As president and CEO of Prime Group Realty Trust, Jeffrey Patterson does his best to keep everyone happy. Demanding his attention are the Chicago-based real estate investment trust’s 102 employees, the tenants who occupy Prime’s millions of square feet of rentable space and the organization’s expectant shareholders. Patterson’s philosophy of business is to create incentives for his employees that will encourage them to provide top-notch service to their tenants, which will, in turn, build long-term, profitable business relationships. Not only does it look good on paper, but his approach has been successful to the tune of $117 million in 2005 revenue more than enough to satisfy Prime’s shareholders. Smart Business spoke with Patterson about how creating discourse, defining objectives and providing a little motivation keeps everyone at Prime Group Realty Trust in perfect harmony.
Conduct your business. A good CEO needs to be a good orchestra leader, and somebody who understands most of the facets of his business and can motivate people who play all different kinds of instruments.
Everybody has different skill sets, and put- ting the skill sets of different people togeth- er and the strengths of different people for different responsibilities generally results in a more positive result than one person or a couple of people trying to do everything.
If people aren’t playing in tune in the orchestra, if you’ve got some negative thinkers or people who don’t want to accept responsibility for the plans that they’ve cre- ated, that can create problems. In most cases, you can’t live with it, and you’ve got to weed out those kinds of performers.
I look for people who will be good team- work members. I look for people who are self-starters and motivated and have the intelligence and the desire to complete the task. I don’t know that you ever know that you’ve found the right person, but I don’t just rely on myself to do that.
I typically involve key members of the team in that discussion. You get more bal- anced input as to the capabilities of the per- son that you may be considering hiring. First and foremost, listen to your people before making decisions.
Create friendly competition. I’m fairly hands- off in the sense that I try to let the people that are responsible for our assets ... run things on their own and make decisions on their own. I’m able to do that because most of our employees have been with us for quite a long time.
With respect to our tenants and focusing primarily on property management people who run specific buildings, it makes them responsible for their existing relationships with their tenants; it makes them responsi- ble for the bottom line of the buildings and empowers them to produce their own results.
The other thing it does is when these peo- ple run their building individually or run their assets individually, is it creates a little bit of competition among all of the folks in the company to want to make their building perform the best, relative to their peers. I don’t think competition is ever a bad thing.
Create a place for dialogue. We try to have fairly open lines of communication with firmwide meetings, which we do a couple of times a year, and we have some confer- ence calls more often ... as circumstances change. You just need to make the effort to do it, because it’s important.
I don’t know that it took any more than that to do it, but once you start doing it, the communication becomes very two-way after awhile. If there are any questions as to what the strategy is going forward, it pro- vides a place for dialogue to make sure everybody’s clear on the direction we’re headed and it creates an opportunity to ask questions about any concerns.
Provide incentives. The most positive way to motivate your staff is with previous results. We set goals up, and when people achieve those goals they’re recognized. Peer recog- nition, as well as financial recognition as a result of achieving goals, sort of propagates wanting to do it repetitively.
A leader’s most important responsibility is to produce results and, at the same time, foster an environment that’s mutually ben- eficial for the employees and stockholders. I don’t think you can disengage the two because if you don’t provide the proper incentives for your employees, you can’t achieve the results.
Success in our business happens when we are providing a service for users and our users are happy with the service we provide, our shareholders are happy with the results that are being produced and our employees are properly motivated to keep our tenants happy and produce the results.
Define your objectives and recognize achieve- ment. I would describe our culture as friendly but results-oriented. Everybody gets along and works well together, but there are clearly defined goals and objec- tives, and recognition occurs for the group that meets or exceeds their goals and objectives, and it’s not just our internal rewards system.
In our case, some of our buildings have been recognized by their peers with awards, which is external recognition. So it’s two types of recognition, really, one that we’ve put in place and another that’s generated by the employees to be honest with you.
The external recognition is usually gener- ated by the results our people produce, because we start with the approach that you’re responsible for your building, and you’re responsible for your results. All our people have a great deal of input into the goal-setting process, so in a sense, we’re making people accountable for what they say they can do.
People are more productive when they know what their goals and objectives are, and we’ve been fairly successful in the last few years in achieving our goals and objectives.
HOW TO REACH: Prime Group Realty Trust, (312) 917-8788 or www.pgrt.com