STUDENT HOUSING INDUSTRY LEADERSHIP: EVOLUTION OR REVOLUTION?

STUDENT HOUSING INDUSTRY LEADERSHIP: EVOLUTION OR

REVOLUTION?

By Wesley Easly

We’ve all heard it once before, “evolve or die.” What does that really mean, career-wise? In the case of modern business practice, it has come to mean that you must constantly reassess your business protocols and perhaps your overriding philosophy in some cases. What if the universe as you know it, in this instance, the majority of the stu­dent housing industry, subscribes to the same phi­losophy and means to deliver their service armed with two decades worth of professionals groomed in those same practices? From this standpoint, evolution is extremely difficult if you are using your peers for inspiration or motivation to improve.

That is why I, for one, propose revolution! Candidly, I am merely observing what I see in a small, but influential number of student housing developers and operators. For the past few years, and in ever so slightly grow­ing numbers, we have seen forward thinking executives take-on key leadership roles with­in student housing firms. These profession­als have come from the hospitality industry, consumer goods, retail and technology. Who inspired these hires, why aren’t more compa­nies considering these candidates, why is the adoption and success rate of these hires not as high as they should be, and how can you assess if this is right for your company and if so, what can you do to ensure a successful long-term “stick rate?”

Traditional, evolutionary methods have failed the student housing world in dramat­ic fashion at the mid-management level and now, as we reach an aging (and personally financially sound) founding/executive level of these firms — in the C-suite as well. The reasons are obvious; the highly specialized nature of our industry has required us to hire and promote from within more readily, the overall demand for privatized student hous­ing and the advent of firms to supply it during the past 15-plus years has moved at the speed of light and more often than not, the modus operandi has been “all hands on deck” to meet this demand. As a result, the luxury to develop human capital solutions and talent mentoring take a back seat, if they exist at all. A final punch was the global economic crunch of 2008-2009 that kept would-be new talent from entering our space in addition to most C-suite executives having to focus on right­ing-their-ships at a portfolio and capitaliza­tion level rather than working on succession planning and mentoring.

However, the revolution we see has been enacted mostly by the founding partners of these firms. The most innovative companies in student housing are conducting introspec­tive analyses of their founders’ strengths and weaknesses and their personal desires for both themselves and the company. They are asking themselves, “how do these fac­tors affect the daily operation of the firm?” Additional factors include identifying “core drivers” of the company. Essentially, what is it that makes the company “tick” and how do you create an operational culture around those? Finally, who is most equipped to lead, ideally from non-student housing industries that can match as many of those core drivers as possible?

For instance, we have helped our clients identify factors such as; staff/associate engagement programs (as in the hospitality industry), customer service focus, revenue enhancement and ancillary income (other than utility management) aligned to customer service, multi-channel marketing and sales/ leasing and distribution (as in purchasing, supplies, commodities and maintenance) among others.

Our research and recruiting efforts have led us to find a number of complementary industries that lend themselves to consider­ation; hotels, full-service restaurants, high-customer facing lifestyle/brand retail, rental cars, cruise lines and even B2C Web services, among others.

I’ll admit that most of the above has been considered before. The problem is gaining traction from within to keep these hiring ini­tiatives afoot before an actual hire or (gasp!) after a new hire has joined. Once again, revo­lutionary executives embracing this change have had to take on certain responsibility beyond their self-assessment. Most notably, an admission that the company has problems and needs to make changes is required if results that improve upon the status quo are to be achieved. Further, hiring an outside operational executive to bring new ideas and change may require redefining what “operations” means in your company. In our rather slow-to-adopt estate industry, operations all too often are confined to property management while everything else falls on the CEO. Obviously, this can create a “weak link” scenario. Most Fortune 500-caliber professionals (executive or mid-management) embrace operations as a global melting pot of sales/revenue, ser­vice delivery, customer engagement/assess­ment, employee engagement/assessment and a number of other factors that drive the busi­ness. Not accepting this global view prior to the new hire is akin to using a Formula 1 racer to fetch groceries. This will result in low adop­tion, frustration and ultimate separation.

To combat and rectify these pitfalls, I’d recommend the following. The incumbent C-suite must begin with an attitude of open­ness and respect for other industry sectors and practices. In considering talent from the outside, you must provide a definition of breadth of responsibility across the enterprise during the recruitment and a definite man­date of breadth or responsibility during their employment — despite your gut reaction to want to control through outmoded (and pre­viously identified as less than ideal) practices. Finally, with the use of metrics and tracking, the C-suite must be personally engaged in this process for months, if not years.

Wesley Easly is managing principal of ibr Search