No-Fault Policy

Drive-Home Thought for Today:

About 10 years ago, one of my first clients, and later, a great friend, teacher, mentor, and partner – taught me a great lesson. I was just out of school, Redstone was in its first months of operations, and we were working on a significant turnaround and renovation plan for his struggling student housing asset. It was the middle of the great recession, and we had just been hired to change things quick – this was our big chance! Before long, we were missing deadlines, budgets, and the anticipated leasing/revenue response to our capital expenditures was underwhelming relative to what we had hoped for. At our weekly meeting, we reviewed the progress. When he pressed into the details, we had many great reasons for why things weren’t moving along. “It’s the market!”, exclaimed the leasing manager, “Those students just aren’t willing to pay in today’s environment.” I piped in, “These vendors and contractors suck, I just can’t believe it.” And we went on and on.

He waved his hand and said something I’ll never forget. “Team, I have what we call a no-fault policy. I just want to learn what we need to do to get back on track – I’m not interested in whose fault it is. Let’s learn the lessons we need to learn, make corrections, finish the project, and move on to bigger and better challenges.” He then proceeded to ask questions, in a sincere, neutral, and curious way, on what the real challenges were. At that point, team members felt safe to offer up ways on how they would do it better next time, lessons learned, and glaring mistakes that they had made along the way. At the end of the summer, we had hit our targets - projects got done on time, we hit our "stretch" rent-roll number, and put the property on path to a 20% NOI jump within a few crucial months.

In any organization, people have two jobs: (1) Do the actual work. (2) Convince their supervisor, boss, or whoever else that they are doing a great job at #1. In a bureaucracy, Job #2 takes up 90% of time and resources – both time and emotional/mental resources. You can see this almost immediately. Maybe it's our tribe mentality - worrying more about the pecking order within the organization, than the standing and progress of the team in general. In a thriving organization, people don’t worry about who gets the credit or the blame, and the focus remains on doing good work. How do you want your people spending their precious time and energy?

Now, this does not mean that the same mistakes repeated over and over are tolerated. It isn’t a carte blanche to screw things up forever. Maybe that's what we fear as managers. Failure may be accepted when coupled with dogged perseverance and best efforts, but incompetence cannot be. However, creating psychological safety within teams and companies allows for learning curves to play out, and levels of feedback, bluntness and candor that make it readily apparent when people are falling short - but makes it clear that they have the clear support and resources they need to make things better.

Best of luck to everyone as we get to the home stretch for leasing and renovations this summer!