Granted, there are many times when founding executives are justified in their attachment. The multifamily business is littered with leaders who stepped down and then came back—Lowder at Colonial, Lane at Lane Cos. Both returned to help their companies when the economy tanked. And those returns went well. Of course, there are also situations that are not as seamless, such as John Williams’ notorious attempt to come back to Atlanta-based Post Properties, a REIT with 20,505 apartments in nine markets.
Wood Partners – Ryan Dearborn
Credit: cleftwich
Atlanta-based Wood Partners recently went through a transition from chairman Jerry Durkin to new CEO Ryan Dearborn. That transition came only a couple of years after Durkin took over from former CEO Leonard Wood, who retired in 2007. “We started Wood Partners with the understanding that all the founding senior partners would retire in their early 60s because we wanted to be an evergreen company,” Durkin says.
Wood Partners says it looks internally to fill executive-level slots (though CFO Joe Keough was brought in from the outside). Dearborn, who played a senior finance role and led the company’s expansion into the West, was considered a viable candidate to run the company. When it became clear in early 2010 that the industry was on its way to recovery, the company decided to fast-track Dearborn’s ascension to CEO. “By doing so, we wanted to eliminate our succession plan as a negotiating point in 2013 or 2014,” Durkin says.
“I think the biggest issue companies have with succession planning is that senior leaders have difficulty walking away or reducing the scope of their role, which is a huge problem if you want your business to be a viable one long after you are gone,” says Jerry Durkin, chairman of Atlanta-based Wood Partners, which owns 14,000 units nationally.
These days, Post is looking to plan ahead. “It has been all hands on deck,” says Linda Richards, the senior vice president in charge of human resources at the company. “Now, as things are picking up, we’re beginning to look at succession planning differently.”
Lee makes an effort to help these CEOs move on by getting them involved in other activities, whether it’s chairing the board of a nonprofit or getting them into fundraising. “There are all kinds of things you can do to keep them active and involved and utilize their expertise in a guru kind of way versus running the day-to-day operations,” he says.
But not every leader rides off quietly into the sunset after accepting the transition. Cates, for example, stayed on Mid-America’s board for seven years. In some situations, it wouldn’t have worked, but Bolton says he and Cates had mutual respect. They also had a monthly meeting to chat about the company.
“The incumbent and successor either need to have a special relationship, particularly if the incumbent will stick around for a while, or the incumbent needs to get away and be totally gone,” Bolton says. “At most major companies, consultants will tell you, the best thing is for them to leave and not create a perception issue for the new guy.”
