Our A|E Advisors group (www.ae-advisors.com) has just completed our annual CEO Forum, where 50 firm leaders from across the country came together in Scottsdale, Arizona for a 2-day CEO roundtable. A thought provoking session this year was the discussion of our CEO Survey Report. We once again surveyed A&E firm CEOs regarding the trends and challenges that they’re seeing today. I’d like share some of the survey results with you, and also pose some follow-up questions.

Important Trends
CEOs are tracking several external trends that will affect their firms for the next 3-5 years. Dominant among these is the perceived increased commoditization of design services. Seen as a legacy of the recession and the slow recovery, many CEOs observe that clients have come to expect high performance for low fees, and that too many firms engage in harsh, fee-based competition. In the words of one CEO, “The new normal is pushing our clients to expect A/E services bordering on perfect, delivered right now, and as close to free as possible.”

Considering this significant trend: What is your firm doing to combat commoditization? Demonstrate its value? Differentiate itself? How effectively does your firm’s strategic plan address this?

Talent Recruiting and Retention
In another leading response to the question about trends, CEOs express concern about the limited projected availability of labor resources, citing professionals who have left the industry, relatively fewer qualified graduates, and the loss of experience brought on by retiring baby boomers. When asked to identify strategies for acquiring, retaining, and developing talent in the next 3-5 years, the majority describe measures they are taking to improve their firm culture, work life, and work environment. One CEO reported, “We’re totally committed to providing a better environment, culture, and reward structure than any of our competitors can, or will, provide to their employees.”

What are your strategies to win the talent war? How is your firm differentiating itself as an employer? How is your firm appealing to current and prospective entry level, mid-level, and senior employees?

Future Leadership Challenge
CEOs were asked to pinpoint their biggest leadership challenge and describe how they plan to address it. By far the dominant challenge cited was leadership succession. Their responses reflect this concern at their own level as current CEOs look ahead, and throughout their management teams as principals and senior managers “age out.” As once CEO stated concisely, “My biggest challenge is successfully developing a replacement.”

How has your firm addressed leadership succession planning on a 5-year and 10-year horizon? How deep is your “bench?” How will current senior leaders transition out of their positions, perhaps into lesser roles in the firm? Who will fill the vacancies?