First of a multi-part series exploring what it means to be a principal in today’s AEC firm.
Firms in the AEC industry have a lot of titles for staff, and the meanings of those titles vary widely. As you would expect, the number of titles typically increase as the firm grows. The title of principal is no exception to this rule as there is no universal job description for this role.
The one caveat in this group is that the vast majority — 93 percent — are owners in their firm. So the industry views the title of principal as the acknowledgement of being an owner.
It is important to note that we should be flexible as to the job duties, but clear and intentional as to what it means to be an owner. Becoming an owner should not be viewed simply as a promotion, but rather an acceptance of the risk and reward of being a business owner. Too many view ownership as a rung on the career ladder that must be achieved. Frankly, there are a lot of current and aspiring owners in the industry that do not have the investor temperament or the character to be a good principal, partner, or owner. To be an owner, you must act and think like an owner. Here are some interesting stats from Zweig Group’s recent Principal, Partners, and Owners Survey that should give you a better sense of what being an owner can mean for you personally and professionally:
41 percent of principals have signed a non-compete agreement — This means that if you leave the firm under certain circumstances, you may not be able to take a job where there is a perception of competition.
49 percent of principals have signed a personal guarantee for some or all of their firm’s debts — This means that your personal assets are at risk if the company runs into financial stress. Many aspiring owners do not understand the risk this introduces into their personal lives.
49 percent of owners have their stock value tied to how they leave the firm — This means that a portion of your investment in the firm could be reduced if you leave the firm or have certain life circumstances that require liquidation. Typical conditions include leaving to compete, divorce, death, and retirement.
I hope this introduction to being a principal, partner, or owner in your firm expands your perspective of this important career decision and that you view it as more than a milestone.
Chad Clinehens, P.E., is Zweig Group’s president and CEO. Contact him at email@example.com.