Identifying
Retail Leasing Talent
By Forbes J. Rutherford, Rutherford
International Executive Search Group Inc.,
Toronto, Calgary, 855-256-5778
About the Author: Forbes Rutherford http://ca.linkedin.com/in/rutherfordintl leads a consortia of talent acquisition
companies that allow clients to attract talent at any price point along the
recruiting value chain. Rutherford International (www.rutherfordinternational.com) is an
executive search and management consulting firm that supports a network of real
property, private equity, venture capital and investment management firms with
identification and behavioral assessment of executive talent.
Furthermore, we
offer rapid on-boarding and departmental enhancement strategies that can reduce
time to proficiency for critical front-office functions (including sales) by 30
to 50% compared to traditional training protocols. See: http://tinyurl.com/rutherford-group to review our
integrated approach to talent acquisition.
The following is the first of a serialized article detailing
the results of behavioral study conducted by a leading behavioral scientist and
sponsored by Rutherford International Executive Search Group Inc. (www.rutherfordinternational.com). Through a
marriage of actuarial and behavioral science, the study benchmarks the success
attributes of Canada’s top retail leasing executives in the following
functions: Senior Retail Leasing Manager/Director; Greenfield Leasing
Manager/Broker (included repositioning of existing assets) and VP Retail
Leasing. Preliminary results to date are considered 86% accurate, and the study
will be expanded into additional global markets to yield additional data. The
article is serialized over the month of March with brief entries published each
Monday.
In my
capacity as an executive search professional in real estate, I’ve been a keen
observer of shifting trends in organizational design and talent for the past 30
years. Within the last decade, Baby Boomers in management have started to give
way to Generation X and Y with the Millennial generation rapidly filling junior
and intermediate leasing roles. This generational shift was clearly evident at
last year’s ICSC conference given the number of fresh faces attending broker
and owner leasing booths.
These fresh
faces caused me to wonder how they may have been selected for their retail
leasing role and who in the crowd had the capacity to become succession
candidates to management. Some had recognizable surnames, all were eager and all
were excited by the prospect of beginning their careers in a function that is foundational
to creating value and a traditional springboard to promotion within the
industry. The seeming promise of this pool of talent in the room seemed incongruent
with the lament of old guard industry leaders who confided their frustration that
for every 10 junior retail leasing representatives or agents they hired, only
one would exceed their expectations.
Darwinian approach to talent selection
This lament
is frequently followed up with the additional complaint that after two or three
years developing a protégé’s expertise, the risk of s/he being poached by a
competitor was high. It was an extraordinary statistic. Imagine hiring ten
junior/intermediate leasing representatives to get one that merits promotion to
Senior Retail Leasing Manager, only to run the risk of losing him or her to
competition. These are odds even Vegas wouldn’t consider. Admittedly this 10:1
ratio is founded on anecdotal evidence and likely an exaggeration, however even
if the ratio were 5:1, it remains an extraordinary admission of failure in the
ability to identify potential leasing talent.
How should executives
mitigate hiring risk when selecting a junior retail leasing representative – without
resorting to a Darwinian approach to talent selection?
The answer
and resolution to this question is available through a research study conducted
by a renowned organizational behavioral scientist and sponsored by Rutherford
International. The study benchmarked the behavioral profile of a cross section
of some of Canada’s top in-house and broker retail leasing executives. Of the
85 behavioral traits assessed, we found 20 traits that are within varying
degree core attributes to the high achievers in three studied retail leasing
positions: Greenfield Leasing Executive/Broker; VP Retail Leasing and
Manager/Director Retail Leasing.
The observations in this study are
provocative
Traditional Approach to Hiring
At present
the emphasis by hiring managers is on screening for traditional sales
personality characteristics, perceived industry network and apparent track
record when assessing prospects with experience. In the case of hiring an
inexperienced prospect, the industry tends to screen for traditional sales
characteristics solely. As indicated above, however this approach typically
yields poor results.
In fact, the
study observes:
Observation
1: The use of typical sales profiles would not successfully predict high
performance in any of the three retail leasing roles as little or no
correlation exists between the behavioral attributes of successful salespeople
and that of high performing retail leasing professionals.
The
observations in this study are provocative, and underscore the importance of
early assessment of the behavioral strengths of leasing representatives and
placements that can effectively leverage those strengths. Read the example of a
retail executive following a successful science based hiring approach prior to
the Vegas ICSC conference here: http://tinyurl.com/vegasandleasing.
ABOUT THE STUDY
Underlying Science behind the Study:
Job Component Validity (JCV)
Our approach
to establishing a benchmark for retail leasing performance is based on a selection
methodology known as Job Component Validity. Grounded in formal actuarial science,
this single standard system has the potential to revolutionize hiring. Major
thought leading publications such as Science Daily, American Psychologist and
the International Journal of Selection and Assessment have pointed to the ability
of JCV to accurately identify almost anybody for anything in 1/1000 the time
and cost.
Potential to revolutionize hiring
In the world
of psychometric assessment, industry is served by a myriad of tools designed to
categorize and slot an individual’s personality into an understandable quadrant
or color code. It’s a confusing array of choices for the layperson. Even the
categorization is perplexing:
- Category
1 assessments are often clinical based, highly accurate and designed to provide
the user with decisive options without having met the candidate;
- Category
2 assessments are accurate within 60-70% of predictive validity but require a
behavioral interview to validate findings;
- Category
3 assessment tools are often characterized by their cheap and cheerful price
and are most often used for staff and middle management hiring. They tend to
emphasize personality type, offer no predictive correlation for success on the
job in question. In fact the predictive validity of this category is so limited
that the governing body of American Psychologists will fine any member found to
be using one popular C3 assessment tool as a basis for hiring.
A fundamental
weakness with both Category 2 and 3 assessment tools is their lack of
granularity insofar as only 26 to 50 overall character attributes are
considered (few actually assess more than 35). A person’s behavioral DNA is a highly
complex interplay of attributes. Limiting the number of assessed attributes when
calculating Job Component Validity significantly diminishes the predictive
accuracy of the assessment.
A further
weakness of these tools is the authors’ penchant to dumb down the results in a
manner that’s meant to be understandable to the layperson, with explanation
from a certified consultant. The output is often fancy, but lacks scientific
rigor.
Behavioral DNA is highly complex
sequence of attributes
Predictive Validity of the Retail
Study
The
granularity of our benchmark is the result of a Category 1 instrument which
measures 85 statistically distinct behavioral attributes. No assessment tool is
100 percent accurate; however, the synthetic validity* of our methodology can
be used to estimate predictor validity in these situations within 86 percent
accuracy.
Note:
“Synthetic validity is a logical process of inferring validity on the basis of
the relationships between components of a job and tests of the attributes that
are needed to perform the job components.” International
Journal of Selection and Assessment
Data Collection
Rutherford
International handpicked the national survey sample based upon industry
referral, a sound understanding of the three position requirements as well as
having a long familiarity with each participant’s perceived high rated proficiency
either within the industry or their company.
The sample
highly rated performers within each of the three retail leasing roles were
asked to complete an online survey. Most individuals competed it within
approximately 90 minutes, but there was no time limit and the assessment could
be done over several shorter periods rather than one sitting.
Core Behavioral Traits Identified –
Retail Leasing
Our
assessment instrument measures 85 statistically distinct Behavioral Attributes
(few assessments measure more than 30) and 35 Career Themes (few measure more
than 10) which interface with more than 2500 Occupational Titles….few tests
measure more than 200 career titles.
Of these 85
statistically distinct Behavioral Attributes, we identified approximately 20
attributes that a successful Manager, Retail Leasing, Vice President Retail
Leasing and Greenfield Leasing/Broker as a professional group demonstrated to a
higher degree than the typical employed population.
A sample of
the identified behavioral attributes common to this professional group are: Self-Expression,
Analytical Thinking, Assertion, Initiative, Fraternity, Stamina (Physical and
Mental), Stress Tolerance, Seeks Adventure/Change, Visibility (Outgoing,
Extroversion, and Desire for Social Attention.)
STRATEGIC QUESTIONS TO CONSIDER WHEN
HIRING
As I scanned
those fresh faces in the ICSC crowd, four questions came to mind that science
based hiring and resource management can resolve. Elements of these questions
will be addressed over the coming weeks:
- Imagine
if it were possible to quickly assess the individual members of your retail
leasing team’s potential for near to high performance.
- Conceive
the efficiencies achieved if you could balance your leasing team’s effectiveness,
ensuring within 86% of predictive accuracy that the leasing manager best suited
for green field is attached to the development project, while the leasing
manager best suited for infill leasing focuses on the existing portfolio.
- What
is the impact on team morale of promoting your star leasing executive – who
lacks the capacity to manage others – out of a desire to retain him or her? How
might that promotion sabotage the very goals you set out to achieve when that
leasing executive’s poor management skills begin to surface?
- What
savings in acquisition and retention could you achieve and how much compression
in project timelines could you recover if your new hires had the behavioral
profile equal to or better than the top retail leasing executives in the
country?
SUMMARY OF STUDY RESULTS
In this
category, we identified leasing professionals that have a clear track record in
substantively repositioning a retail center though tenant re-mix and/or
front-end development leasing using a set of drawings or executing on the
owner’s vision for the dirt. We wanted to determine if there was a clear
incongruity in behavioral attributes between a professional responsible for Greenfield
leasing and a leasing professional responsible for leasing a stable portfolio. A
clear distinction does in fact emerge.
Observation 2:
A “Probability of Career Success
Score (POS),” or “Predictor of Success Score” ranging from 60-80 suggests that only
25% of Retail Leasing Manager/Directors and 42% of VP Retail Leasing have the
wherewithal to be “High Performing” in a Greenfield or asset repositioning
leasing environment.
Observation 3:
Not a single Vice President, Retail
Leasing nor Manager, Retail Leasing participating in the overall survey group
and who were excluded from Rutherford International’s Greenfield participant
list scored within the 60 – 80 range of the Greenfield Predictive Profile.
Observation 4:
An actuarial extrapolation of survey
results would suggest that 75% of Manager’s, Retail Leasing employed by
Owners/Managers do not possess the fundamental success attributes necessary to
be effective in Greenfield leasing (includes repositioning of a retail asset).
Observation 5:
Furthermore, given the Manager Retail
Leasing’s poor score in the attributes critical to the Greenfield benchmark, we
believe that employee development programs designed to improve these behavioral
attributes will have little benefit.
What does this mean?
We are
confident that this Greenfield Leasing Predictive Profile can be successfully
applied to predict who would be successful in the front-end leasing or
repositioning activity of a retail development.
How information can be applied.
Assuming
relevant education and experience with the lease document and nuance of the
business are in hand, we can predict with 86% accuracy as to whether the
individual has the wherewithal to be “high performing.”
3. Vice President Retail Leasing
In this
category, we identified approximately 20 distinct behavioral attributes that a
successful Vice President Retail Leasing demonstrates to a higher degree than a
successful Manager, Retail Leasing. The ‘Mean Score’ for these 20 distinct behavioral
traits achieved by VP participants in this benchmark was 64% whereas the ‘Mean
Score’ for the same traits by Managers, Retail Leasing was 39%. This would
suggest that a significant percentage of Senior Managers, Retail Leasing do not
have the behavioral wherewithal to become even average VP Retail Leasing
executives.
Observation 6: A “Probability of Career Success
Score (POS),” or “Predictor of Success Score” ranging from 61-82 and deemed to
be “Near to & High Performing” was achieved by 50% of the VP Leasing
participants, while the remaining 50% scored between the 50-58 range on the POS
for this role.
Observation 7: Only 33% of Managers, Retail Leasing
participants that were not part of the Greenfield Leasing profile scored within
50 – 55 on the Vice President, Retail Leasing Predictive Profile. An additional
50% of Managers, Retail Leasing participants scored 14 – 46 range of this same
sample which means a total of 88% of Managers, Retail Leasing scored less than
55 on the Vice President, Retail Leasing Predictive Profile for Success.
What does this mean?
The “Mean”
age of VP Retail Leasing executives within Canada is somewhere between 45 and
55 years of age. When one considers the limited number of high performing
executives within this group in conjunction with the weakness for high
performance identified at the Manager level, we believe that the Canadian retail
owner/developer will likely face succession challenges for the next ten years.
Owner/developers will
face succession challenges for ten years.
Through our
benchmark, companies are able to assess the success potential and manage the
career trajectory of their rising management stars in a manner that meets the
strategic needs of the firm’s growth. A statistical analysis suggests that a
significant percentage of Managers, Retail Leasing do not possess the
fundamental attributes to be successful in the role of VP Retail Leasing; nor
are they likely to increase their score in regard to these specific attributes
through employee development programs.
We are
confident that this VP Retail Leasing Predictive Profile can be successfully
applied to predict who would be successful in this role.
How information can be applied.
Assuming
relevant education and experience with the lease document and nuance of the
business are in hand, we can predict with 86% accuracy as to whether the
individual has the wherewithal to be “high performing.”
4. Senior
Manager, Retail Leasing
Of the entire
sample of retail leasing professionals we determined that 72% had the critical
behavioral attributes to achieve a high level of performance in the role of
Senior Manager, Retail Leasing. Within this grouping of 72%, only 39% of incumbent
Senior Managers, Retail Leasing perform at the same level as their superiors
and Greenfield colleagues.
Observation 8: A “Probability of Career Success
Score (POS),” or “Predictor of Success Score” ranging from 60 - 90 and deemed
to be “Near to & High Performing” was achieved by 72% of the overall retail
leasing sample, while the remaining 28% achieved a POS rating as “Typically
Meeting” expectations.
What does this mean?
Statistically,
a high percentage of retail leasing professionals possess the necessary
qualities deemed necessary to be “high performing” in the role of Senior
Manager, Retail Leasing (responsible for stable assets.)
This is not
the case however with respect to the repurposing of or development of retail
assets, where it’s evident that a significant number of the retail leasing
professionals currently employed by Owner/Developers do not have the behavioral
foundation to “high perform” in these roles.
Our leasing benchmark optimizes the
prediction of performance
How information can be applied.
Through our
benchmark, companies are able to assess the success potential and manage the
career trajectory of their rising management stars in a manner that meets the
strategic needs of the firm’s growth. A statistical analysis suggests that a
significant percentage of Managers, Retail Leasing do not possess the
fundamental attributes to be successful in the role of VP Retail Leasing; nor
are they likely to increase their score in regard to these specific attributes
through employee development programs.
We are
confident that this Senior Manager Retail Leasing Predictive Profile can be
successfully applied to predict who would be successful in this role.
Assuming
relevant education and experience are in hand, we can predict with 86% accuracy
as to whether the individual has the wherewithal to be “high performing.”
Commentary on Study Impact and Use of
Information
“Increasing the internal talent ratio”
Your next
great leasing executive may be in finance or property management. Rarely does
one witness a retail property manager transferred into a key leasing role.
Hiring risk is generally the reason for this reticence on the part of
management. However armed with the (POS) Probability of Success score for
Manager, Retail Leasing, you can reduce hiring risk while increasing the scope
of your internal selection ratio when posting the position.
You can reduce hiring risk
Becoming
known within the industry as an organization where individuals have the
opportunity to break out of functional silos raises your corporate brand
identity thereby reinforcing the organization’s image as a great place to work.
“Understanding what you have”
Whether
acquiring a property or an operating company, the granularity of our bespoke
research helps you enter a new market; strengthen the existing leasing team or
department including the assessment of talent prior to an acquisition, merger
or co-venture.
“Managing employee expectations”
We’ve noted
in our research that it’s possible and quite likely that your Manager, Retail
Leasing is a “high performer” with respect to leasing a stable portfolio, but
lacks the behavioral attributes for promotion into the VP Retail Leasing
position. How do you manage the career expectations of this star performer?
Manage an employee’s expectations
The benchmark
allows you to manage an employee’s expectations by applying other means of
recognizing their importance. For instance, with foreknowledge companies are
able to structure a performance based compensation and recognition structure
that rewards the high performing manager while moderating the individual’s
perception that leadership of staff equates to career growth.
“Hiring Process Re-engineering”
There are
hard and soft costs to wrongful hiring and/or hiring error. Hiring effective
and motivated people can become a predictable and consistent process. Employers simply
needs to align every aspect of their recruitment, interview, and assessment
process around the promotion of their corporate brand and the “science of
hiring.”
“Leasing Team Planning – Bench Strength”
Our approach utilizes
key behavioral factors and the Drexler-Sibbet Team Performance Model to enable
analysis of strength/gaps against required performance; and to identify best
fit from an individual and team balance perspective. For example, firms hiring Manager’s,
Retail Leasing for a relatively stable retail portfolio should have little
difficulty in hiring a competent “first string” to its leasing bench.
Your first string of leasing
professionals quickly wilt
However throw
in an element of economic chaos or projects that require some form of
re-purposing or re-valuation through a tenant remix, and the capabilities of this first string
may quickly wilt into a third or fourth string of leasing professionals.
“Employee Development Programs –
Focusing on Strengths”
Companies
invest heavily into the development of their employees; often these programs
are designed for multiple participants and have little effect if meant for
behavioral modification. A person’s behavioral attributes are relatively
ingrained by the time they finish adolescence although it is possible to make
some adjustments by focusing on one’s ‘near strengths.’
Shifting a "Behavioral DNA" takes a
great deal of effort.
The benchmark
allows you to apply programs that are customized to the individual by targeting
specific ‘near strength’ attributes where improvement will have the greatest
effect. To have a high performing “POS” score one must have a 65 point score or
greater in a majority of the attributes key to the POS benchmark.
Statistically, it’s not possible to move an attribute’s behavioral score more
than five points, yet moving a key attribute from 60 to 65 through a targeted
career development program will have a dramatic effect on the POS score and the
individual’s ranking. Shifting "Behavioral DNA" takes a great deal of
effort.
Note: Read Article - "You are what you were and will be what your are"
“Mentor/Mentee Programs – Risking Mediocrity
Counseling Excellence”
It is not
uncommon for a junior leasing manager to be placed under the wing of a firm’s
Senior Leasing Manager. However imagine if it was determined that this
particular Senior Leasing Manager’s POS score indicated that h/she was unlikely
to progress beyond an average status in their current role, while the young protégé
had all the attributes to be a high performing VP Retail Leasing executive one
day. In this instance, is it appropriate that this Senior Leasing Manager
should mentor, and if so, to what extent and for how long should h/she be
responsible for the junior representative’s development?
Survey Results to be continued:
April 14th
for Succession Planning through customized success profiling
I’ll be publishing
excerpts of the study each Monday for the next two weeks. If you would like
to receive forthcoming excerpts directly please contact me at forbes@rutherfordinternational.com.
In the meantime, should any other
questions come to mind, I would be pleased to offer you additional insights
from the survey and offer insight as to how we could impact the development of
your leasing team and ongoing succession strategy.
Sincerely,
Forbes J. Rutherford, President, Rutherford International, Toronto/Calgary
forbes@rutherfordinternational.com or 855-256-5778
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