Thursday, October 27, 2005

CRISIS & PREVENTION MANAGEMENT: Strategies for Realty Managers ( 1 )

By Vernon Rupert Grant, CBPM, GRI

Institutional and individual investors with interests in industrial plants, commercial and residential properties, will find the following useful. Other executives and managers in general, who have responsibility for profit and non-profit organizations, will also realize the practical application of the information herein.

Building a Foundation of Understanding

The professional practice of business management involves complex processes. The further practice of property and asset management carries with it also a very special set of challenges. But even more challenging, painful, and lonely, within that field is the specialty area of Crisis & Prevention Management (CPM).* The dynamic nature of CPM encompasses multiple variables that require direct attention, analysis, daring imagination, flexibility, speed and focus.

Aside from the familiar business aspects of operating real property, we face a period in our world’s history, when properties of all type are vulnerable to the threat of man-made explosions and horrific destruction. As though the risks of business operating crises and unfathomable natural disasters were not enough, property operators and owners now have to refocus their thinking about crisis preparedness and response, due to new types of threats. Many crisis events are outside a manager’s control, but many others can be prevented given the proper level of planning, business maintenance and care. Are many even vaguely aware of what is expected of them during and after such events? Knowing how to effectively deal with the crisis process is the greatest advantage a manager can have. Yes, experience in these instances counts for everything, and lack of it could turn out to be quite costly, even deadly.

The crisis process involves a vast array of fast moving events that demand the kind of decisions that are tough, quick, and sound. The soundness of those decisions will always be a matter of evaluation and ‘Monday morning quarter-backing’ after the dust settles. Managers frequently worry that their ‘not so sound’ decisions could turn out to be irrevocable. Indeed, many of these decisions do turn out to be irrevocable. Therefore, the process dictates the possession of the type of fortitude not normally called for in a more stable and controlled management environment.

With that said however, CPM can be successfully carried out with a lot of fun, if the challenges faced are addressed properly. If a pattern of proper execution of CPM principles has emerged over time, the professional benefits derived from such experiences would be invaluable. Such benefits would include (although not limited to) the building of a wealth of core competences for the manager, as well as the development of an extraordinary will to survive. Whether it is a physical plant or natural disaster, a financial crisis or a shareholder/board civil war, the manager’s business acumen, people skills, and overall leadership abilities will be thoroughly tested. That, in effect, will prove to be the defining moment of one’s understanding of the environment in which they work.

Developing passion, dedication and discipline for the job of property and asset management, are important ingredients for the successful delivery of the services that are offered to clients. Dedication to the appropriate application of sound management principles, and a love and understanding of people, interwoven with a positive mental attitude, will provide the foundation for a rewarding career. Anything outside of such a formula will only result in the manager being ill prepared when “the big one” hits. It is always that raging crisis that one is not prepared for that gets a manager all twisted and frazzled. There will not be any need to get frazzled, if the essentials delineated below (and in subsequent articles) are followed. The more crisis experience a manager racks up, the more prepared he or she will be for the next one, and so on. Can a manager ever be prepared for a crisis? The answer is, yes. Think of the worse-case scenario and plan for it.

Property managers have long complained that there are no on-target manuals or books that
they can pull off the shelf which can adequately prepare or guide them through their particular crises. In this respect, the following represents the first in a series of outlines covering the fascinating specialty area of Crisis & Prevention Management.

The Principle of Preparedness

Contrary to popular belief, crisis management has less to do with pressure and more to do with being prepared. Preparedness is that other word for “proactive.” It takes great skill during the initial ten (10) minutes of an instant crisis to successfully apply a wide body of knowledge. That, in part, is a reason for preparedness. On the other hand, the problem-solving process is a lot less strenuous when one has ten (10) months in which to apply the same body of knowledge. When managers understand various issues relating to their specific business operations, and have gone through a rigorous review of certain crisis scenarios, they will experience a lot less pressure when applying what they know during a crisis. Imagine having eight (8) seconds to make a decision – one might go through knowledge processing and thinking for seven (7) of those seconds, and call a decision in the remaining one (1) second. Sometimes, those eight (8) second decisions can be irrevocable. This can be particularly frightening if in fact those decisions turn out not to have been based on sound information or knowledge.

Managers should always remember that they have millions of dollars in assets and numerous lives entrusted to them, along with huge budgets to care for. Each property that is being operated is a business (or a company) unto itself, with a vast array of stakeholders who have vested interests in the same. As such, these operators are property executives, and not just managers. Their clients then expect them to be prepared in carrying out their responsibilities. Thus, their success or failure in handling a crisis is largely dependent on their level of preparedness.

Subordinate, but indispensable supporting links to the principle of preparedness, are the following four components: (1) building a thorough knowledge of the managed portfolio of properties; (2) the sharing of experiences and appropriate information; (3) developing human understanding; and (4) developing effective community/public relations. The immutable truths about preparedness are unmistakable threads within these components. Those truths bear a practical resemblance to everyday managerial life.

* First appearance and introduction of Crisis & Prevention Management (CPM) as an official industry coinage.

Vernon Rupert Grant is a New York University trained realty management executive who holds a number of high-level industry awards in management/leadership, including crisis prevention. See Profile for more information.