Why Leadership in Construction Is the Difference Between Growth and Chaos
When construction businesses struggle to grow, leadership is usually the real issue.
On a recent episode of the All Things Facades podcast, our CEO Tom Wood shared unfiltered insights from over a decade of placing senior leaders into high-growth construction and building product firms.
The conversation covered everything from family succession dramas to margin erosion and market diversification. But the thread running through it all was the critical role of leadership in construction businesses, and what happens when owners get in the way.
The Owner Bottleneck: Wearing the Cape Too Long
Many founders say they want to step back, but they rarely mean it.
They still put out the fires. Still make the final calls. Still get copied into every operational issue. As Tom puts it:
"They like wearing the cape. They like being the ones with the answers."
In these cases, leadership becomes a bottleneck. The owner's identity is so tied up in the business that letting go feels like losing control. But without that shift, businesses plateau.
At around £50 million turnover, the game changes. Structure, visibility, and scalable operations become non-negotiable. Owners who resist that reality tend to stall. Those who recognise it and bring in the right people, that is when things really start to accelerate.
Nowhere is the leadership challenge more delicate than in family businesses.
Tom shared examples of second and third-generation owners trying to hand over the reins to their children too soon:
"They're trying to put these kids in leadership roles, and they're just not ready. Premature promotions cause chaos."
The better approach is to bring in a seasoned operator and be honest from day one. "This is a family business. One day the kids will run it. Your job is to get them ready."
When that is the brief and everyone is aligned, succession planning can work. But when egos or legacy take priority over capability, it almost always fails
Operators Who Add Real Value
So what makes a good leader in this space?
For us, the answer is clear:
- They have stayed through the hard times, not just the highs
- They give the owner confidence, visibility, and room to step back
- They manage up, communicate clearly, and protect the legacy
This is not about textbook credentials. It is about having the patience and strength to operate in tough, privately owned environments, especially where the founder is still involved.
The best leaders in construction businesses are not just technically sound. They know how to coach, how to build trust, and how to hold the reins without grabbing the spotlight.
One of the sharpest points made in the episode was about pedigree versus fit:
"I once put a £500 million leader into an £80 million contractor. It was a disaster."
Too often, businesses hire for the CV and not for the reality of the environment. Someone who is used to polished boardrooms and shareholder updates might struggle when they are suddenly in an owner-led business where meetings happen on-site and nothing is ever truly off the cuff.
Understanding that dynamic and hiring leaders who thrive in it is critical.
Read ArticleDiversification and the Margin Squeeze
Beyond leadership hires, the episode touched on the external challenges facing contractors.
Margins are under pressure. Big unitized projects are drying up. Clients are demanding more with less. The solution many businesses are turning to is diversification.
- Moving from mega-projects to mid-size ones
- Exploring new geographies like Florida, the Midwest, or overseas
- Expanding into panels, modular systems, or complementary services
But again, it comes back to leadership. Who is going to lead that diversification? Who understands those markets? Who can build trust locally and deliver consistently?
Dropping a sales rep into a new state without operational support will not cut it. Companies need boots on the ground, long-term commitment, and leaders with real presence in those spaces.
Executive Stickability: A Growing Problem
There is also a trust issue at the executive level.
Owners worry about investing time and money into new leaders, only to see them jump for a better offer two years later. That instability can kill momentum.
Our advice is to look for evidence of "stickability". Has this person ridden the waves in a past business? Have they seen both the boom and the downturn? Can they articulate where they add value and when to step aside?
This kind of self-awareness is rare, but vital. Particularly in construction, where timelines are long, contracts are complex, and team continuity is key to performance.
If there is one thing the episode made clear, it is this:
Scaling a construction business is less about headcount or turnover, and more about learning when to step back, when to invest, and when to let others lead.
Owners do not need to disappear. But they do need to make space.
The most successful companies Tom sees are not led by superheroes. They are led by self-aware founders who know when to bring in operators, when to plan succession properly, and when to focus on long-term value instead of short-term control.
That is the future of leadership in construction businesses. And don't forget to check out our other insight piece on this very topic.
