The sustainable company: How to grow a business 5X and keep full operational control

JLL has been in business for 250 years. How has the company persevered that long, weathering storms and taking advantage of opportunities to sustain itself and become the organization it is today?

Here’s a view from my own perspective. I joined JLL as CEO in September 2004, handing the position on to my successor, Christian Ulbrich, in October 2016. In 2004, we were a company with $1.2 billion in revenue and 19,000 employees in 100 markets and 35 countries internationally. By 2016, we had grown into an integrated global company with over $6 billion in revenue and more than 70,000 employees in 280 corporate offices and 80 countries.

Growth on that scale requires significant changes in operational approach, so how did we grow five-fold without losing operational control, particularly through the period punctuated by the “Great Financial Crisis”?

Looking back, I identify six success factors.

1.    Set and pursue a consistent growth strategy. Support the strategy with a set of measurable growth priorities to guide the way. In 2005, we created what was known as the “G5,” identifying five global priorities for areas of our business where we saw the greatest potential for profitable growth. Then set a target: aggressive but attainable financial objectives. In 2012, we developed our “2020 strategy for focused growth,” a set of internal revenue and profit goals, building on our G5 approach to take us to the end of the decade.

Within this framework, flexibility is also needed to keep products and services tailored for changing customer demands. Our markets have evolved massively over 250 years, and only constant innovation and evolution have kept us relevant.

2.    Combine organic growth with rigorous M&A. Develop a culture of growth that gives the company the license, encouragement and funds to support both organic growth and mergers and acquisitions. Growing organically is generally lower risk, and, compounded over a long period, is a powerful engine. M&A allows for extra growth and is an effective method to add capabilities and coverage, but carries greater risk.

Our approach to M&A has been consistent over the years. Since 2004, we have closed more than 100 strategic acquisitions with total valuation of over $3 billion. In each case, we acquired selectively and conducted rigorous due diligence, examining strategic, cultural and client fit, as well as finances and operating risk. We maintained pricing discipline while focusing on high-profit, high-margin opportunities. We also minimized operational overlap that can destroy value. And we planned and managed integration with great care. This last step is key: When acquisitions look good on paper but fail in practice, poor integration is usually the culprit.

3.    Adopt and protect financial safety by reinforcing a strong balance sheet. This allows a company to fund rapid growth in good times and weather economic downturns, emerging with strength while competitors struggle. Strong companies seize opportunities to reinforce their financial position – issuing debt into attractive markets, expanding a credit facility at improved pricing and regularly extending its maturity. Keeping debt within self-imposed limits, while continuing to grow via acquisitions and organic investments is also important. Remaining focused on generating solid free cash flow from the business allows the company to maintain a low leverage profile and reinforces investment grade ratings.

4.    Establish and maintain strong governance.  Good governance improves productivity and protects the company from expensive, self-inflicted wounds. The groups in a company’s business support network – Legal, HR, Professional Standards, IT, Finance, Risk Management, Internal Audit – work to build and adapt systems to protect the company financially and legally. Strong companies build significant knowledge-management systems and robust tracking and training capabilities to manage enterprise risks in complex global organizations.

At the same time, it is vital to find the right balance between centralized control, which helps keep the company working as one efficient firm, and decentralized operations, which encourage innovation and entrepreneurship. All this while accommodating the disparate needs of different working styles in diverse geographies.

5.    Build a strong and differentiated brand. A corporate brand is far more than a company logo or color palette, and far more valuable. A strong, uniform global brand with the right brand attributes creates value by stating what the company stands for, how it expresses itself and how it interacts with clients, employees and other stakeholders. It allows people around the world to recognize the company instantly, drives increased sales and builds trust with clients. And the brand helps the company with a key priority: attracting talented people.

6.    Focus on culture and values, and the superior people they attract. Companies which endure and prosper over a long period tend to have strong culture and values. A company’s culture changes with time. For example, thirty years ago, few organizations actively embraced diversity and inclusion in their culture. Now the most successful companies embrace diversity as both a cultural necessity and a strategic priority.

But while culture evolves, values remain constant. Our bedrock principles – teamwork, excellence and ethics – guide the company in all we do. They are easy, even obvious, to state, but demand constant reinforcement. How do you promote teamwork across a global organization? How do you focus tens of thousands of employees on excellence? How do you transplant the highest ethical standards to all economies? The key is constant attention and reinforcement: rewarding the best while removing the unacceptable.

Companies with strong cultures and values typically attact the best people. However, hiring, motivating, retaining and promoting superior talent demand more: from creating superior training and career development systems, to developing outstanding performance management and skill development programs. Attracting the best also means gaining access to the full talent pool by identifying diversity and inclusion as strategic priorities.

As new generations enter the workplace, new demands emerge. Flexible working, career mobility, attention to environmental issues and inspiring work spaces can be just as important as starting salaries to younger employees.

These six priorities interact to build and continually grow a strong company, a business that is sustainable in the broadest sense of that term. Prospering over the long term means successfully creating and driving commercial opportunities, while managing all shapes of risk: financial, operational, ethical, legal, environmental and social. Companies who succeed are prized by customers, shareholders and employees. The goal is to build for the next 250 years!