Becoming a principal isn’t a reward for past success – it’s the start of owning responsibility for future value.
In architecture, engineering, and construction firms, becoming a principal is often treated as a destination. A reward for years of technical excellence, client trust, and long hours. But in reality, the principal title isn’t the finish line – it’s the beginning of a very different job.
At its core, being a principal of a company is about ownership and value creation, not just seniority or technical expertise.
For leaders asking what is a principal in business, the answer is simpler and more demanding than it sounds: a principal is responsible for the long-term health and value of the firm.
Zweig Group’s 2025 Principals, Partners + Owners Report shows that roughly 80 percent of those with the principal title also hold ownership stakes in their firms. That single fact fundamentally reshapes the role. Being a principal owner changes what matters. It shifts the conversation from individual performance to enterprise performance, from billable hours to return on investment, and from short-term execution to long-term sustainability.
When principals of a company fully embrace that shift, firms perform better. When they don’t, growth stalls, frustration builds, and leadership teams struggle to move the business forward.
Thinking like an owner, not just a senior professional
Principals who think like business owners behave differently. They focus less on staying busy and more on creating leverage. They ask better questions about where the firm is investing its time, talent, and capital. They understand that while market conditions fluctuate, firm value is shaped by decisions leaders make every day.
Most of the drivers of firm value are controllable: growth rate, profitability, diversification, leadership depth, brand strength, and risk management. Growth, in particular, is a powerful force. It supports talent development, reduces dependency on a handful of clients or leaders, and positions the firm to adapt when markets change.
Yet growth requires principals who are willing to lead change, not simply manage work.
The real challenge behind the manager-producer dilemma
One of the defining challenges for anyone with a principal job title is the tension between producing work and leading the business. Many principals still spend a significant portion of their time in technical delivery or project management, even as expectations around leadership, strategy, and mentoring increase. This “manager-producer” dilemma isn’t really about time sheets. It’s about role clarity.
Many principals continue to spend significant time in project delivery because it’s familiar, comfortable, and measurable. Meanwhile, the harder work – setting direction, developing people, making tradeoffs, and holding peers accountable – gets deferred. On paper, the principal of a company may be a leader. In practice, they’re often still operating as senior producers.
This creates a leadership gap. Firms can’t scale decision-making, develop future owners, or pursue growth effectively when principals are stretched between delivery and leadership without clearly prioritizing the latter. The most successful firms are explicit about this transition. They don’t expect principals to abandon technical work overnight, but they do expect a deliberate shift toward activities that create enterprise value.
Being less billable is not a failure of productivity. It’s often a sign that a principal is doing the work only owners can do.
Governance isn’t bureaucracy – it’s clarity
As firms grow, informal leadership structures that once worked start to break down. Decision rights blur. Accountability weakens. Sensitive topics – partner performance, compensation, ownership expectations – become harder to address.
Zweig Group’s data reflects this tension. A meaningful number of principals believe peers are not pulling their weight, yet most firms lack consistent evaluation processes for principals themselves. That disconnect erodes trust and slows decision-making.
Strong governance isn’t about control for its own sake. It’s about clarity. Clear expectations for principals. Clear criteria for performance and contribution. Clear processes for making and revisiting major decisions. Firms that treat ownership as a professional responsibility – not a lifetime entitlement – are better positioned to grow, transition leadership, and preserve value.
Governance, when done well, enables leadership. When avoided, it quietly undermines it.
Investing in the role, not just the title
The most effective principals share a common mindset. They understand how value is created. They accept that leadership requires tradeoffs. They are willing to evolve their role as the firm evolves. And they invest in developing themselves as business leaders, not just technical experts.
For firms defining what is a principal in practice, not just on an org chart, this distinction matters.
Becoming a principal is not something you “arrive at.” It’s something you grow into – intentionally.
Firms that recognize this early, and support principals through education, peer accountability, and clear expectations, build stronger leadership benches and more durable businesses. That drives return on investment which benefits not just owners, but every single employee in the firm.
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Chad Clinehens is president and CEO of Zweig Group. Contact him at cclinehens@zweiggroup.com. |
