By being proactive and creating spaces to learn and grow, firms can benefit from this evolving workplace landscape.
The world as we know it is quite different than it was just a few short years ago. The concept of a workplace has taken a dramatic shift, challenging decades of established workplace and accountability models. In an industry that has significant representation from groups over the age of 50, ideas and topics like knowledge transfer, communication, conflict resolution, leadership, and mentoring/training are all more relevant than ever. These challenges are felt particularly hard within the AEC industry, which has historically represented an older median age for its workforce compared to other critical industries.
Adding to this, many employees are still working from home – scattered across geographic locations – which can often separate them from workplace dynamics. These challenges have added further pressure to firms going through an ownership transition. Firms who are looking to establish successful transition programs are finding it difficult to rely on traditional practices. Lately, I’ve taken several inbound inquiries for consulting work where the firm has recently gone through a split and/or created separate entities. Two of these were already essentially separate entities, and the other was a single entity that split.
In each of these inquiries, the request was to establish a plan and path for the remaining leaders to grow an awareness of what ownership means and get comfortable with the concept of buying into the newly established entity. In these examples, it is perhaps a bit too late in a firm’s life cycle to be addressing questions like, “What does it mean to be an owner?” Though splits and divestitures can be positive in many ways – such as removing toxic leaders – they can also carry with them a negative connotation leading to confusion and discontent post-split, which doesn’t set a strong precedent for a successful transition program.
The success of a transition program lies with a firm’s ability to be proactive, working sometimes 10 years in advance of the targeted exit date. Bringing in new owners to help pay down debt doesn’t breed inspiration. However, proactive planning with such a range can perhaps prevent splits and discontent from happening, which will in turn allow the firm to succeed in increasing their value. However, long-term planning for leadership and ownership transition faces new challenges stemming from the increase in employees working from home.
In responding to this next generation of leaders, they should be enabled to make their own decisions and mistakes and to gain access to information to grow their practice. This will allow this next generation of leaders and owners to develop the skills required to own and manage a firm. Ultimately, this requires a level of humility as this focus requires putting ego aside and allowing room for others to grow in their professional practice – in the pursuit of growing the firm and its people. As a firm creates these programs and spaces, communicating the goals, plans, and success of the firm to these potential future leaders becomes a useful tool for employee engagement. A good measure of this are revenue targets and growth goals, which have become extremely important in letting employees see themselves as part of a healthy growing organization with expanding opportunities.
In the above examples, the owners calling to set up a plan had just gone through months, if not years, of deliberations, legal proceedings, negotiations, and financial dealings. While ownership in small, privately-held firms is a unique challenge to each situation, having programs and expectations for people to learn what ownership looks like will go a long way in setting up the future success of the firm. These programs will help identify employees who can take the organization to the next level and ultimately ensure a smooth ownership transition, and, if they aren’t in your firm already, actively pursue them and bring them in. As owners look to navigate the changing landscape of the AEC industry and its dynamic workforce, the success of long-term ownership transition programs hinge on being proactive about identifying and preparing leaders of the future. There is still so much to learn about how our changing methods of work will impact AEC firms over the long-term. By being proactive and creating spaces to learn and grow, firms can benefit from this changing landscape, and ensure the long-term success of their firms in the process.
Will Swearingen is vice president and director of research and advisory services at Zweig Group. He can be reached at wswearingen@zweiggroup.com.
