magazine | Jun 2, 2022 |
How this designer is building the next generation of leadership for his firm

In the first decade of running architecture and design firm Workshop/APD, Andrew Kotchen and his co-founder Matt Berman strategically diversified their portfolio to ensure steady growth even in uncertain times. Over the years, their team swelled to nearly three dozen employees. Then the pandemic hit, and the firm doubled in size again. Growth at that scale means being a leader, but also building the firm’s next generation of leaders from within.

How this designer is building the next generation of leadership for his firm
Andrew KotchenCourtesy of designer

Your firm has grown from pretty big to really big in the past two years. What does that feel like, and how have you approached this latest round of hires?
One of my very early mentors once told me that no matter what you do or where you go in your career, you need to always preserve a portion of your time to do what you love. If we allow growth to dilute our pleasure about what we do and where our strengths lie, then growth becomes something that you fight instead of something you can embrace and enjoy. So as Workshop/APD has grown, that’s been the foundation for our growth.

We decided early on that we were never going to grow in size only based on projects—we were going to grow with a long-term strategy in mind, when we felt we were ready to dip our toe into that next chapter of a firm’s progression. By thinking that way, we have never put ourselves in the position where we were growing and contracting based on our projects and workflow.

Does that end up meaning that you hire in groups instead of onesietwosie hires?
It means we’re always looking for great new talent, and we will invest in that talent even if we don’t believe the work is there today. The belief is the work will be there tomorrow. But that’s also where the stress comes in, right?

Growth doesn’t have to be scary if you loosely map it out. We have doubled our size in terms of people—gone from 40 people to 80 people right now. We were able to do that only because we had built an infrastructure of leadership. We have a core group of people who have been with us for 15 or 16 years, and we have hired another round of amazing leadership folks, so we had that uppertier leadership and management in place that allowed us to grow. As you know, there’s no talent on the streets right now—everybody is hired, and it’s an employee’s market. They can go wherever they want, and they can name their price. But we were able to get a lot of upper-middle management, and those people wanted to come to work for us. When you get to a point in your career where people want to be part of your team, that also makes it easier to build a team quicker.

When you’re talking about that many team members, does it start to get easier to make a hire?
All of it is terrifying. The reality of the kind of growth we were experiencing really hit me when we were doing bonuses at the end of last year. We’re a very bonus-heavy firm—we bonus people really well, and we always have, even when we’re not as profitable as we’d like to be, just because we believe in rewarding people for their great work.

But when you’re talking about bonuses for 80 people, that number has a lot more zeros.
That number has zeros and zeros, and the zeros keep going. It’s pretty daunting, but it’s also exhilarating, exciting and energizing all at the same time.

I am always the pessimist. If you talked to my co-founder Matt, he is this hopeful optimist who floats in the clouds. But finally, after 23 years, I am optimistic, too. I believe that the phone is going to keep ringing—even when the economy turns, I still feel like the phone is going to ring enough to support this level of an office. The creative growth and the financial growth are two different things. Creative growth is building the team, trusting the team and moving projects forward; financial growth is really building financial security, which is where the stress comes from.

How do you project that growth?
I always try to reinforce to everybody in the office: Our burn rate is X, and to become more profitable and to grow, we have to be X times .02. With inflation, and with people wanting raises, it is just constant. We have been fortunate enough to work with a company called Precise that specializes in financial modeling for our kind of architecture and engineering firms. They have changed our ability to see the future at Workshop/APD that we never could before—we model things out as if we’re a financial institution.

The more legs you put on the stool to give you a more secure foundation, the more confidence you have to take risks and grow your firm with less fear. So when you’re looking at spreadsheets that show your cash flow is great 12 months out, you feel pretty good about making certain decisions, and you can project out that modeling. You can look back and take historical trends, and you know that’s the number side of it.

So many firms grow very reactively, where everybody is stretched so thin before the principal finally caves and hires the next person. How do you get out of that mindset and start getting ahead of that cycle?
“I’ve got enough work for three people to do and the phone keeps ringing”—that’s what they all say, right? I’ve coached a lot of people through hiring their first, second, third and fourth employees, and it’s pretty simple: What are you good at? Personally, I’m good at meeting the clients—I’m able to generate the work. You have to ultimately believe in yourself and that you can do what you’re good at, and you’ve got to put your ego aside and know that you’re not always good at everything.

Then it just becomes a numbers game: If I hire another person, I can be out doing something and actually be billing 175 percent of what I billed last week for every hour of the day. So not only do I take work off my plate and relieve my stress, I can make more money. It’s a very simple thing, but it all comes back to investing in yourself and believing in yourself that you can step over that line to release control to someone else.

You say that it’s simple, but that sounds hard!
It’s impossible. I still deal with it every day, but otherwise you’re always going to be this stressed-out solo practitioner who can never get out of your own way.

You can also step over that line and believe that other people can do some of the things you do day-to-day and do it well—maybe not as well as you, but that’s part of having employees and growing. You have to be willing to say, “For the next 12 months, I’m going to make less money, but I’m going to invest in myself and my business.” Then when everyone makes that step, they find they’re making double the money.

At what point did you start to feel your role change as the firm grew?
It really changed the second year. With two people, your role changes because you’re either sharing decision making or you’re sharing responsibilities. Another shift came when we became a firm of five to six people. I have not drawn anything on a computer since then. I sketch all the time, but I don’t get into the production side of a project because there are other people who are better at it. I can generate all the work, and so that’s what my role has become.

You have two fellow partners at the firm now. How do you divide the responsibilities between yourselves?
All three of our partners manage different aspects of the business, and we all try to stay in our lanes: one is marketing and PR, one is product and HR, and one is technology and running the office. We have realized the things that we are good at and the things we are passionate about. We have tried to create a system where we report to one another, and where we report to people in the office, because you can’t have any 80-person firm with 80 direct reports. You’d suck up all your time communicating with those people.

You realize as you grow that you can have only so much one-on-one interaction, and then you need to create another layer. We often refer to ourselves as editors and curators, not producers, and that happened really in the five-to-10- people range. Back then, I said I never wanted to go above 18; then we were 20 and I said never wanted to be above 25. And next thing you know, we looked up and we had doubled.

When you look back, is there any piece of you that misses your role when the firm was smaller?
I really enjoyed connecting with the people in the office. Now I want to know them and be friendly, but I can’t have 80 office friends. And they don’t know I’m that person who wants to get to know them, either. To them, I’m just a person on the other side of a Zoom call who gets angry sometimes, and that’s kind of a bummer. There are, quite frankly, a lot of people whose names I don’t know, and I don’t like that. That has been the hardest part. Has working remotely been part of that, or is it just a numbers thing? Well, one, we will never be back in our office five days a week. We’re probably going to be a three- to four-day office. That’s the new normal. But I also just think the numbers are such—and my schedule is such—that there’s no time to build those foundational relationships with newer people. The reality is that the next layer of leadership in our office is building those relationships, and that’s the future of our firm.

Homepage image: Andrew Kotchen and the Workshop/APD team designed this house on a hill in Armonk, New York, so that its great room opens on three sides, welcoming in the breeze. | Read McKendree

This article originally appeared in Spring 2022 issue of Business of Home. Subscribe or become a BOH Insider for more.

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