published by The McGraw-Hill Companies, focus on the successful translation of specific business goals into architectural solutions. (The October issue of Architectural Record contains its own write-up of the awards.) Each entry includes business plans, photographs, as well as architectural renderings. Nine teams of clients and architects won this inaugural contest on the basis of developing innovative solutions to the vital issues in today's global information economy: growth, restructuring, and new ways of working. "The key is using architecture to keep businesses and people on the leading edge," says juror Terrance R. Flynn, senior adviser to the vice-chairman at MBNA America Bank.
To ensure impartiality and fairness, the contest was run by the AIA based on criteria chosen by BUSINESS WEEK and Architectural Record: Did architecture play an integral role in achieving the client's goals? Was the quality of measurable results attributed to the architectural design solution? How well did the client and architect work together to meet goals?
The AIA chose the judges, and this nine-person panel was perhaps the first architectural jury to contain businesspeople, including a chief executive officer, as well as a number of the most renowned architects in the country.
In all, there were 153 entries. The largest category of submissions, 66, was for office/corporate facilities. There were 81 renovation projects and 63 new-construction projects. Nearly half the entries had budgets in the $5 million to $25 million range, and 40 projects were budgeted at more than $25 million.
What trends did the contest pick up on? Start with corporate reinvention through architecture. Recreational Equipment Inc., for example, was until recently a rather dowdy consumer co-operative. Known to its four million members for its high-quality mountain-climbing equipment and other outdoor gear, REI wanted to transform itself into a hipper retailer in the face of growing competition from catalogs and malls. Mithun Partners Inc. replaced REI's Seattle flagship store with a wildly exciting shopping arena. The architects designed a huge 65-foot-high, freestanding climbing rock, mountain-bike trails, and "rain rooms" so customers could test all their equipment before buying it. By choosing such materials as raw wood, unpainted steel, and concrete, they attempted to reflect REI's core values of honesty, authenticity, and straightforwardness. Within a year, this retail entertainment architecture, reminiscent of the NikeTown and Disney stores, had boosted REI's sales signicantly.
The contest also unearthed the trend of recyling--not cans, but buildings. The savings turn out to be enormous. Northern Telecom Ltd. chose to reclaim an old digital-switching factory for its global headquarters outside Toronto. It spent $50 million remaking it into a horizontal office building--a cityscape complete with neighborhoods and streets. A new building would have cost up to $150 million.
FLEXIBLE SPACES. Integrating factory and front office was the third award-winning trend. This idea, which began with such Silicon Valley companies as 3Com and Sun Microsystems Inc., blurs the physical lines between production and design, management, and sales. The goal? To create flexible space and bring together engineers, software writers, factory and warehouse employees, salespeople, research and development staff, and designers to cut cycle time and spark innovation. The idea is to bring about "fortuitous encounters" between disparate groups that lead to new ideas and products.
The winners of the BUSINESS WEEK/Architectural Record awards are chock full of the devices used to build in this serendipity: wide interior "streets," piazzas, gardens, coffee stands, escalators, gyms, stairs, and anything else that might bring people together to socialize. The award-winning Herman Miller SQA Inc. building--SQA stands for simple, quick, and affordable--highlights the trend. Designed by architect William McDonough, the building employs a long, skylighted corridor "street" to bridge production and office areas and draw blue- and white-collar workers together. There are few walls or doors and lots of amenities to promote interaction and nurture employees--a cafeteria, a basketball and fitness center, and "hang-out" areas for informal breaks. Offices have windows that open, sporting great views and lots of sunshine. Production areas have huge skylights. The new design reduced turnaround time, which is critical to Herman Miller, since its office-furnishings business is directed at companies undergoing restructuring and change.
All the winning teams of the BUSINESS WEEK/Architectural Record Awards successfully rethought the work process. The architects spent long months on each project examining how people do their jobs. Work in the Information Age is complex and often involves speaking with team members inside the organization; having extensive dialogues with clients, customers, and the outside world; and doing individual, creative work in private. The winning projects contained spaces for both kinds of collaboration as well as privacy.
As in all real estate decisions, the tax code often played a role in the decisions of the contest winners. Thanks to the tax law, there is good reason to tear down office walls and add furniture. Fixed assets (translation: walls) depreciate over about 30 years and are a capital expense. Movable furniture, however, is depreciated over about five years and is not a capital expense. Indeed, furniture can even be leased. Financially, open plans with few walls allow companies to reallocate their capital to other business needs.
The BUSINESS WEEK/Architectural Record contest shows that those who balance cost savings with boosting productivity and innovation get the best results. Take the example of Gemini Consulting Inc., which won an award together with architects Thompson and Rose Architects and Reiter & Reiter. Gemini wanted to consolidate two groups in two locations to better serve its clients. But it wanted more--to have the office represent how the firm works and what it stands for in relation to its corporate clients. "They had cultural ideas we tried to capture in architecture and reinforce," says Charles Rose, principal of Thompson and Rose. "Freely exchanging information was one of them, so we broke down office walls." In fact, they actually designed and manufactured task-specific furniture and rooms. Three were spaces for "hoteling"--ports where consultants could come in from the cold. Rooms to accommodate clients. Walls to handle huge data charts. "They wanted the office architecture to be a powerful narrative that explained the principles of their business," says Rose.
DISCOVERY PROCESS. In architecture-speak, what Rose did with Gemini is "programming" or "writing the program." It's a discovery process in which the architect analyzes the business organization and culture, breaking down work into its component parts, where the relationships really are. The immediate goal is to simply work out the space requirements. But it is much more analogous to management consulting than construction. "Programming is where business finds out how it actually does its work," says Frances Halsband, principal at Kliment & Halsband in New York. "This is where you get to the soul of a company."
Some architecture firms even have their own proprietary programming methodologies. In Houston, Hellmuth, Obata & Kassabaum (HOK), which designed the award-winning Brampton Center for Northern Telecom in Toronto, architects use "problem-seeking" programming to probe into the goals, assumptions, relationships, and overall organization of their business clients. Sound like McKinsey & Co.? You bet. With all of the BUSINESS WEEK/Architectural Record winners, architects and clients spent major time collaborating.
Of course, not all of the players made it into the winner's circle. "There were some dreadful entries that were completely dehumanizing," says juror Paul M. O'Neill, chief executive officer of Alcoa. "Some of the semi-open floor plans looked like old insurance offices where desks were lined up in military precision or old factories with cords hanging down from the ceilings," says O'Neill, who works in a well-designed open office while presiding over Alcoa's switch to an open plan.
What kind of architecture firms turned up winners? A number of them were small--husband-and-wife shops. "They really listened," and their efforts were "innovative and different," according to their clients. But not all the winners were so small. HOK, for example, is a large firm. The key to winning was cutting costs while delivering on creative environments.
For a more detailed look at who did it right, read on.