Best Firms, Hnedak Bobo Group: HBG Gives Its Architects The Freedom to Design
See if this scenario sounds familiar: A couple of guys come out of architecture school armed with newly minted diplomas and dreams of putting their mark on the built environment, Howard Roark-style. Somehow they connect, do a few jobs together, and decide, hey, what the heck, let's form a partnership. They work hard, get a little lucky, the projects roll in, and before they know it, they've got 20 or 30 people working for them.
At some point in this story, maybe 10 or 15 years down the road, those wild and crazy guys with stars in their eyes discover that they're no longer designers, working intimately with clients. Now they're businesspeople, or worse, "managers," sweating out every detail from health insurance policies to paper clips. Before long, one of them cries out, "Enough! I want to be an architect again!" They dissolve the practice and, now in their forties or fifties, start out all over again, only with less hair on their heads.
That's essentially the scenario Greg Hnedak and Kirk Bobo wanted desperately to avoid when they got together with Joseph Gooch in 1979 to start a firm in Memphis, Tenn. Four years later, the pair bought Gooch out and formed Hnedak Bobo Group, with a clear vision of keeping design and business in perspective.
"Architects don't get any training in running a business," says Bobo. "As soon as they grow past 10 people, somebody gets frustrated and they often break up."
Practically from the start, Hnedak Bobo Group has divided the business side from the design side, says Bobo, an alumnus of the University of Virginia architecture school who relishes the business end of things: His father co-founded a bank in the family's hometown of Clarksdale, Miss., and at one time he chaired the National AIA Practice Management Committee. Hnedak, a New Jersey native with a BS in architectural technology from the University of Memphis and a BArch from the University of Tennessee, enjoys putting most of his effort into the design side. Both are fellows of the AIA.
At HBG, architects concentrate on design and client relations, while the 25-member management staff—led by a management committee consisting of chief administrative officer Terri Struminger, COO Ron Johnson, and CPA Jeff Bailey—oversees all business support functions (including marketing, IT, legal, human resources, finance, and administration) and a number of project operational functions (including quality assurance, risk management, construction administration, and code consulting) for the 85-person firm.
This bifurcated structure liberates HBG design professionals to devote themselves almost exclusively to projects and clients. If an architect needs help with a job estimate, there's a full-time estimator on staff, something rare in a firm of this size. Too busy on a project to fill out a health insurance claim? Not to worry, the HR department will do all the paperwork. Need new clients? No problem, the firm's two full-time business development staffers will cover the trade shows and prospect for new business on your behalf. Need help finding staff? The HR department employs a full-time recruitment/retention professional.
"We put a lot of emphasis on repeat business, so we want our designers to be spending time with our current clients," not worrying about operations details, says Hnedak. "Our most valued employees are the ones that deliver the project to the client. We want our people to see that serving in a project leadership role could get them to the top at this firm." As Bobo says, "We want our aspiring professionals to know that if you're a designer at this firm, you can retire at this company as a practicing professional."
At the same time, the HBG business model offers management staff the opportunity to aspire to bigger things, too. For example, both Struminger, a 14-year veteran of the firm, and Johnson, a 22-year-veteran, have made partner, even though neither is an architect.
Hnedak says the formula works only if the founders of a design firm are truly willing to give up control of business operations to others. "So many architects, when they reach their 50s, start losing interest in the design issues and start looking for other things to meddle with," instead of leaving those responsibilities to trained business professionals. Bobo puts it this way: "I see it over and over again—architects who think they're smarter than other people."
By sticking to the model, HBG has been able to compete effectively against much larger design firms in the highly competitive hospitality, casino, and entertainment market, where it is ranked #6 nationally by Hotel & Motel Management. Although hospitality accounts for the lion's share of HBG's work—it opened a second office in Las Vegas in 2001—the firm also has design studios in urban and civic architecture (HBG's offices are in a historic 1871 building on Memphis's Cotton Row that the firm restored) and corporate workplace design, including five million square feet of corporate space in the last five years.
Projects include the Gaylord Texan Resort and Convention Center in Texas and the Gaylord Palms Resort and Convention Center in Orlando; the U.S. Federal Courthouse in Greeneville, Tenn.; the International Paper Headquarters in Memphis; and the FedEx Express World Headquarters. HBG has also established selective alliances with other firms—notably Rossetti Associates, Detroit; Austin Veum Robbins Partners, San Diego; and Australia's Group GSA, Sydney—as a means to expand its scope of work.
Many small- and medium-size design firms have tried to implement similar management structures, but few have done it as well as HBG, whose employees have benefited from the founders' thoughtful planning and resolve. That alone was enough to convince the editors of Building Design & Construction to name Hnedak Bobo Group a "Best AEC Firm To Work For" in the under-100-employee category.
However, as the accompanying box shows, HBG's structure allows it to do a lot of other things to keep employees energized. Take, for example, its mentoring program. In one case, a senior staff member, Terry Hughes, a 28-year veteran of the Memphis/Shelby County Code Enforcement Office, took a young charge under his wing. Within two years, that protégé, Paul Towery, became a leading figure in the firm on code integration issues.
The founders have also been working on a succession plan for a decade, mindful that it's not an easy process. "To make the succession work, it has to happen well in advance of the founding partners walking out the door," says Bobo, 54. He and Hnedak, 59, have divested 25% of their ownership to the firm's other principals and have committed to divest themselves of 25% more by 2010.
Looking ahead, Bobo sees HBG as poised for growth. "We have the ability to attract huge projects on a national basis, so the food is out there to feed the firm," he says. The Management Team operating platform also has "plenty of capacity" to support a practice twice the current size.
The critical factor in the future of Hnedak Bobo Group gets down to its people, says Bobo: "We want our young, middle-tier professionals to feel that there are enough seats around the table that they're not going to bump into a ceiling."