The structural risk hiding inside New Zealand’s most successful engineering firms

There is a pattern I have seen repeatedly across engineering consultancies and technical services firms in New Zealand: a business that is genuinely successful, technically excellent and commercially strong – and quietly dependent on one person for almost everything that matters.

The founder holds the client relationships, the commercial judgement and the institutional knowledge of the business. More than that, he or she often holds its leadership gravity – the thing that keeps decisions moving and standards high. That model builds exceptional companies. It also carries a structural risk with a word most firms prefer to avoid: succession.

Most engineering consultancies and technical services firms were built through technical expertise, responsiveness and reputation. In the early and mid-growth stages, a founder-centric model works well. Decisions move quickly, standards remain high and relationships are personal.

Growth changes the conditions. More people, more projects, more coordination and greater operational pressure begin placing different demands on the leadership structure. At some point, the founder can no longer realistically remain the centre of every major decision, relationship and escalation point – and the business needs leadership depth to match its technical depth.

The transition is easy to miss. Technically strong businesses can remain commercially successful for a long time while founder dependency sits unexamined beneath the surface. The problem only becomes visible once the organisation starts trying to grow past it.

Sector consolidation sharpens this.

I saw a related dynamic during my time with Jacobs Engineering, supporting the integration of SKM and CH2M across Australia and New Zealand. While the context was different, the organisations that navigated change most effectively had leadership depth beyond a small number of key individuals. The lesson was clear: resilience and enterprise value are strongest when capability is embedded across the business rather than concentrated in a founder or two.

Further, the firms that command the strongest valuations are rarely those with the most charismatic founders. They are the firms that have deliberately built leadership depth, broadened client relationships and created confidence that performance will continue when the founder steps back. Buyers pay for future earnings, not past achievements. The greater the confidence that earnings will endure beyond the founder, the stronger the valuation and, often, the multiple.

When I was first engaged with Airlab in early 2020, the brief was focused: leadership coaching and development support for emerging leaders within the business, including Jason Capstick, who was stepping into broader operational responsibilities.

Airlab had strong technical capability, a respected market position and a founder who had spent more than four decades building both the business and its reputation. Established by Mike Dane in 1978, the company had grown into one of New Zealand's leading specialists in commissioning and indoor air quality services.

What became clear fairly quickly was that the business was entering a much broader leadership and succession transition than the initial brief had suggested, and my role expanded accordingly – from executive coaching into supporting the wider evolution of the organisation itself.

Jason progressed from senior technical leadership into Auckland Operations Manager, then National Operations Manager, before being appointed General Manager. At the same time, Airlab was working through a broader founder transition, creating the conditions for leadership responsibilities to progressively move beyond the founder while retaining the experience, technical judgement and industry knowledge that had helped build the business.

About a year into the engagement, I was brought back to help establish a more formal governance framework, eventually stepping into the role of Advisory Board Chair.

None of this was about replacing the founder or dismantling the entrepreneurial culture that had made the business successful. It was about building a structure capable of supporting continued growth while reducing the organisation's dependence on any one individual – clarifying accountability, strengthening governance discipline and creating the conditions for the next generation of leaders to actually lead.

One of the things Airlab navigated particularly well was Mike Dane did not disappear from the business. Instead, the role evolved. As broader operational leadership transitioned to the next generation, the founder stepped into a more specialised chief estimator role – one where his experience, technical judgement and industry knowledge kept creating genuine value without him needing to be the operational centre of gravity.

In my experience, this is where most succession transitions either succeed or fail. The strongest ones are rarely about removing founders from the business. They are about allowing leadership structures to evolve while still respecting the capability, history and commercial value the founder brings.

I have also seen the opposite – founders who hold too tightly to operational control, unintentionally blocking succession as new leaders attempt to step forward. Often this does not come from poor intent. More commonly, it comes from deep personal investment in the business and discomfort with approaches, decisions or leadership styles that differ from their own. Sustainable succession requires space for the next generation to lead differently, while still having access to the founder’s experience and judgement.

Across the transition period, Airlab grew profit, revenue, and headcount while significantly reducing staff turnover. But the more durable result was organisational – the business developed the depth to sustain performance without depending on a single leadership figure to hold it together.

What Airlab worked through is not unusual. Across New Zealand, many mid-market engineering consultancies and technical services firms are entering similar territory – founders thinking seriously about succession and ownership transition, emerging leaders being asked to take on complex operational and commercial roles, clients demanding greater organisational maturity.

Succession planning in this sector has too often been treated as something adjacent to the real work – an ownership exercise to be dealt with eventually, separately from questions of strategy, growth and performance. The firms that handle this well treat it as the same question. Building the next generation of leaders, transferring institutional knowledge, establishing governance that actually functions – this is the work of growth, not a prelude to it.

The succession transitions that have worked – Airlab among them – share a common quality: the founder does not step back so much as step sideways, into a role where their particular expertise keeps creating value without crowding out the development of everyone around them. Getting a founder to see that possibility, and to trust the people stepping forward, is usually the hardest conversation in the process. It is also the one that determines whether the transition holds.