Do You Think You’re Going To Live Forever?

The results of this month’s A/E Pulse survey seem to indicate that a large number of principals believe they will live forever. Here are the results, along with some of our conclusions and interpretations:

1. In 2/3 of firms under 50 employees, the founder still owns most or all of the firm’s stock. These firms will find it increasingly difficult to affect a satisfactory ownership transition as the founder gets closer to retirement age.

2. In over 40 percent of firms under 250 employees, authority is still based mostly on the amount of stock owned rather than organizational position. These firms will find it increasingly difficult to grow and prosper.

3. Less than half of all firms have an ongoing ownership transition plan that is working smoothly. With most owners in the Baby Boomer generation, the lack of a good ownership transition plan means that the current owners won’t get the full value from their stock when they finally sell it.

4. Most firms (56 percent) have identified future leaders but 1/3 of these firms have no leadership development program of any kind. This is increasingly frustrating to the future leaders of these firms. And they will be ill-prepared to take over when the current generation retires.

5. Only 17 percent of firms assign future leaders to temporary positions in order to broaden their experience. These firms will find that their future leaders have serious gaps in their knowledge base that will prevent them from successfully taking over their firms from the retiring generation.

If your firm falls into any of these categories, you need to attend one of PSMJ’s upcoming Ownership and Leadership Transition Planning Roundtables. PSMJ is holding two Roundtables this fall on each coast for the leaders of today's A/E/C practices just like yours – October 24-27, 2011 in Miami, FL and November 7-10, 2011 in San Diego, CA. Let PSMJ walk you through a structured, logical approach to developing practical planning tools, and help you avoid the pitfalls to set your firm on the right path to a successful leadership and ownership transition.