It was 2003 when Bill Hankowsky found himself alone at the top. Less than a year after taking over as chairman and CEO of Liberty Property Trust, Hankowsky was charged with both preserving a legacy and building a future.
Willard G. “Bill” Rouse III, the man who founded the company that would become Liberty Property Trust, succumbed to cancer that May. Rouse was the only leader the company had ever known since its inception in 1972, and he was the one who had set in place the standards, ethics and policies that became Liberty Property’s culture.
Now Hankowsky, who had been named president in 2002, was charged with preserving that culture while building a company that could flourish in the 21st century.
“Bill was a visionary in the business and a beloved leader,” Hankowsky says. “As with all entrepreneurial founders, it was Bill’s company, so I didn’t view it as stepping into Bill’s shoes. I don’t think anyone could have stepped into Bill’s shoes. But it was a tough situation to step into.”
For Hankowsky, taking over for Rouse meant starting with a return to the basics upon which Rouse founded the commercial real estate company: Promoting the culture, building longstanding relationships with customers and real estate brokers, and finding employees who wanted to do the same.
If your company is built on a foundation of solid core values and a strong culture, chances are the moves you should make in the future will become more evident.
This is how Hankowsky has used communication and a strong corporate culture to continue carrying the Liberty Property torch lit by Rouse more than a quarter-century ago.
Build on the past
The day after Rouse died, Hankowsky and Liberty Property’s board were preparing for the company’s annual meeting when one of the board members pulled Hankowsky aside. What he said to Hankowsky helped set the stage for the coming months and years of his tenure.
“We had decided to go ahead with our board meeting because we agreed that’s what Bill would have wanted, and one of the board members took me aside and told me, ‘You have this job to do what you think is right, not to guess what Bill would have done. That’s why he wanted you to have it.’”
The message was clear to Hankowsky: Build on the past, but don’t live in it. That can be difficult because a change in leadership can trigger anxiety in a work force, particularly if the incoming leader is taking over for someone who had held the position for a long period of time. Even though Hankowsky had been with Liberty Property for a number of years prior to assuming the top post, he says he still encountered a moderate level of concern over the future direction of the company after Rouse died.
“There is sort of a subtle pressure because people tend to get anxious about change and the future, to the degree that there is a new leader and he is going to be different,” Hankowsky says. “‘Are we going to change who we are, are we going to change in size, are there going to be new demands?’ So there is a certain balancing act as you move forward.”
Hankowsky attempted to curb any organizational fretting over the future by making decisions a team-oriented process. When a large-scale decision that affected the future of the entire company was placed on the table, Hankowsky and his leadership went out among employees, getting their thoughts and feedback. He says that even if everyone doesn’t ultimately agree with a final decision, if everyone has had an opportunity for input, your ability to build a consensus, or at least a compromise, is enhanced.
“Part of building a team-oriented culture is building consensus, seeking input,” he says. “Two heads are better than one; three heads are better than two. So we encourage people to seek others’ opinions because it absolutely yields better decisions, and we develop a culture where we respect each other’s opinions. That’s the way we operate.
“Of course, while it’s important to gain consensus, in the end, someone has to make a decision and act on it. If you’ve sought input, people then need to respect the fact that it was a fair process, and even if they’re reluctant, follow the decision that was made. In the end, people don’t follow a decision they don’t understand.”
To help build a bridge between employees and management, and involve employees in the decision-making processes of the company, Hankowsky attempts to visit each one of Liberty Property’s 19 nationwide field offices each year. In addition to providing an employee interface with management, the yearly tour of offices offers an opportunity for Hankowsky and his leaders to reinforce the core values of the company.
Additionally, Hankowsky hosts a quarterly employee conference call after quarterly earnings are released.
“I host the call, I take questions, I walk them through the quarter, where is the business, where are we going,” he says. “Through all of that, I try to make a point that our culture and values are part of the building blocks of that. When we hire new leasing people or sales folks, I always tell them I’d prefer they lose a deal than lose our reputation. As important as it is to be competitive and win, we want to make sure we win with integrity.”
Start with the right materials
During Hankowsky’s first year as CEO, he received a call from a real estate broker. It was a call no company leader wants to receive.
“He said, ‘Bill, one of your guys who I’m working with misrep-resented something to us. I know that’s not who you guys are, so I thought it was important that you know about it,’” Hankowsky says.
In just about every business, if you don’t have integrity in your operations, you don’t have much else. The knowledge that a Liberty Property representative was less than truthful in dealing with a broker revealed two things to Hankowsky.
“As much as I disliked that it happened, it was a great testament to our reputation, that it was so strong that it was actually perceived that someone stepped out of it,” he says.
The second revelation was that if you want to perpetuate a culture based on solid ethics and integrity, you must hire people who can move that culture forward.
Hankowsky says having the right skill set and level of ambition can get a candidate in the door for an interview. But for that person to get the job, you really have to be able to dig down and find out whether he or she is a match for your company’s core values.
“If you put people with good values together, you’re going to have a good culture,” he says. “So in addition to wanting to hire people with great skill sets and drive, we want to hire people who share the values we have. You really can’t put values into people. They have them or they don’t.”
There is no secret formula to finding the perfect match for a position. To drill past a person’s interview facade takes multiple interviews and a lot of patience.
“Candidates generally have multiple interviews with different people in the company,” Hankowsky says. “One reason is that none of us are perfect in judging others, so having collective decision-making is good on that front. It’s also a way to, as a group and a team, try to evaluate how somebody would fit in with us. Sometimes, there are people who we literally just say, ‘We don’t think it’s a good fit.’”
Hankowsky says he remembers a favorite saying of Rouse every time he and his management team make a hiring decision: “If you had to let someone go, two people made a mistake.”
In the case of the Liberty Property employee who misrepresented the company, he wasn’t terminated. But he did have to tell the broker he made an error.
“We didn’t let the person go because we also believe that people make mistakes,” Hankowsky says. “You shouldn’t make the same mistake twice, but you can make a mistake occasionally. This person is now a terrific performer in the company, has learned a great lesson from (the mistake), and I’m very happy with the outcome.”
Hankowsky turned the situation around and used it as a positive development, an opportunity to reinforce the culture to an employee and to a broker with whom the company frequently does business.
“I remember speaking once somewhere a couple of years ago and someone asked me, ‘How does Enron happen?’” Hankowsky says. “Enron happens because people tolerate behavior and values when they probably shouldn’t have, and it happens when a company doesn’t have an open culture.
“If there are lots of meetings, if the doors are open and you run a company where people feel like they’re welcome to come to meetings and have their opinions heard, where people do things in a very transparent, open way, then someone who does something inappropriate is going to stick out like a sore thumb. The day-to-day behavior of the people in a company greatly reduces the possibility of an (Enron-type situation) happening.”
Relate the culture to customers
With employees, your culture isn’t what you say it is; it’s what they see it as. The same goes for your customers. That’s why it’s important that your employees not only absorb and internalize the culture but reflect it, as well.
Hankowsky says that in the world of business, and real estate in particular, you never know who is going to be a repeat customer, so you’d better make the best impression you can.
“As much as it’s a very big country and big economy, there is an understanding that there is a real estate brokerage community, and if we deal with a broker, we’re going to see that broker again,” he says. “They’re going to bring in another customer, and they can bring that customer in with a favorable recommendation about us, or a ‘watch yourself around these guys’ recommendation. Whatever happens, you’re going to see these guys again.”
Liberty Property which had approximately $698 million in revenue in 2007 has a number of metrics it looks at to gauge the level of satisfaction of both real estate brokers and building lessees, including lease renewal rates, market vacancy rates and periodic surveys.
However, the best way to ensure that the metrics look good is to have a customer-centric approach to problem solving, which again comes back to the culture.
“I have a saying that when a customer walks through the door, his job is not to lease your 10,000 square feet of office space,” Hankowsky says. “Your job is to solve his real estate problem. That could mean telling him we don’t have an answer, that a better solution for him might be something else.
“Culture absolutely manifests itself in the behavior of your people in the field. If we take a long-term view and find the best possible solution for a customer, that customer will come back.”
HOW TO REACH: Liberty Property Trust, www.libertyproperty.com