strategy
Unlocking Transformational Leadership in Multifamily: The Gap and the Gain Philosophy Inspired by Dan Sullivan
Photo by Alex Radelich on Unsplash
In life, as in business, the momentum behind achieving the next milestone often overshadows the accomplishments already achieved. This perpetual cycle is similar to the treadmill effect, where the sense of satisfaction and achievement remains elusive. What if, through intelligent leadership, you could break this cycle and lead with a sense of fulfillment? Enter the Gap and the Gain philosophy, inspired by thought leader Dan Sullivan, Founder of Strategic Coach.
Why Multifamily Real Estate Leaders Should Pay Attention to the Gap and the Gain
Within the multifamily context, we operate in an environment marked by constant flux—legislative changes, technological advancements (a lot as of late), and shifts in renter behavior. These factors bring both challenges and opportunities. Utilizing the Gap and the Gain philosophy, you can refine your decision-making process and achieve a broader perspective. Here’s how:
Measure Against The Past, Not An Idealized Future
The ‘Gap’ represents the chasm between where you are and an often unattainable, idealized future state. The ‘Gain’ is the measurable improvement from where you started. Instead of being perpetually dissatisfied by dwelling on the Gap, the Gain offers a shift in perspective. Imagine a multifamily complex with a high rate of occupancy but falling short of some modern amenity provisions. You could consider yourself unsuccessful or shift your perspective to acknowledge the gain from an initially lower occupancy rate.
Profound Impact on Strategy and Marketing
The Gap and the Gain philosophy can substantially impact strategy and marketing. Let’s consider PropTech, which is transforming real estate ecosystems. Most real estate leaders focus on the next big thing, thus dwelling in the Gap. Instead, one could concentrate on the Gains made through incremental innovations, providing a more immediate and motivating perspective for your team. It’s not as sexy, but it might have a similar impact. If you’ve recently integrated a RentTech solution to automate your rent collection process, celebrate the time and efficiency gains before stressing over the next tech update.
Human-centric Leadership
The essence of this philosophy harmonizes perfectly with the human-centric leadership approach. Recognizing the gains of your team not only propels productivity but also enriches work culture. The Gap and the Gain methodology add a crucial layer to performance metrics, making it more holistic.
Innovative Application Through Technology
In the era of Big Data and AI, technology can be leveraged to make this philosophy actionable. Advanced analytics can provide historical data to measure the Gain more objectively.
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Why Logistics Matter
Photo by Robson Hatsukami Morgan on Unsplash
“Amateurs talk about strategy. professionals talk about logistics.” – USMC General Robert Hillard Barrow
Strategy and logistics are two important concepts often discussed in the business world and the military. While strategy refers to the overall plan or course of action that an organization or individual follows to achieve their goals, logistics refers to the practical details and processes involved in implementing that strategy.
The quote by General Barrow suggests that professionals, or those who are experienced and skilled in their field, focus more on logistics than strategy. This is because they understand that the success of any plan or strategy depends heavily on the ability to execute it effectively.
In other words, property management professionals know it’s not enough to have a good idea or a well-thought-out plan. They also need to consider the practicalities of implementing that plan, and that’s where logistics comes in. This might include sourcing outside services or materials, coordinating with property team members, scheduling tasks, and ensuring everything runs smoothly.
By contrast, amateurs may be more focused on strategy and less concerned with the details of execution. They may be more prone to making grandiose plans without considering how they will be carried out, or they may underestimate the importance of logistics in the outcome.
This is not to say that strategy is unimportant; far from it. A good strategy is essential for any organization or individual to achieve its goals. However, it’s important to remember that even the best strategies can fail without proper attention to logistics.
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The Importance of Execution in Business
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It’s a well-known fact that having a solid business strategy is crucial for the success of any organization. But as management guru Peter Drucker famously said, “strategy is a commodity.” In other words, having a good strategy is essential, but it’s not enough. It’s what you do with it that counts.
That’s where execution comes in. Execution is the art of turning your strategy into reality. It’s the process of taking all the ideas, plans, and goals you’ve developed and turning them into tangible results. It’s the difference between having a vision and making it a reality.
Why is Execution Important
But why is execution so important? Because no matter how well thought-out your strategy may be, it’s only as good as your ability to execute it. Without proper execution, even the best strategies will fail. On the other hand, a mediocre strategy executed well can still lead to success.
So how can you improve your execution skills? Here are a few essential tips:
- Set clear goals and objectives. It’s critical to clearly understand what you’re trying to achieve so you can measure your progress and make adjustments as needed.
- Communicate effectively. Please make sure everyone on your team understands their role and what’s expected of them. Regular meetings and clear communication channels can help ensure everyone is on the same page.
- Stay organized. Keep track of your progress and ensure everyone works towards the same goals. Use project management tools or create a task list to help keep things organized.
- Stay flexible. No matter how well you plan, things will inevitably change. Be prepared to adapt and adjust your strategy as needed.
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Apartment Budgeting: Corporate Rent Premium
Over the last couple of weeks we have discussed premiums that apply to such things as Month to Month Leases and Short Term Leases. Today we take a similar angle in the Apartment Budgeting Series as we are penning on the subject of Corporate Rent Premium. In the spirit of consistency, we will start by putting some definition around the term and then we will dig into some budget strategy and possibly some thoughts on marketing.
Corporate Rent Premium Defined
Corporate Rent Premiums are convenience fees added to your Apartment’s Market Rent. It is a little bit different from the last two fees that we penned about. In this case, apartments are generally leased and paid for by third-party agencies. National Corporate Housing and Oakwood are a few examples of the aforementioned third parties. You, in a sense, up charge the agency for the convenience of getting out of the lease(s) with just a standard 30 or 60 day notice.
I have seen the fee applied by way of flat rates and/or percentages with upsides of $300 or 10% of the market rate.
Corporate Rent Premium Budget Strategy
Like all other rent premiums this can be a tricky thing to budget for and it definitely something you want to control. To budget, I would refer to a twelve month trailing all the while considering current economic conditions. If the economy as a whole is downtrodden that the likely hood of a boom of corporate leases landing in your lap is between nil and none. If the economy is gaining traction and or booming you will likely see this business experience an uptick. But, it is always open-ended.
Remember to control this. I can’t tell you how many times I have sat in an owner’s meeting trying to remind them of their generosity in giving up 20% of their unit count to a corporate housing provider only to have that provider pull the rug out from under them. How quickly it becomes the other’s guys hot potato to deal with and explain. 5% is a good number to manage. 10% is pushing the risk handle. Anything beyond that is pure gamble in my book.
Corporate Housing Marketing Strategy
No ballyhoo with this one. It’s a simple down to earth Dale Carnegie approach to getting your foot in the door. Do a little research and find out what the owners and account executives grapple with. What are the biggest problems that they deal with? What keeps them up at night? What rattles their brain(s)? Get into that in the way of solutions. Solutions that you can play into their real-time business transactions and make sure your company and community are associated in some way. Be swift with any help that you can give to them. And, don’t be shy about asking for the business.
Your always looking for some premium to rent multifamily maniac,
M
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Apartment Budgeting: Lease/Short Term Premium
Back for another week of budget talk. Hope this past week has been over the top and amazing for all of you. If not, you have a whole life of potential in front of you so don’t fret too much. Last week we talked about Month to Month Premiums and this week are moving on to Apartment Budgeting: Lease/Short Term Premium.
Lease/Short Term Premium Defined
Lease/Short Term Premium is a fee that is added to any lease that is less than the desired six, nine or twelve month lease that most of us non-revenue management practitioners desire. Call is a fee of convenience if you will. It allows a resident to have flexibility in the way of getting out of the lease contract without any lease break penalties. It is a simple month to month premium that you tack on at the initiation of the lease term.
I have seen this fee applied in the way of a flat fee ranging from $50 to $100/mo. And, I have seen it applied as a percentage of the lease rate ranging from 5% to 10%/mo.
Lease/Short Term Premium Budgeting Strategy
I typically consult a twelve month trailing report to determine what my forward-looking twelve month budget number should be. This is again one of those fees that is very hard to budget for given the fact that is simply random in nature. Unless you are located in a somewhat urban area with a propensity to attract corporate type clientele, you will rarely book income to this line item.
Marketing Short Term Leases
Don’t forget that everything is marketing. And, this line item should prompt you to look for marketing opportunities. Use Short Term Leases as a bullet point on your website. But, don’t get too crazy as you don’t want to create unwanted exposure. But, it would not be a bad idea to let two to three percent of your unit count produce some extra revenue.
Your looking for opportunity in every line item multifamily maniac,
M
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