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The importance of succession planning

The importance of succession planning


Written by Penny Craswell.

This article originally appeared in AR146 – available now through newsstands and digitally through Zinio.

Like all businesses, architecture firms need to be serious when it comes to succession planning.

This is especially true now when a huge amount of businesses are facing uncertainty as Baby Boomer leaders and owners reach retirement age. A recent survey in Australia found that, in the next decade, 60 percent of private business owners in Australia will be reaching retirement, and that the resultant transfer of ownership assets and business equates to $607 billion (Monash University Family and Private Business Research Unit).

Unlike other professions, such as accounting and law firms, in architecture, succession planning is one area of business that is often overlooked. This is especially so for the majority of Australian architecture businesses that employ fewer than 200 staff – most of which are led by a living, working architect (or two or more architects), who owns the business. But succession plans are vital for any business, no matter the size.

For those larger architecture firms that have survived 50-plus years of practice, the transition from the original owner/architect to a collective leadership and ownership model may have occurred decades ago. HASSELL is an architecture, interiors and landscape firm with studios in Australia, China, Southeast Asia and the UK that was founded in 1938 in Adelaide and takes its name from one of its three founders, Colin Hassell. For HASSELL, succession planning has undergone several stages, from the original founders to leadership under John Morphett, who was influenced by his time working with Walter Gropius at the Bauhaus, to the next phase led by Tim Shannon, which saw the upscaling of the firm through new locations in Asia and elsewhere. Current managing director Rob Backhouse has been in the role for nearly eight years and has recently become chair as well. Constantly on the lookout for the next generation’s leaders, Backhouse describes the practice’s approach as a collective. “Once firms become bigger and they become distributed with multiple locations, to survive and prosper you have to share authorship and ownership,” he says.

At Hayball, the strategy for succession planning is proactive, with the firm announcing an employee share ownership scheme in 2013. Under this system, shares are granted independently of seniority within the firm. This has several benefits, including bringing more individuals into the core of the business.

“It means that people have an insight into the business side of the practice and are often than more proactive about commercial matters,” explains Tom Jordan, managing director of Hayball. Allowing people to slowly buy into the business is also a powerful human resources tool. The focus for Hayball is therefore about talent attraction and retention, about identifying future leaders while retaining the legacy of the design leaders of the practice.

“Succession planning is vital – you need to be doing it all the time, not just for leadership, but to identify a career path for everyone in the organisation,” says Jordan.

For smaller firms, the question of succession planning may be raised when the lead architect approaches retirement. In this case, it is best to start planning for the changeover five years prior, in order to give the business time to adjust to the change, which may affect finances, design and management style, as well as client relationships.

Succession planning may also be useful in the event of a change in career – the benefits of a working brand and team do not have to dissipate because the owner of the business changes their priorities and decides to take a career break or change careers entirely. As strange as it may seem to prepare for an event when the key players in the business are absent, not to do so means risking the future and legacy of the business.

This article originally appeared in AR146 – available now through newsstands and digitally through Zinio.


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