Executive Corner: What’s My Legacy? An A/E Generation Transitions Out
Growing up, my father was fond of sharing various quips and quotes. Some were motivational, others just corny, and I’m confident most of them went in one ear and out the other. But one that always stuck with me was the famous Maya Angelou line: “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” A poignant citation for aspirational self-improvement, it also speaks to the vital legacy we all want to leave with people and organizations. And as A/E Baby Boomers accelerate into retirement, many leaders and owners have been pondering that question.
A massive and entrepreneurial generation that kicked off their A/E careers during the 1970s and 1980s is now entering the sunset of their profession. Actuarial figures estimate 10,000 Boomers reach 65 every day, and millions more will be retiring by 2030. And yes, some will continue to work, consult or dabble in the industry, either for continued fulfillment or financial reasons. However, their departures will continue to have major ramifications for organizations everywhere.
Boomers have generated billions of dollars in design revenue and trillions in construction during the last 40 years, reshaping the nation’s building, environmental and infrastructure landscape. They have gone through expansions and recessions along with evolutions in project delivery, technological advancements, workforce changes and business fads. Iconic A/E firms were formed during this period, and a wave of venerable leaders came of age to guide organizations of all sizes and disciplines.
We’ve had the privilege of working with countless leaders and owners on growth and exit strategy engagements. Often nostalgic and reflective, Boomers are mindful of how their acts and initiatives will endure. Having attained their professional and financial objectives, the following are some of the meaningful legacy achievements that left them with pride and closure.
• Designed projects that improved their communities. Whenever I visit clients’ offices, I’m inevitably led on a tour and get to view exciting plans on the boards as well as finalized projects that dot the hallways. Leaders will point out assignments that reshaped their regions: a new K-12 school, reservoir, hospital, transit corridor, city park, mixed-use development, bridge, wastewater plant, airport wing, waterfront, courthouse or substation. And while solving design challenges is the role A/E professionals play in our complex world, the long-term culmination of these efforts and projects often is the core legacy Boomers embrace.
• Cultivated lifelong relationships and friendships. As we all know, companies have their own unique office social dynamic. We work alongside colleagues on demanding projects and deadlines. Sometimes we agree, and sometimes we don’t. Teams unplug during happy hours, cornhole games and holiday parties. Individuals have offered their delight in the many lives they’ve been able to touch, including business partners they started with, junior people they patiently mentored, respectful competitors they rubbed elbows with and the collaborative clients who became lifelong friends.
• Identified and groomed their successor. A critical component of professional and organizational legacy is principals and presidents “passing the baton” to the next individuals capable of leading the firm. Depending on an organization’s size and dynamics, there may be many options to consider—or just a few. These leaders have steadily prepared their successors by challenging them with different tasks, encouraging them to work on areas where they are deficient, and critically assessing if they can handle the roles and rigors of leading a modern A/E firm. Effective succession planning ensures operational continuity and engagement while demonstrating to staff and clients confidence in the future.
• Transitioned their firm for sustainability. Failing to have an ownership transition plan in place can lead to existential issues for any firm. Leaders preparing to retire know their ownership stake will comprise a sizable part of their financial and estate plan. Part of building a viable and purposeful legacy is successfully perpetuating the organization, which comes in various forms. Some companies pass ownership down to family members. Others will implement a formal internal sale program to a younger group or implement an Employee Stock Ownership Plan (ESOP). Some founders may choose to sell the firm to a larger strategic acquirer or private equity firm, particularly if a buyer brings a compatible culture and additional resources (managerial, financial and recruiting) to the table.
• Expanded their organizations. Retiring A/E executives have benefited from 40 years of favorable macroeconomic and industry conditions along with sensible strategic decisions and initiatives. Regardless of the firm size or growth trajectory, they have intentionally created cultures that emphasize people and performance. They opened branch offices and added key hires and clients. They built lasting and recognizable brands. They acquired firms for scale and diversity. The aggregate effects of this consistent growth and profitability have meant professional opportunities for millions, wealth-building avenues for owners and staff, and positioning our industry for the 21st century.
Ultimately, what’s a legacy, and how do you define it? Valuing what you care most about? What you wish to share or leave behind? How you make others feel? A dedicated generation that has transformed the A/E industry is about to find out.
About Steve Gido
Steve Gido specializes in corporate financial advisory services, including mergers and acquisitions, business valuations, ownership transition plans, and strategic planning for engineering, architecture, environmental consulting and construction firms. He leads ROG+ Partners’ merger and acquisition practice, and has advised on a wide number of A/E/C transactions, representing buyers and sellers of all sizes and disciplines.