Targeting High Performers – An Introduction to a Three Part Series
As Principal of Rutherford
International Executive Search Group Inc., I have observed economic inflection
points that have caused shifting employment trends within the Canadian
commercial real estate industry since 1986. Today, the industry continues to
adapt in response to a rapidly evolving environment. Technology and the
Internet have democratized access to knowledge, improved capital flows, and
condensed decision trees to the point where the dynamics of a deal from
inception to completion are no longer constrained by transaction friction.
Employment opportunities that exist
today were mere futuristic musing in the 1980s – or entirely unanticipated.
From engineering science to operational analytics, from emerging sustainability
frameworks to shifting ownership structures, building owners and operators face
wide-ranging new challenges. Each
new inflection point in the economy fosters opportunity and in many instances
generates the need for new functional roles that demand a completely different
make-up of skills. The following is a brief review of some of these
inflection points.
Consider the early 90s,
which ushered in shifting ownership structures including the move to public
REITs. These, in turn, prompted the creation and ascendance of the Asset Manager role. Few could define this new
role at the time, but somehow everyone just knew it was needed. The question of
where to focus the role – property management, leasing, finance or investment –
was destined to be answered by each organization a little differently,
depending on its culture and business objectives. Today, however, the position is firmly
entrenched within owner and advisory organizations.
The new millennium
saw virtually every city planner become a Jane Jacobs acolyte. Along with
tiered and rampant development fees, they championed intensification of our
work, recreational and living space. This urban renaissance not only led to the
comeback of the 80s style entrepreneurial commercial developer focused on the
high-rise condo market, but also fostered the creation of a myriad of new jobs.
Within major Canadian markets, high-rise mixed-use office, retail and
residential developments introduced an immense economic multiplier effect
across the breadth of the urban business community.
Capital pools shifted their investment weightings in favor
of commercial real estate. Once considered aggressive, a 5 to
8% percent allocation of pension fund assets in real estate is now perceived as
conservative. Through effective use of technology and access to big data,
pension funds are far more efficient in underwriting their investment risk
today than they were in the late 80s when I first began monitoring their
activity.
Canadian REITs will be celebrating their 20th
Anniversary this year. When first launched as an investment vehicle, REITs prompted more than their
fair share of skepticism. I recall conversations with CFOs
and capital market professionals confessing their lack of confidence in the platform.
The smart money wasn’t sure if this embryonic concept would become an
acceptable retail investment vehicle. The early institutional first movers in
this space would need to trade their units in order to create a robust
secondary market. That took a few years to happen, but now every savvy boomer
with a thirst for investment yield has an allocation of REIT units in their
portfolio. REITs have impacted the employment of and wealth creation
opportunities for real estate professionals in a manner that far exceeds what
was available to the industry professional in the late 80s and early 90s.
Consider the
application of technology in my profession. I recall recruiting the president
of a major development company while driving up Toronto’s Don Valley using a
car phone that cost more to wire into the trunk of my car than perhaps the car
itself. Now this same call is made via video conference from the deck of a
sailboat on a wafer thin tablet. Time,
distance and location have become irrelevant to effectively conducting
business.
But for all the wealth and job creating inflection points in
our economy, ask a CEO what is relevant
to maintaining a continuously improving business process, the likely response
is not “access to capital” but rather “having
ready access to talent, the ability to hire right, and knowing how to motivate
human capital.”
This challenge is
what keeps most CEOs up at night and often presents itself as a
succession planning issue. The problem, however, is more one of
scarcity than deployment; there are
simply not enough high-performing
executives available. Recently, I matched a CEO with a Chief
Investment Officer, when asked if we had found the right match relative to the
CEO’s personality, my behavioral scientist indicated that the likelihood of
finding another candidate as closely matched was 1:25,000. While admittedly
gratifying to me given my role as an executive search consultant, the statistic
underscored the harsh demographic reality our industry faces, and will
continue to face for the foreseeable future.
In this vein, Gallup has predicted the emergence of a global
war for talent. Thought leaders of all stripes concur with this view and are
prodding public policy makers to embrace this reality. What can we expect in a
war for knowledge workers? Any well fought war involves strategy and tactics.
A conventional campaign within that war requires effective logistics,
while an unconventional one demands audacity. Winning the war will require
all four traits and more.
Accessing, hiring and motivating talent human capital need
not be hard, but success demands that we set aside our assumptions, resist the
illusory comfort of following instinct, and instead place confidence in the
actuarial math that underpins science
based hiring. 40% of all senior level hires in corporate America fail
within 18 months, meaning organizations that neglect science based hiring do so
at their peril. Mistakes are costly, and happen far too often.
There is a simple means to improving these odds and
ensuring the probability of success. I have some thoughts on this subject which
I’d like to share with you over a brief three-part series called, “Targeting High Performers & Predicting
Performance.”
As well, I
invite you to join me on LinkedIn at http://www.linkedin.com/in/rutherfordintl or follow my blog at http://rutherfordinternational.blogspot.ca.
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