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Architecture firms growing - carefully and thoughtfully

Daily Journal of Commerce

May 9th 2013

Going through the wringer tends to remove the wrinkles.

"Through the '90s, we were really indoctrinated into the belief that bigger is always better," said Jeff Myhre, the founder and president of Myhre Group Architects. "Our company at that time (prior to creation of Myhre Group), through the '90s, would take on any project, any client, for any reason. We gauged our success by head count."

Myhre carried that philosophy over to Myhre Group, which was hit hard by the Great Recession. From 2007 to 2010, the company reduced its staff from 135 people to 25. Equity dried up and so did Myhre Group's pipeline of projects.

Now, as the economy re-emerges, architecture firms including Myhre Group are growing again. But this time it's tempered with a focus on project selection, and a new appreciation for payroll.

"My partners and I have concluded that bigger may be better for some, but it's not better for us," Myhre said. "The other thing that comes with growth at the haphazard growth rate is quality of staff diminishes... There's a very high turnover rate, which is not good for clients or quality control. It creates problems with morale. It's just not a situation that you want to find yourself in if you care about being an enduring great company, which we do."

This week, Myhre Group moved into an 8,200-square-foot office space on the fifth floor of the 620 Building in downtown Portland. The firm now has 40 employees, but its new space can accommodate only 13 more.

Instead of focusing on the amount of work, Myhre Group is zeroing in on the type of project - both in terms of diversity and chances of ground being broken. If the company had been more selective in how it chose clients in 2005 and 2006, Myhre said, it probably would not have had to lay off so many employees in 2007 and 2008.

Even large firms are refining their practices post-recession. ZGF Architects - Portland office has nearly 200 employees, but Bob Packard, the company's managing partner, said the staff had to be reduced by 15 percent during the downturn. ZGF is exercising shrewdness as it proceeds.

"There's an attitude of being very careful about the number of people you have, and what their skill sets are, and trying to be very responsible to the firm as well as to the new employee - that it's not just for a week or a month-long effort that we're getting them for," Packard said. "When we hire somebody, we like to know that it's for a little bit longer."

Packard said the general word on the street is cautious optimism. ZGF started hiring again six months ago, and its billings are tracking closely with the national trend.

According to the American Institute of Architects, the national Architectural Billings Index scored 51.9 in March. It reveals construction activity nine to 12 months down the road; any score above 50 indicates growth. March's score was down a few points from February's, but in general the index of late has improved steadily.

Hennebery Eddy Architects is ramping up too. In a few weeks, it will temporarily relocate to a new space in the Pittock Block, while its offices are completely renovated and expanded.

Hennebery Eddy also reduced its workforce during the recession. Its new space will accommodate 25 percent growth, but Michelle Vo, a principal at the firm, said that isn't planned in the immediate future.

"This is something we've been planning for some time, and we have confidence in where (the economy) is headed," she said. "It doesn't mean we're bullish and taking a gamble. We just have confidence. I would say our growth has been steady over the past few years, and I think our approach - the balance of projects that we have, and being a client-focused firm - is all good for us."

While the architectural ship appears to be righting, Packard said he still notices the empty seats previously occupied by young people who jumped overboard when it was sinking. He worries how their departure will impact the field when older generations retire.

Shawn-Patrick O'Donahue was one of those casualties. In 2009, he was one of more than 100 employees who lost their jobs when Sienna Architecture closed its doors. O'Donahue joined some colleagues who had been laid off (some from Myhre Group) to start their own firm. It fizzled after two years.

"We all had high hopes and high expectations, but we also knew in general that we had the deck stacked against us," he said.

O'Donahue didn't leave the field, but he left Portland. A headhunter found him and placed him in Chicago, where he's now a senior designer and vice president of hospitality and design for VOA Associates.

VOA is a massive, worldwide firm, but it too is putting a greater focus on project selection. O'Donahue said the firm assesses how its reputation and brand will be affected by a relationship with a potential new client before it moves forward.

"We've actually passed on work when we didn't feel like it served our goals, or those of our clients," he said. "In the past, as it was really heating up, it was kind of this attitude where we would take anything that came across the plate and deal with the consequences later."

For Myhre, that understanding came with a personal metamorphosis of sorts. He would have a lot to say to himself in 2007 - namely, don't be afraid to pass on risky business.

"You have to ditch the fear," he said. "That's the first thing. If you're going to let fear drive your decisions, you will never be in command or control of your life... Profits follow passion. If you're passionate about it, you're going to be good at it. And if you're good at it, then people seek you out and pay you."