I own a family of mid-sized property management companies in the District proper. My passion for the hands-on work of “landladying” took shape 15 years ago when I purchased a little historic adobe duplex in Tucson, Arizona. Property management had always been my side hustle, but in 2008, landladying for a living started to sound good. So I gave up my nonprofit work and went all in. Today, at Flock, our companies keep 52 folks employed and aggregate 6.5 million in business annually. All told, we manage over a billion dollars in real estate. And we built the companies one door at a time.
I never thought of myself as a risk taker, but starting a business at the very height of the great recession was certainly a leap of faith. In the early days, though, with just a few team members and zero payroll, I was really only risking my time and sanity. That I could launch what would become a thriving business in the height of a recession felt like a feather in my cap. I love to solve problems; I’m at my best facing challenges, finding ways to thrive despite the circumstances.
But when this pandemic hit, suddenly, my time and talent weren’t all that was at stake. I worried hard. And early. How would I protect my employees? How would I serve and soothe my clients and, importantly, our residents?
I started my business for the same reason most people do: I wanted to make money. But I also wanted to change lives. For the better. Like a lot of successful business people, I grew up in financial insecurity. Yet I was the kind of kid who saw the potential for earning money everywhere she looked. I washed cars, I shoveled walks, I vacuumed houses, I cared for pets, I sold Girl Scout cookies to pay for summer camp. But my deepest dream was to work in an office. My mother didn’t understand my burning need to be an entrepreneur, but when I was 11 years old she took pity and offered me one half of our ramshackle garden tool shed to do with what I pleased.
What I pleased was to set up my enterprise, The Sherlock Holmes Detective Agency, a name of which I was very proud and found not the least bit unoriginal. Although I’d read all the Nancy Drew mysteries I could find, I had an uneasy grasp on what the work of a nonfiction detective entailed. Nonetheless, I had a very clear picture of myself sitting behind my desk, taking meetings with distraught clients to review the scope of their mysteries.
Given that our house was in a perpetual state of repair, construction scraps were at my disposal. I mounted leftover squares of drywall inside the shed and made a patchwork rug from carpet remnants. I painted the walls yellow and created a makeshift chair from a wooden box that wobbled only a little.
To land my first client I would need to advertise my services, so I rode my bike to the offices of the local newspaper to take out an advertisement. I remember Roberta, the editor and sole employee of the Idaho Mountain Express as a kind woman who treated my request with grave professionalism. Now that I’m a parent I can imagine this moment through her eyes. I feel such gratitude for her simple display of empathy.
Like every other nimble business, my company has gone virtual, and quickly. Today my life is about live chats, board meetings via Zoom, virtual home inspections, camera-based maintenance diagnostics, and leveraging technology with vendors. We’ve streamlined communications and found new efficiencies in our workflows that impact everything from banking to processing applications and managing relationships. We’re engaging new vendors and contractors; the kind of people who can pivot as quickly as we do. We’re also spending more time on our company culture, on thought leadership, and–of course–on financial modeling to stay afloat. Most importantly, we’re checking in and contributing to the wellness of our community, our residents and our clients.
Since this crisis began, we have operated under the philosophy that it’s better to risk making tough decisions too early than bad decisions too late. In early March, long before any states began to issue stay-at-home directives, we furloughed our maintenance team, while projecting a $225,000 monthly drop in revenues. This has resulted in not so much a financial gap to bridge as a yawning, terrifying chasm. But there was no question: we needed to prioritize public health over profit and even solvency. I knew that working quickly to solve for the worst possible scenario would help us save our Flock in the long run.
As every good leader knows, the buck stops at the top. What every good leader also knows is that when the bucks run out, the top should be paid last. Tragically this ethic is practiced so infrequently in the U.S. that it becomes an exception to celebrate and the rarest demonstration of servant leadership. Owners paying themselves last should be the rule, not the exception. I am the person who hired our teammates; they and their families rely on me for their livelihood. How could I possibly accept a full paycheck during this time?
I took a 75 percent pay cut for the duration of the crisis. I now make just enough to cover the mortgage, utilities, food, and the babysitter, who can of course no longer babysit. Like so many of my employees, I’ve asked her–and she’s happily agreed–to perform a different job for a while. She’s become an essential worker, shopping for groceries for me and the management team as well as the two families sheltering in my guest house and basement apartment.
I asked our management team to accept a 5 percent cut; in response they offered 10. They also offered to halt their retirement savings payments so that the company could save on our 401k match program. We are running on fumes, operating in short-term crisis mode; hoarding cash that doesn’t need to go out the door. We are focusing on payroll and small business vendors and covering bills that would threaten our credit worthiness or expose us to liability if they went unpaid. Everything else–property taxes, utilities, scores of other invoices–have been put on ice.
As for the rest of the staff, we are resetting the financial clock every 14 days in order to guarantee their salaries for the following six weeks. We’re still offering 100 percent employer paid benefits and health care. My financial models are continually evolving. There is no long-term financial plan because that would be an exercise in futility and frustration, given things are changing so quickly.
But we know nonetheless that nothing will be the same once we emerge from this crisis, and so a long-term vision for our company is emerging, driven by a staff that is incredibly, doggedly motivated to make it work.
I am disheartened by the behavior of some of my competitors and colleagues during this crisis. Landlords are emailing impersonal newsletters screeching CORONAVIRUS in the subject line, or worse, nastygrams reminding tenants their rent is due on the first no matter what. They inform them in insensitive language about the availability of public assistance and food banks.
At Flock we’ve refurbished our website to be a pandemic information hub. We send residents newsletters driven by caring and empathy and positivity. Most importantly we reduced rent by 15 percent in the buildings we own. A colleague asked me why I did this, what did I see as the long game here, what was the strategy? I didn’t have an answer. I did it because I could. And for me, that means I must. I did it because empathy is my engine.
Let me assure you I am no saint nor martyr. I am in survival mode like everyone else. It turns out that for me, servant leadership helps me survive. Frankly the adrenaline rush I get when I’m trying to solve a big problem is like an opiate for me. Yet also a way of healing: because my young life was marked by a deficit of concern for my state of mind and physical well-being, I developed a hunger for empathy. Since I wasn’t getting the empathy I needed, I discovered as I grew up that showing empathy to others filled that void. This empathic urge, combined with an unabashed need to be in charge, led me to stumble organically into a leadership style that I’ve refined over the years and which I’ve come to see as essential to the success of my business.
Empathy is not a common keyword, shall we say, in the property management industry. Or in business in general. My industry in particular has earned its reputation.. Common wisdom suggests that in order to succeed, a landlord must resist all her empathic urges or simply fail. But expressing empathy–in word and action–is what feeds me. I wish more people would try it. I wish our culture allowed for it. Some people have no idea how good it feels.
The same grit I used as a young side hustler is serving me well now. All those childhood freelance gigs helped me prepare financially for worst case scenarios. Shoveling walks and playing detective didn’t exactly prepare me for the enormity of a global pandemic, but it did get me ready for something at least medium big.
Ever since the backyard garden shed office, I’ve known that any company I started would be anchored in generosity. To that end, I’ve always measured profit not in dollars but in the number of good jobs we create; good jobs that mean people can not just pay their bills but enjoy their lives. I want to create career paths and provide healthcare and ensure people have time with their families both now and in the future. So even when faced with this imminent and shocking loss of revenue, the math was simple: since profitability means good jobs, then we’ll remain profitable as long as we can.
The hardest moment I’ve ever experienced in any job anywhere came just two weeks ago, when I had to tell my employees that we needed to be worried for our livelihoods. I told them the leadership team was working on continuity and I shared our short-term planning in great detail. I told them I was thinking of them twenty-four seven.
I was alone in my home office, saying these impossible, unthinkable words, and knowing in my heart of hearts that despite these dark circumstances this was also one of the greatest moments of my professional life. I was occupying the intersection of concern, ingenuity and innovation, panic, anxiety and adrenaline, uncertainty and grief, exhaustion and sophisticated planning. In that moment, I was my very best self.
Lisa Wise is the Owner and CEO of Flock DC. For more information visit flock-dc.com.
Published at Wed, 22 Apr 2020 16:30:00 +0000