The second 100 interior design Giants refuse to be second best. Their $307,879,526 in earnings during 2004 represents not only a 17.1 percent increase over the previous year but also a 67.7 percent faster growth rate than that of the top 100 Giants.
Although this group, unlike the top 100 Giants, has yet to catch up with its own super-earnings of 2001, 58 of them grew at rates ranging from 1.62 percent to 163.14 percent. Compare that with last year, when only 35 of the second 100 Giants registered any growth, and none came close to a rate of 163.14 percent.
They also left their imprint on a total 134,583,998 square feet of installations, for an increase of 15.97 percent and a growth rate approximately 16 times greater than that of the top 100 Giants. The value for those installations came to $7,061,281,420, up 10 percent from the previous year.
Spending on green products also grew by 43 percent. That's not too surprising since 82 percent of the second 100 Giants believe sustainability is becoming a more important factor in design decisions. Two firms—one in the group's top 10—attributed their current success to doing environmental design and to their ability to meet the U.S. Green Building Council's LEED standards for sustainable projects. Their timing couldn't be better since even some of the largest companies in the United States are beginning to embrace ecofriendliness as a good business practice. "We see that green is green," says chairman and CEO of GE Jeffrey Immelt.
In the meantime, most of the second 100 Giants found success through traditional methods. Nearly a third attributed their good fortune to stepped-up marketing and business-development activity, ranging from direct mailings to networking. Seven hired marketing and business-development staff, two urged existing staff to focus on marketing, and one created an in-house position for business development.
These weren't the only areas to receive attention. Seven upgraded technology, not just related to design but also to cost-efficiency. One quarter have been rethinking the ways they manage projects and the firm itself. Positions such as firm librarians, traditionally considered overhead, are now billable; staff training is on the rise; and principals are becoming involved in day-to-day project duties. (One firm calls this "working principals.")
Of course, there's always the chance these firms would become Giants even if they had not bolstered their organizational systems. One firm took the unconventional (some might say romantic) approach of tailoring its marketing to the "interests and passions" of its professionals: "When professionals are excited about what they're doing and with whom they're doing it, new business is naturally generated," it claims. This process succeeded, but so did another, this one at a firm in the top third of the second 100 Giants, which simply declared, "We worked harder."
The second installment of the three-part annual business survey of Interior Design Giants comprises the second 100 largest firms ranked by interior design fees for the 12-month period ending December 31, 2004. The first 100 firm ranking was published in January; the final installment listing the top 50 Hospitality Giants will be published in October.
Interior design fees include fees attributed to:
All types of interiors work, including commercial office, hospitality, retail, medical, and residential.
All aspects of a firm's interior design practice, from strategic planning and programming to design and project management.
Fees paid to a firm for work performed by employees and independent contractors who are "full-time staff equivalent."
Interior design fees do not include revenues paid to a firm and remitted to subcontractors that are not considered full-time staff equivalent. For example, certain firms attract work that is subcontracted to a local firm. The originating firm may collect all the fees and retain a management or generation fee, paying the remainder to the performing firm. The amounts paid to the latter are not included in the fees of the collecting firm in determining its ranking.
The data was compiled and analyzed by the Interior Design market research staff in New York: Laura Girmscheid, research manager, and Wing Leung, research director. Judith Davidsen is an Interior Design contributing editor.
