No. 1: Focus on Infrastructure First
NMHC Chairman Daryl Carter, CEO of Avanath Capital Management, moderated an in-depth discussion with expert panelist at the 2014 NMHC Annual Meeting on starting and building new multifamily enterprises. The early days of any enterprise aren’t easy, but Carter and the panel offered three major pieces advice from their own start-up experiences:
Carter noted that some of the best early advice he received was two-fold. First, concentrate on what the next five, ten and 20 years will look like. Second, build operations and accounting staff before you start doing what it is you do.
“Even if you can’t afford it, you need to do as much as possible,” he said. “What happens when a company starts to take off is that you try and get control of it. With a solid infrastructure, when we grew, we were able to handle it.”
Clyde Holland, CEO of Holland Partner Group, agreed. “Unless you have a system that people can believe in, you’re going to run gauntlets,” he said.
No. 2: Build the Right Team
Finding great employees is also critical. According to Holland, “You need to ask yourself: Who’s going to give you the presence you need to become real to the market?”
Peter Donovan, senior managing director at CBRE, agreed, “The vision isn’t that hard. It’s building the team - the people.”
All the panelists noted that leveraging your network is a huge advantage in hiring. “I think networking really helped us get a foothold in terms of launching our business,” said Holland.
Donovan also pointed out that you sell yourself to prospective employees as the principal in an enterprise. “At the end of the day, I’m convinced that most of the decisions that are made are all about you,” he said. “If you’re good, you’ll be successful at recruiting.”
No. 3: Honesty is the Best Policy in Crisis
Although sometimes people are afraid to declare a crisis, honesty is actually vital, said Lauren Brockman, principal of Anbrook, LLC. “Downplaying crisis is a mechanism we all employ,” he said. “But I found that, if I went to my team and said we were in a crisis, they responded in a full frontal assault kind of way.”
Brockman also emphasized that “it’s the elephant in the room anyway, so by acknowledging it, you show them that the leader understands.”
When delivering bad news, Holland added that it’s important not to deliver it in pieces. “If you tell them, ‘here’s the problem,’ then next week it’s this, plus this, you destroy your credibility,” he said. “Instead, it’s better to tell them the whole truth right away and move forward.”