Risk vs. Reward: Be Strategic

3m 29s

In this ARE 5.0 Practice Management Exam Prep course you will learn about the topics covered in the ARE 5.0 PcM exam division. A complete and comprehensive curriculum, this course will touch on each of the NCARB objectives for the ARE 5.0 Practice Management Exam.

Instructor Mike Newman will discuss issues related to pre-contract tasks including negotiation, human resource management and consultant development.

When you are done with this course, you will have a thorough understanding of the content covered in the ARE 5.0 Practice Management Exam including business structure, business development, and asset development and protection.

We talked about what can go wrong when you're pursuing work. We talked about what could go right, like what's the advantage of going after different kinds of projects. And we talked about the idea of being strategic, and that being strategic is really an effort to understanding what the risks are and understanding what the rewards are for each of the different types of projects that you're pursuing and that you're working on. So trying to really get a handle on that and keep track of it and have a system for mitigating problems and have a system for exaggerating, if you will, the positives, like getting the positives to work.

What this really is is a playing out of the business plan. We talked a little while ago about the idea of creating a business plan. What a business plan is, remember, is it's sort of where in the beginning you write, "Here's our idea. "Here's our summary, here's our mission statement. "Here's the expectation of what we think. "This is how we think it'll be organized. "This is how we think the numbers will work. "This is how we think where our strengths are "and where we think our weaknesses are, "and this is what we're gonna do about our weaknesses "and this is what we're gonna do to increase our strengths." Now we go into an action plan.

We've got marketing, we've got all these things, and we're writing all that stuff out. Well, this is the playing out of that process. Now you're in the middle of it and you're going through this as a process. Conceptually, now would be a good time to go back and now you're going back to that business plan, but in an analytical way. It's not a proposal for the future anymore. Now it's partly proposal for the future and partly direct analysis.

So you're actually using the documents that you've made in order to be clearly producing useful work that you can use to make better choices for the projects that you're gonna be accepting in the future. This is where we start combining together. We started talking about profit and loss statements and balance statements, pro formas, business plans, quality assurance plans. All of these things are these sort of abstract ideas and like, "Yeah, we put that together years ago." It's like, well, no, this is a living document that is part of the system so that you're always reevaluating and you're always making sure that the decisions you are making make sense.

It may be that as you go through these processes you realize, "Wow, we've flowed into a new type of work. "We're doing the wrong marketing "or we have the wrong organizational structure "for how we wanna do this work." The only way to have that moment is to go back through and review. It ought to be a systematic system. So that might mean that there's just a lot of reviewing of the old quality assurance plans and the old business plans and that kind of thing, or it might be that there's an annual retreat for everybody in your design practice, or maybe there's a weekly, every Monday morning there's a meeting and people bring up issues.

There's a lot of ways that this can be done. There's not one set way of doing it. The idea, though, is that there's a process that allows for input and allows for analysis and updating of all of your systems, and that you're using your systems, right?

All of this stuff, everything ties into everything else. The way we think about contracts, the way we think about fees, the way we think about project delivery, all of that stuff is gonna go into how we're approaching projects, how we're creating relationships, and how we're gonna get new and better relationships in the future.

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From the course:
ARE 5.0 Practice Management Exam Prep

Duration: 11h 29m

Author: Mike Newman