Word on the Street: Issue 238

The Godspeed of Trust

Mark and I were interviewing Neil Churman, president and CEO of Woolpert (Dayton, OH) (ENR #47) (and Morrissey Goodale alum), for the Word on the Street podcast last week. (The episode will drop—as the kids say—later this month.) During our chat, Mark asked Neil a (surprisingly) insightful question about trust and how Neil builds and sustains it with his leadership team and throughout the firm. In his response, Neil discussed the importance of being genuine, authentic, and logical as it pertains to the concept of trust. This got me thinking about trust in the AE industry—specifically, the trust that a firm’s shareholders/investors have in their CEO and how that is built.

1. “Trust takes years to build…”: Tenure. It’s important. Take one look at the demographics of AE industry CEOs and you see the painstaking work of building trust over time. The median tenure of the CEO of an ENR Top 500 Design Firm is 27 years. (It’s worth noting that this is 36% longer than the duration of the median U.S. marriage, which begs the question of what a “median” marriage is, but I digress.) The vast majority of industry CEOs have spent most of their careers at the firm that they are now leading. They have built trust over almost 10,000 days (that’s a LOT of leftovers being put in the company fridge for lunch)—with their colleagues, their erstwhile bosses, their employees, their clients, their subconsultants, and their vendors. Importantly, in showing up and doing the right thing for (most of) those 10,000 days and being genuine, authentic, and logical, these CEOs have gained the trust of their firms’ board of directors and enough shareholders to entrust them with leading the firm into the future.

2. Seven years and counting: Seven years. That’s the median length of time that the CEO of an ENR Top 500 Design Firm has been in the position, long enough to have gained even more trust by (a) navigating through the pandemic of 2020/2021 and (b) presiding over the unprecedented good (nay, great) times that their firms have been experiencing over the past decade. The investment in building a trusted relationship between firm and CEO over 20-plus years—the industry’s traditional “grow from within” model—has for the most part yielded outstanding results over the past decade for both firms and the current crop of CEOs. Good times.

3. A new kind of trust: However, over the past decade the “grow from within” model with CEOs earning trust over 10,000 days of service has seen a competitor emerge as the industry has recapitalized. Since 2016, we’ve seen an increasing influx of private equity (PE) into the industry with an accompanying step-function increase in M&A. Nine years ago, just 4% of the ENR Top 100 had PE in their capital stack. Today, that’s 23%. (And in the entire AE and environmental consulting industry there are about 190 such PE-backed firms.) The tenure of the CEOs of these ENR 100 PE-backed design firms is markedly different from their peers. Their median tenure at their current firm is just 9.5 years (compared with 27). And their median time in the hot seat is just 4.9 years (compared with 7). Six in ten of these CEOs were hired either directly into the CEO seat or a CXO position (usually CFO or chief growth officer) for a year or so and then into the CEO seat. A couple have come from outside the AE industry. So much for 10,000 hours of trust building. For sure, this new model, this new kind of trust also requires genuineness, authenticity, and logic. But in this model, the trust built over days and months and years of service to the firm is replaced with “faith.” Faith on the part of the firm’s new PE partners (who are the major shareholders) that the CEO has the industry and business savvy to deliver the financial results and ROI that they require.

4. Faith plus trust: We first covered this topic last year in “The Death of CEO Succession Planning as We Know It.” My focus then was on how the traditional CEO development path (demonstrating competencies over years in roles of increasing responsibility while getting to know the name of every employee, client, and vendor and receiving company-supported business management and leadership “training” before heading into a Survivor-type face-off with one or two peers for the position of CEO) was being upended by the new breed of PE-backed industry players. But as I thought about it more, I was struck with the unique challenges that each newly installed CEO in a recently recapitalized-by-PE design firm faces. Given that the average “hold” time of a PE-backed firm is currently around four years, the new CEO must very quickly (a) deliver the superior financial results required by the financial sponsor (to maintain their faith in their choice) while (b) simultaneously earning the trust of management, employees, clients, subconsultants, and vendors. With the latter being something that their non-PE-backed peers have had over 10,000 hours to do. It’s a remarkable balancing act to pull off. And by and large, the CEOs of these PE-backed ENR 100 firms and their 170 or so peers throughout the industry have, to date, accomplished their missions.

5. Four essential qualities: On average, 20 new PE-backed platforms are created every year in the AE industry. If you fancy throwing your hat in the ring to be the CEO of one of the 20 that appear this year, then remember that genuineness, authenticity, logic, and faith are what your future stakeholders and investors are looking for. 

While the topic of trust may not be explicitly front and center, I’m sure it will factor into the many panel discussions, presentations, and networking conversations among the over 200 AE industry executives, investors, and experts at the Western States M&A and Business Symposium this June 11 to 13 at the stunning five-star Wynn Las Vegas. Early-registration rates are available until midnight on April 18, so register today to reserve your place and save.

P.S. Thanks to one of my favorite Canadians, k.d. lang, for today’s title.

Contact Mick Morrissey at [email protected] or 508.380.1868. 

6 Ways to Lead Through the Fog of Uncertainty

Congratulations. You’re in charge during one of the stranger stretches in recent memory, the pandemic notwithstanding. If you’ve had that sensation lately—that the floor keeps shifting just a bit under your feet—you’re not alone. We are, collectively, living in a moment defined by ambiguity. Political polarization. Regulatory volatility. Unpredictable funding streams. Environmental disruption. Talent movement. Economic wobble. You name it, it’s got a question mark hanging off the end of it.

And yet here you are, steering your firm through the murk, making decisions with less-than-perfect information. Juggling growth aspirations, project schedules, and client expectations, all while the world resists settling down into anything resembling “normal.”

But here’s the truth: Nothing was ever certain. Not really. The current climate just makes it harder to pretend otherwise.

A Little Reality Check

Let’s start with some blunt perspective: Tomorrow is a promise to no one. Leading an AE firm never came with a money-back guarantee. That rock-solid, two-year backlog could be derailed by a single policy memo or a natural disaster on the other side of the country. Supply chains snarl. Governments change their minds.

None of this is meant to be pessimistic. In fact, it’s quite the opposite: This is your reminder that uncertainty is not the enemy—it’s simply the playing field.

As a leader, your job is not to eliminate uncertainty. (Spoiler: You can’t.) Your job is to guide your firm through it—to steady the ship, adjust the sails, and keep an eye on the horizon, even when the fog rolls in.

Concerns With New Wrapping Paper

Of course, there are fresh reasons to feel uneasy. Some of the concerns you’re navigating hadn’t surfaced in decades. Inflation, for example, continues to make budget forecasting feel more like dart-throwing at times.

Political shifts have created swings in infrastructure funding, permitting regulations, and energy policy. Clients—particularly those in public sectors—are pausing or pivoting, depending on the day.

And let’s not forget the environment. Whether you believe in climate change, catastrophic weather events are no longer a future scenario—they’re showing up in your project schedules. Fires, floods, and hurricanes don’t care what phase your site is in. They’ll cancel concrete pours without apology.

In short, you’re not just managing your firm anymore. You’re managing volatility itself.

So, How Do You Lead Through All of That—and More?

1. Ditch the fantasy of perfect clarity

Let’s be honest: AE leaders like order. But waiting for certainty before acting is a fool’s errand. If you’re sitting on a decision because “we just need to wait for things to settle,” I’ve got news: Things may not settle.

Make the best call you can with what you know. Leave room for course correction. Create feedback loops. Progress, not perfection, is your friend.

(And no, your spreadsheet with 18 tabs isn’t going to tell you the future. But we both know you’re going to open it anyway.)

2. Plan for scenarios, not predictions

Stop treating your strategic plan like it’s been carved into stone tablets. Instead, treat it like a set of hypotheses. Scenario planning allows you to ask: What if funding dries up? What if interest rates spike again? What if we lose a key rainmaker?

When you game out a few plausible futures, you loosen your grip on any single one. You create agility in your thinking—and your firm. And when the curveball comes (it always does), you won’t be caught flat-footed.

3. Use culture as your compass

When the external environment feels shaky, your internal environment matters more. In times of ambiguity, people look to culture for clues: What do we value? How do we behave under stress?

Your team isn’t asking you to predict the future. They’re asking if they can trust you when it shows up. And you can’t delegate that. Whether you like it or not, your steadiness—or lack of it—gets mimicked across the organization.

Keep your culture tight. Double down on transparency. Communicate what you know and what you don’t. (It’s okay to admit to not knowing—just pair it with a plan.)

4. Balance your risk portfolio

Firms that thrive in turbulence aren’t the ones who hunker down and hide. They’re the ones who diversify smartly.

Are you over-concentrated in one client, one market, or one region? Time to rebalance. Consider offsetting volatility in public work with more private clients—or vice versa. Look for recession-resistant sectors. Invest in your backlog, sure—but also in relationships and brand equity.

If you’re going to make a bet, make sure it doesn’t sink the ship if it doesn’t pay off.

This approach doesn’t mean playing scared. It means being deliberately gutsy, not blindly aggressive.

5. Invest in adaptability, not just strategy 

Here’s a wild idea: Your strategic advantage might not be in your plan at all—but how fast you adapt when the plan breaks.

Build systems that can flex. Cross-train your teams. Automate the boring stuff so you can focus on the meaningful work. Get your PMs and designers to talk to each other like they’re on the same team (because they are). Build a culture where change isn’t feared—it’s expected.

In other words, design your firm like it’s going to live in a world where the plan is never final. Because it won’t be.

6. Guard your attention like a national treasure 

When everything feels uncertain, everything can feel urgent. But if you react to everything, you lead nothing.

It’s tempting to obsess over every headline, every whisper of market movement, every news alert. Don’t. Your team needs you focused on what matters: your people, the firm’s culture, the firm’s clients, and long-term value.

Yes, stay informed. But don’t become a panic sponge. Panic is contagious—and so is calm.

The Opportunity Within Uncertainty

If the ground were stable and the skies were always clear, any firm could grow. Everyone would know the playbook. But uncertainty? It filters out the average. It rewards the resilient. It sharpens leadership. It favors those who don’t just brace for the storm—but learn to surf it.

This is your moment to build something durable. Not because the conditions are certain, but because they’re not.

Lead your people. Adjust the sails. And remind yourself that thriving isn’t about having all the answers—it’s about continuing to move forward even when you don’t.

Contact Mark Goodale at 508.254.3914 or [email protected].

Market Snapshot: Idaho

50 states in 50 weeks – This series leverages our market intelligence database to bring you powerful AE industry insights. Each week, we highlight a new state in green while previously featured states fade to a lighter green. Next, let’s look at Idaho.

Idaho Economic Performance and Outlook Grade*: A

• Economy: B+
• Population: B
• Workforce: C+
• Financial/Fiscal Health: A

* Overall grade is assigned based on a curve (relative to all states’ performances).

The Gem State may no longer be a “hidden” gem, but Idaho still glimmers with AE firm opportunities. Drawn by a lower cost of living and natural beauty, transplants from California and other Western states flocked to Idaho during the COVID pandemic—and the trend has not abated. The U.S. Census Bureau reports that only Utah’s population has grown faster since 2020, and the Idaho Department of Labor forecasts that the state’s population will rise by 15% between 2022 and 2032, nearly four times the national average. Online small business lender OnDeck named Idaho tops in the country for small business growth, the American Legislative Exchange Council Center for State Fiscal Reform rated it second in economic stability and outlook, and the U.S. Bureau of Economic Analysis ranked it fifth in real GDP growth since 2020. Idaho’s burgeoning science and technology sector is a particular growth area, and last year the state government approved a 10-year, $2 billion funding bill to repair and replace aging schools. The Idaho Department of Labor projects a 16% growth in architecture and engineering occupations between 2022 and 2032. See below for regional highlights in Idaho:

• Boise: Two enormous projects under construction—Micron’s $15 billion memory chip facility in Boise and Meta’s $800 million data center in Kuna—are sparking additional real estate projects but also exacerbating rising construction costs and a construction labor shortage. Boise Airport is undertaking a multi-year capital expansion plan to handle a 21% increase in passenger volume since 2019.
• Idaho Falls: Advanced technology projects at the Idaho National Laboratory are spurring construction of associated scientific and energy research facilities. 
• Coeur d’Alene: Rapid growth in outdoor tourism, retirement communities, and luxury homes is spurring demand for high-end residential and hospitality architecture.
• Twin Falls: Growth from Clif Bar and a $500 million Chobani plant expansion is boosting industrial projects related to food manufacturing and logistics.

For sector-specific data and insights for Idaho or questions about our market intelligence and research services, call/text Rafael Barbosa at 972-266-4955 or email [email protected].

For a comprehensive outlook for 2025, you can access the 2025 AE Market Intelligence Webinar (recorded on January 28). Click here for details.

Weekly M&A Round Up

Busiest week of 2025 with 29 new domestic and global transactions: The Western U.S. continues to see active consolidation, with four new deals announced in CO, CA, and NV. Industry M&A activity is now up 5% over the past 12 months. Last week, we reported additional domestic transactions in NH, ME, NJ, GA, TX, FL, MO, and Washington, D.C. Globally, deals were announced in Ireland, the UK, Germany, Italy, and Australia. You can check all the week’s M&A news here.