We’re all accustomed to the use of the word sustainability as it relates to issues of the environment. But it pertains as well to the corporate environment, to the mission and the culture of the places where we work.
I read a sobering statistic recently in IREM’s JPM Magazine. In an article on succession planning, Christopher Lee, president and CEO of the Los Angeles-based CEL & Associates Inc., said that “only 30 percent of smaller firms survive into the second generation, only 12 percent survive into the third generation and only 3 percent of firms survive into the fourth generation.”
Sobering indeed. What is missing in that 60 percent that fail to advance beyond the first generation? More to the point, what of those who can’t survive through generation three, long past the time when start-ups should stabilize?
Of course, the reasons can be as varied and numerous as the sands of a beach. But I will bet that in the great majority of cases, whatever other problems there may have been, there lacked a vision and a mission.
Please note here that vision and mission are different from product and service. Every property management firm promises superior service, but how does that wide-eyed promise play out in the specifics of a company’s strategic plan?
Do you even have a formalized strategic plan, one based on growth projections and contingencies against market fluctuations? How does the promise measure up against the local competition? How does it flex for market changes? How well does it resonate throughout the corporate team? How well does every division within the operation act to deliver on that mission?
Here’s just one piece of the continuity/sustainability puzzle: Chris Lee, in the above-mentioned column, advocates for succession planning to start not when the CEO begins dreaming of retiring and looking over yachting brochures. Rather, it should begin at the hiring process: “We encourage firms to hire people who have aspirations to do more and a motivation and desire to be better than they are going in, rather than hiring just to satisfy the status quo or fill an empty chair,” he told JPM.
I would add to that the need to maintain ongoing education of all critical staff, not only to improve their skills, but also to ensure their continued focus and engagement.
Of course, his plan is an ideal and no one I know does it perfectly. And as we are all aware, hiring is more a crap shoot than it is an exact science. But Lee’s advice does suggest the necessity to inform immediate need with long-range goals. Unless you can keep your car in your lane (immediate need) while anticipating what the road conditions are like up ahead (long-range goals), you are doomed to a short, happy life.
If your company has a clearly stated mission and strategic plan, and if its long-range goals are embedded in the culture of your operation and branded in the hearts and minds of those who work the daily operations of your business, you’ve come as close as possible to ensuring your corporate longevity.
After all, how well can we manage the assets of others if we cannot manage ourselves?
With more than 30 years of property management experience, Chris Mellen, CPM, is 2016 president of the Institute of Real Estate Management. Mellen is also vice president of property management for the Boston-based Simon Companies, supervising the day-to-day operations of all properties in the firm’s portfolio.