From Architect to CEO: Building a Global Design Firm: DLR Group CEO Steve McKay

Speaker A: From the Big Night Media studios at the Boston TD Garden, this is the Word on the street podcast hosted by Mick Morrissey and Mark Goodale.

Speaker B: Good to see you, Mick.

Speaker C: Likewise, Mark. Always good to see you.

Speaker B: Golf season or for you landscaping season, depending on the course you are on. I understand that your game is just. You're on fire right now after a tough start, is that right?

Speaker C: It was a very tough start, I have to say. But I've used AI to improve my game, as have you. My scoring in AI, my swing in AI. Yeah, AI is rooting my life right now, Mark.

Speaker B: Yeah, I understand. I understand now, Catherine, do you, you play golf, don't you?

Speaker D: Not very well at all.

Speaker B: Yeah, but you play?

Speaker D: No, no, actually I, I just kind of swing and sometimes I hit a ball and it goes a few feet.

Speaker C: Swinging a mess. The cart ride is swinging.

Speaker D: A messy. Yes, I'm a great car driver.

Speaker B: Traps, breaking, science wraps.

Speaker C: Oh, by the way, I'm in the market for a new card. Yeah, Four seater.

Speaker B: Really?

Speaker D: A four seater?

Speaker B: Four seater?

Speaker A: Why do you need them?

Speaker C: Lithium battery. It's going to be fantastic.

Speaker D: You don't want to get the ones with the back too?

Speaker C: No, because you can't put your clubs on.

Speaker B: Is that operated by AI as well? Yes, I understand, I understand. Well, have you played in Scotland?

Speaker C: I've never played in Scotland.

Speaker D: That's bucket list. The. Those are the greatest courses in the world.

Speaker B: Well, there's a reason I ask, because our terrific Guest today, Steve McKay, hails from Scotland. He is the CEO of DLR Group, the employee owned integrated design firm. Ranked number 61 on the ENR Top 500 list. Steve grew up in Scotland, played rugby at a high level, trained as an architect. You don't see that every day. And spent decades rising through DLR before uh, becoming uh, CEO. Steve, welcome to the street. Uh, uh, it's really great to have you.

Speaker A: Appreciate it. Thanks for having me.

Speaker B: And so can you talk to us about uh, your, your rugby career? Because it did have a period uh, at the end of it as I, as I understand. But uh, you played for quite some time.

Speaker A: Yeah, I did. I um, I played in high school where it started. I went to a high school that only had a rugby team. No soccer team, no football team. So I played rugby. I was fortunate enough to play with a great bunch of folks and played all through high school. Played at uh, a, uh, little club level and then did some Scottish school stuff which was a lot of fun. And then unfortunately got injured and uh, ended my career probably sooner than I Wanted it to at the time, but probably a good thing.

Speaker B: Injuries happen in rugby. I understand.

Speaker A: Just little ones. Yeah, just little ones. But, yeah.

Speaker B: Uh, fingers hanging off, toes hanging off.

Speaker A: It was never that bad. We saw some pretty gruesome stuff.

Speaker C: I can imagine.

Speaker A: You know, the weather's not great, so it's kind of like a natural painkiller. When it's minus 12 outside and you're playing rugby and shorts on the west coast of Scotland, it's, you know, you can't feel anything anyway, so I remember

Speaker C: coming home after games. Cause I played rugby too, Steve. I remember coming home covered in mud. Like, just covered head to toe in mud. And it wasn't like there was a lot of water pressure for a shower. So it was always a bath that I would take. And that bath after I'd come out of it was just ringed with dirt.

Speaker D: Dirt?

Speaker A: Yeah.

Speaker B: Turf.

Speaker A: It's a grass. It's a turf. Still on you, you found things in places you didn't know you own. It was fun. I enjoyed it. It was a great sport. Taught me a lot. So, yeah.

Speaker B: I was gonna ask you, Steve, what parts of that journey still shape how you lead today? Did you take anything from rugby with you into the work world?

Speaker A: Bear in mind, I mean, I've lived in the States 25. I lived in the States 32 years. Been a citizen 25 years. And so I had to learn all the sports in the US but in rugby, I really loved that you did offense and defense. You were. There was just a team, you know, it wasn't a different set of people who had the ball. So you had to be in defense when you were being attacked, and you had to be in attack when you were, uh, when you had the ball. And I kind of. The thing I really love the most about it that I remember today is you. You know, you learn how to win gracefully, and you learn how to lose gracefully.

Speaker B: Yeah, yeah.

Speaker A: And then our business and architecture, where, you know, you're. Particularly when you're, you know, your win rate, you're lucky if it's one in three, one in four. Um, you need to learn how to lose gracefully. And in rugby, that's kind of what it taught me. It didn't matter how hard the game was, didn't matter how many sneaky punches there were on the field at the end of the game. It's handshakes, it's showered, it's beers, it's thank yous. Um, and then a lot of times, you'd walk back to the club with the people that you had been on the field with. And so that's probably the biggest thing that it kind of taught me is to win and lose.

Speaker B: Yeah, and, and uh, you know, and, and you mentioned earlier too about uh, you have to play offense, you have to play defense and everything that comes with both of those, uh, wearing a lot of hats I guess is the, is the term that's used in our industry. Same kind of thing I guess, but also toughness, uh, trust I would imagine, uh, is part of that game too.

Speaker A: You'll learn how to be a team and be a little flexible. I mean I ended my rugby career and as a winger, started my rugby career as an inside center. So I kind of progressively moved further along the offensive line until I was out in the wing. And that was another great lesson. You know, when you're, when you're winning, the wingers gets all the glory falls

Speaker B: out to the winger.

Speaker A: See when you're losing, winger gets the ball and then the winger gets pummeled. So you know, because nobody else wants it because you're getting, you're getting beaten. So yeah, it was, ah, I enjoyed it. Listen, I really enjoyed it. And um, if anything else, I've always been a team, even in my job. You know, I say this a lot to um, a company, the staff. I've never done a project alone. Yeah, yeah, there's no such a thing in our industry as a project alone. And um, so I've always liked, I worked all through college, all through university with really the same four or five people. Yeah, um, we did all the projects together mostly. And um, so yeah, I've always been kind of a team person. I like people. That's probably the big. I like people.

Speaker D: That's a good way to put it, Steve. After college, you know, you kind of looked to the great wide world. You ended up in Jamaica for a couple of years. And then I love this story that you got in a car for seven months and drove around our lovely country, the United States before ending up in Seattle. Can you talk a little bit about what that experience made you realize this was the place for you?

Speaker A: Well, I don't know if I knew that at the beginning to be honest. When I was young, I was in the fortunate position that my father's eldest brother was a chemical engineer and he finished the latter 30 years of his life running the Bahamas oil refinery company in Freeport Lucaya, Grand Bahama Island. She's a 6 foot 8, thin as a rake, white freckle faced, ginger haired Scotsman. And he married Miss Bahamas, 1969. So that was the dream everyone on the island knew. I mean, when we were old enough to be able to be put on a plane on our own, we were allowed to go spend our summers in the Bahamas. Oh, wow. And so the first time I came back from a trip like that, my father said to my mother, he will never stay here. He's seen that there's a bigger world. So when I graduated, there was a huge recession. Between my first graduation and second graduation, it was a big recession. And a lot of my friends went to Hong Kong, some went to Australia, and I really wanted to go abroad. But there was two jobs at the largest architectural practice in Europe at the time, which was the Department of Architecture and Related Services at Glasgow City Council. And it was because Glasgow owns all its public buildings and they're open to the public and it has the largest council housing, public housing stock in Europe. And I got a job in the civic section, so I never got to travel. I went back and did a degree, and as soon as I was finished, uh, I applied for jobs all over the world and ended up with one in Montego Bay, Jamaica. It was an absolute. I loved it, it was great. But I didn't want to really be kind of a traditional expat. So after three years, I left. Met my, um, wife at the time, she had never been outside America. So we traveled for seven months anywhere she wanted. And then I came to, uh, Wisconsin, where she was from originally. Bought a, uh, 56 Buick Roadster and did, um, 50, uh, 4,000 miles in 38 states. We were in Salt Lake City, supposed to be visiting friends in Portland, Oregon. We had my first little mobile phone, a little startpack phone, and we got a phone call that said they were delayed, they had been on a vacation and their flights were delayed. Could we hold off? I didn't want to stay in Salt Lake. We'd been there three or four days already. So we said, hey, we could, we could nip over to Seattle and then from Seattle we could just go see friends. It's so close. Got to Seattle on a Saturday evening, Sunday morning, woke up, went to the university area, didn't know it was the university area. Just found a coffee shop, picked up a newspaper, and there were two columns of, uh, jobs for Architects, which it never happens. So we knew the economy was good. Monday morning I went up to the university, asked to speak to the chairman and said, I know nothing about American architecture. I know nothing about this city. Tell me a little about it. He was very kind to see Me. And he was very kind to sit with me for a few hours, made a few phone calls, and then lo and behold, I had a week's worth of interviews and I ended up at DLR Group 30 years ago this year.

Speaker B: And was there a, uh, uh, you spent. So most of your career has been with this firm 30ish years, right?

Speaker A: Yeah, I did about five and a half, six years before that. But yeah, my career is defined by this firm.

Speaker B: Was there a moment early on where you said, this is going to be the place where I stay, or did it just sort of happen over time that you just, uh, never really left?

Speaker A: No, I don't know if there was a moment in time. I mean, I know why I stayed. I do think there was a moment when I began to understand what employee ownership meant. That was a different thing. It took it, and it really did take seven to eight years for it to sink in. To sink in. But my boss, who's passed away now, he wasn't the gentleman who interviewed me. He was walking past the interview office. He was the um, soon to be managing partner. And he got called in by the gentleman interviewing me because he played golf and I was Scottish, which of course everyone assumed he played off. And um, that was at 3 o' clock in the afternoon and at 6:30 that I suppose early evening. Now, John, his name is John Perrett, John asked me if I wanted to go for dinner. And he was the managing partner and he took me out for dinner. And John and I just talked and talked and talked and talked. And eventually at the end of dinner he just said, you want to, you want to start working Monday? And I, I went to DLR Group on Monday. Yeah. So I, I don't. I stayed because of people like John. Yeah, I stayed because the people were, in my opinion, kind of really, they seemed really genuine. And they have all been ever since then. And so, you know, but um, the employee, the part where I realized it was in my blood was probably, you know, about year seven or eight, you know, I had moved through my career there. I'd had my first kind of own job, their own project there, and all of a sudden I had moved up in leadership. And I thought, you know, this is great. Uh, really, this is, I like this,

Speaker B: this is a good ride.

Speaker A: I like these people a lot. And I trusted them, which is super important to me.

Speaker D: Yeah.

Speaker B: Did you ever envision that you would be the CEO at some point or did it just sort of, kind of happen?

Speaker A: I never envisioned it that way. I, I, uh, get Asked that a lot, actually, when we do AMA things at work. I love the industry. I just do. I love this. I love the profession. I'm still fascinated by it.

Speaker B: Yeah.

Speaker A: And so I just wanted to be in the profession. I wasn't a particularly good student because I wanted out, I wanted to work. And, um, I liked all the facets of the work. I still love contracts, I still love being on site. I still love talking to the contractors and watching it get done. I happened to fall into this idea that I was good at designing things. And so they asked me to be the, really, in the end, the chief design officer for the company, which I was for many, many 17 odd years. And, um, I suppose if I had a kind of a moment and somebody said, this will be the end of your career, I'd have been happy. But I always had something in me that knew it wasn't the end. I always knew there was something else left to do. And to me at the time, it was changing the scale of the business through design work. And that's what I had worked on for so long. Um, so I never really said, I'm going to be the CEO, I'm going to be the CEO. I wanted the scale of the business to be different, to provide opportunity for all the people who work for the business. So it was a different kind of mindset. And then I suppose in a way, m the people that were senior partners or managing partners at that time kind of must have saw some. Must have seen something in that. And, um, and I became the CEO.

Speaker B: Well, you had an aspiration, and the CEO role happened to fit that aspiration versus you saying I want to be CEO.

Speaker A: It seems, you know, ironically, I. My memory is. And it's. It's a little fuzzy because they don't tell you everything. But of course I interviewed for this job. I didn't get handed the job. There were other people who wanted the job. But one of the things that, uh, I said to the company, I had spent 20 years in the business at DLR Group trying to make sure there was inspiration in all of our work, M in every location. But what we didn't, I'm not going to say we didn't have what we struggled to connect as a matrix organization was a joint aspiration, two different things. So I had spent all this time making sure the work in the offices was all as best it could be at the same level, and that the scale of the work, the opportunity, the work was all changing. But I saw this need to have to change the next level in the company to not just be a lot of offices that happen to be connected by a structure, but to actually unite everybody with the same aspiration. And if you asked at the time, 30 different offices what the aspiration of the company was, you'd have got 30 different answers, and now you don't. So inspiration and aspiration went hand in hand with me. And I told the board that at an interview. And afterwards, one of them kind of told me that was one of the big reasons they.

Speaker B: You hit the nail on the head about, uh. And this is where people get confused about purpose or mission and vision. Mission is sort of what you're talking about. We're here to do something special. And then the vision is sort of like, well, what kind of vehicle do we need to build to come through on that commitment better than any of our rivals could ever hope to do?

Speaker A: Yeah, you know, I got great advice, and you talk about becoming a CEO. I get asked this a lot, too. And, uh, my past CEO did a wonderful job and gave me great advice to go find other CEOs. And, um, they told me I had a great friend. He was the CEO at Steelcase, Jim Keen. He's not the CEO anymore, but he was wonderful. Wonderful. In my opinion, wonderful CEO. And he called me up and congratulated me, and we used to chat every Saturday. And he said, stephen, you gotta think of it like, uh, a concert, a rock band. He said, you've gone out in the studio, you've made a set of songs, now you're going out, uh, on tour. When you go on tour, you don't sing new songs. You sing the songs that made the band famous.

Speaker C: That's right.

Speaker B: That's what the game is.

Speaker A: You need to pick the songs you're gonna sing, and you're gonna sing them, and your tour's gonna last two, three, maybe even four years. He said, you'll know it sunk in when you turn up in an office and somebody hear somebody murmur, God, the CEO's here again. He's gonna tell us about the same three things he's always told us about. He said, then you get to go back to the studio and make a new album. And I took that advice and did that, uh, and worked with her, their group, and our comms people, and kind of set an aspiration for the people in the business, and then spent three years telling people that story.

Speaker D: I mean, and, Steve, you've really been a part of the significant growth of dlr, and you've helped it, you know, not feel overly corporate or Sterile. How do you protect that almost stubborn culture? Almost stubbornly protect that culture as the firm has scaled and it's kind of

Speaker A: interesting, I mean, we've scaled, you know, we've been really, um, growing last five years particularly. And I say the same thing that's kind of on the backs of the giants that came before me, quite frankly. Um, but we hold onto certain things sometimes because we don't really have a choice. We are not 1850 people in two offices. We have 38 offices and 1850 people. And so, um, you stubbornly hold on to the scale of our offices. We don't want 300 people in one office, 400 people in one office. It changes the dynamic. We have to have a home M office for filling out applications and awards. If you ask anybody in the business, in our business, and our firm will tell you we don't have a home office because we don't want anybody to be seen. We are an employee owned, 100% employee owned Matrix organization. Our leadership is dispersed. My CEO sits in Kansas City. My chief design officer sits in Phoenix. Practice officer sits in Los Angeles. Chro sits in Minneapolis, et cetera. Kind of go down the line. Um, and so we've kind of. It's been good for us culturally and it's been a challenge, an operational and scaling challenge that you kind of constantly wrap your arms around. But it's. That's the only thing I know. I used to tell this stuff. I shouldn't, I shouldn't. But when they, this is the good stuff.

Speaker B: When somebody says, I shouldn't say this.

Speaker D: I know we're all saying this.

Speaker A: We're going to get a T shirt printed. Truthfully, we're going to get a T shirt printed that said there's no plan B. Because I told the staff, I said, there's many the first year. I said, look, I only know one thing. Uh, the value of the work is incredibly important. It brings its own rewards, both professionally and from an enterprise fiduciary standpoint. If we do the best work of our creative lives, it'll make a difference. And I don't have a plan B because that's all I've ever done. I'm not clever enough to have a plan B. I only have a plan A. And, um, that's it.

Speaker D: I mean, I'd love to talk about this too. You know, you've said so many times in this conversation, ownership is so much at the core of who DLR is. You know, we are 100% employee owned firm. How does this actually show up in behavior, not theory of your team.

Speaker A: Yeah, I think you've got to look for it in kind of three different places. So the aspiration I set for the company was, uh, projects, people, and performance, in that order. There was a lot of discussion on was it people first? And I said, well, people are not our, uh, industry. Our industry is what we do. The project, the built environment, people are really important. Super, super, super, super close second. But they're really important. And so when you think of employee ownership in those three buckets, projects, people, and performance, they kind of all intertwined. At project level, you ask any client if they'd like to talk to the staff or the owner. They all want to talk to the owner. And so it kind of seeds an attitude of the staff when they do own things, that their voice is important to the client. And so from a project standpoint, uh, it makes a difference. From a people standpoint, it means everybody in the company has a meaningful voice. And that is very true. Practically, we vision with all 1800 staff. On a practical level, the vision of the company every five years is not set by the executives. We spend a lot of time, takes us about five months to plan, and we vision with all 1850 staff. And so their voice matters. And then we narrow it down until we get to a group of 100 staff, and then they help set the vision. And then from a performance standpoint, we tell people to act like an owner all the time, and that's really in the running and the operation of the business. You know, when you get the chance to go out and you know the company's buying dinner, maybe you're in a sports bar with your team versus the most expensive steak and lobster restaurant in the city. And our staff kind of think that way. And I've been with people who didn't think that way. And you tend not to survive at DLR Group. So, you know, I think if you. If you think of employee ownership, it's a meaningful voice, that you're a steward of everybody else. There's no such a thing as being alone. The person next. You're responsible for the person next to you. And it shows up that way in the things that we do.

Speaker B: And that's the phrase, right? Fully responsible. You're fully responsible for yourself, the clients, the outcome of the company. And there's no I've got mine kind of mentality.

Speaker A: There is no I. And employee ownership. It's all a we. And in fact, if you are, uh, an I kind of person, you tend not to survive at. But Certainly at DLR Group, it's, it's always a we. And in fact, even in my role, I say this very often. And I mean, I am, I am a steward in a moment of time.

Speaker B: That's right, Yeah.

Speaker A: I had this really great conversation with another CEO who was asking me about, about esop. They were not an esop, and they were asking about the esop. Very successful company. We were late, late one night, you know, over cocktails, admittedly, but late one night, and he said, you know, I'm a little bit envious. He said, you know, if all our partners left the business today, if they all walked away today, business probably wouldn't survive. But you're not like that in DLR Group. I said, no, if we all left today, the employee owners would just keep going. The company has its own legacy. It's not bound or based simply by the people who at, uh, that moment in time have a chance to guide the ship.

Speaker B: They're just shepherding it through picking up the flag.

Speaker A: And that's how I really feel that that's very important. And that's what our founders believed.

Speaker C: So, Steve, um, you're ranked number 61 in, um, the Engineering News records top 500 design firms. So let's just look at the top 100. You're one of the most iconic design firms in the US and abroad, right? I mean, globally, you've got a reputation. 25% of the top 100 are now capitalized by private equity. Another 9% are publicly traded. Um, so there's you, there's Gensler, there's som, there's a number of iconic brands that are either employee owned or partner owned. But let's just put them together. Um, right now, how conscious are you and the board of how the capitalization of the industry is changing? And do you use or do you deploy your ESOP as a competitive advantage going forward? You talked about a win rate of 25%, maybe one in four, whatever it is. So do you see that show up in your win rate? Do you see it show up in your turnover rates of staff? How do you see it show up or do you.

Speaker A: Well, I mean, I think there's a couple of different questions there, but, um,

Speaker C: I think three actually.

Speaker A: Uh, so are we aware and conscious of the change in the industry financially from a, you know, Certainly from a PE private equity standpoint, of course, you know, we have two growth strategies. We grow organically about 50%, and we grow by merger and acquisition about 50%. Uh, and that's changed in scale and we were 600 people and you had a firm that was 50 people. It was a big deal. You know, when you're 1800 people and you have a firm of 50 people, it's still a big deal, but it's an easier deal to swallow. And, um, we've always been well run, so we have, we don't carry debt of any variety in the, in the business, um, from that standpoint. So we've always funded our own mergers and acquisitions. Always. Um, but as we can now consider larger mergers and acquisitions, we're going to have to consider a different structure of how we go about them, because the cash in the bank has its own value. And do you spend it all on a merger and acquisition? You've got a liability to the shareholders. I've always said this kind of bluntly. The death of an ESOP is when it has to go to the bank to borrow money to pay its own shareholders.

Speaker C: Bingo.

Speaker A: And so we will never have, have that. But that means as the stock grows and the company grows, the money in the bank needs to grow. So now there's less money in the bank to do mergers and acquisitions. And mergers and acquisitions are becoming more expensive. Therefore, at some point, and in fact, we're kind of in discussions at some point, how will we choose to do this? And we've got, I think, two kind of simple choices. One, um, organic growth, sorry, emerging acquisition growth can only be done at a certain scale, or we have to find a different way to spend money. And we aren't there yet. But I see that and the board sees that in the future. The ESOP part of it makes a difference in many. Our retention and recruitment rates are certainly not above. You know, these are hard numbers to feel, you know, the fuzzy numbers.

Speaker C: Fuzzy numbers.

Speaker A: I mean, you know that everybody's great. You know, you walk in a room full of architectural CEOs, but it bugs the hell out of me. You walk in a room with architectural CEOs. Oh, yeah, yeah, we're all high and we've all got billion dollar jobs. Life is great. Life is rosy. It never is. That's a lot of rubbish in my opinion. Um, but if you kind of look around, if you go to the American Institute and you go to the large firm roundtable that we're part of, our retention rates are no worse than anybody else's. In some cases, it can be a little bit better. Uh, but it also depends on the size and scale of the firm. Depends on if they're a little bit better. So, you know, uh, the ESOP shows up there and it also shows up in how we structure compensation. We're going through a big compensation philosophy change at the moment because a large percentage of our uh, profit goes back to our staff. Um, and so the balance between, ah, base salary, incentive, comp, bonus comp, defining all that, ah, it gets quite complicated. And we're right in the middle of trying to bring a little bit more. We want to see translucency to it because we're in a generation of young professionals who want more transparency, far more transparency than we've ever got. So they want more transparency to the ESOP also. And there are much more. I don't like to say I was a dumb audience, but they're a very sophisticated audience because of the access to information that I never. I didn't have the ether, I couldn't look up the stack. I didn't have copilot to ask what an ESOP was. But they do. And so they ask really deep because

Speaker C: they're smart folks, right?

Speaker A: Smart folks are motivated, smart, and they are, and they see a purpose and a vision. You know, there's a lot of stuff you talk about with the younger staff and the way the profession is different today, but, you know, you kind of get what you get. And I think they're brilliant, these young. They really are brilliant. In my opinion. They're quicker, faster, better as they should be than my generation ever was. It's just finding a way to synthesize that to a business at the same time as a career, at the same time as providing them a, uh, quality of life, which is the whole point of the esop. Quality of life for them that's part of their work.

Speaker B: Are you finding. Steve, uh, uh, between the guaranteed, guaranteed, uh, salaries, compensation and the incentive comp, is there a shift going on there? There is no pattern. I find in a lot of firms. They're starting to folks in general. And again, it's a wild big generalization that folks seem to be, uh, valuing the things that are more, uh, uh, guaranteed versus the.

Speaker A: Yeah, it's very true. I mean, I think the change, the biggest change is that here, and you're right, it's a bit of a fuzzy conversation, but they want some stability. But that's not that different. I mean, if you ask my generation if they wanted more base salary than bonus, they would say base. Everybody says base. You know, that's how I pay the mortgage. Everybody sees the same thing, but I also see a, uh, change in what incentive means to them and what incentives bring value. You Know, I had a great conversation with a bunch of young staff in the office the other day that said, what would you give up 20% of your base salary for? Uh, so what would you give up 20% of your base salary for? Now we're having this debate about hybrid. We had this idea of a completely virtual office. Completely virtual. We are four, one. We're in four days, one flex day. And I said, would you be willing to give up 20% of your salary to be completely virtual and no appointment? Because remember, at that point you've got a job, not a career. Two different things.

Speaker D: And what was the response to that? Was there an excitement?

Speaker A: Initially when you say it, there's a bit of an excitement. And then when you start to talk through everybody, it's kind of like coming back to the office. Nobody wants to do it. And then when they come back and they realize they like the people they work with and the number of people who come up to you and say, that was great, love that. Oh yeah, we had a project meeting. Can we still have more flexibility? You know, you get that kind of hypocritical balance there. But I mean we're really looking at that. The staff are the DNA of the company. You know, they're the lifeblood of the business. And I say this often, it hurts me more when a staff member leaves the business than it does when I lose a project. Yeah, I can see that.

Speaker D: And you were someone who was really instrumental in making DLR an international company, starting the Shanghai office and um, working in the Middle east and in today's environment, thinking about those needle moving projects and that great design work and things that you can really be proud of. Do you find the younger generation getting as excited about taking those big leaps and you know, looking at, working on those monumental projects?

Speaker A: I think they're excited about projects, uh, at scale. And that's one of the things we pushed for opportunity and scale, meaningful scale, um, internationally. You know, when I pushed internationally, it was not to be international, it was to be global. That was two different things in my mind. I didn't want to win work in other countries and bring it all back to the U.S. i just didn't. I'm very proud to have to live in America. I'm very proud to be a citizen. But I do know the world's a much bigger place than just the US and so I wanted us to be a global firm because I believe, and I still believe this, that to understand the history and the culture, the community, the society, uh, even the politics of place is incredibly relevant to the work. And if you have the chance to do that by being there, why would you not? And so we put Chinese people in China and Shanghai and the same in Dubai, and now we're in Saudi and we're not done. There'll be other global, uh, locations hopefully in the very near future. And so a lot of it is because talent doesn't only exist in the U.S. it just doesn't. I know that's a shocker for me.

Speaker B: Most of it is in this room. Granted, outside of this room there's still a difference.

Speaker A: And I've just, I've always believed that,

Speaker C: uh, yeah, so Mark and I, we've been in business out 30 plus years doing this for the industry. And a lot of our work, particularly with firms of your scale in the US was trying to get them think globally. Because if you look at prior to the Great Recession, if you're a U.S. based firm, you really didn't need to work anywhere else in the entire world.

Speaker D: Right.

Speaker C: It's like if you're a Texas firm now, you don't have to work outside of Texas. You can scale in Texas.

Speaker A: Texas.

Speaker C: And prior to the Great Recession, you could scale in the US in the contiguous 48 and go to Hawaii if you wanted to have a lot of fun. Um, but your firms headquartered in Europe or headquartered in Asia or headquartered in the Middle east would have a global view. Same with Canadian firms. Canadian firms had a global view after the Great Recession. The mindset change for a lot of the large architecture firms in the US was you can't be a US based firm and work internationally. You have to have a global mindset. And it's really hard to do, really hard to shed what you've had and actually embrace the global perspective. And you all have done that very, very well, probably as well as anybody else in the industry.

Speaker A: Well, uh, I appreciate that. I'm not again, for me it was just I didn't want to go to Shanghai, for instance, and take 25Americans. Our general manager was one of the largest LDIs in China and our staff were mostly, uh, uh, Chinese. And you're right, Mick. And what people didn't realize, and it's still happening, I think I just read a statistic, if you follow the Royal Institute of British architects, 28 for the first time ever. I, uh, think it's nearly 24 or 28% of fees for the largest practices in Europe are now coming out of America. So they're coming this way. Why are we not going that way?

Speaker C: So that's it. If you Talk with the CEOs of the large European firms, the US is just a big hole in their donut, right? They're everywhere else, but they're not really in the US and to be truly global, you gotta be in the US and you gotta be a player in the US not just an afterthought. Which leads me to the question,

Speaker D: do

Speaker C: you know what percentage Of Enor top 500 firms have a foreign born CEO?

Speaker A: I don't care. But I get the impression that you

Speaker B: were about to tell in our next episode.

Speaker C: That's not a fair question. Because it's an interesting perspective, right?

Speaker A: Yeah, I mean I think it is. There's no question. Sometimes people say, you know, how did a, you know, how did a guy from Scotland end up in a, what was, I mean historically a Midwestern, you know, born in Omaha, Midwestern farm. Um, but you know what, you know, Scotland and Ireland particularly, you know, that make it the same thing. I think there's more Scottish and Irish not in Scotland and Ireland than Ireland. We've always had um, um, a kind of a wanderlust to uh, impact the rest of the world and so. But I don't know, the global thing's just interesting to me. I just don't believe that you should only look at one place for talent. I don't believe you should only look at one place for projects. And I don't believe that your impact uh, at our scale anyway, shouldn't reach and can't reach other places. I mean what we do, we should do for good. And you should want that to be as broad in my opinion at uh, our scale anyway, as broad as possible. But I'll say this to you said about the uh, about the growth. There's so much access to information today that no matter how big you are in Texas, you're going to end your scales stuck there. You know, there's more um, potentially more educational work in two other nations than there might be in America, depending on who's whose analytics you read. But just think about that for a second so you can build a company and just say I'm just going to keep being this being a little bit bigger than I am here. Or uh, you can take the chance and say, you know, the next largest market that needs education and as close to the system in the US is xyz. Why don't we go there now? What does that bring you? Resilience. The one thing we've got 10 regions, 12 sectors. The resiliency of the business is incredibly Important to an employee owned firm because we're not selling to anybody. It has to survive for all these people who've invested in it, um, to continue that legacy. And so resiliency is really important. And resiliency, I think today can't just happen in the US. You have to look at the opportunities in and around the other kind of fun places in the world. It's kind of life's rich pageant, isn't it?

Speaker B: You know, underpinning this whole thing is design. And you look at the cost pressures and the efficiency and the speed that everybody wants. Does design still matter today?

Speaker A: Oh, yeah, uh, I think maybe more so today than ever before. You know, I think the public cares. When I came to the States, I would tell you that Europeans cared more about design than Americans, just in general. I know that's a bit of a sweeping statement, but I don't think that's true today anymore. I think there's a much more sophisticated understanding about the value of design. And if you think about it, people want more efficiency out of their homes, they want more amenities in their workplace. They want to turn up to places and cities. They, uh, want to be more entertained when they go out. These are all built environment challenges. Now they might not know that they're design values. And that's the difference. The challenge for our industry is that people don't recognize that those are design values. Why are you happy when you get home? Why are you happy when you're in a stadium? Why is there a reverence when you're in a cathedral? The public don't think about that. They just know it's true. They feel it, they sense it, but that's what we create. And so I think the value of design is intrinsically growing, in my opinion. And still, um, unless you commoditize, which we won't do. There's nothing wrong with being a commodity driven firm. There's some really good ones out there. But. But the value design is the same. I used to have this analogy. So there's a coin. The business is quite simple in my opinion. So take any coin in the world. On one side is the enterprise of the business. On the other side is design value. Now that coin, let's just say it was a pound coin. In the uk, that coin is worth a pound. I can go spend that pound. Enterprise value, design value, same thing. If you scratch one face off that, that one side off, see, I scratch the face away. Legally, that's worth nothing. You can't spend that. It's not worth anything. And that's the design business. You have to have the enterprise and the design value lockstep and this, and this coin and this value that you're going to spend and run your business in practice that way.

Speaker B: Given you're such a student of design, it's what you do in a way, it's who you are. Is there any place in the world that uh, you've walked into that just unexpectedly knocked you off your feet?

Speaker A: Yeah, you know, I think there's, there's probably two places in memory that I'm um, reminded of that one's harder to describe. So I'll tell you one, that's the first one that's easy. Uh, first time I went to Shanghai, 26 million people in a mind blowing city. Uh, that is as small as you need it to be with little alleys and little markets and little, little temples. Or as big as you need it to be. Standing on the bund looking over at what I think is one of the most interactive skylines in the world. So it still fascinates me to this day. But really the only piece of architecture that's ever brought a tear to my eye. Uh, I met an older gentleman in a bank in Montego Bay, Jamaica. I was putting my salary in the bank and he was an old American gentleman, he must have been in his late 80s, if not early 90s, John was his name. And of course we happened to chat because we were the only two people in the bank. And it turns out his wife had been an architect. And if his story's true, and I never looked it up, one of the first graduating female architects from Harvard and she had designed her home in Jamaica and he invited me for dinner. Uh, so I went and this home's very simple. Just think of a tic tac toe board, think of knots and crosses. The hole in the middle is completely missing. Looks up at the sky directly above and below on that board is roofed over, but it's a pass through. On the right hand side is garage, kitchen and dining room. Each square on the left hand side is all bedrooms and a living room. It sits on a plinth, it's exactly 15ft bigger than it. And every exterior wall is Venezuelan mahogany shutters and they all open. Uh, and I remember walking into that house, which had never happened to me for, and he was probably because he was so proud of it. His wife had passed of course by that point. And I just remember thinking I could never do this. My brain is not wired with this level of simplicity. And yet it was just Stunning. I thought I could live here forever. It was just so simple and so beautiful and I just, I never forget that, that day. And that's one. It kind of drives me with a lot of technology. I love technology. But I say to our staff a lot, just because you can doesn't mean you should. And just because we can pump out 500 renderings at the drop of a hat, what's the story you're trying to tell? Because this house told a story, their story, her story, and it was just mesmerizing.

Speaker B: It floored you?

Speaker A: Yeah, it did, completely floored me. I remember it, you know, 30 odd years ago, I remember it.

Speaker B: That's a great story.

Speaker D: It's incredible. I mean, it's the tactile feeling of

Speaker A: some of these pieces.

Speaker D: And, you know, I think we need to touch on the AI of it all. The AI of it all. But I mean, you, you seem to have a very realistic view of AI. You're not into the camp of AI will solve everything. What's been your honest reaction to the wave that's hit this industry?

Speaker A: Yeah, I'm not sure AI will. I'm not sure. I don't believe it will solve everything. I just don't believe it will solve everything today. Um, I think one of the things that AI is going to find itself, it already has in so many places in what we do, and there are so many places where you can see its value already, um, particularly in things like planning tools that take away a lot of the grind of options. But at some point somebody has to make a decision and the decision's not always obvious. Um, and it's not always. I say this a lot. I have a residential client. We want to do this, we want to do this, we want to do this. And you say to yourself, you'll not like that in the end, trust me, five years from now, that's going to drive you nuts. How does AI do that? That's judgment. And so I think it'll get there. I really do. I really believe it'll get there. But I'm not a skeptic. I love technology. I just think there are moments for it that make a lot of sense. We've all chased a lot of really shiny objects. I'm building the universe at DLR Group right now, reasonably sophisticated in how we handle our data, which is really what it is all about. It's all about data. And, um, I think even we are mind blown at the hairball of places that AI and or automations, which are, we have to get A bit more sophisticated with our language. Words matter, I always get told. And so there's a lot of automations which are different than AIs. And I think we're just beginning to see what are AI agents in our industry, which is not the simple. I did a clever web search, but actually using it to make more, uh, intuitive, uh, uh, decisions on things. So it's going to change what we do. It is already changing what we do. But I don't think we're at a moment yet where there's this massive, um, fall off a cliff m moment. I mean, I've got young staff that can't believe we had drawn boards in an office, and guess what? They're gone. And then I can't believe staff that had drawn boards going, I can't believe we're going to use that VDU screen computer. If I had a dollar for every time somebody told me technology was just going to. I was going to lose my job because of it, I'd have retired by now.

Speaker B: Well, you've had cad, bim, all that stuff. Right. Is this one different, though, from that this changes everything moment, which you have seen?

Speaker A: Again, I think it is different because one of the things our industry, we have to learn in our industry is there was kind of an ethereal thing about having to produce something with your hands. And it wasn't because you had to be a good draftsman or a good draftsperson. It was because you were trying to connect a story. Our work delivers a narrative. Our work delivers a story. In essence, it has a soul. And in the communication of it, which is the most important part of selling the work, the story, the communication of it, you thought through all that. Uh, it's kind of why I love to practice in China. It's very poetic. Um, there's always a poetic concept that you can trace it back to meaning, something bigger. And the challenge we have with some of the AI work is it's not tracing it back to anything with any meaning. It's just, here's the 5,000, 10,000, 500,000 things you could do. And I often say, well, what story are you trying to tell? Uh, if you're going to pick this planning or these renderings, what stories is it telling about? What you. Because, remember, the beauty of our profession is it takes something that happens, uh, in your heart and something that happens in your head. That's creativity, isn't it? And it connects them together and you have the ability to tell that story. That's what an architect does, or any

Speaker B: creative professional Does, Yeah, any artist, any kind of designer. And um, you know, that's the humanity is still in.

Speaker A: It will be, but it will change us.

Speaker C: One of the big concerns that we're finding our clients are wrestling with. And again, it's moving at such speed. I really don't like to use the term exponential, but it is moving exponentially is what it does to. When you look at a firm like yours, 1850 people, multiple offices, multiple regions, matrix organization. When you look at that type of organization as a leadership team, your imperative is let's behave as one firm as much as possible. Let's be one firm, you and your peers. There's a one firm concept, um, which has really been deployed over the last 20 years as we have moved away from individual geographic based profit centers which just force you into commodity. One of the concerns that we're trying to help our clients with is whether AI will destroy the one firm concept. Because how do you make everybody as uh, savvy about AI throughout the organization? Because if you're not as savvy about AI, you will fall behind your peers, you get left behind and then suddenly we've got some strange things happening in our organizations.

Speaker A: Yeah, in truth, we face that right now. We've always spent a lot of time, effort and energy being one firm because we are a patchwork threaded together with a. We tell this story, this red thread that threads everyone together. Um, however, we do have 40 design technologists now in the firm outside of our CIO structure, outside of the information, uh, uh, structure. One of their challenges through practice, integrated practice, was they are the why and the what. But they're very challenged on the how m they come up. This is why we should do this and what we should do. But Now I've got 1850 people, 10 sectors, 10 regional, blah blah, blah, to get it, to get it all through. And so we're going to go into right now our third, what I call major evolution of practice. We did one eight years ago, seven or eight years ago. First time we kind of evolved how, uh, we thought about practice and we've just made a couple of new roles. And the whole purpose of it is to go from the why and the what to the how consistently. Now we've faced this challenge before with design. I used to say, and the company still say it to this day, the bar of design is equal across the whole firm. It's not great in Seattle and bad in Chicago. It's not fabulous in Orlando and dreadful in Kansas City. It has to be the end. The aspiration has to be that that bar moves up collectively at the same time for everyone. But you know, there's a challenge. We did that through knowledge communities, through having uh, a design forum, through putting people in both sectors and regions and offices whose responsibility it was for design excellence, for the quality of the work, for the critique of the work, for the share of the work, not necessarily doing the work. And now we're faced with the same kind of challenge, uh, with technology and AI so that we don't have a laggard office.

Speaker C: And those are huge investments that you made to bring it together with design and have the bar level and elevated, um, which you really can only do as an employee owned firm. You make the decision to say we're going to make this investment. Because that doesn't show up immediately in the P and L. Right. And in fact immediately it hits the P and L in a way that you're like oh my gosh, overhead.

Speaker A: Yeah, overhead goes crazy.

Speaker C: A big experiment for the industry in this world of AI going forward.

Speaker A: Yeah, certainly the how is, you know, I had a great conversation at the lfrt. Um, somebody asked at a table, you know, how quickly will it fundamentally impact our industry? And the general consensus was this five to seven years. And my consensus was 24 to 36 months at the outside. I ah, really do think that because I'm with you, the speed of change is now even greater. The difference is there was a really interesting Forbes, uh, article written about AI and what we are trying to do, all our firms are trying to do is we're trying to find AI and socket it and pocket it and synthesize it into the organizations that we have to its highest and best value, whatever that may be to your organization. But a different way to think about it and then try and set some course to which is what we've been trying to do is if you were building this organization again from the ground up, what would it look like? And so instead of trying to find the places and the pockets on your existing system or uh, structure, what would we look like if we set the goal of being three quarters of a billion dollars in new fee, half a billion in revenue, etc. Etc. Etc. Diverse, employee owned, how would we use technology and what would the firm look like? And if your mind shifts to that, then our individual verticals are beginning to think a little bit differently and it's different. You can't tear them down to zero and rebuild them. But when you get these moments, these catalytic moments to make change, what I'm saying to Them is don't be fearful of it.

Speaker B: Embrace it. And you know, you mentioned something interesting about these, uh, drafting boards. And my father had one in the basement for many years. And now these younger professionals are thinking, uh, I can't believe that you actually had them and how big your office had to be to house all these things. When you get 10 years out from now, what will be the drafting board discussion then? What do we have today that will be seeming, uh, you know, it's interesting.

Speaker A: We've talked about that before, obviously, and you want to find, in my opinion, you want to find some big meaningful thing, you know, but in fact, I don't think that's what it is. I m think in actual fact, in 10 years time, what our younger staff will say is, I can't believe you guys used to do timesheets.

Speaker C: Boom.

Speaker A: I don't think it's. I don't think. And I think it'll be for lots of reasons. One, because they won't. That'll have been automated. Two, hopefully by that point, these newest generations will help us push to value rather than ours. And so they won't be held accountable that way. I'm not sure they'll get there, but that's my hope, my dream of it. I don't think it'll be this big. You know, I can't believe you had so much square footage of real estate. I think because if you think about, I think about my own career and it wasn't going from a drafting board to a computer. That was a wow moment. It was not having to go back after lunch and pick up handwritten phone messages from a slot. So that was. I remember that was a change. Yeah, that was a monumental change in communication. It was a monumental change in communication when we went to smartphones that you didn't need. But that was the littlest thing. It wasn't that I was sight snapping pictures and I didn't have a camera. It wasn't that I was doing, you know, digital memos and all that kind of stuff. It was that I got back to the office and didn't have to pick up a stack, those little printed note cards that the front person had written who called me. And that's great.

Speaker C: Yeah, it's great.

Speaker A: That's the change that they will see. And I think for me, that'll be timesheets. They'll be like, you did timesheets.

Speaker C: Yeah, that's good.

Speaker B: And now, Mick, it's time for Word to learn.

Speaker C: Oh, this is fantastic.

Speaker B: How excited you get. Um, we ask our guests for some wise words. And so Steve, you've had a long career, a successful career, and you've led through all kinds of growth and disruption. And you still seem genuinely energized by the work, the role and the profession. So for the younger folks coming into this industry, what's the key to building a career you love?

Speaker A: Great question. I think the key, uh, that you ask, there's in the question and that's career, not job. You know, a career. I say this often, first of all, a career is a two way street. You should have one. There's much easier professions to be in if you just need a job. So you're building a career in a professional services industry and the usual you gotta have this comment about passion and talent nowadays. Some people say follow your passion, some people say your passion's your hobby. Follow, uh, your talent, and then it becomes your passion because your talent's what will provide you a career. And all that, uh, is they're all really good. I'm not an overly philosophical person in truth, so I'll tell you what. I give the same people, I've given the same advice my entire career and I think I've taken this advice of myself. And it's simple. Participate. Visibility. Visibility. Visibility.

Speaker B: Interesting.

Speaker A: Be visible if you want to build a career in your own authentic way. I've been noisy and boisterous. Some people, uh, are methodical and pragmatic. It doesn't matter as long as you are visible. So you have to participate and that will grow you a career. You'll do it in your own way. You'll do it with your own voice, you'll do it with your own actions. But visibility, visibility, visibility, you can't change the world if you're hidden. You can't grow your career if you're hidden. You can't influence the people around you if you're hidden. You don't have to be noisy and boisterous at uh, all. You have to be authentic to yourself. But visibility, visibility, visibility. And I've told so many people that, uh, and I think that's probably in the end what I did, if there was one key quality to have is the difference between an architect in the US and an architect in general in the UK. When you set a professional license in the UK, a large part of that license, 20, 25% of it is self reflection. The example is simple. In America, you can sue me every week. I can be in court every week as an architect, and as long as I win, I'm okay. That's not true in the UK you get sued every week as an architect in the UK somebody will eventually say you are lowering the bar of the profession so you have to self reflect. You're taught to self reflect. Are you doing the right thing? And I think self reflection is a quality that you should have to build a career. Not just about your career but about you, about your personal life. And so I tell staff after visibility, visibility, visibility always find time somewhere in your life to find a quiet moment to think and reflect on the who of who and the what of what. And uh, you'll probably find yourself pretty happy.

Speaker B: Yeah. That is uh, if you're wise out there these are words for you. And I think uh reflection is critical and as you say it's what have I learned and how could it change my world and others world going forward. Um Steve, thanks so much for joining us today and thanks to our viewers. Ah, as always, please like and subscribe and we hope to see you next time on the street.

Speaker A: Mhm.