TALENT OPTIMIZATION: Stop trying to engage your employees who shouldn’t be there.
We hear so much about the importance of getting employee engagement up and turnover down that it is tempting to jump right into piling on the perks, programs, and committees. But this ignores the reality that you are “pushing spaghetti” with your bottom performers, who are often the outsized drain on all efforts related to engagement and turnover improvement. Start 2026 by asking every Principal to list their bottom 10% and exactly what they are doing to get them out or up in the new year.
OWNERSHIP TRANSITION: There’s no “right” ownership model, but there are some wrong ones.
Thinking too small and too slow are two common mistakes that drive well-intentioned ownership plans into a ditch. Too small? That is looking for a 1:1 replacement of exiting owners. Growing firms have growing capital needs. In most cases, it should be a 1:2 or 1:3 ratio of exiting to incoming owners to keep the firm adequately capitalized. Too slow? The downside to all this growth as of late is that AEC firm equities have gotten expensive. Start early bringing in owners with small bites.
BUSINESS DEVELOPMENT: Your value is in the output, not the input.
Hot take…your clients aren’t buying your time. Instead, they are buying your expertise and/or experience to get them to an ROI faster than the competition. Starting thinking this way in your marketing, your proposals, and your project management. How are you adding value to their objectives? Articulate that in their language. Less downtime? Faster permitting? Higher occupancy? Sell that.
PROJECT MANAGEMENT: Demand a client-controlled Change Management Reserve Fund.
Most Project Managers accept the client’s bureaucratic approval process at face value. Don’t let a procurement or contract office dictate the project’s velocity. Ask clients to create a dedicated Change Management Reserve Fund that is controlled by the client’s Project Manager so that small changes can move quickly. This bypasses slow contracting offices, formal amendment delays, and multi-layered approvals. It also lets your Project Manager and the client resolve issues fast with minimal friction.
TTECH AND INNOVATION: Stop trying to protect jobs and start automating the work that everyone hates.
Proactively use AI to eliminate the mind-numbing, low-value work your people would gladly give up anyway. This reframes AI from a threat to a relief valve, and it also accelerates adoption by targeting the tasks employees never fight to keep. Don’t promise AI won’t replace jobs. Promise it will replace the parts of everyone’s job they resent.
This is content from the PSMJ Newsletter, exclusive to PSMJ PRO Members. PSMJ PRO is the fastest-growing network of AEC firm leaders. Not a PRO Member? Try a 50-day trial (no credit card required). You can request a trial here: https://bit.ly/50dayLI