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Spencer Levy
Dream, live, prosper. That might sound like the iconic salutation of Mr. Spock, the first officer of Star Trek's original Starship Enterprise. But that's the motto of DLP Capital, a private real estate investment and financial services company that seems to be on a mission of its own. On this episode, two of the firm's leaders share the methods and practices of a firm that is, with a nod to the Trek fans in our audience, moving at warp speed.
Don Wenner
At DLP, we expect our leaders to row the boat, while they steer the boat, while the boat is being built, going down the river. And that's a lot of work.
Spencer Levy
That's Don Wenner, DLP’s founder and CEO. Don’s also the author of a book called Building an Elite Organization: Blueprint to Scaling a High Growth Business. We'll share the values and practices that have made him a rags to riches story, a purposeful leader, and a pretty demanding guy to work for.
Claudia Schiepers
There's full transparency. There is no hidden agenda. We know where we're going and everybody knows what their part is on how to get there.
Spencer Levy
And that's Claudia Schiepers, one of DLP's managing principals and its chief administrative officer. Claudia is responsible for strategy, operations, and the execution of mission critical initiatives across the organization. Coming up: a conversation on impact, values, leadership and more. The stories, spirit and culture of DLP Capital. I'm Spencer Levy, and that's right now on The Weekly Take.
Spencer Levy
Welcome to The Weekly Take. And this week, we're going to be talking about leadership and how to form a winning organization with Don Wenner. Don, thanks for joining the show.
Don Wenner
Hey, Spencer, a pleasure to be here. Really, really excited.
Spencer Levy
Great to have you. And then we are joined by Claudia Schiepers. Claudia, thanks for joining the show.
Claudia Schiepers
Thank you so much, Spencer. Happy to be here.
Spencer Levy
Delighted to have you. So starting off very simply, Don, who are you and what do you do?
Don Wenner
So I'm the founder and CEO of the firm. Started it 16, 17 years ago. So, we as an organization invest in housing, mainly workforce housing. We manage private capital, and then we invest in housing as a lender, as a partner to other sponsors, as a direct sponsor, ground up development, existing housing, and do all the vertically integrated pieces to execute on that strategy.
Spencer Levy
Let's go to your organization. I'll turn it to Claudia first. In as simple as you can, tell us exactly what your company does.
Claudia Schiepers
Sure. I think at our core, we are investment managers. We have a number of funds and we have about 2,200 families that invest into our funds today. And we use those funds to invest in real estate, both debt and equity. I think that's the short elevator pitch of what we do as an organization now. We give a lot of training to our clients or whether they are investors or real estate operators. We give them a lot of workshops, training about how to live full lives. So we try to really build relationships. It's not about doing a one off deal. We look for families, companies, other organizations who are aligned with our values, and we help them grow because if they grow, we grow.
Don Wenner
And I'll just add one thing there. You know, we're impact investors who invest in workforce housing. That's the center of what we're investing in. As Claudia said, we're doing so as a lender. We're doing so as a partner to other real estate developers and sponsors, and then we're a direct sponsor as well. What we focus on doing is we've built an organization centered around our people, and that's the hardest part and the most important part of growing an organization. The both terrible and great quote that I've heard many times of, you know, business would be so easy if it weren't for the people, right? But it's true, right? That's the hard part. Building a great organization revolves around attracting, developing, retaining, investing in the best people. And we're focused on four different crises at DLP. First is the affordable workforce housing crisis, we call the jobs crisis, which is what led me to writing the book, we call the happiness crisis, and also we call the legacy or wealth crisis. And so we focus on finding great entrepreneurial small businesses who really want to build and scale a great business. They have the desire, they have the ability to grow and build a business. And then we come along and we help them put discipline in play. We help them invest in their people. And we only attract and work with people who share our ten core values, from driven for greatness, which means people will seek knowledge, are curious, want to learn, want to grow, to grit, which is passion, perseverance towards long term goals, to stewardship. And we find those who are aligned with those values and we help them build a great organization while, and through, investing in and building great team members and helping them be great fathers and mothers and leaders in their church and so forth, at the same time.
Spencer Levy
I think you should just tell the audience just a little bit about your back story. Tell us how you got started and where you are today.
Don Wenner
I grew up in Bethlehem, Pennsylvania, an hour north of Philly, kind of best known today maybe for Lehigh University, and grew up to parents who had me at a young age. 16 years old and, you know, lower middle class, as they call it. My mom ran a home daycare. My dad was a prison guard. And so grew up with that kind of background – nobody having gone to college nobody having started a business. Moved out of my parents home thinking I knew better than they did, and everybody else, at about 17 years old and went out on my own and being on my own and going to college, studying finance, I stumbled into real estate at 20 years old and never looked back. And we started a residential brokerage and home flipping. The very first day I entered real estate, my marketing message was “Your home sold, guaranteed, or I'll buy it.” And that time was October 2006. So that was the peak of the real estate market. So it was a good time to be guaranteeing to sell people's homes as people were struggling to sell. And we built an investment business through that time and kind of continued to expand and grow into all the things we do today.
Spencer Levy
Just put one number on. How much do you manage today? How big is your assets under management today?
Don Wenner
About 3.4 billion.
Claudia Schiepers
I think one of the most amazing things and also the most annoying things about Don is that he is not just that visionary CEO, but he's also very heavily focused on execution. Like all of us want to get on this rocket ship and see where it's going. And having him understand that execution piece and really being very disciplined about how we execute on our plans just helps everybody tremendously in the organization. We talk a lot about communication and how important communication is. There is nobody in this organization who doesn't know where we want to go and how we're going to get there. And just having that emphasized over and over in our daily huddles and our weekly meetings and our monthly team huddles. All the time, we talk about this, and it's very clear. We have our high level mission, but then our execution plan, which we design out in our company compass, which hopefully you read about in the book. It is very clear to everybody. There's full transparency. There is no hidden agenda. We know where we're going and everybody knows what their part is on how to get there.
Spencer Levy
I was going to get to the book later, but let's get right to it right now because communication is one of the key elements of this book and it comes in many forms. One of the things you talk about is clarity of communication, consistency of communication, and how often you communicate with your team. I had this little sinking feeling in my stomach when I was reading about that communication and I was saying, boy, you know, are there too many meetings? Are there too many emails? Are there too many Zooms? Can you overdo it? Can you over communicate? What do you think about that, Don?
Don Wenner
That's a great question. And to your point, you know, for anybody, of course, who hasn't read the book, you know, we have a lot of meetings, as you alluded to. So for us, setting that vision that Claudia mentioned starts on vision day at the very beginning of every year where we share out not just to the organization, but our partners, our investors, our everybody in our universe kind of where we're going and how we're going to get there. And then throughout the year, we carry that message forward and then all the really tactical communication issue solving is the center of all of our communications, all of our meetings. From daily huddles every day, to focused meetings we call L-ten meetings, we’re solving issues, to pipeline meetings, to trainings, you name it. While in the important goal meetings, we're focusing on one singular, really big goal. It's a lot of meetings. And when people first join us, some of it takes people back. It’s, oh my goodness, there's a lot of meetings, and why that feels so unique and so different and maybe doesn't seem all that attractive to people when they first hear about it or see it is because at most organizations, meetings are the enemy of productivity. Meetings are what you have to do that stands in the way of you doing your work. And when meetings are done effectively, they're the most productive use of time, right. It’s the time that we come together and we solve issues and we get aligned and we have clarity on where we're going. It allows us to refocus and recalibrate. So despite all the work we do in communicating through meetings, through our intranet, through external communications, through webinars, you name it, our podcast, all the communication we do, consistently, people are looking for more, and so we hear that a lot, a need for more communication. When we survey our team members on issue solving day every year, the most common theme is, they want more communication, even though we feel like we're providing a lot of it. So I haven't yet come into a case where we over communicate. I'm the type of person I feel like hey, if I've said it once, I don't want to say it again. Nobody wants to hear me say it the second time. But I've learned through my years and sort of maturity of doing this that people need to hear it multiple times, that it takes time to sink in and hear it at the right moment. So I haven't yet hit the point of over communication.
Spencer Levy
Claudia, one of the words that Don used there is probably my favorite word in all of business, certainly in real estate, and it's productivity. And why do I like that word? I like that word because it's hard to measure. How do you approach measuring productivity and how it will influence the growth of an organization?
Claudia Schiepers
Sure. Like, so, we have a lot of tools that we use to measure productivity. And I think one of the biggest tools that we use is what we call rocks. Rocks are kind of, some people call it goals, but I think it's much more than a goal. It's really a commitment to achieve something in the next quarter. So we make everybody in our organization set rocks every 90 days. And not only do we tell them, like, what is going to be your rock, what are you going to achieve in the next 90 days? What do those two week milestones look like? So if you're going to achieve this in 90 days, what does that look like after two weeks, after four weeks, after six weeks, after eight weeks and then after ten weeks? So that you know whether you're on track or off track. And every two weeks, people go into our systems and we have software to back this up. And they say, I'm off track or on track. This is not really to just grade people. It's also to see where people are off track so we can jump in and help each other get back on track of those rocks. So every quarter we have pretty clear view of what we're achieving, what we're not achieving.
Spencer Levy
Rocks. Let's just go to that term. Just define it a little bit better. Don, I think you were going to jump in there. Just define that term, rock. What does that mean?
Don Wenner
Our rocks are our top priorities for the next 90 days. Every person in the organization has three top professional and three top personal priorities for the next 90 days. That's what you're going to accomplish. That's your, you know, think the 80/20 rule, That's your 20%. Those are the things that are going to move the ball. Statistically, we grow by about 15% every 90 days, and we have for 17 straight years. And rocks are a big part of that. But one other comment I wanted to add to how we measure productivity. So our number one key metric as an organization is what we call productivity per person, and it's something we put in place about four or five years ago now. And one of the authors that I'm a huge fan of, I referenced throughout the book multiple times, is Jim Collins. And Jim Collins in one of his, maybe less famous books called How the Mighty Fall. He talks about how most companies that go out of business go out of business due to indigestion, not starvation. And a lot of companies go through significant growth but actually become weaker as they grow. So we said, all right, we're winning all these awards, we're having all this growth. How do we measure how effectively, how productively, we're growing the organization? So we set up this measurement we call productivity per person, which is net revenue divided by our number of team members. And we track that on a trailing 12 month basis. There's not a perfect measurement, but it gives us the direction. Are we producing more revenue per person to the organization as we grow? And we started this journey on, January 1st, 2018 was when we first produced this number, and we were at $108,000 per person, which was a meaningless number at the time. It was just where we started. And today we're at 380,000. So we've three and a half times our productivity per person while we've tripled the organization. So that's one of the biggest ways that we measure how effectively or productively we're growing the organization.
Spencer Levy
Let's go to your operator side. About how many operators do you work with, and that you provide debt and equity to, what would be the smallest operator and what might be the biggest?
Don Wenner
So we have today about 150 total operators we're actively working with, but about 50 that are part of what we call our elite membership. And these are 50 sponsors and they're from good size homebuilders to multifamily or ground up developers to value-add multifamily operators to self-storage operators. But these are generally individuals on average who have 40 to 80 employees. On average have $100 to $500 million of assets under management, and really want to build and grow something incredible. So on the small end, they may be building 50, 100 homes a year or, you know, 50, $100 million worth of assets to the large end. We have some of our members who are larger than we are in assets in our management. But they've decided, they've committed, to building a great organization, which means doing the hard stuff. For a lot of real estate guys, finding deals and raising money is all they think about. That's what it all comes down to, that’s what the whole focus is on, and that's the easy stuff. But maybe you could just focus on that when the market's been like it has been, right. You called it the days of the milk and honey…
Spencer Levy
One of my favorite expressions.
Don Wenner
Yes. For those of us in multifamily, that's been easy, right. But when values aren't going up 10, 15% a year, it starts getting hard. And execution, these little details called cash flow become important. So we really focus on finding those who are really serious about doing. I'll give, I want to give a really quick story to explain it. So we started off as a lender in 2014. We were a sponsor, an operator, since 2006, investing directly in 2014, we said, hey, we're going to start providing capital to other real estate sponsors and felt it was a really scalable way for us to grow upon our knowledge and our expertise. And so we started having some smaller real estate operators who were generally speaking, we'd find individuals who maybe were flipping 20, 30 or 40 homes a year, and now wanted to start building a business. And so one of those sponsors, I'll call Alex, we started with him flipping 20 plus homes a year in early 2015. And by 2018 he had 150 to $200 million real estate portfolio. Went from himself and a few guys in construction crew to 50 employees. And he was a great success story, right? If I was on a podcast or talking to my investors in 2018, he'd be one of the guys I'd be telling you about how much we've helped him grow this business. Well, in December of 2018, about 9:30 at night, on a Thursday night, Alex called me in kind of a panic and he was very scattered and all over the place and he just sounded really upset. And, took a few minutes to figure this out, but what prompted the phone call is he couldn't make payroll on Friday. He couldn't pay his employees the next day. And after kind of confiding or sharing that or telling me how, even though he had built all this success and all these people, he was doing everything himself. He felt he had nobody could count on, he hadn’t built or developed any leadership. His controller just quit and he was pretty sure his controller was stealing money from him. His projects weren't getting done. He was working 80, 90 hours a week. And because he was working so hard and so stressed out, he wasn't attentive to his wife and his young kids. And his wife just filed for divorce, is taking his young kids. And so he was pretty beside himself, right. You can imagine, I felt like in this moment, and for me, it was like a punch in the gut because until that very moment he called me, I thought he was a success story. I thought, hey, we had helped him so much. He grew his business, the American dream, you name it, right. And I realized at that moment that we had completely missed the mark. We had only helped him do one thing, scale his business. And as you read in the book, we think of every business as four quadrants: strategy, people, operations and acceleration, and they have to be a part of one plan together. So we didn't help him hire. We didn't help him put operations and execution in place. We didn't help him with communication. So after finding this out, we actually made payroll for him the next day, so he could pay his employees. And then we got in and started helping him. We went to work, helping him hire people, put in discipline and structure, put in the elite execution system, what the book is on, and turn that around. Now, he's still one of our clients and running a phenomenal business and that was the preface to his membership, to what we do today and how we went about why I wrote the book and how we've gone about building this community.
Spencer Levy
Claudia, you have 2200 investors. If you wanted to press the easy button, quote unquote, you would go to a big institution “X” and say, okay, we're now going to be an institutional player rather than dealing with these high net worth family offices. What do you say to that person, Claudia? Why do you stick with your business model versus that alternative?
Claudia Schiepers
So I think what Don was saying earlier, we care about the relationships and we care about, you know, having similar values between the people we work with and our organization. And, you know, these families, they care about doing well for themselves, but they care just as much about doing good in the world. And by investing with us, we share that value of, we want to make an impact. And we do that through solving the four crises that Don mentioned earlier. And that's what our investors care about. And quite honestly, I'm not so sure that big enough investors or institutional investors care so much about that as we do. So I think that's the short answer to that. There's a, there's just value alignment. And Don calls them faith based wealth creators, that large, big part of our community. And there's just a connectedness. And just like we have our elite membership, we have a prosperity membership. We help those families as well, through a membership, with lots of tools, workshops, trainings about defining what their legacy is going to be in this world.
Spencer Levy
Let's now talk a little bit about the market. The market right now. I can't control the market. You can't control the market. And for homebuilders in particular, it's getting soft quickly. And when I say that, we're seeing a fall off in demand from buyers, we're seeing the material spike in mortgage rates. We're seeing homebuilders slow down building. Tell us about how you're dealing with them given the change in market conditions over the last six months.
Don Wenner
For us, and this has been a phenomenal last 90 days, six months. So no doubt, I mean, we're out actively investing and we're taking part in, you know, taking out debt from, you know, agency or banks and so forth. And, you know, we're dealing with higher interest rates today, right. And we're dealing with loans being sized to lower proceeds, and those types of things. But those are things that affect other people a lot more and they affect us in the way we built our business. So for us, the homebuilders we work with, we work with a lot of them, have been doing phenomenal. And a lot of our homebuilders, though, are building for rent. And the rental markets that we are in, which about half our portfolio today is in Florida and Texas, which are, I would say arguably, but not arguably. They’re the two best markets in the country. And so they're having no problem with demand on the rental side, which is probably 90% of what our sponsors do, is they're building for rent in the market. There has been incredibly strong. We've had no, no pressure around rents. We've had no lack of demand. It's been really, really positive. But on the other side, some of our borrowers, they may also be borrowing from us, but borrowing from large banking institutions. Well, now those large banking institutions are pulling back or won't allow as many spec units or whatnot, which is just bringing more business to us. Some of our clients do sell and partner with some of the big national builders who, because their stocks have been hammered, are trying to put a pause on closing on land. They're trying to push things off to next year. They're trying to still kind of tie up as much as they can, but not have to close on anything right now. But again, that creates more opportunity for those who are able to build, because there's less homes being built, there's less competition, there's less competition for the suppliers. That's helping with being able to get supply of products. So for us, there's been way more positives to this volatility. We love volatility, all forms of volatility. Every time there's change, the fear of the change creates, I think, more opportunities than the change itself, and the panic that comes in the market, right. People ask me questions all the time. Well, what's going to happen if the government gets rid of 1031 exchanges? It'll be great. So many people are going to sell. What happens if property values go down, right? It’s going to be a great, lots of time to buy, right? What happens if interest, you know, there's lots of opportunity like the great Sam Zell likes to say, you know, we all buy deals, not markets. And there's tons of opportunities if you're able to adjust. And during Covid, we bought a whole bunch of student housing properties that were in distress due to schools being shut down. But the multifamily markets were incredibly strong, right. And we opened these properties up to be available to the local market and bought 50% occupied properties and turned them to 90 plus percent occupied overnight. There's always, through change, great opportunity that comes about. So for us we couldn't be more excited.
Claudia Schiepers
And it comes back to our core values. It's not letting the outside world dictate our progress, right?
Spencer Levy
So the words I'm hearing on this podcast over and again: mission, values, you used the word faith a couple of times, Don. And I'm just going to just let you know that among my many things I do, Don, is I'm very proud to be co- chairman of the Research Committee for the Real Estate Roundtable. And one of the things I focus on is affordable housing. And I don't think it's any mystery to anybody that affordable housing is in crisis right now. There is not enough of it. We can't build it fast enough. Don, you're mission driven. You’re workforce housing. But rents are skyrocketing. How do you reconcile those two issues?
Don Wenner
Yeah, it's a major challenge, no doubt. And I'll start with saying, it starts with the philosophy. People ask me that type of question in different ways. And I think, you know, well is making money and doing good must be a conflict. Well, how do you reconcile, as you said, raising your rates and keeping housing affordable? Well, it starts with a different strategy and a different approach. And the nice thing is, it's a lot harder to do good and make money at the same time. It's much, much harder to do it. But they don't have to all be in conflict. So, number one, the first thing we do is we, in order to execute on this strategy and invest, and as we like to say, we invest in housing that is and will remain affordable for the local workforce to be able to live where they work. So that's kind of what we’re focused on. And how we define affordability is, I think, kind of institutionally accepted, which is, our rents are less than 30% of the area median income. And across our portfolio, our average rent is about 18% of the area median income. Our average rent across our portfolio today is a little over $1,000 a month. There's not many places in the country today that doesn't have an incredible need for $1,000 a month places to live, right. But that's not the same rent in every market. If we were in Saint Augustine, Florida, where we're headquartered out of, if you can produce 17, $1800 a month places to live, that's what's very much a need. And that fits the need of the local police officers and social workers and so forth. You can't find anything decent for under $3000 a month. So the first thing we have to do is choose to invest in markets where we can afford to produce or have housing that is affordable to the local workforce. And every market has this need today. And then having a strategy that focuses on keeping it affordable, but the great thing is that doesn't have to be in conflict. So I'll give you a simple example. So many multifamily operators have had a strategy for the last decade. I'm going to buy properties for, say, the rents are $1,000 a month. And I'm going to dump 40 grand a door into that unit and put in all new counters and brand new kitchens and brand new flooring and brand new lighting and all these changes. And I'm going to raise the rent from 1000 to $1500 a month, right. And in Excel, that works. I will argue, I don't think it really works that well in real life, but in Excel, it works really, really well. That's not our business model. Our business model is to buy that property with the thousand dollar a month rents and we'll go in there and put in hard surface floors because that's going to cut down our maintenance costs. We’ll put in new lighting there and cut down utility costs. We'll tackle any deferred maintenance in that property. We’ll repaint it, and we'll take that rent from, say, 1000 to $1100 a month or $1200 a month. And now, not only is it more affordable, it better serves a local workforce, but we actually end up getting a better return by not tearing the unit apart, replacing it. The average tenant in Hattiesburg, Mississippi, where we're buying a property right now, doesn't care if we have brand new granite counters or not. They don't. Maybe that matters in New York or even a big market like maybe a Charlotte, right. If I'm in Maine. In Maine, and there's a whole bunch of competing properties, maybe that matters. But in Hattiesburg, Mississippi, it doesn't. If the unit’s clean and it's safe, that's what matters. So we can actually get a better return, a better IRR, by not tearing the unit apart and going and upgrading everything to the highest level. But also at the same time, we're keeping it affordable. And then by not only keeping the unit affordable, investing in the community. Investing in community services at the property, making it a great place to stay where people don't move. One of the biggest expenses of residents is they move every 14, 16, 18 months. We want to keep our average occupancy at over ten years. So it's a different operating model.
Spencer Levy
What I find very interesting about this, I think, in addition to the control aspect that you run into when you team up with certain types of institutional capital, they also are focused on the top 50 MSAs. I have not checked the top 50 MSA list, but I'm pretty sure Hattiesburg, Mississippi is not in that list. And so what you have is the ability not only to invest in workforce housing, you have the ability to invest in markets. Small markets make you the big fish in a small pond. Is that part of the strategy?
Don Wenner
It is a little bit. So when we focus on our markets with job growth, population growth, and generally speaking, we're still targeting markets with at least 50,000 person MSA. So we're not going to Timbuktu where there's not even a grocery store in the market, right. But we're going to, as you said, Hattiesburg, Mississippi. I'm talking to you right now from Asheville, North Carolina, which is a hot market today, maybe in some people's eyes, but it's certainly not a top 50 market, or a Saint Augustine, Florida, where we're headquartered, or an Allentown, Pennsylvania, where we started the organization, or a Fort Worth, Texas, not central Dallas. We're in Corpus Christi, Texas. Or we're in Winter Haven, Florida. Or Daytona Beach, Florida. These are markets that aren't your Miami or your Atlanta or your Charlotte, not the top 50 MSAs, but they’re markets that people are moving to and jobs are moving to. When we first started investing in North Carolina and South Carolina, most of the larger investor institutions would say, why would you want to own real estate in the Carolinas? So that seemed tertiary. And now Raleigh and Charlotte are two of the best markets in the country. Or Tennessee, you want to be in Tennessee. Nashville is one of the best markets in the country. Still, there's not as much money in Mississippi or Alabama or Arkansas or Louisiana, those types of Sunbelt markets. So I think a lot of our strategy is being, you know, three, four, five, eight years ahead of the institutions and kind of paying attention to where population’s going and where there's the right opportunities and being where there's less competition for and compression of cap rates is certainly part of the strategy.
Spencer Levy
We've talked about so many concepts here, but I think the one concept we didn't talk about, we danced around it a little bit. Hiring the right people. Hiring the best people. So, Claudia, why don't you go into that, just the day to day challenges of that. And then, Don, I’d like your perspective as well.
Claudia Schiepers
Well, it definitely makes me think about the conversation you had with Jacob Morgan, right. You talked a lot about culture and you want to create an organization where people want to work, right. It starts there. And we believe very strongly that culture eats strategy for lunch. It's about how do we create a culture where people want to come and work and where they thrive? And it comes back to that relationship aspect that we do with our real estate operators and with our real estate investors. We don't just care about how people show up at work and how they are, whether they're happy at work or not. We care also about how their life is going and are they happy in their personal life? There's no such thing as work life balance anymore. We call it living fully. We want people to excel in all aspects of their lives, having these core values that are more than just words on the wall. And I strongly believe, just like Jacob said, you have to, when you walk around our offices, you can feel the values, they come alive. It is not just words on the wall, and we use them in how we hire. We use them and how we communicate with our people. They're everywhere. But we are also, as you heard throughout the conversation, a highly disciplined organization. Our culture is not for everyone, and we're okay with that. And people that fit with our culture are going to thrive here, right? They're going to feel ecstatic, excited to come to work hard, high drive. Lots of things are happening. We're moving so fast. We're doing amazing things. Nobody's bored here, ever. But for people that do not thrive in an organization or in a culture like that, it's not fun. So we're trying to be very careful about finding the right people that fit with that culture because it's so important. And, you know, we hire for attitude and not necessarily for the skills. The skills you can learn, the attitude and the will is something that's very hard to teach or bring to somebody. So I think it starts with that.
Spencer Levy
Don, let's go back to this employee question because I think every organization is a collection of its employees. And we talked about the values thing, about wanting people that have this inner drive. How do you hire and find that right person with the drive in mind?
Don Wenner
Yeah, and it's a great question. And fortunately for me, an answer to this question, it’s the number one place I've spent my time for the last decade. And that's not an exaggeration. I spend the largest amount of my time on interviewing and hiring and choosing the right talent in organizations. By far the largest allocation of my time. I average 6 to 8 interviews a day. I have three today. It's a big, big focus of the organization and of mine personally. And I'll start with just saying, you know, the great Howard Schultz, founder of Starbucks, once was asked, how does he get people at Starbucks to smile so much? And he said, well, it's really simple. Hire people that like to smile, right? So yeah, sometimes we overcomplicate things, right? So we have ten core values. To your point, one of those core values is driven for greatness, which means people seek knowledge, are curious, will go find the answer. Grit is passion and perseverance towards long term goals, it’s the stick-to-itiveness, the not giving up. So our actual process is, we go out, we first determine what are we looking for in hiring somebody. We get very specific. We use a tool we call RREK which stands for roles, responsibilities, expectations, and key numbers. We know what success is for somebody before we hire them. We use that then to craft a job ad that's going to attract people to want to apply and set up to screen them out. So instead of saying, ten years experience this, five years experience this, we're telling them the kind of organization we are and the type of people who would want to work here. And we do that in our job ads. We use things like LinkedIn. We use all the big job boards, Indeed. We do work with external recruiting partners, as well. And we get out there and show who our culture is, what type of person works in our organization. Then when they come into our screening process, they interview themselves on an interactive video interview. We ask really strange questions to people, you know, what's your purpose? What's the best book you read recently and why? These are the types of questions we're asking. The person who says, I don't really read books, they're out. We're not interviewing them, and I'm not exaggerating at all. Then they do a behavioral assessment and we look to see, is that a match and what this job needs? And then we do a cognitive assessment. So as much as we're looking for people who have a great personality and a great fit and are positive, energetic and curious, and want to learn and want to grow and are humble, we're also looking for people who are really smart. Who really can process information and handle a moving environment. If they pass all those assessments, then we start interviewing. They get interviewed on a wide range of questions, a wide range of things testing those values, testing their skills, testing their approach to leadership. They go through panel interviews. We do that zoom. We do a face to face. We do a wide range. We try to get them out of the office. We take them for walks. We put them in job testing. We test skills, we test abilities, we bring them to our live events and see how they interact with our clients and our investors. We do a lot, a lot, a lot of time to make sure we're bringing the right people in the organization. And with all that time spent, we don't get it right every time. We still get it wrong a good amount of the time. We usually find out we got it wrong within the first week. We may wait a few weeks to make the decision, but we pretty much always know if they're going to make it. We like to say at DLP, we expect our leaders to row the boat, while they steer the boat, while the boat's being built, going down the river. And that's a lot of work, right. We got rid of, kind of, executive titles because for an executive here, you've got to be willing to roll up your sleeves and row the boat while you guide your team, while it's still being built, while we're still figuring it out. And that’s not for everybody. It's not for people who maybe worked in a very large organization and are part of being on committees that meet 12 times to make a decision. We're going to have a meeting and then we not only expect the decision to be made, we expect you to go do it tomorrow. So it's a different environment.
Spencer Levy
On behalf of The Weekly Take, I want to thank, first, Don Wenner, the founder and CEO of DLP Capital, for coming here today.
Don Wenner
Thank you.
Spencer Levy
And then I want to, of course, thank Claudia Schiepers, the managing principal at DLP Capital. Claudia, thanks for joining the show.
Claudia Schiepers
Thank you.
Spencer Levy
Thanks again to our guests from DLP Capital. You can find out more on our website as well. CBRE.com/TheWeeklyTake. There’s info on our guests, the show and ways for you to share it. Don't forget to subscribe, rate and review us wherever you listen. We'll be back next week as we look ahead to the annual Labor Day holiday with a conversation on, of course, labor. A very important topic for our time. For now, I'm Spencer Levy. Be smart. Be safe. Be well.
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