What happens when you die?
No worries. This isn’t a metaphysical question. In my ears covering real estate, I am always surprised at he number of executives who prefer to live in the
moment with no thought to the future. And while that carpe diem
approach might play well on party weekends, it won’t work in
the marketplace. In short, I am still surprised at the number of
otherwise savvy practitioners who have no succession plan.
Happily, those C-Suite occupants who fail to strategize beyond
their own tenure seem to be (if you will excuse the expression)
a dying breed. When I started in this business, roughly back
when the wheel was being road tested, it was an industry of lone
gunslingers scratching out deals on the backs of cocktail napkins.
Back then, there was little thought to building something long-term beyond maybe some vague idea of leaving the shop to
But then something happened. It seems those kids came with
more than silver spoons in their mouths. They came armed with
MBAs. Or at least with a savvy sense of how business should
be conducted—now and generations hence. Structures began
to appear that elevated the firm beyond the cocktail napkin to a
Brokers became consultants to clients, managing not just the
one-off, but the portfolio and anticipating (or at least attempting
to anticipate) downstream need. That was when we began to
hear about such concepts as diversification as a hedge against
market slowdowns. Obviously, this is history oversimplified, but
the essential facts are there. One by one, industry participants
embraced a more corporate model, and the industry as a
But I believe there is still some evolution to take place. When
managing GlobeSt.com, I talked with Transwestern CEO Larry
Heard about the industry’s progress in succession planning, and
he agreed that a vestigial "go-it-alone" mentality still exists
“Commercial real estate, just like the oil and gas industry,
has leadership made up of people who are bold, innovative
risk takers,” he told me. “They also tend to see themselves as
invincible. But as companies get larger it’s more realistic to
recognize that there are a lot of people depending on you for
discernment and strategic planning. You can’t leave succession
to chance. You need to strategize on that as proactively as you
would an important client relationship.”
And, in fact, he revealed to me that the firm had just completed
that very task, but he didn’t go quite so far as to name his
successor (though I tried, folks, I tried).
So what steps are necessary to build a bulletproof succession
plan? Well, nothing is bulletproof, and flexibility and options are
key. So here are Heard's recommendations:
1. “You need to build upon the vision that leadership has in
regards to an organization’s potential,” he says.
2. “A successful plan is transparent to the company and to
3. "A good plan will also enhance your corporate culture and
elevate your brand," Heard says, explaining that the culture
consideration is “a very internal element while brand elevation is
more of an external view.”
4. And both of those are different from innovation. "That’s
a mindset," he says, "people can get complacent and simply
continue along with those old tried and true practices. That can
be fatal. A succession plan without innovation is sub optimal."
5. “The plan should infuse a sense of urgency to the entire
organization to perform at a high level,” he continues.
“Companies ought to realize that they’ll be watched very
carefully—especially by clients—to see if everything they’re
hearing about is going to play out as promised.”
6. Finally, says Heard, you have to “tap people who are willing
to accept significant responsibility. Not everyone does. It’s one
of the things you should not take for granted.”
Let’s face it, folks. You aren’t going to be around forever. But
ensuring the longevity of your firm is quite a legacy.
AFTER YOU'RE GONE
BY JOHN SALUSTRI
JOHN SALUSTRI has been among
the most recognized journalists in
commercial real estate for the last
25 years, as Editor of Real Estate
Forum and as editor of GlobeSt.
com. John is currently engaged
in freelance writing assignments.
He may be reached at salustri@
optonline.net or 917-912-0038.
ABOUT THE AUTHOR