Making it happen Featured

7:00pm EDT January 31, 2007

When Doug Johnston became president of SCI Real Estate Investments LLC two years ago, it didn’t take him long to recognize the growth potential of the company. “Within the first week I was here I suggested, even though we had only about 30 employees, that we would have 100 employees in a year,” Johnston says. “That was certainly an eye-opener for the people who were here.”

In just two years, Johnston has taken the potential he saw and made it a reality, as the property investment firm has grown from one Los Angeles office to 28 locations nationwide and in 2006 posted revenue of more than $40 million. Smart Business spoke with Johnston about why it’s up to leaders to model what they expect from their employees.

Q: How would you describe your culture?

The culture here is work hard and play hard, and finding that balance is a tough thing to know sometimes. Some people are really focused on work all the time — I tend to be one of them — but it’s important that we all step back and enjoy our lives and each other. We focus typically on once every three to six months having a really big, fun get-together, whether that’s a picnic or an outing at the race track or whatever, but something that is heavily thought out and has absolutely nothing to do with work.

The first step in building that kind of culture is twofold. First of all, it’s setting the pattern that there is nothing here I wouldn’t do personally. People in our company often see a pretty fast pace and orientation from me personally, and that sets a pattern.

I demand a lot of others, but I demand even more from myself. For me, that has been a very effective management style, and it breeds some degree of respect that you’re not being handed something that somebody else would not do.

Q: How would you describe your leadership style?

My leadership style is very much hands-on. The pattern I’m trying to set throughout our company is a very high attention to detail. Initially, I set that pattern myself, and if I then see that the department heads and individuals pick up that pattern, I’ll withdraw and let them do their thing.

Attention to detail, in my experience, is always a good thing, provided it’s not overdone and provided you do allow focused people to take over their own show. You have to be very mindful of when to step in and show people the pace you want, the attention to detail you want, and critically, when you have to step back and let them do their thing.

That’s about a three- or four-month process of seeing how the employee thinks and making sure that they’re thinking with enough passion and dedication to sustain themselves.

Q: What’s the most significant lesson you have learned in business?

I learned a very painful lesson 20 years ago when I counseled an employee in front of his peers. That was a dreadful mistake, and accordingly, that lesson was that counseling always occurs in private.

Never, under any circumstances, embarrass an employee in front of others. It’s a frightful scene of misplaced respect and lost trust and worse. Employees always respect being told in private what they’re doing right or wrong, and they never, in my experience, enjoy being told those things, and certainly being counseled negatively or reprimanded, in public.

The leader loses respect. There is sort of the Bobby Knight, basketball coach theme that slapping people around, either physically or mentally, is perhaps for him a successful coaching style, but in the business world, it’s very problematic.

Q: What is the danger in growing too fast?

One danger to growing too fast is losing track of details. Service slips, and people don’t know what’s expected of them or they’re not well-trained.

We’ve done a pretty fair job of keeping all those things in check. A few simple things helped us avoid that, such as communication solves all problems.

It was pretty uncommon for a company our size two years ago to implement a plan whereby virtually all of our employees above an entry level were on BlackBerry. The complexity of our business is such that we simply need to have everybody in constant communication with each other.

The mantra is communication solves all problems, and that extends to the technology of virtually all our above-entry-level employees having a BlackBerry and re-emphasizing that very saying in all staff meetings. When people hear that over and over, they’re not hesitant or afraid to ask the boss, and those things are important.

HOW TO REACH: SCI Real Estate Investments LLC, (310) 470-2600 or www.sciproperties.com