Firms that scale successfully evolve their leadership approach, formalize operations, and stay grounded in culture.
"Businesses grow through stages, and each stage demands a new kind of leadership.” This quote from John C. Maxwell captures a critical truth: the leadership style that drives early success often becomes insufficient as a business matures. In the early days, founders typically lead through personal drive, hands-on involvement, and fast decision-making. But as firms grow, leadership must evolve – embracing strategic delegation, scalable systems, and the development of others.
This is especially true for architecture and engineering firms, where growth is often shaped by both market forces and internal complexity. To sustain growth through each stage, leaders must recognize new challenges and develop the skills necessary to navigate them.
These are the key leadership concepts essential for driving growth at four different stages:
1. Startup phase (1–10 FTEs). This phase begins with one or more individuals who see an opportunity to build a business around their expertise. Early success hinges on their ability to deliver quality work, build client relationships, and respond quickly to opportunities.
As demand grows, the firm must replicate its capabilities across teams to scale effectively. Leadership at this stage must:
- Have a commitment to training others
- Delegate minor production tasks
- Ensure their vision of quality and service remain consistent
2. Small firm (11–50 FTEs). With multiple production teams and growing client demands, leadership must now focus on managing both people and processes. It’s also during this stage that foundational support functions – such as marketing, IT, and HR – begin to take shape.
Growth becomes constrained not by market opportunity, but by leadership’s ability to delegate. One of the most common roadblocks at this stage is the founder’s reluctance to release control. Without trust in the next tier of managers, firms often plateau.
To break through, leaders must:
- Shift from an individual to a corporate structure mindset
- Focus on standards and repeatable systems
- Delegate operational responsibilities
- Invest in mentoring and developing team (business) leaders
3. Mid-size firm (51–200 FTEs). At this level, managers must be trained in core business functions – budgeting, forecasting, staff development, and backlog management. Principals become responsible not only for delivering work but for generating it.
This transition can be challenging for technically oriented professionals. Many firms address this by offering ownership to key individuals who are willing to embrace the business side of the practice. While this may dilute equity in the short-term, it can fuel long-term growth.
Sustaining momentum also requires aggressive hiring. A firm may need to onboard 30 or more new employees annually just to support organic growth and replace typical turnover. Without a structured recruitment and onboarding program, growth may stall. At this stage, acquisitions become a viable path to supplement organic expansion.
To thrive as a mid-size firm, leaders must be willing to:
- Teach and delegate business operations
- Develop future principals with both technical and business skills
- Formalize recruitment and retention strategies
- Reinvest in the firm through ownership stake or M&A
4. Large firm (200+ FTEs). Larger firms require robust, scalable systems to manage complexity. A dedicated executive team (C-suite) typically oversees business continuity, financial planning, and human capital strategies.
Growth now requires a strategic balance between organic expansion and acquisitions. Structured internal training programs ensure alignment with the firm’s standards and culture, while leadership development becomes formalized to secure future continuity.
Mature firms often have dedicated teams for M&A – focused not only on financial performance, but on cultural fit, talent retention, and integration. Leadership takes on a visionary role, constantly exploring new markets, service lines, and geographies.
To lead a large firm effectively, leaders must:
- Build scalable systems and leadership pipelines
- Align culture across diverse teams and locations
- Combine organic growth with strategic acquisitions
- Maintain a long-term vision while managing short-term execution
Final thought.
Each growth stage presents new challenges – but also new opportunities. Firms that scale successfully do so by evolving their leadership approach, formalizing their operations, and staying grounded in culture. Agility, systems, and clarity are the levers that drive sustainable growth at every phase of the journey.
Position your firm for the next stage of growth. Whether you’re looking to expand through acquisition or maximize value in a sale, Zweig Group’s M&A consulting team brings decades of AEC-specific expertise to every transaction. From identifying the right opportunities to structuring, negotiating, and closing deals, we help firms at every stage of growth navigate the complexities of M&A with confidence. Learn more here.
Steve McAdams, PE, is a mergers and acquisitions advisor at Zweig Group. Contact him at smcadams@zweiggroup.com.
