Smile Succession Planning Made Easier: With so many Baby Boomers retiring soon, apartment companies discuss the best methods for finding new talent, training existing staff and relieving the fear some feel when seeking their own replacements.
The multifamily housing industry today faces the realitythat many middle and upper-level management executives, are contemplating retirement in the next seven years. Combined with any unplanned exits in the workplace and the challenge can seem daunting.
An increased focus toward preparation for these transitions is being witnessed, whereas clients are discussing desirable qualities in candidates and future corporate hiring plans.Strong personnel management directed toward these issues is becoming more commonplace.
Using history to base a forward-looking perspective on leadership, this knowledge combined with careful planning could become an opportunity in which to improve--and sometimes restructure--responsibilities within an organization.
Companies could plan to achieve additional leadership through acquisitions or mergers in addition to the traditional strategies of internal employee development and infusion of new talent.
There clearly are challenges to the succession process--However subtle, there is a human "fear factor" that may surface when one begins the process of training replacements. More prevalent, successful executives typically have a strong business personality. This can be problematic when proceeding with a succession plan, as this personality type typically has a natural resistance to relinquishing control. The process can be challenging and emotionally difficult as a result.
One way to minimize this resistance is to recognize three types of control: Information, Input and Actual Control. Define the limitations of potential successors to the first two levels until a transition is made. This allows current management more exposure to how a potential successor would handle situations without the risk of actual control and assist with the comfort level of their mentor.
Based on interviews with some of the top multifamily executives, following are their thoughts about how to address future leadership and succession planning strategy.
Pinnacle: Emerging Leaders Pinnacle is a national leader in third-party fee management of investment real estate, managing a national portfolio of more than 1,000 apartments, office, industrial and retail assets valued. at more than $17 billion.
One big challenge with succession planning is the reality that the organization is bigger than any individual, which is difficult for many to come to terms with, according to Pinnacle's President Rick Graf.
As a brand, Pinnacle has been built during the past 30+ years and will outlive its founders and the current management team. "Once we come to grips with that reality, the process of 'letting go' becomes easier," Graf says.
Pinnacle established an Emerging Leaders program in 2013. The program is designed to identify those with high potential leadership capabilities. The initial group comprised nine individuals from various disciplines of the organization, Graf says. The criteria for consideration included the potential to be in "C-Suite" positions in the future. The program provides unique educational opportunities, both internally and externally.
"This will equip our team to be prepared for future leadership roles as they are presented from within the organization," Graf says. "Each program participant has an executive mentor. The mentor is required to spend specific time with the participant. to ensure exposure to various aspects of the company, but also to help them grow and develop as future leaders within Pinnacle, as well as in the industry."
Graf says Pinnacle's approach to the fear factor when training "replacements" is to truly encourage the team to hire and develop individuals who are better equipped to succeed than they may be. "If we continue to hire individuals who are the same or less-qualified as we are ... then we haven't advanced the cause of our company and the industry," Graf says. "The ability to get past the 'fear factor' that this person may M fact be our replacement is critical to the growth of any organization. It is always good to remind ourselves that 'It is not about me!" To prevent people from feeling that they have "topped out, we feel it takes a combination of culture and company," Graf says. "The culture needs to be one of appreciation and inclusion. We have significantly impacted our culture to take the time to appreciate key milestones and achievements of our associates. This includes big accomplishm.ents as well as the lesser things that we need to take the time to acknowledge. We also encourage the use of common courtesies such as 'please' and 'thank you.' Just like your momma taught you!" Additionally, the ability to include the team of associates with happenings of the organization is. critical, Graf continues. "We all want to feel included in where the company is going and how we can participate in getting us to the desired goals."
When a decision is made to bring someone in from outside the company, it is a "delicate process" to make sure that the existing associates understand the unique skill set that is sought, while at the same time believing that there are future opportunities to grow and contribute.
"The key is communication at all levels to make sure the associates see the benefit of an outside perspective," Graf says. "We have successfully deployed a combination of internal promotions, as well as bringing in talented individuals from outside the company to meet our growing demands," Graf adds.
Milestone: Transparency Is Key
Milestone Management is one of the largest residential property management companies in the I ilited States with communities mostly in the Southeast.
Succession planning takes a commitment from senior executives inclusive of transparency throughout the organization, says Steve Lamberti, President of Milestone Management.
"The needs of the business are constantly changing and the alignment of skilled talent to those needs must be flexible," Lambert says. "Hiring or promoting the right person in conjunction with the development plan for their exposure and actual introduction to the job responsibilities are key factors to success."
Balancing the expectations of talented individuals with the overall development needs of the organization as a whole can be challenging, he says. "How to make the plan fair, objective and open to all potential successor candidates may present challenges, as in the methodology for judging candidates and identifying the necessary future skills for rising to the next level," Lamberti says.
Milestone does not have a formal succession plan in place, according to Lamberti. "We focus on each employee we hire in middle" and upper-management, measuring their potential to grow and succeed at the next level. A strong annual appraisal system incorporating individual career aspirations are outlined throughout the entire organization at Milestone, and development plans are in place to help associates achieve those goals," Lamberti says. "Our work environment is very transparent in measuring growth and development of all middle and senior management."
That transparency is a key to Milestone's success. "Fear in the work environment is counterproductive and a short-term solution, if at all, to a problem," Lamberti says. "If the decision to bring in outside leadership is made, strong successful professionals respond and prosper in an environment of transparency and open communications as to 'why' leadership has taken this path. "Opportunities for others to advance may in turn provide future opportunities for the mentor," Lamberti says. "Open and honest communications with your team is always the best practice. Communicating in advance of this type of change is critical Spend time with the new hire and any affected employees to ensure that they understand the 'why' and the intended outcome for the betterment of the entire organization. No one likes surprises, especially when they believe it is negative to their career and advancement."
Concerning losing talent to a competitor, Lamberti was emphatic: "First and foremost, one never wants nor should one stand in the way or restrict one's opportunity to better themselves with a new position and financial gain," he says. "If you keep your key team members engaged and informed on the corporate business plan, you will reduce the opportunity of them leaving. But, remember: Good people are always at risk of being recruited."
Greystar: Balancing Talent and Opportunity
Greystar Real Estate Partners is a vertically integrated multifamily company offering expertise in investment management, development, and property management throughout the United States and internationally. Greystar is the largest operator of apartments in America, managing more than 210,000 apartment homes in more than 100 markets with 5,600 employees.
According to Bob Faith, Chairman and CEO of Greystar, the biggest challenge in succession planning is making sure that talented people are in place who are capable of taking on additional duties, yet are not "looking over the fence" and are happy and challenged in their current roles.
"It is always a balancing act," he continues. "We have a formal succession plan that is reviewed by our Board on an annual basis for the executive officers of the firm. Having said that, it is part of our normal review process for every manager to talk about their direct reports and what is being done to groom potential successors."
Greystar invests heavily in its people's careers through training and encouraging industry involvement, Faith says. "We are a very open book company, so we talk about our corporate goals and strategies up and down the line so people understand the direction and goals of the firm in case they are needed to step up."
Greystar has specific goals and incentives for executives, he says. "With regard to mentoring and training a successor, every executive's year-end bonus is based upon an analysis of their achievement of their goals categorized by our Six Pillars of Excellence: People, Customer Satisfaction, Operational Excellence, Profitability, Growth and Community," Faith says. "The People pillar will always encourage this behavior and be a key part of their year-end review."
When queried as to how Greystar keeps people from feeling they have "topped out," Faith's immediate response was: "Growth."
"Greystar is growing so quickly and has so many opportunities it is rarely the case that people do not have ongoing opportunities to grow and succeed," Faith says. "We are disappointed if one of our 'best and brightest' is wooed away to a competitor. We find that this rarely happens, particularly if our managers are doing their jobs. We always encourage people to think about not only their short-term opportunities but their long-term opportunities for growth and the stability and staying power of the company," Faith concludes.
Gables: Talent and Trust
Gables Residential is an award-winning, vertically integrated real estate company and privately held REIT specializing in the development, construction, ownership, acquisition, financing and management of multifamily and mixed-use communities.
Gables manages approximately 35,000 apartment homes and 500,000 square feet of retail space in high-growth markets throughout the United States.
Frequently, the biggest challenge in succession planning is the fear of "another" agen da, says Sue Ansel, President and Chief Executive Officer of Gables.
"Unless there is a culture of trust and transparency within an organization, implementing succession planning may be misinterpreted by incumbents as a plan to replace them with less expensive talent. This concern is followed closely by succession being a 'future' issue and therefore not highest on the priority list when day-to-day issues are being addressed."
Gables is in the process of implementing a succession plan throughout the organization in conjunction with the currently in-place leadership development program, Ansel continues.
The current program includes approximately 50 cross-functional positions. It has programs in place to support the growth and skill level of its leadership teams, including Gables Leadership Institute, an award-winning learning and development team which offers courses throughout the year, the use of outside providers to teach critical leadership skills such as "crucial conversations" and engaging presentation skills. Additionally, Gables supports associates working through function-specific associations and certification programs.
Employee growth and mentoring is supported through Gables' annual associate evaluation process, which includes a measurement of the associates individual efforts for self-development as well as efforts to develop their team. Additionally, bonus programs include the identification and participation in personal growth and team growth.
The "fear factor" can be the toughest issue, Ansel says, while associates are, in essence, training their replacement. "It can be overcome with honest and open communication with all associates," she adds. "If an organization and the individual supervisors have developed a level of trust and transparency with their teams, this issue is manageable as associates value promotions from within the organization.
Keeping top talent is a priority. It is important to find ways to continue to increase responsibility and add learning opportunities for top performers, Ansel says. Even if there is not a new "role," creating variety and adding challenges that allow a team member to continue to grow personally will help them from feeling they have maximized their potential. Also important to senior leaders is the opportunity to earn long-term incentives (wealth creation/golden handcuffs). Continued personal and financial growth opportunities help to create value for both the individuals and the organization.
If a decision is made to hire from outside the organization, the most important step is to make certain that the person fits the company culture, Ansel says. This can often be best assessed at an "interview" outside of the office in a social setting; over lunch, dinner or a round of golf. Cultural fit will trump all the skills and knowledge someone brings to an organization, she says. An additional important step is a structured onboarding or introduction process for the new associate to the organization. This introduction should not only include programs and processes but most importantly include an introduction to the people. "It is important for teammates to meet and feel comfortable picking up the phone and asking questions of each other," Ansel says.
Vision, Adherence and Core Values
Succession planning in the most common of times is a daunting exercise. Vision, adherence to core values, and integrity are just a few of the qualities that must emanate from executive leadership to ensure a successful future for any firm. Whether a small, privately-held family business or a large corporation, identifying, selecting and integrating key leadership requires planning, commitment, finesse and "a little bit of luck."
Unfortunately, today's climate includes some pretty uncommon times: Economic uncertainty, geopolitical strife and the "Great Recession," coupled with the impending exit of the Baby Boomer generation, leaves the country with fewer individuals who are prepared to take on "C-level" responsibilities while an inherently greater number of individuals are seeking to shed them.
Like those quoted in this article, professional, progressive firms recognize--and in their unique ways are addressing--succession planning. They understand that failing to do so can leave them vulnerable to falling short of accomplishing their long-term goals and objectives.
RELATED ARTICLE: Outline of Well-Planned Succession
Identify critical positions. These are the positions that are crucial to the success of the company to effectively meet its business objectives. Roles that will be required for planned growth should also be considered in this analysis.
Conduct a risk assessment of these positions to determine where the initial focus should be.
Identify skill sets vs. current competencies.
A.well-written job description that includes the ski 1k needed for successful performance in key areas for all critical positions will be essential.
Consider having an annual calendar on file for each position documenting important activities in which that position is involved. Compare these needs with current employees' strengths and weaknesses.
This will be a guide for learning and development plans, setting clear performance expectations and for assessing performance. Many companies discover adding additional technology or other tools that could maximize the effectiveness of a role.
Identify succession management strategies.
Once critical positions have been identified and profiled for competencies and skills, select one of several human resource strategies, which should include developing internal talent pools, and recruitment to address succession planning needs.
Document and implement succession plans.
Document the findings in an action plan that includes timelines, roles and responsibilities.
Evaluate Progress. Systematically monitor the effectiveness of the defined plan and activities to make necessary adjustments.--KB.
BY KENNETH LI BOHAN, CPT, CTS
Kenneth j Bohan, CPC,. CTS, is President of The Liberty Group, a national executive search: and staffing firm for the multzAmily imdustry and an NM delegate for the Houston Apartment Association. Reach him at email@example.com or 713-961-7666.
|Printer friendly Cite/link Email Feedback|
|Date:||Feb 1, 2014|
|Previous Article:||Looking for rent growth: MPF Research reports San Jose, Denver top the list of 04 2013 market rankings.|
|Next Article:||Uder fire: A 72year-old apariment office manager tends off a gunman with a tire extinguisber.|