Episode 30: Building a Best-in-Class Team
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Ryan Swehla:
Stunning colleagues. Obviously from the outside it's like, well, yeah, I want to be around people that are great. Well, the downside is you're around people that are exceptional and it requires all of us to increase our A game. If you don't have the right mindset going into that, that can be really challenging.
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Ryan Swehla:
Today, we decided to talk a little bit about our mentoring environment and how we create an environment in our company that encourages mentorship, encourages growth, and encourages people to become their best professional self.
Joe Muratore:
Yeah. We're looking for something that ultimately fosters trust. There's this idea that business runs on the rails of trust, and that many workers in America spend something like half their day thinking about their jobs and half their day thinking about the politics of the organization, their career plans, their Facebook page, whatever. If we can do things that create an environment of trust that fosters growth, then we'll have our team spending less time worrying about their next steps in their careers and more time worrying about the tasks at hand and the mission of the company.
Ryan Swehla:
I think that relates back to a foundational book for us, Radical Candor, which speaks to this idea that the best thing that you can do for someone is to be completely candid with them. A couple things. Number one, it comes from a place of trust, a place of encouragement, but it also doesn't allow for sugar coating or being timid about how we feel, because doing that at the end of the day is a disservice to the person, to the individual.
Joe Muratore:
Recently I've been treating it as putting things on the table. I like this metaphor. When I'm talking to a team member or talking to a group, I'll say something like, "All right, this is a little awkward. This fits our core values, but I need to put something on the table." What that does is that takes out the attack portion of it. It's not like, "Hey, you're not doing this right and I'm not happy." It's, "I have this feeling that this isn't going right. Let me set this on the table. Let's look at it and talk about it."
Joe Muratore:
It's almost like a scientific process. And now we're not looking at the person and saying, "You screwed up," which may or may not be the case, because I may have screwed up. We're taking the issue at hand, setting it on the table as a group, and talking about it. That's a little bit less confrontational.
Ryan Swehla:
It's from a mindset of kind of continuous improvement versus a chop your head off, you screwed up, because we are a growing company. For us to think that we're going to do everything right all the time, 100% of the time, is naive. I remember recently we had a call with a lender and I felt like it didn't go the way that... Let's say we didn't give our best performance. To the same analogy, it's this idea that you put it out on the table right after the call.
Ryan Swehla:
We had a call, all of us in the team were on that call, and talked about it, talked about what we could do better, where we go from there. When it comes from an environment of candor, combined with trust and competence, it's a very effective way to move forward.
Joe Muratore:
I think our culture pillars are crucial to this. We had another issue a few weeks ago. I can't remember the issue, but at the moment, I felt like this is really important. What was important is we set the issue on the table and we said, "Hey." I led with our culture pillars say that when we have an issue, we're going to put it out that. We're not going to write negative emails. We're not going to talk behind someone's back. We're just going to call the parties to the table.
Joe Muratore:
This was on the phone, so the table was a metaphor, but set the issue on the table and talk about it. It was an extremely productive meeting and solved the issue pretty quickly.
Ryan Swehla:
I think of our core values, extreme ownership, honesty and integrity, excellence in execution, and then the one that's...
Joe Muratore:
Positive, caring, and humble.
Ryan Swehla:
The one that's kind of a sleeper is positive, caring, and humble. Because being in a real estate environment, being in a finance environment, it's very easy to have high egos. But nothing takes away trust more than the sense that someone is working their agenda and their plan and is moving people out of the way to work their agenda. That works not only as the, by the way, the deliverer, but the receiver. We have a partnership that's been in existence for 13 years, and we've been friends for 35 years.
Ryan Swehla:
Without that ability to receive feedback in a humble, self-reflective way, it doesn't go very far, a partnership doesn't go very far. Certainly that culture within our company runs the same way.
Joe Muratore:
I often think that the most powerful stance is an open-handed stance. If you're in a fighting position, if you're playing defense, you're at risk for hubris. You're at risk for making ego-driven decisions. You can ruin things that way. But to be positive, caring, and humble, it's a tight balance. We often talk about the both and. On the one hand, you have to be confident enough to execute with tens of millions of dollars on a plan you believe in.
Joe Muratore:
On the other hand, you have to be open-handed and open to criticism from the market, from your teammates, from wherever. You have to make those two things happen together, and then you have to make decisions. To have an environment that supports to those things, both and, is core to who we are and to where we've gotten so far.
Ryan Swehla:
One of the things that we strive for borrowing from the Netflix culture is stunning colleagues. Well, there's a good and a bad to that. It's all good in the end, but stunning colleagues, obviously from the outside it's like, "Well, yeah, I want to be around people that are great." Well, the downside is you're around people that are exceptional and it requires all of us to increase our A game. If you don't have the right mindset going into that, that can be really challenging.
Joe Muratore:
What about you as a leader though? What about you as a co-CEO? What happens when the talent grows around you? How have you handled that?
Ryan Swehla:
Yeah. It's beautiful. It's beautiful, because I think one thing that we've learned as we bring on more and more exceptional talent is there is so much that I don't know. People who operate as though they're the CEO, because they are the keeper of the knowledge, don't get very far. They end up being the pie maker. They're the ones that know the recipe really well, and that's great. You keep making pies, but you're going to become an owner of a company or an entrepreneur unless you move beyond thinking that you have the knowledge.
Ryan Swehla:
I've actually found it really rewarding when people come into our organization and there are gems of knowledge, wisdom, experience that we didn't even expect.
Joe Muratore:
When we started this podcast you a year or so ago, I think we were 16 or 17 people. Today we're at 42. We've seen rapid growth. We have five people with the title of vice president now. All of them have... Well, most of them have 20 plus years of experience and all of them have more than 15 years of experience. All of them have been exceptional at other companies. It's a radically different environment than when we started.
Joe Muratore:
Personally, I feel like I'm doing the best work of my life, in that I've had to sort of raise my game to hang with this group. But at the same time, the joy has been in the hand-offs. The joy has been in the... We want people to come here at our company and do the best work of their entire lives. People have a career arc and we want them to arc here. We have people of all different ages who [crosstalk 00:08:53] They're arcing here. They're excited about it and we're excited about it. In many ways, I find my job to be a cheerleader and supporter and more of a coach.
Joe Muratore:
It's not, "Hey, guys, let's do this." It's, "Hey, tell me what you're thinking. Why are you thinking that? What's your strategy here? What are you worried about?" And if you start with that sort of coaching conversational environment, it gets to better decisions, and you're not trying to tell A players how to do a great job. You're trying to find little blind spots for them and they appreciate it.
Ryan Swehla:
Kind of back to creating a mentoring environment, we're leaving opportunity on the table if we don't have an environment where it is easy to tap the knowledge of these exceptional people. We all have wisdom in our areas. And if you don't have an environment that allows the latitude for people to reach out and say, "How did you do this? How did you handle that?" I think that's really important. Part of it is creating a physical environment that fosters that mentoring.
Ryan Swehla:
We have level 10 meetings on a weekly basis, and this is an opportunity for people of all, I guess, ranks within the company to be together and be able to talk about issues, talk about concerns, and be able to bring that forum out. The other thing that we have is a very robust internship program. A kind of secret sauce about an internship program is certainly, hey, I've got interns. They can do the filing and that sort of thing.
Ryan Swehla:
But by regularly have having interns and regularly having people that are fresh out of college, that have very little work experience in the work environment, it kind of creates an environment where by default, by necessity, we are in a mentoring mind frame at all times.
Joe Muratore:
We see that as part of our mission, not just like, "We got these young people we got to do something with." Part of our give back is that we are going to honor these young people and we are going to bring them into our culture. We're going to put time into them. Some of them have stayed. Some of them have moved on. Some of them were in the middle of college. We see that as like great. We played a part in their lives, in their world, and they're going to go back into the world and make it a better place.
Ryan Swehla:
One of the other things that we do to help foster that mentoring environment is cross-functional job shadowing. We're officially starting the program in a more formal way this month actually. But the idea is that we have finance and accounting part of the organization and we have the operations part of the organization, the property management, asset management. In many organizations, those are very siloed. As we grow, we have to consciously figure out ways for those two not to silo in an ineffective way.
Ryan Swehla:
Part of how we're doing that is making sure that every person in operations spends a day in accounting and understands the various roles and aspects within the finance department and vice versa. The finance people are out at the property receiving rents or meeting with a vendor alongside an operations person so that they get a better sense of the properties and the operations side of things.
Joe Muratore:
I think there's an idea at our company too, which is the idea of mentoring up. We're a small enough size, maybe this will be more difficult as we get larger, but mentoring up happens when team members come here and change the organization in a little bit. I think that each person who endeavors to have a career in business or someplace like our company has in their heart some way that they... Something they've really wanted to do. Most people who come here have been at a few companies before.
Joe Muratore:
They saw things that went great or didn't go so great. What I encourage people to do, and I think our culture encourages, is to ask them, how are you going to make your market this company? Some people ask us, "What's the great state away?" And the answer is, well, we've got some culture pillars. Here's how we've done it so far. But we are big believers in what got us to here won't get us to there.
Joe Muratore:
And to get to there, we need bright people like you who are willing to come and honor us with the gift of your goals in life, your knowledge, what you've learned, and whether that's in accounts receivable or asset management or portfolio management, or whatever, rent collection. Come here and help us create that thing which hasn't been created yet. Lead that charge within the company. We'll treat that as this precious thing. I think that in a way like we mentor down, but the greatest honor we get is when people mentor up.
Joe Muratore:
Even if they're in the middle of the organization or bottom end of the organization, that they're going to come and punch above their weight. That they're going to bring ideas, and they're going to lead those. They're going to be vulnerable. That is the greatest gift that team members can bring to our company, and I think that we've done really well by honoring that gift from them.
Ryan Swehla:
I think one of the most rewarding parts of the stage of business that we're in also is that we're able to blend our business and our desire to improve the community that we live in. One of the examples that is very near and dear to us is the Graceada Scholar program. Where on the one hand potentially we're bringing a pipeline of strong candidates that may decide to work for our organization.
Ryan Swehla:
But when you really get down to the why, we live in the Central Valley, improving the overall status of the Central Valley is really important to us. This is a way to kind of touch on both of those. If you could maybe talk a little bit about the program and how it came about.
Joe Muratore:
Sure. Well, I was in Florida on vacation, and I was staying at the Rosen Shingle Creek Hotel. Being the entrepreneur type that I am, I looked up Ken Rose.
Ryan Swehla:
No, Harris Rosen.
Joe Muratore:
Harris Rosen. Yeah, Harris Rosen. Anyhow, Harris Rosen developed this program where he sponsored a specific neighborhood within Orlando. Harris Rosen, by the way, has got an incredible story and I encourage you to look him up, but sponsored this one neighborhood and ultimately paid for 250 kids to go through college. I ended up meeting him in the locker room at the hotel. This guy is now the largest independent hotel owner in the State of Florida. I think he owns 6% of the hotel rooms. But it's funny, I was talking to him about business.
Joe Muratore:
But once I asked him about this program, he just lit up and maybe talked for or 20 minutes about it. Anyhow, it was great. We came back and we talked about it. We said, "Look, we've got a neighborhood in town here, the airport neighborhood, and what a great neighborhood, but there's a lot of undocumented people. There's a lot of poverty there, but there's a lot of heart in that neighborhood. They have an outstanding little league team. Their PTA is like super robust at the school. There's a lot of heart there. How can we support that neighborhood?"
Joe Muratore:
We had our first Graceada Scholar happen this year. This young man, despite having a pretty challenging upbringing, played four years of sports, took multiple AP classes, got accepted to Fresno State for mechanical engineering. And at the time we met him, was driving five days a week to Fresno an hour and a half each way, and working at Johnny Carino's as a waiter or a busboy or something to make it all happen. Now he has a paid for apartment. He has paid for schooling, and it's been a joy.
Ryan Swehla:
Fortunately, we'll be able to have him, if he so chooses, work in the office during the summers as an intern, as a paid intern. That's where bringing together our desire to do better in the community and our business is so rewarding, because it allows us to do things that simultaneously improve the community and help make our business a better business.
Joe Muratore:
Let's bring it back to a close here, Ryan. Let me ask what role mentorship has played in your life.
Ryan Swehla:
Mentorship has been tremendous in my life. I can think of so many people and circumstances that were pivotal in how my professional and, frankly, personal environment grew. I would just say that, like you mentioned earlier, speaking about our business coming with an open mind frame instead of a closed mind frame is so critical. There are so many people with wisdom, with experience, with perception that are ready and willing to provide that to people that are listening.
Ryan Swehla:
My hope is that in our work environment, we're creating that same environment where people can say, "Hey, I need guidance. I need help." It's an environment where they can feel comfortable doing that because that has been so influential for my professional career. What about you?
Joe Muratore:
I'll take it a different direction and to say one of my favorite quotes is from Charlie Munger who says, "Make friends with the eminent dead," and by that he means read frequently. I often tell my kids when we walk in the library, there are thousands and thousands of books her, and they are all calling out to you. Somebody took months or years of their life to write their life's work on a piece of paper and you can read it and learn from it. At the moment I think of Trammell Crow and his biography. I believe it's Master Builder or something like that.
Joe Muratore:
I loved who he was as a person, his background, how he built his company, his relationship with his wife, his dedication to his family. I liked the way he built partnerships all over the country, that there was this network of respect and hard work. But the kind of culture he put into his company inspires me to want to build a company like that. He built it for... Of course, I'm just reading the book. But as I interpret the book, it came from a place of love and joy, not a place of tight-fistedness or just desire for absolute wealth, but just a pure expression...
Joe Muratore:
A mostly pure expression of creativity and joy. I hope to harness that in our company too, and I think our friendship is a core piece of that. I think that you've been a great... I've enjoyed learning from you.
Ryan Swehla:
Yeah, same here.
Joe Muratore:
At this point, I see the next 30 years as an expression of creativity and joy, and I look forward to making the world a better place.
Ryan Swehla:
You can't manufacture that. I mean, at the end of the day, to create an environment where people are their best self, where people are at the highest part of their career arc, to use what you mentioned earlier, that can only come from a place of joy and desire for great things. It can't come from an environment that is authoritarian or anything like that.
Ryan Swehla:
I think honestly, as we look forward, I think we're going to see an even more blossoming work environment, even more blossoming exceptionalism in the talent that we have. The best thing that we can do is foster that and let it be what it becomes.
Announcer:
Thank you for listening to Durable Value, an investor's podcast, where we demystify commercial estate with safe, sound investment strategies to help you balance your portfolio. If you enjoyed this podcast, be sure to rate it on iTunes or wherever you get your podcasts. To learn more, visit graceadespartners.com, where you'll find more information, investor's tools, case studies, and more. This podcast is hosted by Joe Muratore and Ryan Swehla. It's produced, edited and, mixed by Melodic, with intro music by Ian Post. Thanks again for listening and we'll see you next time.
Joe and Ryan share how they've built a team that challenges them daily.
In this episode:
How to create an environment that fosters mentorship.
Being realistic about one’s own shortcomings
Why we keep our core values at the forefront of decision-making
Why we pursue “stunning colleagues” that challenge one another
How to foster continued learning
How approaching internship programs can create a talent funnel
What cross-functional shadowing is and how we’re employing it
What “mentoring up” means
Why it’s important to blend business and community goals
Reflecting on how mentorship affected our outlook