Building the dream Featured

11:25am EDT May 24, 2006
In 35 years in development and construction, Robert Lauth has learned that no matter how good his vision for his company or how innovative his approach, nothing happens without people.

“I’m passionate about two things, people and change,” says Lauth chairman and CEO of Lauth Property Group, a commercial real estate development firm. “This business is all about both. For a long, long time now, we’ve realized the importance of people and the need to have people who are specialists, who are uniquely qualified in distinct areas, as well as people who are ready, willing and able to adapt, to be flexible to the markets, to the economies, to trends and so forth.”

People with the ability to handle greater responsibility and to deal with new opportunities are critical because Lauth has spent the last several years stepping away from day-to-day operations so that he can focus on the future.

“I’m focused largely on the horizon, looking at what’s coming, where I see us as a company in five years or in 10 years and how we’re going to get there and leave it to others exactly how we’re going to implement those strategies,” Lauth says.

Lauth says it hasn’t always been easy to give up the reins.

“It was a fairly difficult transition,” he says. “It frankly got to the point where I just realized I couldn’t do it. I hadn’t done it by myself. It took a lot of really great people to get to the next level; it’s going to take a whole lot more talented people. In a manner of speaking, I gave into the inevitable. There a whole lot of people who are a whole lot better at a whole lot of things than I am. And I’m happy that a lot of them are right here.”

Lauth has spent years developing projects around the country and has created a work environment that often brings people to his door looking for a way to join the organization. Those people are central to Lauth Property Group’s growth strategy.

The key to bringing in the right people begins the moment they step through the door. Lauth recognized long ago that to deliver on his vision meant finding not just people with the proper skills but also people who have the right attitude.

“The interview process here is rigorous; it’s long,” he says. “Some would describe it as arduous.

“We conduct many interviews with each candidate that we have serious interest in. The intent is to give the future associate and as many Lauth people as possible the opportunity to get to know each other to make sure its a good long-term fit.”

If, after 10 interviews, both the candidate and the people at the company are still interested in each other, that phase of the process is considered a success. But the interview is only the first step.

Testing, the majority of which is done online, further identifies the best candidates.

“We use a variety of different tests and testing companies,” says Lauth. “Some are skills-based, but most are designed to find out if it’s going to be a good fit. We test for personality, aptitude, likes and dislikes. We are fond of the expression ‘unique ability’ and we are constantly trying to figure what everyone’s are and how to use them.

“We really try to find good people first and figure out what they should do second.”

Today, there are 325 people at Lauth, and because the company is growing, Lauth is looking to fill a number of new positions with people who can adapt to an ever-changing company.

“It’s going to continue to change and improve daily,” says Lauth. “They’re going to continue to grow. And it’s important to us to buy into that concept that they are ready, willing and able to change, adapt, be flexible and grow with us.”

Recruiting people is generally not an issue. Lauth has created an atmosphere that potential employees seek out, and the national scope of the company — with projects requiring expertise in areas that range from construction to accounting — mean plenty of qualified candidates interested in career development.

And once they arrive, he wants to make sure they stay.

“What we’ve learned over a long period of time is, to attract and retain the best, you have to do a whole lot more than just offer a market-or-better compensation plan,” says Lauth. “You have to figure out ways to incent people and reward them beyond their basic compensation plan. Allow them to share in the company’s success. We have many programs, and they are tailored depending on what level within the company the associate serves.”

Virtually every associate is eligible for a bonus. The bottom line, Lauth says, is the company’s management understands they serve in a people business. They want the best people working at the company and for long-term success, they have to stay.

“The industry standard on a nationwide basis for development and construction companies, in terms of annual turnover, is 34 percent,” Lauth says. “Four or five years ago, ours wasn’t that high but it was in that neighborhood. We realized, given the critical importance of people to what this company does, that we wanted to stop that, and we wanted to be an industry leader.”

Lauth formed a leadership committee whose sole purpose was to make the company what he calls an Employer of Choice, a place people wouldn’t want to leave because they were part of a fun and successful organization.

“The EoC initiative goes hand-in-hand with the goal to get the best and keep them,” says Lauth. “If we accomplish that, turnover takes care of itself. To be a true Employer of Choice, you have to give your associates many other things they long for, a chance to grow both personally and financially.”

Lauth decided to let his employees figure out how to achieve that goal.

“I am intentionally not part of it,” Lauth says. “I attended the first meeting and told them what my vision was, what my goal was, how important the Employer of Choice initiative was and said, ‘That said, I don’t have any idea how to get it done. You all are very bright. You know your individual disciplines and your people. Come tell me when you’ve got some great ideas.’”

The committee reviews salary and benefits packages and looks at educational opportunities for employees to make sure needs are being met and employees have an opportunity to grow professionally. The group also looks at internal communications, what’s going on within the company and even the social life of the employees and makes recommendations on what can be done to make Lauth an Employer of Choice. Among the many activities the committee instituted are company-hosted, after-hours mixers and Friday lunches.

“You have to make them not only be part of the ongoing plan but feel like they are part of it,” Lauth says. “Everyone is part of the success, but everyone needs to feel and understand how important they are.”

All the events are meant to continually foster communication while showing appreciation for the hard work necessary for the company’s success.

“As a result of a lot of hard work and hundreds of ideas that have been implemented over a three-year period, our turnover last year was 12 percent,” Lauth says. “People are very envious of that. We do that by doing everything we can think of to make sure, up front, when someone joins Lauth, it is a good fit for both them and us.”

Lauth may now be considered an Employer of Choice, but it’s an ongoing process.

“Their work is never done,” Lauth says of the committee. “It’s a journey, not a destination. Hopefully we’ll never stop improving, and that will lead to more and more really great people wanting to become part of this team.”

Lauth’s vision has led the company from doing $160 million in development to one that, three years later, is doing $650 million worth of projects and has a goal of reaching $1 billion. He attributes the growth to the way the company treats its employees.

“The culture here is probably what I’m most proud of,” Lauth says. “It’s taken a long time to develop. It’s familial; it’s collegial. Everybody here likes being here. They not only enjoy their jobs and the environment, everyone has the right tools to do their job. It’s comfortable; it’s fun and playful in some ways.

“People don’t come to work just for a paycheck. They come to work because they believe in what is being done, believe in the future. They want to be part of it. They want to be rewarded, and they want to enjoy working with the people they’re working with.”

With a culture based on talent and trust, Lauth is ready to let his employees take the company to the next level.

“That $1 billion goal is clearly in our sights, and it’s frankly happened more quickly than we even imagined,” Lauth says. “It gets back to the power of people, what they can do when you get the right people properly empowered and equipped.”

And there is no doubt he will get some help deciding what that new goal will be.

“I rely more and more for all the right reasons on people,” Lauth says. “As we’ve grown, I’ve had to change. I’ve had to adapt. One of the ways is to segue from being a very, very hands-on entrepreneur, who used to be involved in everything ... who today worries about making sure we’ve got the right people in the right seats, people who have the unique abilities to run their groups or be part of their groups.

“The biggest change for me is to understand that and rely on all these wonderful, talented people who are doing such an extraordinary job for us.”

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