Mark Rose has chalked up an almost dizzying array of accomplishments since becoming CEO of Grubb & Ellis Co. in March 2005.
The real estate company launched a new business and took it public, started a project management and a private capital investment group and sold 5 million shares of stock in a public offering. It beefed up its brokerage ranks by 10 percent and replaced the heads of four of its largest offices.
Add to that the development of a five-year strategic plan to revamp a company that had been rendered moribund by a previous management team that had fumbled while trying to transform it into a consulting business. That floundering had led to an exit by many of its valued personnel, the key asset in a business reliant on market savvy, seasoned professionals and sharp salesman-ship.
“They had a leader who was hired and came in and supposedly had all the answers on his way in the door, and that’s just never a way to build a successful company,” Rose says.
Rose has taken hold of the situation at Grubb & Ellis to revamp the company in a substantial way, but not in a manner that would cause the convulsions that can occur at public companies that fall into trouble and resort to quick fixes.
“It’s nine parts evolution, and there might be one part revolution,” Rose says.
That evolution started with Rose’s realization early on that the culture at Grubb & Ellis, which posted $490 million in revenue in fiscal 2006, was bruised but still retained a solid core of value that he could build on.
“Changing the culture was less important than not harming the culture and finding ways to augment and adjust and improve it,” Rose says. “The Grubb & Ellis Co. has been around for 48 years and has a great culture. It has a culture of collegiality. It has a culture of great client service. It has built a brand that many of the individuals that have been here a long time have fostered to make sure that the brand lives on and all of those positive attributes were there.
“But unfortunately, because of some missteps in the leadership positions and the management positions over time, there were things like the lack of some tool kits that might have been built to improve the clients’ services even further.”
Rose chose to revive the company not by transforming it into an image of his making, but by making the organization drive the change and by taking the best aspects of its culture and returning it to its historic corporate roots.
“What I wanted to do and what was a challenge to do was come in and reinforce the message that we want Grubb & Ellis’ culture to be Grubb & Ellis’ culture,” Rose says. “We wanted it to be credible that a CEO was not coming in with past experience working for a competitor for a long time and was going to turn it into that place. “But you do want to celebrate all the great parts of a culture, and you do want people to feel comfortable that you do understand it.”
Going into the field
Rose’s background includes a stint as as a CFO, but in the early months of his tenure, he spent more time immersing himself in the day-to-day activities of the business than he did looking at the company’s books. Before he got started, he wanted to get an authentic understanding and feel for both the business and the culture at Grubb & Ellis.
“First is assessment, and assessment of a culture is not sitting in your office,” he says. “It’s getting out there and meeting with people. This is a people business; it’s a high-performance professional sales organization. That’s what a real estate service organization is, so it’s about the people. I visited almost every office in the first year, and those visits were to assess and to listen.”
Rose didn’t limit his contacts to those within the company in that first year. He spent a lot of time with people outside the company who could give him a view of Grubb & Ellis that he couldn’t get inside, even if he ventured out of the executive suite. New to Grubb & Ellis, Rose tapped the expertise and experience of his predecessors to gain insights about the company.
“One of the first things that I did, I went out and sought out some of the prior CEOs of the company to hear what did they think of the company, what was the culture,” Rose says. “I went back to some of the leaders of the company 10, 15, 20 years to hear what this company was all about and what this place means to them that I could embrace and understand and build on that.”
And he quizzed the company’s customers and its competitors, two groups that he says are likely to give an unvarnished view of how you’re doing.
“I met with our clients to listen, and I actually met with our competitors to hear from them, and it’s a very interesting process because your competitors will tell you all the things that you’re doing wrong and they’re using against you in pitches, and they’re basically giving you the key to combatting them and how to be more successful,” Rose says. “I met with them and said, ‘Tell me, what are your views of Grubb & Ellis?’”
To gain a sense of how the company was conducting itself in the field, Rose even threw himself into the sales process, pitching some major pieces of business to clients.
Getting in the trenches was more than a tactical move. He says that by putting his hands on the organization to witness firsthand how it works, he sent a powerful message throughout the company.
“I will tell you that in the first six months or so, when several teams, both long-tenured and new folks, asked for help and I agreed to get on the plane to help them, I think it sent the right signal,” Rose says. “It’s a business where we can strategize until the cows come home, but you actually have to get out there and do it, and I think that was probably one of the earliest successes for this organization. The feedback I got was, ‘This guy was willing to get on a plane and come help us.’”
And while being involved in the nuts and bolts of the business can have its payoffs and rewards, Rose warns that it can have a downside if it’s taken too far.
“The one thing that you don’t want to do is get into micromanaging or build an organization where you’re hindering empowerment and just spending time focusing on accountability,” he says. “If your leadership is spending too much time sticking their hands into the empowerment side, you take the empowerment and accountability out of balance.”
Rose says that driving change can be a difficult process, and that there nearly always will be some resistance.
“Any time you need to make change, there will be those who are either protecting what they built, protecting their jobs, or protecting that they may not have an answer or that what is comfortable is the best, when in most cases, the success of most organizations comes when you push people out of their comfort zones.”
And while some will try to hinder change or won’t be able to meet its challenges, the key to overcoming resistance is not to force the change from the top but to give the organization the responsibility and empowerment to drive it.
“Different CEOs have their own version of unlocking the code, or the secret sauce,” Rose says. “But when you believe in getting your teams together and making them part of the solution and part of the changes and don’t come into the office and say, ‘Here, do this’ or ‘You’re going to do this’ or ‘This is a best practice,’ that’s very powerful.”
Instead, Rose puts much of the responsibility for coming up with strategy and determining the changes the company needs in the hands of his employees. Working on walls of white boards, Rose and his team base every change on a hypothesis that has been fleshed out based on factors such as what they’ve observed about the company, the marketplace, the latest technology and the competition.
In one case, the company came to the conclusion that it needed to reorganize how it delivered its four principal lines of business to clients. With its old structure, services were in two business silos and not readily offered or available to clients of one unit or the other.
The process of developing a hypothesis and working through it led the company to revamp the fundamental structure of its service delivery. Now, says Rose, Grubb & Ellis can serve fewer clients and derive more profit by offering a wider array of services that are available to all of them.
That kind of fundamental change comes when a company can tap its brainpower and bring ideas and change up through the organization.
“Building an organization that will think out loud and think for themselves and will have views, whether you implement them fully or at all, that process has been more sophisticated and very successful in helping us make the sheer number of changes we’ve made,” Rose says. “True, as a management team, you’re guiding somewhat, but what you’re guiding is a framework to get you to a place. But the content really needs to come from the gray matter, the brainpower of your organization and the team that you’re building. It’s been very successful in the early stages to include a diversity of opinion and the knowledge of many individuals to not only craft something that is good but something that is very, very sustainable.
“A few simple strategies and tactics to change a company instill empowerment and accountability, connect with everybody to understand why you’re doing it. We may know that we need to get to Z but the CEO can’t tell you how to go from A to Z. There needs to be a collaborative effort to get there.”
The company’s five-year strategic plan is still in its early stages, not at A but still a way to go to Z. However, Rose expresses optimism for a plan that was put together with input from a wide variety of people, both within and outside Grubb & Ellis. Critical to putting together such a plan is the willingness to listen to as many of those sources as possible.
Says Rose: “I don’t care whether it’s the company or it’s at home with your family ... you have to listen. So many great ideas come from folks other than yourself, and if you’re confident enough to embrace them, hopefully good things will happen. There are a lot of smart people out there.”
HOW TO REACH: Grubb & Ellis Co., www.grubb-ellis.com