Given Prologis’ longstanding pre-eminence in the industrial real estate sector, it’s understandable to lose sight of the fact that as the Great Recession set in, the company was on the ropes—the third-worst performer in the S&P 500 at that time, in fact. Walt Rakowich, newly promoted to the CEO chair, had to let one-third of Prologis’ workforce go. On this week’s Walker Webcast, Rakowich recalled that a bankruptcy filing was a serious possibility for the company.
Instead, Rakowich led Prologis back from the brink, largely by establishing a culture of transparency at a fast-growing organization where senior executives had often been at odds with one another in recent years. Along the way, he formulated principles of leadership that he has espoused both as a speaker and as author of the recent Transfluence: How to Lead with Transformative Influence in Today's Climates of Change.
In these climates of change, the old-style, my-way-or-the-highway model of leading a company won’t cut it. “Command and control is out,” Rakowich said on the webcast. “It doesn’t work anymore.”
What does work, he said, is leadership that is empathetic, that lifts others up and that conveys a sense of meaning and purpose to the organization. However, part of the process of establishing that style of leadership is acknowledging that you don’t know everything.
That’s a hard pill for a CEO to swallow. According to conventional wisdom, “leaders are supposed to have all of the right answers,” said Rakowich.
In fact, vulnerability is the most uncomfortable state for a leader, he said—but it can be a powerful tool for transformation, as it invites other team members to let their guard down. He added that too few leaders see it that way.
“Real humility takes courage,” Rakowich told Walker & Dunlop CEO Willy Walker. “It’s not about being weak, but about acknowledging that you have weaknesses.”
If vulnerability is the least compatible state for leaders, then the deepest pitfalls for them are “pride and fear,” said Rakowich. He recalled that a great deal of the collective decision-making at Prologis prior to the Great Recession was driven by one or the other of these qualities: on the one hand, a belief that the company could do no wrong in its acquisition choices, and on the other, a fear of losing its competitive position.
Fear, Rakowich said, focuses on the future. However, so does faith that the outcome will be positive. “The antidote to fear is faith, and it’s only a thought away,” he said.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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