5 steps to embracing innovation: stifling creativity is a prescription for failure. Getting rid of the decision-making fear factor and encouraging an innovative-based workplace environment must become the top priorities of apartment industry leaders.

Within the apartment industry, the challenge is not to create or innovate, but to know when to create or innovate and how to overcome a reluctance to make decisions when opportunities abound. According to a recent CEL & Associates Inc. survey, more than 75 percent of current executives surveyed believe there are "many opportunities available," but less than 20 percent believe their organization is designed to recognize and quickly act on emerging opportunities. Following the herd is more commonplace than leading. The inability or protracted manner in which decisions get made is one of the major challenges facing real estate organizations today--and it is stifling creativity and innovation.

The fear factor appears to have taken hold within some apartment firms. Worried that they may be overpaying for an acquisition, that another September 11 is overdue, that the real estate bubble is about to burst or that an economic slowdown or recession is soon to occur has paralyzed many real estate organizations. Worrying about a future or events that one has little or no control over is unproductive and unnecessary. Worrying about a future or events that one can control is counterproductive and internally frustrating.

Saying "no" to ideas and suggestions or rejecting advice and guidance provided by others is often based on a fear of the unknown. Making decisions and innovations today requires a vision, leadership, confidence and trust in organizational talent. An inability or unwillingness to make a decision is a reflection of a lack of confidence, not capability. Innovation will not occur with inactivity or within a workplace environment based on "the way we have always done it," versus an environment that encourages "ways we could do it better."

Recognizing the Symptoms

The symptoms of a decision-challenged organization are fairly easy to spot: hiring processes that take weeks or even months to complete; investment decisions that are over analyzed (analysis paralysis); implementation of new initiatives (compensation, growth, branding, technology, etc.) that seem to take forever to get started; and countless delays or excuses that lead to wasted time in the preparation of a long-term strategic plan.

The reason that only 24 percent of real estate firms have a succession plan, or that most real estate organizations have an overall employee turnover rate greater than 30 percent, can be linked directly to an unwillingness or inability to make a decision. Finishing second or losing an opportunity due to a lack of creativity and doing the same thing differently is not an option.

For an industry founded on entrepreneurialism, risk taking, innovation and bravado, today's reactive, versus proactive, apartment organizations are stuck in neutral--and, in some cases, slowly moving backward.

The classic change-killer mantras--"We've never done this before," "Can you guarantee that this will work?" or "Let's form a committee to study this"--are alive and well in many apartment firms today. The primary contributors to this decision paralysis dilemma are: aging or exiting leaders who "don't want risk" as they wind down their careers; bureaucracy; redundancy and process overkill that stifle creativity; compensation structures that reward the status quo; and hiring practices that fill positions versus find talent.

The biggest deterrent, however, in making decisions and creating innovative solutions is the lack of true authority by others to make decisions (empowerment), and business models built upon past successes versus tomorrow's opportunities.

The Road to Empowerment

Getting out of this performance-inhibiting situation, according to a recent CEL & Associates Inc. study, requires the following five actions:

1. Make Empowerment a Reality, Not a Promise. Just telling other leaders or employees that they are empowered but unofficially declaring that that new level of authority, includes the governing phrase "as long as they don't make the wrong or final decision"--doesn't work.

Letting go of control, trusting others to make the best decisions and overcoming the feeling that "I am only going to be satisfied if I do it my way," are the common traits of leaders who consciously or unconsciously restrict and stifle growth. Leaders who solicit ideas and input from co-workers, committees or advisors and then decide to do it "their way" contribute to decision-making paralysis. In addition, leaders who punish or penalize those who make the wrong decision (after the fact) create a workplace environment that is long on promises but short on true implementation. Innovation occurs when empowerment or the ability, to think and challenge traditional practices can occur.

2. Create a Framework for Making Decisions. It is very difficult to make decisions--particularly the best decision--if there is no context or structure by which to make those decisions. Without an aligned and embraced company vision, it is virtually impossible to innovate or create a best practices environment if them are no clear or focused priorities, it is easy to make decisions on which way to go when one doesn't know where one wants to end up. Every major decision should answer the question, "How will this decision get us closer to our vision?"

Acquisition and development leaders need structure, investment criteria, standards and pre-approved processes. Community managers need authority to respond to non-crisis issues that can enhance value. Why do so many apartment firms spend three to four months to prepare and approve a budget only to ask those responsible for the budget to get approval throughout the year for decisions and purchases that were already included and approved in the budgeting process?

3. Train Employees How to Make Decisions. Making decisions and

innovating are learned, not hereditary, processes. Unfortunately, few apartment professionals know the steps and the framework for how decisions get made or what to do when they have an idea. Few apartment firms or multifamily housing professional organizations offer training classes on how to make decisions or how to create an innovative workplace environment. When one puts off making a decision or following through on a great idea, often an opportunity is lost.

Training leaders and managers on how to understand decision-making options, decision-making goals, decisionmaking analyses and decision-making risks is critical to an empowered organization. Encouraging leaders to innovate and create ahead-of-the-curve solutions and best practices is essential to achieving a competitive edge. Knowing when enough is enough when collecting, analyzing and debating a decision are important traits that can be taught. Knowing when a good idea is a great idea mandates an organizational and operational construct that promotes and rewards innovative thinking.

4. Recognize How to Cure Decisions That Go Awry. No one is immune to making poor, wrong or misguided decisions. No one can predict when a good idea will become a poor idea. The hallmark of the most successful firms, however, is how they handle decisions or innovations that did not go as planned The process of correcting a decision or rebuilding a seemingly good idea must always include the understanding of how to avoid making a similar decision in the future. Blame, finger pointing and a withdrawal of authority to make future decisions are wrong. Stifling innovation because one idea failed is shortsighted. Every decision has an element of risk. While steps can be taken to reduce that risk, some decisions will not go as planned.

5. Create a Knowledge-Sharing and Innovative Environment. One of the fundamental elements of innovative decision-making is having the knowledge and resources to make those decisions when a good idea arrives. Apartment firms that share information, promote best practices ideas, encourage team building, reward team-based solutions and incentivize mentorship tend to innovate and are able to make better decisions.

Removing the "I" and "me" from internal employee interactions will result in a vastly improved decision-making environment. Removing the "who gets credit" when new ideas are put forth or implemented will encourage employees to speak up and take greater ownership of their job and of their contributions to the success of the entire enterprise. Getting rid of the workplace and work process environmental barriers to decision-making is no longer an option. Stifling creativity is a prescription for future failure.

Symptoms of a decision-challenged organization:

* Hiring processes that take weeks or months to complete;

* Investment decisions that are over analyzed;

* Implementation of new initiatives take forever; and

* Countless delays or excuses in the preparation of a long-term strategic plan.

Christopher Lee is President and CEO of CEL & Associates Inc., a real estate consulting, compensation and performance benchmarking firm. Contact Lee at 310/571-3113 or [e-mail].