When a company’s founder transitions out of his or her leadership role, changes must be communicated carefully. The founder is the face of the company and is often synonymous with the brand. How does a new president celebrate the culture, tradition, and past while also conveying that the business will continue to evolve and thrive?
I’ve contended with this question over the past year as I’ve had the great honor of taking the reins of First Communities Management (FCM) from Rob Johnston. Rob founded the company in 1978 and is a well-respected leader in the multifamily industry in Atlanta and throughout the country. Rob is now elevated to chairman, where his day-to-day role is more strategic, leaving me with the operational elements of running the business.
Courtesy First Communities
First Communities manages more than 30,000 apartment units in the Southeast, Southwest, and Mid-Atlantic, including The Duke, a 252-unit luxury property built last year in Victoria, Texas.
The transition of leadership at FCM is largely representative of the state of the multifamily industry as a whole. In the early 1970s, the multifamily segment grew into a valid and profitable sector of commercial real estate. Some of today’s biggest multifamily companies, including Post Properties and Trammell Crow Co., founded in 1971 and 1970, respectively, were created during this time, pioneering the future of the industry.
The entrepreneurs of that era brought a new sophistication to the industry, developing deep relationships and building lasting reputations. Now, many of these founders are transitioning out of their CEO roles, creating an opportunity for a new generation of leaders to reimagine the apartment industry.
This transitioning of the industry’s founding brain trust also complements the current demographic shift to millennial renters, with the combination of these two forces bringing a fresh perspective to the industry.
The challenge, now, becomes: How does a multifamily firm successfully embrace change while leveraging the legacy of its founder(s)? Let’s examine four keys to success in meeting this quest:
Communication
Before the change from the current company leader to the successor, the firm’s internal and external messages regarding the shift should be well planned and establish that the change is a natural and positive progression for the business. It’s a normal human reaction to fear change, so the new leader needs to indicate that he or she is taking a strategic approach and being sensitive to the company’s—and employees’—needs.
Culture and Identity
During the transition, upper management must work to preserve and respect the core culture that made the company successful. The multifamily industry is thriving today, and companies are fighting to attract and retain top talent. Employees are less likely to seek a position at another firm if they feel confident their workplace continues to offer them stability, continuity, and opportunity.
Client Relationships
It’s vital to maintain not only internal company relationships during the transition period, but relationships with clients, as well. For a management company like FCM, attention and emphasis has to remain on the customer’s assets to avoid a lapse in performance. In our case, our former CEO is so well-respected in the industry that we were able to work hand-in-hand in transitioning the relationships in a thoughtful way that instilled confidence in our customers.
Departing Leader’s Legacy
As the exiting chief executive, it’s not only OK but important to put your own stamp on the company while pushing innovation forward to position the firm to succeed after you’ve left. Data-based revenue management and technology, for example, are keys to future success in the multifamily industry. That’s why I’m committed to offering our clients more options, as well as our employees more opportunities, based on data-driven results. I’m also pushing to grow our geographic reach and diversify the kinds of properties we manage, to continue on the path of success with which Rob Johnston has left us.
By having a solid strategy in place, the transition to new leadership becomes energizing rather than turbulent. It’s an opportunity to create a vision for the future that yields long-term growth and success.
