Dear Reader;
Some of the most dangerous assumptions in business are the ones that sound perfectly logical: More backlog is always better. Fee pressure means your price is too high. Leadership and management are basically the same thing. AI belongs with IT. And a lower acquisition multiple means a better deal. Look a little closer, though, and conventional wisdom can lead an AEC firm in exactly the wrong direction. Here are five ideas to challenge your thinking about what really drives sustainable growth, profitability, and competitive advantage.
Do you have any questions about any of these tips? Perhaps you wish to share some feedback? Maybe you need some guidance or support on a challenge that your firm is facing? Let me know in the comments.
A full backlog isn’t always a good backlog.
Backlog stuffed with low-margin work, difficult clients, weak contracts, or projects you’re poorly staffed to deliver can actually make the firm less valuable and more exposed to trouble in an uncertain economy. Conduct a backlog review and assess how your firm’s current backlog profile compares to your desired backlog profile. Then, build a strategic plan to go from current to desired backlog. Registration is now open for PSMJ’s all-new virtual AEC Strategic Planning Workshop that is packed with tools and tips to build the backlog and firm that you want.
Your pricing problem may actually be a positioning problem.
If clients consistently push back on fees, don't immediately assume that your pricing is the problem. You may not have given the client a compelling reason to see your firm as meaningfully different from everyone else. What does your firm deliver that is truly a.) different from everyone else and b.) valuable to the client? Focus on where those two answers overlap in your messaging and watch the pricing pressure ease.
Don’t confuse leadership with management.
Leaders create possibilities and inspire people around them. Managers deal with complexity and execution. One isn’t better than the other. Successful AEC Principals need both skill sets (or need people around them who complement their weaknesses). PSMJ’s popular AEC Principals Bootcamp is one of the best investments you can make to level up your management skills and learn the proven tips for success.
Put AI strategy in the C-suite, not the IT department.
Technology leaders should be deeply involved, but decisions about AI affect staffing, pricing, risk, project delivery, client experience, and competitive positioning. If you are still pushing away AI decisions and hoping the IT department will come up with a plan, do so at your own peril.
Cheap acquisitions can be expensive (and expensive ones can be bargains).
Purchase price and return on investment are not the same thing. In M&A, it is easy to get overly focused on getting a “good EBITDA multiple.” But a seemingly expensive acquisition can generate an exceptional return if you are buying something that materially changes the trajectory of the combined firm. Paying a premium may make sense when the target gives you scarce talent, a dominant position in an attractive market, entry into a difficult geography, specialized technical capabilities, or a leadership team capable of scaling a much larger business. Registration is now open for PSMJ’s AEC Mergers & Acquisitions Summit coming to The Palm Beaches on March 3-5, 2027, where hundreds of AEC owners, investors, and visionaries come together for valuable networking and idea exchange.