Inch by Inch

I read a great article over the weekend about kids with allergies.  

The number of kids out there with food allergies has skyrocketed since I was growing up 30 years ago.  It seems like allergies are being perpetuated because of our unnatural need for cleanliness.  I feel that some day Purell is going to be sued for causing an epidemic.  The thesis discussed in the article (which is working!) is that exposure in very small amounts to known allergens builds up immunity and can be expanded until the point that the child is able to eat the item to which she/he was once allergic.  I hope this therapy continues to develop and helps kids whose lives are being controlled by food allergies. 

In business, we so often think that something can’t be accomplished only because it’s what we have been told, just like the kids who have been told they can never eat peanuts again.  I am a huge believer in breaking pre-conceived limits and making the impossible happen. I support it in my organization and have witnessed great triumphs when people forget about limitations.

Sometimes the results need to be accomplished in tiny increments, like the way the doctor in the article works with her patients with very small doses before adding more.  When someone in my organization achieves a small goal or deal, they then feel confident to move ahead and take on bigger challenges exponentially.  Before you know it, they are accomplishing the impossible.

It is the job of the leader to push team members out of their comfort zones into areas where they may fail, provide a safety net and encouragement if they do get stung, and then get them back out there testing limits little by little.

Luck and Life

“I think life is simpler than we tend to think. We look for answers and more answers. But there are no answers. Things happen in life, good things and bad. People say, ‘Why did it happen to me?’ Well, why not? Some people win the lottery, and others die in a car crash. It happens, and there is nothing we can do about it.”  - Nando Parrado

A few years ago I had the most interesting dinner of my life.  I met Nando Parrado, one of the members of the Uruguayan rugby team that was stranded in the Andes Mountains for 72 days as the result of the tragic plane crash dramatized in the movie “Alive: Miracle in The Andes”.  The team eventually resorted to cannibalism to survive the horrific ordeal.  My favorite part of my discussion with Nando was the effect that luck has on life.  Here are a few take-aways from my evening with a truly lucky, resilient and amazing individual.

1. Luck is uncontrollable.

The night before Nando’s life-changing flight, the pilot called to tell the team that they had a few extra seats in the plane and invited them to bring some family along for the trip.  Nando made a call home, caught his mom and sister, and asked then to join him.  They were available and boarded the plane with him the next day. 

When the plane hit the first mountain peak, it cut off the rear of the plane.  Everyone sitting in rows 11 and above was killed on impact.  Unfortunately, Nando’s sister and mother were in row 12.  As Nando explained it, you just never know what is going to happen in life, and any day any one of us could be sitting in row 12.  Life is controlled by luck.

2. Take chances. 

While trying to climb out of the Andes, there were three different decision points where they needed to go left or right. One way was their chance for life. The other way would mean death.  They had no way of knowing until they ultimately reached civilization.  As luck would have it, they picked the right way three times in a row and lived to tell their story.

“Eighty percent of success is showing up.”  - Woody Allen

I have often thought about this story while dealing with many of the decisions necessary to run a business.  We can’t control luck, but we can make ourselves available to take advantage of opportunities.  Being out there talking, networking, looking at deals, and creating opportunities is what creates luck.  This is what companies must do to grow.

The negative impact of luck is what happened with the disastrous economic downturn of 2009.  We could either shrink away and disappear, or we could take advantage of the situation, pivot the business model, and make things happen.  Make your own luck happen.

“For a brief, magical moment, all my fears lifted, and I knew that I would not let death control me. I would walk through the godforsaken country that separated me from my home with love and hope in my heart.”  - Nando Parrado

#Nando#Luck#Nick Jekogian

My brother Michael and I in February 2012 running the Rocky Road 100 miler in Orange County, CA.

Enduring Leadership

In my spare time I run long distances … very long distances.  I am an endurance athlete who has completed 100-mile runs and even a double Iron Man that took almost two days of non-stop physical and mental effort.  I recently found this article by Jeff Gundersen that pretty much summarizes why I do these crazy events.  In training and enduring these incredible challenges, I have built a personal regiment that has helped me and my business survive these difficult times.

I like Gundersen’s 5 point “Endurance best practices” (below) and added a few of my own afterwards.

1. Take an Endurance assessment. Check your endurance levels and create an action plan where you need energy the most. Want more endurance?  Stop doing what drags you down. Plan for eliminating the “tolerations” in the following areas; business, personal, finance, health and well-being, and relationships. This could include questions, such as; What is keeping me up at night? When do I schedule time away from my work?  What do I need to improve to get into better physical condition? What relationships do I need to remove that drain me of my energy?  Remaining active outside the office will help you build the stamina and endurance you will need on the job.

2. Develop and maintain an optimistic attitude. It is proven medically, people with a “glass half full” mentality are happier and less stressed than their alternative counterparts.  It takes a lot less energy to be positive. Work on your unique outlook and eliminate worrying about all the people, places and things that are not aligned with being positive or outside of your personal control.

3. Delegate, Delegate, Delegate! Identify the tasks at work and at home that you really do not want to do or you are not good at (the “drudge” tasks) and delegate these immediately. You will be amazed how much lighter this will make you feel and give your endurance a boost! Notice how our energy levels seems to be low when we do not want to do something or be somewhere we don’t want to be.

4. Take Control of Your Calendar. Don’t constantly overbook yourself. For example, after a late night of meetings, travel or client entertaining, do not schedule yourself for a 7 a.m. breakfast meeting. Give yourself time to recover. Don’t let business issues spill over into your personal life and vice versa. Work on compartmentalizing the different areas of your life and use success and happiness in one area to raise your energy and spirits in the other areas.

5. Plan ahead. Be Pro-Active! Manage your health and mental well-being! Most senior executives have at least four to five weeks of vacation annually; you will be surprised how many do not take this time off, or if they do, they actually work all day on vacation. Set boundaries, leave the laptop at home, empower others to step up, and disengage on a quarterly basis.

And some of my additions:

6. Make things happen - Don’t just say you want to do something. Go and make it happen. Ask for the next job challenge, or sign up for the next marathon.  The most important step in accomplishing anything is starting!

7. Teamwork is important.  I can’t make it through a 100 mile race without a spirited support team.  The same goes for any day at the office. Surround yourself with great people to get you through.

8.  Mix business with pleasure - You have to love what you do in business to keep sane.  The same goes for athletics.  I like to complement them with each other.  I run with business colleagues, I walk around the park while on conference calls, and I take the stairs with my daughters instead of the elevator to combine training and business/family.

Take a look at this article about the endurance training for business success.

“Build Endurance for Maximum Leadership” by Jeff Gundersen

Business Model Repair

I found this article, “Your Business Model Doesn’t Work Anymore” by Geoff Colvin, interesting for the real estate industry and our entrepreneurial business in particular.

In the mid-90s, I started a business model that had recent college graduates with little to no real estate training buying $100s of Millions worth of real estate.  The model was simple.  My first acquisitions associate started in Philadelphia, whose streets are in a simple grid system.  It was very easy to put Philadelphia’s map into a spreadsheet and then measure progress and results.  Progress was based on how many offers were made to owners of apartment buildings, and results were measured on the number of purchased buildings.  

At the time, the process of buying and selling buildings was very inefficient, so we were buying the buildings that were too big for the small residential brokers to sell and too small for the big commercial brokers to bother with. We found an inefficiency in the marketplace, and we took full advantage   The first year I started this model, we bought 26 buildings, all in separate one-off transactions.  Within a very short period of time we realized an increase in value, on average, of about 20% of purchase price.  In today’s market that is considered a grand slam.  We went on for 10 years replicating this model in 18 different US markets and purchased over 500 separate apartment buildings to create what was one of the largest first-generation, private (no outside capital) multi-family portfolios.

“Change before you have to.”  - Jack Welch

Inevitably, the model stopped working.  Looking back I can see what killed my model and how we should have pivoted, but hindsight is 20/20.  In 2005, the real estate market started getting hotter; however, more influential on my model, the inefficiencies of the buy/sell process were fading.  I am one of the many business owners that can say the Internet destroyed my business model.  Before 2005, a broker would send marketing packages out to 20 to 50 buyers, typically by US mail or fax.  After 2005, with advancements in desktop publishing and email, those same packages were being sent to 200 to 500 prospects.  Today, a typical multi-family deal is seen by more than 1,000 potential buyers.  This has created a very efficient market that doomed my model of buying at discounted prices.

“If you do not change direction, you may end up where you are heading.”  - Lao Tzu

I look back and realize that we not only should have stopped trying to buy under our broken model, but we should have pivoted 180 degrees and sold into this high-priced and very efficient sales process.  When 100 people are interested in your assets, it’s time to be a seller.  When no one is interested in an asset, it’s time to be a buyer.

“Efficiency is doing things right; effectiveness is doing the right things.”  - Peter Ducker

As we look forward, we have created new business models that we feel work in today’s environment and will work going forward.   We still find undervalued assets and make them more valuable.  That is simply what we do and what we intend to continue doing down the road. But we have pivoted the execution of our model into the more efficient buy/sell atmosphere and are now focused on a number of opportunities that we believe will make the types of gains that we saw in the 90s.  Signature is reinvented, and we intend to move forward with resilience.