John Westrum Featured

7:00pm EDT November 24, 2006

It was 2001, and CEO John Westrum had had enough of squabbling over lot sizes at township zoning board meetings. To remedy the situation, he took Westrum Development Co. out of the suburban real estate development business. Now, instead of cookie-cutter homes, Westrum is putting his creative side to use revitalizing underdeveloped properties in urban areas. As a result, the company — which had been at $100 million with 70 employees — fell to seven employees after Westrum sold off its suburban developments. Since then, as a result of his new business model, Westrum has grown the company to 80 employees generating revenue of $78 million in 2005 and more than $100 million in 2006. Smart Business spoke with Westrum about how he changed his company’s reputation and why he encourages employees to challenge his ideas.

Find a niche in your industry that you can enjoy. You have to decide how you want you and your company to be perceived. Find the niche within that expertise that you have that gives you the self-esteem that you want.

In the mid-’90s, the general trend in society was to not like the suburban residential developers. There was really a hatred toward them. I didn’t like doing something society didn’t like, and I thought I was good at understanding market niches.

So I sold all the suburban stuff and retooled to be an urban developer and go where people wanted us to go. We went from being considered almost a devil out there tearing up cornfields, and we changed into the angel reclaiming abandoned and underutilized properties in urban centers and depressed neighborhoods.

We’re doing the same thing, we’re just doing it in areas where there is a desire for you to come in and do things creatively.

Hire team players who can think. The key part that I look for is a motivated and intelligent person. The order of priority first would be intelligence, secondary is drive and motivation, third is their compatibility with others to work on a team, the last one is their expertise in the business.

We actually try to hire folks with expertise, but not so much expertise in the business because you have to buy in to that team-building program. If you come in to the program and you want to be a super-star, it’s just not going to be a good fit.

When I interview people, I don’t even look at the resume. I see if I feel they fit into the company mold and if they can be compatible with the team. Because if they’re not, it’s not good for anybody.

My son is 13 years old and plays on a football team. All the kids go out there and say, ‘What position do you want to play?’ Well, every one of them wants to play quarterback or runningback or wide receiver. Then someone has to say, ‘Look, kids, you can’t all do that. Someone’s got to snap the ball, someone’s got to play guard, someone’s got to play tackle. Let’s figure it out. You’re the best-suited for this position, you’re the best-suited for that position.’

If the tackle always thinks he should be the runningback and is annoyed about that, then he’s not going to do his job right. That’s why, as a CEO, you have to leave your ego at the door.

Emphasize personal responsibility. The theme of my management system is democratic decision-making and autocratic implementation. We’re into consensus-building, we all agree on what the goals are, we assign people to get to those goals as a team, and then we plow forward.

It means the group makes a decision about what the results should be, and we break down the tasks and they volunteer to be the person responsible and they set their own due dates. There’s an acronym called PRIDE we use; it stands for ‘Personal Responsibility In Delivering Excellence.’

We emphasize the personal part. It’s not where I say to people, ‘You have to do this, you have to do that.’

We all decide what we have to do, and if some people don’t pull their own weight, there’s usually other people there to back them up.

Empower your team to challenge your ideas. The biggest pitfall a CEO can face is his own ego. That’s why we clearly go with the democratic decision-making and autocratic implementation. It really comes down to the fact that there’s nobody in our company that is afraid to challenge a decision.

For example, if we go out to a site and I say, ‘We really need to put a fence around that model,’ they don’t just cower and say, ‘Well, the CEO said to do it, so we’re doing it.’ Everybody feels comfortable saying, ‘Well, we looked at that and that fence will make people feel they’re trapped in their community. Why don’t we use hedges?’ or something like that. Always empower your team around you, allow them to feel free and feel comfortable challenging your decisions.

I surround myself with extremely intelligent people who are motivated, and I focus on the results and let them achieve those results in their own way.

Communicate like regular people. We have what we call ‘hats off’ meetings. We’re all just people; we’re all just adults who have come to a meeting.

You may be informed about things, but you are allowed to ask anything of anybody. You’re allowed to challenge them; you’re allowed to compliment them.

The ‘hats off’ meetings just really allow people to feel comfortable about communication. I might get a little annoyed sometimes if I’m trying to get some work done and people come bopping into my office, which is why we try to do most of our communicating through e-mail and regular meetings. But if someone feels strongly about something, speak now or forever hold your peace.

It allows for a much more comfortable environment. And people feel respected and desired rather than they’re just here to make money for somebody else.

HOW TO REACH: Westrum Development Co., (215) 283-2190 or www.westrumhomes.com