We often measure the worth of a multifamily firm by the financial value of its properties, but that calculation overlooks a key factor in any company's success: people. "'All of your real assets go home at night,'" says Lane Co. CEO Bill Donges, quoting a favorite business expert.

In contrast to properties, though, getting the most value out of people requires far more than the management equivalent of fresh paint and updated signage. To be effective, a leader must be trustworthy, visionary, and credible. "People follow those that they respect," says R. Scot Sellers, who oversees Archstone-Smith Trust, a public apartment REIT with more than 2,700 employees nationwide.

Alison Rice
Katherine Lambert Alison Rice

That can seem hard to accomplish these days, when business headlines frequently proclaim the latest ethical collapse. "When you see greed take over as it did at Enron, you want to go into high schools and say, 'These are the exceptions,'" says J. Ronald Terwilliger, CEO of private powerhouse Trammell Crow Residential. For those who would prefer to be exceptional leaders instead, these three leading CEOs have a few words of advice.

1. Pay attention to your boss. Working for W. Dean Henry and Preston Butcher, both of Legacy Partners Residential, gave Sellers his first hint of the importance of operating in protected markets. Today that's a cornerstone of Archstone's business strategy.

2. Know how to manage risk. In real estate, this is the difference between making a bundle and losing your shirt. "I learned in my first real estate job how not to finance a real estate project," Terwilliger says, recalling the no-equity, floating-rate 1970s deal. "We went bankrupt."

3. Hire people who want to serve others. Despite the legend of executive egos, smart leaders know much of their work will happen privately, as they coach people to public success. "Great leaders in all walks of life are committed to helping others," Sellers says.

4. Connect with your colleagues. "People value those who are willing to get to know them. They want to believe you care about their goals in life," says Sellers, who believes that an insightful manager can dovetail an employee's dreams with corporate priorities, creating powerful results for all involved. Good relationships like this don't need to end when a colleague leaves the company. A few weeks ago, Terwilliger played golf with 11 former partners. Talk about a lasting business bond.

5. Allow employees the opportunity for ownership. Terwilliger believes strongly in this Trammell Crow principle, which gives strong performers the chance to become partners in the business. Sharing risk and the rewards aligns their financial interests with yours and the firm's.

6. Innovate. Without new ideas, a company cannot grow. "You've got to be willing to experiment," says Sellers. Such efforts aren't always immediately heralded as a great advancement. "You have to be willing to stand up for what you believe in, despite a lot of criticism," the Archstone CEO says.

7. Make change as predictable as possible. To ease the pain of corporate change, Donges recommends sharing information to the point of over-communication. "The very time you need the most trust is when it's hardest to establish ... [when] people feel like they are having the rug ripped out from underneath them." Make sure everyone knows what, when, why, and how everything is happening.

8. Read. Good to Great. Wooden on Leadership. Harvard Business Review. Books and magazines offer new information and insights, says Donges, who orders his favorites for his management team. Still, book smarts are no substitute for life experience. "I don't think you can read yourself to leadership," Donges says. "I think you have to do it."

Time to stop reading and start leading.

Executive Circle

For more executive insight, attend the MFE Conference in Las Vegas, where the opening Oct. 4 session will feature Constance B. Moore of BRE Properties, Thomas W. Toomey of United Dominion Realty Trust, and Christine Curry Freeland of Riverstone Residential. To register, visit www.mfeconference.com.