Prologue of “The Champion Way™”
By Champion in : Prologue, The Champion Way™ // Apr 27 2010
Prologue
It was the spring of 1999 in Scottsdale, Arizona. I had not been happy for some time with my role in assisting the development of three large lifestyle entertainment shopping centers, one of which had been built in Florida, the others in the planning stages for Arizona and Southern California. Simply put – I was not happy. I was not able to verbalize why, but came to two conclusions. The first conclusion was that I wanted to be in the real estate development business in Arizona. The second was that I wanted to do it in a manner very different than anything I had been exposed to in the past.
Fast forwarding, this book is a result of the journey [with my family] that I have taken since the spring of 1999. It is a book that outlines the basic precepts of how we have built an interesting and fun real estate development company that endures for the benefit of all its stakeholders. To this date, we have far exceeded my expectations and my dreams. The book itself is a series of monographs, each of which deals with a different community of people with whom we work. In later chapters, we discuss the relationships we have with our sellers, tenants of our shopping centers and office buildings, buyers of our condominiums, municipal staff and politicians, equity partners, banks and other financial institutions that provide acquisition, development and construction lending to us, our consultants, (architectural, engineering and other specialized consultants), our construction contractors and those who might purchase our investment properties when completed.
How did I get to today? Born in Edmonton, Alberta, Canada, my parents raised me to standards that have stood me in good stead throughout. Without question, there were many times that I now know I did not meet those standards. In fact, I believe that even in the practice of law in Canada, there were times when my mother questioned the reputation that she felt I was attaining which, to be kind to me, was a reputation of being hard-nosed and unwilling to change – but one that was known to get the deals done. My practice was a real estate practice. I will discuss that in a little while.
Recently visiting my ninety-six year old uncle in Seattle, and in conversation with him, I also realized that a nurturing force in my life was the fact that his father, my grandfather, lived in our home until the year of my Bar Mitzvah. Only now do I realize the depth of his impact on me. I was explaining to Uncle Jack that the core ideology of Champion includes the word ‘Respect’ and the word ‘Dignity’. While no doubt that was taught to me by my parents, as time went on more and more I realized that it was taught to them by my grandfather and that it has now been ingrained in all of us. My grandfather was in the wholesale grocery business in Alberta. Throughout the small towns of Alberta he was known as someone who would help anyone in need. If an owner of a small store in Vegreville, could not pay his bill, he would still make the next shipment… and the next… and the next. At the end of the day he might not have been paid, but he did everything he could to help that store keeper earn a living for his family.
My mother Lottie and my father Irving did exactly the same. Their community and charitable work in Edmonton is legendary. They left a legacy, when coupled with the work of our widespread family and friends, [delivering to us or creating in us] a never-ending set of goals and expectations.
I started my professional life with the benefit of the doubt that because my last name was Lyons and my mother’s last name was Newhouse, that I would be respectful and dignified. In the early days of my career as a lawyer, I am not sure that was always the case. What I am sure of is that today, if my mother, father and grandfather could see the workings of Champion, they would be more proud of me now than they ever have been before.
Part of growing up in my family was the understanding from the day you were born that you would attend university. There was never a doubt. There was also not very much doubt that you would be in one of the professional schools. My mathematic skills were not good, thus engineering was cut out. I could not draw a crooked line if I needed to – therefore architecture wouldn’t work. The sight of blood made me faint so that solved the problem of being a doctor or a dentist. I was not born as a member of the first nations and therefore I couldn’t be an Indian chief. — I graduated from law school.
In the third year of law school I was very fortunate to have a choice of firms to work in. One of the best decisions I ever made was choosing the firm now known as Witten. The senior partner at that time, later, the Honorable Mr. Justice Tevie Miller, came from a family where the same basic principles were part of their everyday life. The same was the case of the other four lawyers in the firm. I was the sixth. The choice of the Witten Law Firm over a period of years catapulted my career. I was largely assigned to work with a real estate lawyer known as one of the ten best real estate lawyers in the country. Danny Pekarsky entrusted me with matters at a very early stage. Danny made the decision a few years into my practice, to leave the practice of law and to move to British Columbia to become the Chief Executive Officer of one of our client’s public companies. At first I was scared, and concerned, maybe even devastated. But he walked me through the process. He left to me a real estate practice that most lawyers would do almost anything to obtain. For that I am forever grateful. He also gave me lots of advice on how to proceed. I hope that I followed most of his advice, but know that in one case I did not. I choose to prove that I could keep each and every of the clients and keep each and every one of them happy. There was one client who I was advised should not be kept as the time spent with that client would be much more difficult than I would ever imagine. Unfortunately I took that on as a challenge and did not take the advice. That really was the only sour note in the transition. The rest of the clients gave me enough rope to get into the program and, I hope, were satisfied with the work that was done. The law firm grew in that timeframe allowing me to also grow the process. The practice was extremely fulfilling but, about ten years into the practice I was not happy.
Susie and I were married in 1971 and in 1982, had two children Alisa and Adam. We were living in a lovely home, but I was working – yes I probably fell into the definition of a workaholic. I did love what I was doing in the practice of law, but didn’t love the business of the practice of law. After one grueling six-month often twenty-four hour day file, which was successfully completed, I came home and asked Susie if we could start a conversation about my leaving the practice of law and potentially moving to the United States. We had no idea what we would do in the United States but, I knew that there had to be a change. With the love and support of my family, in August of 1983, we loaded the station wagon and started an eight-day drive from Edmonton to our vacation condominium in Scottsdale. While still in Alberta we went to see the dinosaurs in Drumheller, Alberta, which was something that the kids enjoyed at the beginning of a very long car ride. Then we stopped in Lethbridge, Alberta to see Susie’s grandmother, who the family might not see again for some time. Our travels took us through Yellowstone National Park, Zion National Park, the South Rim of the Grand Canyon down through Flagstaff and into Phoenix and Scottsdale.
We had decided that if something did not arise for me to do in Scottsdale within one year, we would turn the station wagon around, pack it up, and move back to Canada. There was an assumption that someone would give me a job. As it turned out I started my independent real estate career with partners in February, 1984. The only interlude which was not directly real estate development was a short period in the early 1990s when I made a decision to go back to Edmonton, take on a role in the law firm and assist in rain-making for the practice. That was a good experience but one that was not a fond memory for my family. I uprooted a fourteen-year-old son from his friends in Scottsdale and “abandoned” our daughter as a freshman on the way to Canada at Northern Arizona University in Flagstaff. While I do not regret the decision that I made [as I thought it was the best for my family and its security at that time] clearly, I do regret the decision as to how it affected my family at that time. Having the benefit or the burden of a legal background as well as several years in the development industry, I came to the conclusion in the spring of 1999 that something had to change. I did not know what it should be or how I should deal with it but, in June of 1999 I called a friend of mine in Chicago and asked if he would be in Scottsdale in the near future. We agreed to meet for dinner on September 3rd. Shelly Ginsburg was kind enough to listen to me and to the background of my current state of mind for an hour. After that he asked me what I wanted. I told him that I needed advice. He was quite clear that after having listened to me for an hour, I was going to get all the advice he could give me. After a few minutes though, he asked me what I really wanted. He pushed me to make a decision at that time. I hesitated. I wasn’t sure if I wanted a partner to start a new development company or I wanted to be an employee. He indicated that I did know and that he expected an answer. I said I wanted a new partner. He said – good decision. That was the beginning of Champion.
October 1, 1999 was the first official day that Champion did business. We started slowly but, within two years, had redeveloped a medical office building, built from the ground-up a 100,000 square foot shopping center in Las Vegas and had put our foot in the water with a high end residential renovation on the top of a mountain in Paradise Valley. The residential development was the first and the last that I will ever do. The other two developments were profitable but, more important, started to prove our track record. Our initial business plan was to insure that after two years the community acknowledged Champion had a track record to development and would be accepted by sellers, tenants, and the like as a reputable and sustainable development company.
In the spring of 2001, however, I was concerned that we were not moving aggressively enough. Our business plan had been to do added value shopping center developments. Added value development is typically the acquisition of shopping centers that were tired and in need of refurbishing and re-renting to create value increase. In that time frame in the Phoenix marketplace, those products were few and far between. I started looking for ground-up development. We were successful in going into several projects and, as of the date of writing of this prologue, have developed or are in development with a total of twenty-four projects having a total value of some Three Hundred Million Dollars.
But in the spring of 2001, I was concerned that I had the ability and the confidence to take the company further. I was fortunate to be introduced to a coaching program out of Toronto Canada – The Strategic Coach – which helped (maybe enabled) me with the tools, the coaching, and the encouragement to take Champion where it is today.
There are hundreds if not thousands of books that have been written about operating the business, small and large. Much of how Champion operates today is from the mixture of several concepts in a couple of dozen books that I have read over the last four or five years. We refer to this as The Champion Way™. The Champion Way™ has created The Champion Experience™, as well as a series of experiences and unique processes. Each of the monographs will go into depth as to each of the processes and each of the communities we serve.
Yes, I did say each of the communities we serve. I have been incredibly fortunate with the staffing of Champion. You will not hear anyone in Champion ever say “that is not good for Champion”. Everybody, understood before they came to Champion that the best way – no – the only way, for business to thrive is to focus on the other person, to constantly look to the needs, empathize with and embrace the requirements of the “you”. Of the many business books we spoke of a moment ago, many indicate that people must come first. The books are all correct. The trick is in the execution. The trick is in the level of permission granted to any superstar who comes to work in your company. The trick is trust. The execution is insuring that every employee cares, is committed, accepts that their journey in Champion will be one where they learn something new every day and embrace that concept, trust, are dignified and respectful. It is a two-way-street. They must care and we must care about them and we do.
Champion’s team is referred to as Partners in Advocacy. Champion consultants are referred to as Partners in Communication.
Many of the concepts in this book have been taken from the coaching of The Strategic Coach, books by, among others, Jim Collins, Patrick Lincioni, Marcus Buckingham, Tom Rath, and Steve Farber. Nothing in this book is intended to override or take any copyright or intellectual property claims. The Champion Way™ and The Champion Experience™ is a conglomeration of all of those writings, as well as other experiences I have had in my family, educational and business careers.
I often use the expression that I am happy to be wrong. That takes people back but this is what I’m saying. I am happy to be wrong because if somebody shows where we are doing something in a fashion that is not correct, I’ve learned something obviously I did not know the moment before. Because what I thought we were doing was being well done. There goes an opportunity to make a change.
Making changes makes us better. Making us better will make us more predictable, productive and profitable. This is a basic concept of Strategic Coach. We maintain these attributes by Leadership, Relationship and Creativity. We have thus learned to increase our packaging and proprietary assets. We have positioned ourselves to take on our greatest strengths.
Recently, we were in negotiations with a gentleman who was discussing the possibility of investing equity dollars into Champion’s projects. An interesting and temporarily upsetting interlude ensued. We were discussing the level of involvement our equity partners had in the projects. Because of the minority nature of that group’s investment, we had to find a way to insure that they would be informed, but at the same time, could not affect a project’s direction. As soon as I made a particular comment to him, I realized that he was concerned if not upset. I then realized why my misstatement would affect him and then realized how I had misspoken or, more importantly, a basic principle that I had not yet enunciated to them. There is a reason why no Champion team member will ever enunciate “that is not good for Champion”. The reason is because they do not think of Champion when making decisions. They think solely of the projects. We all recognize that whatever is best for the project is clearly best for Champion. Best for Champion is by no means defined as the most money for Champion because that will not always be the case. The best for Champion is and must be defined as how do we build and develop a responsible project in each circumstance for the needs of the community and of the tenants or condominium buyers. While that might not make the most money, ultimately it serves the needs of those three communities as well as the surrounding neighborhoods and, therefore, will be a successful project. A successful project is far more important than a highly profitable project. It is our experience that a successful project will be profitable.
The most important mistake that was made is doing business with people who did not say please and thank you, who were not dignified to or with you or anyone else and clearly were not respectful. We have learned that it is much easier to say “no thank you”.
I was involved in a classic case of a major project in the United States where the senior development team simply made a decision the project was good for the community, believed that they had the support of the municipal politicians but made a fatal flaw – as a team they ignored the wishes of the neighborhood and the community itself. The neighbors and the community could have been easily shown why the project in its presented form or in some modified form would be best for the community, but, instead of embracing the community, empathizing with the community and, if nothing else, talking nicely to the community, they were ignored or at worst, shunned. Needless to say – the project did not succeed. We intend never to allow that to happen inside Champion in the future.
It is very interesting that in the real estate development business, you can learn much from what most people would consider competitors. In the industrial manufacturing business, two companies are manufacturing competing products. I would imagine that there is little information shared between those companies to make each company better. But in the real estate development business, we all recognize that we cannot build all of the shopping centers. While market share is important in certain segments of the business, when you are building neighborhood centers, office condominium buildings and smaller office complexes, especially in a metropolitan area that is growing as does the Phoenix Valley of the Sun market over the last twenty-five years, there is lots of room for quality developers. We consider many of these developers our partners [in a non-legalistic way] and acquire real estate from them, co-develop different parts of contiguous property with them for different uses, and in some cases joint venture properties. Much is to be learned from our friends in the development community and to them I owe a large debt of gratitude.
The next chapters will talk about how we deal with (and have been lucky to be dealt with) by our various communities. We start in Chapter 1 with an overview of The Champion Experience™ and then go to our sellers, the people who own the property that we will ultimately develop. Their needs are very different than any one of our communities. Then we will go on to Team Champion and the other communities.
I do hope that in reading this book it is enjoyable, that an idea is gleaned from this book that will help you in your endeavors. Thank you for taking the time to read it.
Almost everywhere you go today, entrepreneurs talk about their people and how they are very important to them. That is certainly true. Unfortunately research has shown (“Buckingham”) that only two out of ten people working in America today are happy with their jobs. So much for the talk. I truly believe that if you ask every person working on Team Champion as of the writing of this book if they were happy with their jobs, happy with what they do on a day-to-day basis, happy to come to work, they would say yes. No one expects to be doing exactly what they want in any job 100 percent of their day. For sure I do not. But we strive to insure that eighty percent of everyone’s work week is doing what makes them feel strong, what makes them that which Dan Sullivan from The Strategic Coach calls within their “Unique Ability”. Dan defines unique ability as an activity for which you have superior ability, have great passion, are energized by and energize others, and, I believe he would say most importantly, allows you to be in a process of never-ending learning. These concepts are discussed weekly in Champion’s culture meetings. We may speak to them in different ways including insuring that for the vast majority of everyone’s day, they are doing activities that make them feel strong. Everyone at Champion has permission to ask to be relieved of various responsibilities that do not make them feel strong. To take on other activities that the company needs that will make them feel strong. To date, I do not believe there has been a request for a change that has not been affected.
In one interview, a person that my daughter recommended we hire, I found myself saying the following: “There are really only two things in relation to Champion that I want for you. The first is that you have no other jobs so your career other than at Champion, and second, is that you are happy in your job.” Frankly I didn’t realize how important those two items are. But I truly believe that to be the case. Have people left Champion? Yes. But for only two reasons. The first reason is in a single case where I simply made an error in the strengths of the person related to the needs of Champion. It simply was not a good match and one which was my mistake.
In two other cases, people have left to take on positions for which they had greater passion, were more energized, they were excellent at and, could learn and discover more than they could within Champion. While I was sorry to see each go, I applaud them. They are happier today than they were at Champion. Both remain involved in Champion in various advisory and financial ways. I am proud that part of their career was at Champion for in each case, they left behind great platforms for us to build on. They remain our friends and I hope will remain our friends happily forever.
In writing this book I have had to ask myself what is the most important activity that Champion engages in. To do so I go back to questions that were asked of me when we were setting up our initial process called The Tenant Advocacy Experience™. Our consultant asked me who all of our customers were. I listed eight. He then asked me if I had to drop a single customer, who would that be? I decided that would be the buyer of our investment property because at that time the property would have been built and would have been cash flowing and thus, we would have met our goal of having successful real estate. We went through the process eliminating customers one-by one. In the few minutes it took us to go through this exercise, it was obvious that the tenant of our retail centers or the unit buyer of our office condominium projects were the most important customers. Without those people willing to lease or buy in our projects, the projects simply could not be successful. For this purpose, we refer to both groups as tenants and then tag Champion as “A Tenant Friendly Development Company.” Subsequently, we added to the tag “Creating Champion’s One Relationship at a Time”. That is the mantra of Champion. We are a tenant friendly development company and we do create champion’s one relationship at a time.
That thought process gave rise to the entire advocacy program within Champion. Every person associated with Champion is focused on advocating to Champion the very best for each tenant. That arises in several ways, but, focuses the entire attention not on Champion, not on the revenue from the projects, but on what is best for the tenant and thus what is best for the project. Obviously financial tests and goals have to be introduced but, they must be monitored to do everything we can to ensure that each tenant achieves their vision for the project.
Champion operates under the hedgehog theory propounded by Jim Collins in his book Good To Great. Our passion is to transform the industry. A big dream. It sure is for a little company. We continually raise the bar under which we operate. We do believe that we will provide our tenants the best experience in the world. We are clearly not perfect and we sometimes miss the mark but, among others, Michael Wechsler, Champion’s first full-time employee, is passionate and energetic about insuring that we never falter in this experience. Early in 2007, after a year in 2006 of acquiring property to take us from a $50 million dollar company to a $250 million dollar company, Michael made it clear in a board of advisor’s meeting that we had done a poor job in 2006. Did I like to hear from Michael in a board of advisors meeting that he did not think we were doing a good job on a key area within Champion? No! Did it trigger a focus to revitalize everything we do immediately in that regard? Yes. Did the rest of team champion understand the need and then execute? Absolutely! Have we done enough? Not yet! Can we do better? Yes! Is it easy? No!
In the monograph dealing with tenants, I will overview an experience with one of our condominium buyers where we excelled in the advocacy program beyond my expectation [and clearly beyond the initial expectation of the condominium buyer]. The bar has been raised once again and it will continue to be raised experience after experience.
Core Ideology
I am very much of the belief that in defining a company’s core ideology, that while it is something that is discussed infrequently in company meetings, it really is something that either sits inside the soul of the company and each individual. We did not write our core ideology until January 2006. Our board of advisors met in Whistler, British Columbia and spent the entire session reviewing the core ideology. While there has been some tweaking to minor items, our core ideology of transformation, dignity, balance and respect will remain forever. On the other hand, Champion does not have a mission statement other than to be “A Tenant Friendly Development Company, Creating Champions One Relationship at a Time”. Mission statements especially in companies with thousands of employees, must be continually identified and used as tools by management and employees to understand and execute the daily activities, the strength of the company and to help engender customer loyalty. We have few employees, deal with limited numbers of people, and therefore, need to engender our loyalty through the core ideology, especially as it relates to those outside the team, respect and dignity. In hiring, a belief that each new team member has the core ideology imbedded within them is critical.
I once had an opportunity of meeting Jim Nordstrom. The day for me was memorable for several reasons. He had flown in to Scottsdale and parked his airplane at a private hanger. Shortly after the meeting started, a very nervous employee of the company who was hosting the meeting had to come in and advise Mr. Nordstrom that in moving the airplane he had damaged one of the lights at the end of the wing. I learned very quickly that to an owner of a jet aircraft, that was a serious matter. He handled it with an aplomb and a graciousness that was not surprising, but most admirable. The second reason that was a memorable occasion was that I turned to him at one point and indicated that I wanted to ask him a question. He knew what the question was going to be, graciously allowed me to ask it and then said “we hire smile, we teach cash register”. If you go into the background of most Team Champion Members employed at our offices, you will find that few if any had any significant real estate experience whatsoever. Our goal was to hire who understood the core ideology and then lived it with strength every day. To Mr. Nordstrom I say thank you. He taught me two great lessons that day.
I have come to learn that Starbucks has a Mission Review system where every one of their partners has the ability to question whether or not Starbucks in any given circumstance remains within its mission. At Champion we initiated from the beginning an understanding that each team member must act as an owner. A better definition of this will be provided later. More importantly however, every team member has a commitment from me that so long as they act, within their own knowledge base, in a fashion that they would act as owner of the company, then they have the absolute permission to do what is right. That philosophy has given wings to several partner members and allowed them to sore to new heights, achieve things they may not have achieved and allowed each of us to be proud of them and their actions.
The difference between our core ideology and a mission statement is that the core ideology is within one’s self. The mission statement, well done, is a road map using the core ideology to build the best organization possible.
Earlier I mentioned that we followed a principle that was taught to me in a short moment by Jim Nordstrom, “hire a smile, teach cash register”. While that is true at the very early stages of the company, it is clear that the time has come to bring in people with much greater knowledge of the real estate industry, with skills far beyond my own in various areas. While a private company, we decided early on to have a board of advisors. I have chosen not to have a board of directors as I did not want to place upon anyone the ultimate responsibilities of being a director of a company. In choosing to go with a board of advisors I learned one very important lesson. Unless you have a board which ultimately comes to consensus on every item (where votes are not necessary) and that is very difficult to do, a board of advisors offers you much greater strength. In doing so the company is hurt in several ways including the advantage of good advice.
On the other hand, if you do not take your advisors advice, they tend not to come back. It is an informal group of people who wish to mentor and help and be part of an organization of which they are proud. I find their advice invaluable. They constantly keep focus on cash flow and team strength. Meeting after meeting they query as to both the strength of our staff and the numbers of our staff. Cash flow and numbers of staff can be at opposite poles but, first and foremost they all understand that each team member needs to be a champion, that each champion needs to be an owner, and that each owner needs to have the ability to do what is right.
I recognize that it is difficult (yea maybe impossible) for many team members to speak their minds openly. When Michael Wechsler was Champion’s only office team member, I suggested one day that he and I leave the office, go have a cup of coffee and talk. On the way there I decided that I would tell Michael that we would have these talks once a month, that he was free to say anything he wanted and there would be no recriminations. We now refer to these meetings as non-recrimination meetings. They are held with every staff member now once every six weeks. It is an hour at the end of a Tuesday (usually takes an hour and a half) and it is in those meetings that I look to ask everyone, one-on-one, how we can do things better for them and what they need. I very much remember the first time Michael said that there was something that he needed and it was twofold: one, could he have an ergonomically structured chair, and two, could he have a flat screen for his computer. I immediately said yes and went on to look for the larger issues. Since then I often use those meetings to evaluate performance and on the spur of the moment deal with questions of salary and sometimes bonuses. I find the meeting invaluable and I believe that the team does as well. As we grow larger it will be much harder to maintain those meetings on a regular basis but we will find a way to accomplish the same result.
Acknowledgments
The acknowledgments for the time and effort and energy go to many people. I wish that my mother, my father and my grandfather were here today to see the business we are operating. I do believe they would be proud.
Susie, to whom I have been married for thirty-five years, my daughter Alisa and my son Adam, as is the case with many entrepreneurial husbands and fathers, have been ever so supportive of the time, the effort, the often indifference to other matters that they have suffered through. I love each of them dearly and I ever so much thank them for their support.
My thanks goes back to all of my teachers and my law school professors, to my many partners in the practice of law, to so many of my clients who taught me more about the real estate business than you can learn, and then to many of my partners in the development business.
While I have now acquired the interest of Champion from my original Champion partners, they had the guts [and faith] to help me at the very beginning. They have told me they are proud of what we have accomplished.
Our current equity partners have been there when projects came forward for investment, equity being the life blood of our business. My long term friend and partner Jim Griffiths, has lead the charge with the acquisition of equity. Without him Champion would not be where it is today.
I have left my thanks to the Partners in Advocacy that are the core of Team Champion, to the end. They are all superstars. Many have taken a risk on Champion, coming into the company to learn the business for a few months before compensation to their required levels was met. They have all learned very well, are true champions in their own right and truly are superstars.
Related posts:
Recommended Reading
Project Images
