Inside the mind of the CEO
New CEO shares four insights during mid-year all-employee meeting
It had been a good six months for the new CEO of AE2Env+. Her firm—an ENR Top 100 full-service architecture, engineering, environmental, construction services, and surveying/mapping leader—had been nominated for numerous ACEC and AIA project awards, had been named a “Best Place to Work” in one industry and one business publication, and had seen two quarters of strong financial performance. The firm had just announced its acquisition of Green Pied Piper, a virtual reality/digital twinning firm (at least that’s what she thought it was) in Utah, its 11th acquisition in five years.
The year was going very well for the firm. And for her. The board had just awarded her a $1 million cash bonus in addition to a boatload of stock options. But something didn’t feel right. She was restless, uneasy. She needed a new challenge. Last year, the firm had realized the four most important goals of its Vision 2022 five-year strategic plan. Those goals were to (a) have offices in all 50 states, (b) be full-service, (c) have a 50/50 split between public- and private-sector work, and (d) “be a billion-dollar firm that clients and employees are passionate about.” While she was proud of all that she and her team had achieved, she was not one to rest on her laurels. It was time to set a new five-year strategic plan. But first, she was to host her mid-year all-employee meeting.
As distinct from her State of the Firm end-of-the-year presentation, this mid-year employee meeting format was essentially a more relaxed “coffee-talk” Q&A session where any employee could ask her a question. The original plan was to livestream the session from the conference room in the firm’s stunning, self-developed and self-designed headquarters in Miami. However, most of her executive team—including her—had caught COVID at a retirement party for one of the firm’s founders the week before, so she was instead fielding questions from her home office as she quarantined. The kids were away at camp. She had assigned her husband to take the dogs for a long walk (“In this heat?!” he pleaded), and she had cancelled the landscapers and cleaners.
She sat in front of her huge monitor. Coffee mug in hand. Camera turned on. The screen filled with the faces of just some of the 1,250 employees of AE2Env+ in their offices, homes, or coffee shops or in the field. In her AirPods, she heard her assistant counting down, “Getting ready for the first question in 3, 2, 1…” She smiled, looked straight into the camera, and listened to the first question.
1. Are you concerned about a recession and how it might hurt the firm? (From a 22-year-old environmental scientist in the Baton Rouge, LA, office.) Well, we’re monitoring the economy closely for any signs of a slowdown, and as we all know, the U.S. economy has contracted for two quarters in a row. But right now, we don’t see any signs of weakness for our business. If there is a recession, our diversified business, strong balance sheet, and record backlog put us in a great position to weather any downturn. (She was indeed worried about a recession. You don’t live through the Great Recession when you laid off 70% of your staff in your Florida and Arizona operations and not worry about one. But she was even more concerned that she couldn’t figure out just what was happening with the economy and whether a recession was inevitable in the next 12 months or not. None of her peer-group CEOs seemed to know either. Nor did the clients whom she spoke with. While a number of clients cited rising interest rates making marginal developments untenable, others were reporting ramping up their investments. The firm’s federal clients were spending money like drunken sailors while residential developers were retooling projects from build-to-sell to build-to-rent. The economists and research groups that she trusted were all over the map. The current economic indicators were out of sync with anything she’d seen before. One thing she did know though was this: If there was a recession, the LAST thing she was going to do was lay off employees. There just was not enough good talent in the industry to follow the knee-jerk reactions of the past. Indeed, one of the reasons why she had slowly and steadily increased cash reserves—at the expense of bonuses—over the past two years was to make sure that if there was a slowdown AE2Env+ could weather it without shedding employees.)
2. What’s going on with our hybrid work model? People are supposed to be in the office three days a week, but nobody is! (From a 52-year-old senior project manager—and well-known snitch—in the Jersey City, NJ, office.) Our policy is clear. Regardless of where you work or what you do, you must be in the office three days a week. It’s your responsibility to schedule these three days with your manager in advance so that team and client activities and office space can be assigned accordingly. It’s important that we all spend more time together in person to strengthen and foster collaboration and innovation. (She hated this hybrid workplace model that her firm had become. She despised every variation of it that her team had tried to implement through and after the pandemic. She was concerned about the regional, generational, and social fissures it was exposing in the firm. And she was deeply disturbed by the lies that it was creating—everyone knew that nobody was adhering to the three-day-in-the-office protocol—but nobody wanted to acknowledge it. The hybrid was distorting the firm’s values. She knew addressing this would be a central part of the firm’s next strategic plan.)
3. What does the sale of our competitor Heathline, Peregrine and Bloughbock mean for us? (From a 42-year-old “rising leader” in the Billings, MT, office) We’ll have to wait and see. This could be a huge opportunity for us if some of the HPB employees don’t like the new situation and choose to look elsewhere. We would certainly welcome them here. (She didn’t really expect there to be much, if any, of an opportunity. The firm’s long-time frenemy HPB had not been “sold.” Instead, it had been recapitalized by The Dalek Group, a private equity-backed engineering firm created in a laboratory two years ago. It had acquired five ENR Top 500 firms in the past 18 months and with this recent acquisition of HPB was now larger than AE2Env+. She viewed what was happening with HPB as both an immediate and longer-term existential threat. Immediate in that The Dalek Group’s recap of HPB would invigorate the firm—which had been slowly stagnating for years. Longer-term in that a growing number of AE2Env+’s peers were choosing this private equity capitalization model. She worried about its impact on the industry and profession. She had seen how private equity had changed other industries.)
4. What’s the plan for our newest acquisition, Green Pied Piper? (IT Director, corporate office, Miami, FL) We see this acquisition as being critical to accelerate our ability to deliver digital and VR solutions to clients nationally. We will fully integrate Green Pied Piper into AE2Env+ so that its domain expertise will be immediately transportable across the enterprise for seamless deployment. (She was unhappy with herself that she had felt the need to use so much jargon in response to the question. She lived by the rule—or razor—that if something could not be explained to a five-year-old, then it was probably baloney. She had anticipated this question from her IT Director. They had been involved in a struggle for the past three years on the best approach to digitize the firm’s business. The IT Director was an advocate for internal development. Initially, the CEO agreed and over the years had committed significant investments in the pursuit of a digital business model. None of which panned out. So, the decision was made to undertake an acquisition. She was convinced that “fully integrating” the acquisition was the absolute wrong way to go about things. But one of the firm’s external board members—formerly of Silicon Valley—convinced her otherwise.)
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