SPECIAL REPORT: Top Mistakes to Avoid in a Tough Economy

By Erika Schnitzer, Associate EditorLas Vegas—There are a number of mistakes multi-housing companies should identify and try to avoid, particularly in today’s recessionary environment, according to Bill Nye, PhD, Bill Nye Training, who spoke at last week’s National Apartment Association Conference and Exposition in a session entitled, “The Dirty Dozen: 12 Mistakes You Can’t Afford to Make in a Tough Economy.”The first so-called mistake, identified as “Making a silk purse out of a pig’s ear,” is cutting your educational budget and expecting to reach your goals. Tough times require better-trained employees, noted Nye, an idea that resonated throughout the conference—whose theme this year was “Knowledge is Power.”Nye’s list also included, “Don’t let the tail wag the dog,” “Don’t keep a hunting dog if it won’t hunt,” and “Don’t let the inmates run the prison,” all of which discuss the importance of a good employee base. The first maintains that companies cannot allow strong employee personalities to dictate decisions and policies; the second rule states that every team member must bring something to the table, while the third demonstrates the importance of establishing core values that are both relevant and meaningful to employees.“A vacant position is less damaging than someone who isn’t doing what they are supposed to,” cautioned Nye. “Every minute you spend managing others’ behaviors, that’s time spent not managing your strategy and cash flow.” He added that a company can only have engaged and loyal customers if the employees are engaged and loyal. Otherwise, employees’ bad attitudes can tear an organization apart, he said.In terms of managing the property itself, Nye advised, “Don’t throw the baby out with the bath water.” In other words, maintenance dollars are far better spent on prevention rather than replacement parts.He also asserted, “If you show up late, you are going to miss the meal.” While the traditional thinking from a corporate level is to leave the sites alone during the first five days of the month, Nye explained that this is, in reality, the best time to visit the site to see how residents feel about your staff. It is also the best time to make critical strategy decisions.Technology-wise, said Nye, “Don’t put the cart before the horse.” While tracking traffic is important, he advised the industry not to depend on revenue management software and call centers to fix the problem entirely. Instead, teach your team “the key to Transition of Needs.” For example, he explained, rather than immediately asking prospects where they found your property, wait until you know what it is they are looking for and then inquire where they found you. This will ensure you are getting accurate tracking information, as the prospect will feel as though you have met his need first, Nye noted.From a marketing standpoint, Nye advised against “Throwing it against the wall and seeing if it sticks.” Because renters are now predominantly Generation X and Y, Baby Boomers and Traditionalist executives should no longer be dictating your marketing strategy. Instead, he said, “rely on people that understand what works today.”In general, it is “time to clean out your closet” and stop “the blind from leading the blind,” noted Nye. “Start measuring and evaluating in ways that will motivate today’s worker,” rather than relying on your grandfather’s business model, Nye asserted. Furthermore, build clarity within your organization and define what sets you apart from your competition.The final two mistakes to avoid, according to Nye, are “ not seeing the trees for the forest” and “keeping any dirty little secrets.” In today’s down market, many companies are providing concessions on all available inventory, but, said Nye, “ we are in a one-on-one business.” That being said, concessions should be placed on only select units at one time. Then, once these apartments are leased, concessions can be made on additional units. Additionally, Nye noted, “we need our team to focus on financial goals, and yet we don’t share any financial information with them.” The key to operational success, he said, is to share this information with on-site staff, allowing them to see the route to their destination.