STASIOWSKI

Several years ago, when the sole principal of one successful Boston-based architectural firm died unexpectedly, the 26-employee firm closed its doors within a very short time. And this is not an atypical story. Unfortunately, few design firms have a leadership transition plan in place to ensure continuity for staff and clients.

Many sole principals generate 100% of the firm’s business. When they die, the value of the firm typically dies with them. The principal who spends years building a firm often values loyalty rather than entrepreneurial spirit in his or her staff, thus leaving no true leaders in the aftermath of an untimely death. And many principals view initiating leadership transition planning as a demoralizing first step toward personal irrelevance.

Fortunately, the demise of a previously profitable firm due to the unexpected death of a principal can be avoided by simply confronting the realities of leadership transition now. The goal of any leadership transition plan is to keep the firm intact and operating smoothly according to its original vision, whether the occasion for change is is a planned retirement or is the unexpected death or disability of a partner.

Future leaders should be selected and groomed carefully. Loyal employees who have been exceptional producers do not necessarily make the best leaders. Likewise people who possess vision, energy, optimism, inventiveness and courage, but not necessarily years of experience, are often well suited to the leadership track.
Demographics make leadership transition materially different than 10 years ago. While many principles are retiring later, retirement rates will grow over the next 20 years. And the 35-to-44-year-old age group, from which many firms will recruit leadership track candidates, is 15% smaller than the retiring talent pool. As a result, competition for new talent will become increasingly more intense.

In addition, the profiles of young professionals have changed. In today’s shifting global economy, companies are created and fail or are merged and acquired at a rapid pace, often at the expense of employees. As a result, many young designers are more loyal to their own careers and their profession than to firms. The only way these professionals can control their destinies is to move among companies or become leaders early in their careers.

The most talented professionals and the ones likely to make excellent leaders are educated about the world, are independent thinkers and are somewhat impatient for more responsibility and financial reward.
If your firm is facing the issue of leadership transition, consider the following recommendations:

1. Clarify the strategic vision and purpose of the firm. There is no sense picking leaders that do not agree with your vision.

2. Prioritize your firm’s values. These should not be abstract values, such as honesty, integrity or trust, but should be more concrete. For example, if your firm is driven by hourly utilization rates, then assign a high value to billable time on projects.

3. Rank the traits and attributes you value in people. Such traits might include passion, intensity, entrepreneurship and the ability to bring in and keep clients.

4. Do not rank loyalty or technical skill high on the list of attributes for your replacement. Running a successful design firm takes fierce passion, tireless energy and commitment to the team. Buy technical skill.

5. Learn the difference between “transformational” and “transactional” leadership. Projects get done by transactional leaders who can follow guidelines, checklists and schedules. Firms are grown by transformational leaders who think outside the box, move to new markets and envision how one solution might evolve into a series of projects or solutions.

Careful planning can prevent a leadership crisis and your firm’s premature demise. Leadership involves both conducting business and managing a changing operation. Successful transitions occur when you develop the next generation of leaders while still leading your current business.

Frank A. Stasiowski, FAIA, is president of PSMJ Resources Inc.,
Newton, Mass. He can be reached at fstasiowski@psmj.com.