Growing Without Getting Bigger

Most conversations about growth in this industry are really conversations about headcount, and I think that is a failure of imagination.

Jackie Ho, who co-founded Ho and Lacy Architecture in San Francisco with her husband John, put her firm’s ambition in a sentence I have repeated a lot since. They are not trying to build a large firm. They are trying to build an exceptional one.

That is not modesty and it is not a lack of ambition. It is a strategy, and it has a specific mechanism behind it. Her goal is to keep the number of projects small so that the attention stays on those few clients, and then to keep doing more for each of those clients as the years go on.

The firm does bespoke residential work, almost exclusively single-family homes at this point, and it handles everything under one roof, architecture through interiors through furnishing, concept through move-in. That is a turnkey promise, and you cannot make it at volume. The whole proposition depends on there being fewer projects than a firm of that capability could technically take.

So when they went from two people to three, it was not a capacity play in the usual sense. They were not adding a seat in order to add projects. Understanding what they were actually buying is the useful part.

Look at where the hours were going. Ho and Lacy do not bill strictly hourly, but a fair amount of the work is hourly and all of it is ultimately a function of hours. With two people, there were only so many hours available for billable work. And Jackie herself is at about fifty percent utilization by design, because she runs the business side. She has an MBA and that work genuinely interests her, so half her time is deliberately not production. Which leaves one person carrying essentially all of the production for the entire firm.

That was the actual constraint. Not the pipeline, not the demand, not the market. One person’s capacity to draw.

The question she asked was the right one, and I wish more firm owners would ask it in these terms. Given this many projects, running this long, with a pipeline that looks like this, can John alone really handle all this production. And then, more sharply: what is the opportunity cost of leaving all of it on him when he would like to be drawing less.

Opportunity cost is the phrase that matters. The cost of not hiring is invisible on a P&L and it is enormous.

It shows up as the partner who is too deep in details to be at the client-facing high level where he is most valuable.

It shows up as the business development that does not happen because both principals are heads down, in a firm that relies one hundred percent on referrals and therefore needs both of them out networking.

It shows up as the work that gets declined, or worse, the referral that arrives and gets passed to someone else with an excuse about bandwidth.

Jackie was explicit that this used to happen. In the early years a referral would come along every couple of years and they would either try it or make an excuse and hand it off. The firm became a firm when they started saying yes and figuring it out. But saying yes has a floor, and the floor is production capacity.

So the third person is not there to make the firm bigger. She is there to get the production off the partner who should not be doing all of it, so that he can be more focused on the client at a high level, less bogged down in the details, and available for the business development the firm’s referral model depends on.

The firm’s output does not need to double. The firm’s quality per project and depth per client goes up, and both partners get to work at the level where they are actually worth the most.

That is what growth looks like for a deliberately small practice. Not more projects. More capability applied to the same few.

If you are running a firm at two or three people and you have decided you do not want to be twenty, none of that means you should stay at two or three. It means the person you add should be chosen to relieve the specific constraint that is capping your quality, not to expand your throughput.

Work out where the hours actually go, be honest about which of your principals is doing work below their highest value, and hire against that.

Staying small is a legitimate goal. Staying stuck is not the same thing.

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