Development Magazine Spring 2017

Perspectives

The Time for Succession Planning Is Now

CRE companies must take proactive steps to develop succession plans for management and other key positions.

FINDING AND RETAINING great talent has always been a challenge for executives, no matter the industry or geographic location. As current leaders prepare to retire, companies are also challenged with identifying qualified successors. According to Christopher Lee, president and CEO of CEL & Associates, Inc., and producer of the “2016 NAIOP Commercial Real Estate Compensation Survey,” nearly 71 percent of surveyed real estate firms are having a hard time finding, recruiting and hiring talent. Nothing is more important to a firm’s ongoing success than the quality and depth of the team.

Top-performing companies respond to this challenge by taking proactive steps to develop succession plans for management and other key positions within the organization. The development of these plans can serve two purposes: to keep valued employees engaged with professional development opportunities and to identify successor candidates for management positions.

Julie Eisenhauer headshot

Julie Eisenhauer

An effective succession plan should include the following steps:

Identify Potential Leadership Gaps

Take an inventory of your company’s current leadership team. Identify who will be retiring and when. Start with the following questions:

1) What positions will need to be filled in one year, three years and five years?

2) Which skills, talents and abilities do members of your management team require? Which of these is it currently missing?

3) Considering changes in the industry, technology and the environment, what additional skills, talents and abilities will be needed in the future? 

As you go through this analysis, evaluate your organizational structure. Are the right people in the right positions? Establish a timeline for leadership transition and list the skills, talents and abilities required for each position. Document a plan to resolve any leadership gaps that have been identified.

table

Identify Successor Candidates

Review your current staff and identify those who have the skills, capacity and passion to grow with the firm. Who would be the most effective leaders? Do they have the technical and “people” skills required? Make a list of the gap in skills identified and have a conversation with each candidate to understand his or her interests and desire to take on a future leadership role. Determine what actions are needed to close the skills gap and the timeline in which that must be accomplished.

Develop Action Steps

Once you have identified successor candidates, create an individual development plan for each. This plan should be aligned with the timeline established for leadership transition. It should include requirements for education, training, core competencies and exposure to specific business operations.

Locate or create training programs and provide opportunities for candidates to get involved in operations. Provide mentors who can coach these candidates and hold them accountable in achieving their goals. Schedule regular check-in meetings to review the status of goals, accomplishments and areas for improvement. Evaluate the need to revise the development plan based on changes in the business or leadership skills required.

One national general contractor and development company that has implemented many of these steps in its leadership development plan has experienced positive results in staff retention, achievement of employee career goals and accelerated promotions. On an annual basis, the company looks out five to seven years to identify gaps in leadership positions and the “rock stars” within the organization who may fill those gaps.

pie chart

The company then invests in the development of these future leaders by getting them involved in an advanced leadership program that focuses on the development of technical, leadership and strategic thinking skills. The participants in the program work with their managers and sponsors to create an action plan with both short- and long-term goals. Participants are then held accountable for achieving their goals during check-in meetings throughout the year.

Finding, retaining and grooming great talent can be a challenge for many businesses. To compete successfully, a commercial real estate company must take proactive steps to develop a plan that engages talented employees and provides for smooth transitions of leadership. Consider working with an advisor who can help management develop a systematic plan that will ensure the sustainable success of the business. 

Related Links

Black Hawk College Health Science Center

The Future of Family-owned CRE Businesses 

How can family-owned businesses stay competitive in the commercial real estate industry?

compensation report cover

2016 NAIOP Commercial Real Estate Compensation Survey 

Is your salary and bonus package competitive? Find out with the 2016 NAIOP Commercial Real Estate Compensation Survey. This is a digital download publication.

From the Archives: Perspectives Articles from the Previous Issue

Paul Ciminelli

CEO on Leadership: 

The CEO of a Western New York state real estate development and services firm shares his insights about the industry.

headshot of a man

Driving NAIOP's Future 

In 2017, NAIOP will celebrate its 50th anniversary. That’s 50 years of inspiring, advancing and serving the commercial real estate industry. The year also commences NAIOP’s next strategic plan, to which many of you offered input during surveys and interviews last fall.

Selected For You

Thompson hotel exterior

Touchstone: Small Team Big Impact 

This year’s award winner — which prides itself on creating shared value for owners, tenants and the community — developed more than 2 million square feet of space in 2015 with a staff of 10.

Energy Efficiency

Energy Efficiency 

Energy efficiency is one of the most controllable operating costs for commercial buildings. It makes both economic and social sense to employ strategies to reduce a building’s total energy usage. However, arbitrary mandates oftentimes are based on assumptions that have little to do with realistic capabilities and business realities. Learn about our energy policy and provides a understanding of the built environment’s role in increasing energy efficiency.