Get strategic
When figuring out where they want to go and what they want their business to stand for, a lot of leaders undertake a three- or five-year strategic plan. Lewis doubles the effort.
Depending on your situation, you might think that it is far too difficult to gain an accurate picture of where you want your business to stand in 2020, but the longer you can project into the future, the more you can look past short-term fluctuations in your market, talent availability and other factors. Looking a decade into the future allows you to truly spin the altimeter and look at things from a 30,000-foot level.
“It gives you a much bigger ability to focus on what you want to be and what you want to look like,” Lewis says. “There will still certainly be changes in conditions during the time of your plan, but a period of 10 years gives you a long enough period to transcend short-term conditions, whether they be an economic slowdown in your industry or challenges in getting resources and people over a short period of time.”
Whether you want to try and project 10 years into the future or think three or five years is plenty, the need for a well-defined strategic plan is universal in the world of business. Your strategic plan gives employees and management an instruction manual for how to carry out th
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vision and mission of the company and a series of goals that define success.
At Realty Income, Lewis and his team have committed people and resources from inside and outside the organization to building the strategic plan. Since the 1994 public stock offering, Realty Income has gone through a major strategic planning process three times.
“The process is basically to bring in an outsider who facilitates this, spending a number of months talking about the process you’re going to go through, letting people talk about the key questions they have, then getting together off-site with this group to really take a look at the company’s current mission,” Lewis says. “You take a look at the company’s performance toward the mission and then decide whether to recommit to that mission or if there might be something else you need to be doing.”
The rigorous self-analysis includes taking a look at where your company stands financially, its customers, the area it serves, its talent base, recruiting practices and other factors critical to a business’ success.
“It’s really to look at the business and do the so-called SWOT analysis: strengths, weaknesses, opportunities and threats,” Lewis says. “If we could pick exactly what we want to be 10 years from now, what would that picture look like? You get a clear picture of that, and then a clear picture of what it would take to get there. We come up with every possible idea that we can in order to paint that picture of what we want to be in 10 years, and then we kind of work backward from there.”
Lewis says you should ask yourself some basic questions regarding the cultural change it would take to carry out your strategic plan, whether the plan overly ambitious or not ambitious enough, and — above all — can your company be the best at what you’re trying to accomplish?
“Can we do this without betting the farm, yet at the same time be bold enough not to fail?” Lewis says. “Then the big question is to identify the game changes in the industry and business that would allow you to achieve that picture.”
From there, you need to develop a means of implementing the plan. At Realty Income, Lewis recruits people from within the ranks to oversee specific initiatives tied to the strategic plan.
“I create silos outside of the normal operations of the company, and each represents these three or four initiatives,” Lewis says. “I bring people in from throughout the company who work outside of the normal organizational chart, and they work with the teams that are pursuing these initiatives. You have a function that separates the initial implementation of the plan from the regular constraints of the business, whether they are budgetary, hierarchical or people’s egos. Then you spend a lot of time on it. That’s my primary function.”
In strategic plan implementation, there is a time to recruit from within and a time to look outside for your leaders. There are advantages and disadvantages to each route. If you pull someone out of an existing position, you need to make sure you have a succession plan in place for that position. If you hire someone from the outside, that person needs to fill a need, whether it be a skill set or a new perspective.
“Any time you’re undertaking an activity in a manner that is dramatically different from what you’re doing right now, if you don’t already have people who can transcend that knowledge, you need to go outside,” Lewis says.
“I’ve often heard it said that people who come up in a business, they develop very great strengths. Then when they become an executive, their greatest strengths often become their greatest weaknesses. So it’s identifying people in-house who can transcend those strengths and current thought processes to do what you need to do. If you don’t have them inside, you need go outside.”
Developing the mission and vision, then developing a strategic plan to carry it out, and finding the people who can make it happen. It’s the inside workings of a company that a 75-year-old retired schoolteacher in Iowa never sees. But in the case of Realty Income, it ensures that she and all of the investors like her keep getting their dividend checks every month.
How to reach: Realty Income Corp., (760) 741-2111 or www.realtyincome.com