Make adjustments
Glimcher knew it was going to take more than a good attitude and some elbow grease to erase his company’s debt. But as he pondered the big decisions that would have the most impact, he still wanted to show employees that their effort mattered.
So he began looking at the incentive program that was in place to help properties keep their tenants.
“We had an incentive program in place where if you renewed someone, say The Gap was in your mall and you got them to stay, you got a one-time commission,” Glimcher says. “If they were already there, the idea was it’s not that hard to renew someone. If no one was there and you got a new store to go in there, you got two times that amount of money. We put a higher value on new production versus keeping what we had. It was perceived to be a lot easier to keep what you had.”
But in the midst of a challenging economy that played a large role in the company’s debt predicament, Glimcher decided it was time to tweak this incentive program.
“In an environment where things were really tough, just keeping what you had was a big deal,” Glimcher says. “So we actually went in and we altered our compensation method. We said, you know what, renewing a deal is as valuable as getting a new deal. We’re going to pay the same amount for both. We knew No. 1, we wanted to keep the good salespeople working here. And No. 2, keeping the revenue we had was every bit as valuable. And frankly, that was what could be done in the environment.”
You need to take every opportunity in a stressful situation to show your people that you’re all marching toward the same goal. In your case, you need to show people that you are aware of any unique challenges they might be facing as they try to do their jobs.
“Do the goals of your incentive program match the goals of the organization?” Glimcher says. “If they do, it will probably work for you. If they are incongruent, they probably won’t work for you. We woke up one day and said, ‘You know what, the goals we set were fine for before. But they’re not fine for right now.’ As things get back to normal, it will probably go back. I think everybody respects that.”
The good news at Glimcher Realty Trust is that no mall properties had to be sold to erase the big debt. Revenue dropped to $275 million in 2010, but joint venture partnerships were arranged and a total of $300 million of equity was raised.
One of the biggest deals involved a joint venture purchase of Pearlridge Center in Hawaii.
“We’re going to be an 80/20 partner,” Glimcher says. “They’ll own 80 percent of it. We’ll own 20 percent, and we’ll operate the asset. Good things can come out of tough times. Now we’re growing with a partner when really we were contracting by bringing them into an asset. That worked out really nicely.”
Glimcher says the key in any tough situation is to keep your cool.
“When you’ve panicked in the past, has that been an effective mechanism for you?” Glimcher says. “If you yell at someone, are they going to feel good and want to do something for you? Ore are they going to feel kind of down and think you’re a jerk? People who are treated nicely usually wind up doing better things. If I thought people were going to be a lot happier and we were going to make a lot more money because I could go around yelling at everybody, maybe I’d start doing that. I don’t believe that’s true.”
How to reach: Glimcher Realty Trust, (614) 621-9000 or www.glimcher.com
