The property management industry is in a state of flux—changing with the use of remote workers, new technologies and increased competition—but all things considered, the biggest challenge facing the industry is the fact that baby boomer owners are beginning to retire. Estimates are that somewhere between 54 and 63 percent of all property managers will be retiring over the next 10 years. The shifting real estate landscape coupled with the pending wave of ownership transfers spells trouble for the industry if successors are poorly prepared to take the reins of a company.
Studies show that 70 percent of successions fail. But if successors are effectively developed through all four development stages (Worker/Contributor, Manager, Leader/Executive, C-Suite/Owner), growth and profitability are maximized, employee turnover and customer loss are minimized, and owners get paid the full value of their business.
Here are the characteristics of the four stages of successor development.
Stage One: Worker/Contributor
Skills:
• Gaining knowledge of what’s involved in managing a property
• Learning how to interact with tenants and owners
Benefits from:
• Acquiring technical and industry knowledge and skills Stage
Stage Two: Manager
Skills:
• Learning to delegate, managing multiple resources or properties
• Guiding others to drive production, productivity and quality
Benefits from:
• Project management training, general management training and hands-on experience
Stage Three: Leader/Executive
Skills:
• Influencing others to get buy-in for plans and ideas
• Fostering teamwork and collaboration to resolve conflict constructively
• Instill confidence and build trust in teams
Benefits from:
• Breaking old habits and forming new ones
• Revealing blind spots and limiting beliefs
• Gaining a deeper understanding of human nature
• Honing competencies through coaching and mentoring
Stage Four: C-Suite/Owner
Benefits from:
• Develop a vision for the organization
• Hone strategic thinking and move beyond simply developing tactics to cultivating directions for the company that address fundamental problems or capitalize on opportunities
Benefits from:
• Shift perspective from short- to long-term thinking; from self- to organizational-focus; from internal to external focus; and from narrow/silo thinking to big-picture thinking
• Improvement is developed over time and occurs through coaching and mentoring
Strategies for moving to the next level of successor development
Coaching
In order to master the second two stages of successor development, coaching and mentoring is imperative. If you take on this task, you must adopt a coach-like style of leadership—meaning, ask questions (rather than give answers) that 1) Give you insights into the other person; and 2) Allow you to give the other person new insights. The only way to know what questions to ask in order to give them those new insights is to first discover where their thinking, judgment and/or perspective is incorrect. That's what the first set of questions accomplishes. Coaching will help develop the necessary leadership competencies, strengthen executive presence and improve the ability to think strategically.
Mentoring
You must also mentor the successor. This is done by allowing them to make increasingly difficult decisions. Only by guiding their thinking can a successor's judgment be honed. Start with allowing them to make decisions that aren't critical. In other words, a misstep won't harm the company. As their judgment and thinking improves, have them participate in decisions that have greater impact.
The Bottom Line
In order for successors to effectively lead an organization into the future, they need to transition from contributor to manager to leader and ultimately to owner. It is essential that development does not stop at mastering the mechanics of the business.
About the Author
Michael Beck is an executive coach, business strategist and author based in Portland, Ore.