Stop, think and decide.
Someone recently told me to slow down and think more before I react. That was good advice. I think that’s a huge part, just being as calm as you possibly can.
The other thing I’ve been trying to work on the last couple of years is slowing down reaction time and trying to take a little extra time on processing whatever the issue or challenge might be so that you can really try to think through what all the implications are.
I think what’s interesting nowadays is that with the e-mail age and the connectivity we all have with our computers, our Blackberrys, our cell phones is everyone is looking for that instant answer. And the instant answer, a lot of times, isn’t right.
Waiting a day and stepping back and thinking about it, letting your brain think about it when you’re sleeping, helps to put out the right answer for the problem.
Identify your niche.
The best advice I got was to concentrate on a niche and to not try to do too many things within that niche. What I mean by that is we’ve finally settled on really three different types of new development property offices, townhouses and mid-rise and high-rise condominiums.
Concentrating on these things and getting really good at these things has made us much more assured of being able to process over and over new development options. Originally, we were looking at a lot of different development opportunities and spinning our wheels. When we finally decided that we had three development types that we could build, and we could use those parts and pieces in a development, business has gotten a lot easier. It’s just a lot cleaner.
Hire problem solvers.
So much of our revenue is based on development activity. In development activity, we manage architects and engineers and geotechnical companies and general contractors to facilitate these projects.
Our typical project might be $15 million to $20 million per phase of a building coming out of the ground. So we don’t necessarily have a lot of people involved in the day-to-day aspects of running those projects, although we manage all the people. T
he approach that we’ve taken in hiring people is to hire extremely experienced people that exude a lot of self-confidence because of their knowledge base, but at the same time are really are good problem-solvers. Our business is really just problem-solving. So if they can problem-solve, they can be successful in this kind of business because what we’re being asked 10 times a day is, ‘Here’s the issue, what would you like us to do?’
The people we want involved can think on their feet and they can use their experience to figure out how they can fix the issues. They have to be enormous people people, in the sense that they touch so many people every day and direct so many companies to facilitate what we’re trying to do.
Give power to the people.
Most of the people in management positions here really make the decisions on what happens in their field of the business. They might bring it back to a partners meeting once a week, but generally they are empowered to make those decisions and then bring them forward.
I think that’s helped us a lot because that has given them the ability, while we have to be patient, when it’s time to react, you need to react. And you don’t need to go to a group of people every time to get the answer to move forward.
I think trying to set up a mentality where people feel empowered is important. They know the progress they’re making is largely because of how they’re putting things together.
Build a people infrastructure that the organization can support.
The biggest risk that we have in our business is leveraging properties too high, putting so much of a financial strain on the business that you either have to sell out of partnerships or bring new partners into the partnerships, creating a panic in the business.
You can’t stop in midstream in our business. Once you go, you have to go all the way. You also have to build an infrastructure of people, and without those next projects in place, it’s difficult to carry that infrastructure for a very long time.
What we have to watch for is being very careful about how big an infrastructure we build so we don’t get out of balance in a downturn. We call it the roller coaster, because really, in the development business, it’s like a roller coaster ride. The avenue we’ve taken because of that is to have a balance of business.
Spread downturn risks over multiple business lines.
We manage about a million square feet of property and also hold some real estate assets. That can allow the business to stay stabilized in the downturns of the market and really be patient and wait for the right opportunities to come along and make them move forward.
The biggest challenge in our business ... is the aspect of that rhythm and how do you create that rhythm. We try to do it by going toward redevelopments and projects that are not as affected by the economy. In redevelopment circumstances, you are typically looking for the best locations in a community to develop, which helps to negate downturns in the market because you do typically have product moving.
From a company side, we’ve tried to design the business so that our product type is somewhat conservative ... and protect the business through some other avenues of revenue generation, through property management and existing assets.
How the reach: Ackermann Group, www.ackermanngroup.com