If I’ve learnt one thing since having my daughter two years ago is that running a company is no different than raising a child – they are both significant responsibilities that require constant care, making tough decisions. Every bump in the road leads to efforts in self-improvement. Leadership is not an attribute that can be acquired overnight. After years of trial and error, hard work, innovation, and determination, a person might consider themselves a leader. However, in my experience, the more I learn, the more I realise I need to know. It can be overwhelming, but walking through those instances of self-doubt has only made me a better leader.
Whenever I find myself straying off course, I get back on track with a simple exercise—I probe into the different aspects of my company that require attention by answering these five insightful business questions.
1. Company Culture: Where should the lines be drawn and boundaries set?
2. Hierarchy: Is the current management structure effective?
3. Decision-making: What can I learn from my mistakes?
4. Competition: What is the one thing my competitor is doing better than me?
5. The Big Picture: What are my long-term goals?
1. Company Culture: Where should the lines be drawn and boundaries set?
Employees come from various walks of life and work cultures and will likely have differing opinions and perceptions about what is appropriate and what is not. How do you come up with a code of conduct that upholds your company’s principles and values? In some cases, coming to a conclusion is pretty straightforward—situations that involve racism or harassment or even tardiness have clear-cut solutions.
But what if you are dealing with a grey area? According to a survey by Glassdoor, 55 percent of employed UK adults have witnessed or experienced discrimination based on age, race, gender or LGBTQ identity in the workplace.
• How would you respond if some employees of colour wanted to host an open forum to discuss the socio-political issues they face daily?
• What would you do if a particular community wanted to form a religious club in the office? Would you interfere if a specific group of employees started a private chat channel to discuss company matters?
• Where do you draw the line on employee engagement versus a political situation? More importantly, how much do you want to get involved?
DE&I is on the lips of every CEO I speak to. While you can ban political or religious discussions, doing so might lead to employee attrition, as many may feel the company is trying to suppress their individuality. What you can do is help your managers identify scenarios where factors like race, religion, and gender preferences can be used to exclude or inhibit employees. You can also conduct awareness programs to guide the employees and the management to deal with such situations or prevent them altogether.
2. Talent Management: do I have the right people in place?
The next question business leaders should be asking themselves is about work structure. Do you follow a rigid corporate structure or have you opted for a flat hierarchy? In my experience, neither of these work. Too many layers of management can slow down work owing to the multiple rounds of reviews, approvals, or chains of communication.
But not having any structure is also equally problematic. In an attempt to eliminate hierarchy altogether and attract millennials to the workforce, some companies have adopted a ‘Holacracy’ management structure with no titles or bosses. But this could prove to be a recipe for disaster. One company, Zappos, which adopted this structure, lost 18% of its employees to buyouts over ten months. Another, as they grew to about 600 employees, found it became impossible to coordinate efforts or set goals in the absence of department heads.
Every company needs some direction to move forward and achieve their goals. Coordination is the cornerstone of every organisation. If the employees and the departments are not in sync, it will be impossible for you to strategise a game plan or set targets, let alone fulfill them.
Ask yourself the business question about how you want your company’s organisation structure designed. Keep a lookout for budding leaders. Time and again, when speaking with CEOs, I find those with management potential and “softer” skills are somewhat lacking, making it hard to plan for succession. Put a plan in place that will facilitate coordination and strategising without inhibiting the employees. Take feedback, make changes, and allow this hierarchy to evolve along with your company’s growth.
“A”-players generally equal “A”-grade results. The same has never been truer in the current real estate climate. As we enter what is usually considered a challenging market with distress, pricing realignment, capital-raising concerns and further interest rate hikes, it has never been more essential to have the right people in place, whether looking internally or externally if needed. As Blackstone’s Steven Schwarzman said, “If you ask B-level talent to do an A-level job, they will fail every time. That means you can only rely on your A players, and nobody has that many. The opportunity needs to be very compelling for an A player to give up what they’re doing.”
3. Decision-making: What can I learn from my mistakes?
If you are a real estate leader, this is a business question you should ask yourself often. What is the biggest mistake you made this year? Or since the beginning of your stint as a CEO? Running a company is all about learning and unlearning. CEOs are not born; they are shaped by practice, experience, and, most importantly, errors. There is so much we can learn from our mistakes. As one new CEO recently confessed, “For the first time in my career, I feel the need to look behind, to see if people are following me.”
The key to success lies in pushing yourself to overcome the fear of failure. “Being confident and believing in your own self-worth is necessary to achieving your potential.” This is exactly what Sheryl Sandberg told her managers right after she became the COO of Meta. Joe Bae, CEO of KKR, fosters a culture that allows people to make mistakes and thrive: “We’re in the investment business. You’re going to make bad investment decisions and make mistakes. Culturally, we need to create an environment where people can lean into that and be the best version of themselves when they show up…they can be thoughtful, collaborative, risk-taking, entrepreneurial. And if we get that ‘push-down’ into the organisation in the right way, there is so much potential”. Even Jeff Bezos, the CEO of Amazon attributes his company’s stellar success to the failures that preceded it.
Be ready to make some bold moves. If you don’t experiment today, you will never get to know what you could have achieved tomorrow.
4. Competition: What is the one thing my competitor is doing better than me?
As a leader, you won’t really know where you are going until you ask yourself the business question, “Where do I stand in the market?”, and for this, you must compare yourself with your peers. Figuring out your competitor’s strengths and weaknesses can also help you identify your own. This exercise will come quite handy in fortifying your company against market shifts, employee buyouts, and competitive strategies.
Find out where your competitor is offering value by looking closely at their brand, pricing, operational structure etc. See if you can leverage their weaknesses by turning it into your own strengths via dialing in on differentiators. For example, if the competitor is only hiring “B” grade candidates, you hire “A” grade. If there is a lot of bureaucracy to get transactions through their credit committee, short-circuit yours. Find out the gaps in their structures and fill the same in yours. Additionally, you should be able to predict which elements can maximise your potential and which could end up wasting your time and resources.
And, why not become friends with your competitors? Arne Sorenson, CEO of Marriot and Sébastien Bazin, CEO of Accor were fierce rivals but became the best of became friends before Arne’s death. You would think that the competition between these two leaders would cause them to dislike each other or try to tear each other down. Yet Sebastien once cited: “Arne had a strong personality, but he was generous, helpful, and caring. And we stayed in close contact for several years.”
5. The Big Picture: What are my long-term goals?
This is a business question every leader should be asking themselves constantly. It’s easy to aim for short-term goals. But what about the big picture? Where do you see yourself and your company in five years? When I set out on my journey with Hunter Scott Executive Search 8 years ago, I had a vision to go along, and that’s exactly what I did.
The growing influence of real estate investors may weigh down on operating partners to boost quarterly earnings, buy back shares, and increase dividends, all of which can cost their company’s future growth. Sometimes, this pressure could come from boards and executive members too.
Real Estate private markets fundraising slowed last year by – 23%, according to Mckinsey; the total returns to shareholders were lower too. As the CEO, you should be able to communicate with your investors and board members so that they can take comfort from a more a long-term plan. You know better than anyone else what’s best for your company, and it’s up to you to convince the other stakeholders.
The success of a CEO lies not in managing everything but in being able to run it so smoothly that you are replaceable. As the CEO of your company, you should be able to envision a day when your organisation is capable of functioning flawlessly on its own, so you can move on to start something new and better.
Conclusion
High-functioning senior teams that are aligned with a clear vision and mission for the business have multiplying power. Their influence radiates throughout the organisation, influencing the decisions, behaviours, engagement and work of people at every level. Plan ahead, prioritise goals, circumnavigate competitors, learn from your failures, and communicate with employees. CEOs should consider what kind of team they need in place for the business and how to foster the environment that makes that kind of team possible. Also, don’t forget to take care of yourself while you are busy taking care of the company.
Here’s to hoping you inspire phenomenal changes in your company for the second half of the year.
About Hunter Scott
Hunter Scott is a boutique real estate executive search firm founded to deliver the best talent for clients. Leveraging years of expertise in real estate search, we work with real estate funds, private equity firms, REITs, lenders and sovereign wealth houses to achieve immediate and sustainable results. Each client is treated as a “partner” with a view to creating long-term value. All searches are undertaken by Managing Director Lucy Winberg, who has over 15 years’ experience in the real estate sector including in-house for a Tier 1 investment bank. All this means you can be assured of a professional, “white glove” experience, providing absolute discretion and ensuring the best possible chance of securing the candidate who will add the most value.
For more information or a confidential discussion, get in touch with Lucy Winberg at +44 208 323 2552/Lw@hunter-scott.com.
www.hunter-scott.com