We need leaders to come up with ridiculous ideas and impossible solutions, says Mark Van Ness, the founder of an innovative real estate company.
We need, Mark Van Ness believes, greater synergy between people, planet and profit, and it is clear old ideas are simply not working. He’s in good company as a recent Harvard Business Journal and the book Megatrends 2010 share this view.
The world has reached what Malcolm Gladwell would call a ‘tipping point’ in many areas. There is the global financial crisis, the rapid melting of polar caps, increasing rates of cancer at earlier ages and politicians globally who seem frozen by a paucity of new ideas. A tipping point, in case you never read Gladwell’s best-selling book, is an epidemiological term “given to that moment in an epidemic when a virus reaches critical mass. It’s the boiling point. It’s the moment on the graph when the line starts to shoot straight upwards.”
It’s the moment when what has always worked develops terminal failure syndrome.
It’s early in the morning, and property tycoon and social entrepreneur, Mark Van Ness is sitting talking, he is wearing a casual jersey and his hair is slightly ruffled. When he feels an idea is important, he leans forward and frowns slightly. As he is now. “When I was growing up I was exposed to silly ideas. I remember my father coming home for dinner; he said he had a meeting with someone who said they were replacing cash with blue plastic cards. At the time everything was either cash or check.
You should have heard the laughter at the dinner table. My mother said there is no way I will have a card with my money in it, it is absurd. Within 10 years it went from being a silly idea to the norm.” He gives another example. “My school did a field trip to my dad’s data-processing company, and a kid asked, can you program a computer to play chess? He said, technically you could if you had enough money and time, but there is no building in the world large enough to house such a computer.
The impossible soon became a common toy!” Crazy brilliance most often comes when we have our noses to the wall and adversity baying at our back. It happened with Winston Churchill when he became prime minister of Britain during the Second World War; he was the man for the moment, he was able to navigate through crisis in ways he could not quite achieve in peacetime.
FW de Klerk did it in South Africa when the economy of the country he was president of began splintering under sanctions pressure. He did the unthinkable, he released Nelson Mandela and not only brought previously unimaginable prestige to a pariah nation, but also became a model of how to avoid war. Van Ness has had to find the resources adversity impels in small and large ways. He was booted out of home at the age of 17 by his Catholic parents for not going to church one Sunday.
Fortunately he had been working three jobs a day after school since he was 15: working in the stock room of a tool manufacturing company when he wasn’t going door-to-door as a Fuller brush salesman or working in the evenings at a drive-through mini-market. By the age of 18, he had already saved enough to make his first real estate investment! Looking back, he is sanguine, “Growing up, one of the basic values we learned was self-sufficiency.
As the sixth of eight children, I knew that if I wanted a car when I turned 16, I had to start saving from the age of 11.” But finding himself on the street was, not surprisingly, a life-defining moment; faced with adversity, Mark began scanning his environment. “I had a friend whose father was a property investor. I liked his lifestyle – one day I would see him taking golf clubs out of his car in the middle of day and another day he helped paint one of his buildings, whereas my dad worked very long days.”
And so Mark went into real estate and after a few years formed Sperry Van Ness with a colleague, whom he later bought out. The business grew rapidly, and today its 150 offices transact several billion dollars a year, but today’s success cloaks an important story of challenge, setbacks and a process where shared values helped create value. In 1990, three years after Sperry Van Ness was formed, Mark decided to enshrine company values in what he called a Core Covenant.
“Initially we didn’t need to write our values because we were living them every day. Then when we expanded outside our region I hired someone else to manage it; I noted after some months that it did not convey our company values. So I pulled together senior advisers, managers and staff and had them define the values of the organization.
Today, the Core Covenant enhances our culture of collaboration, attracts and retains people in the organization and also helps resolve disputes. It is the basis of our competitive advantage.” He believes that companies that lack active values “will go the way of the American car companies that ignored the quality management movement. This time it’s about social and environmental sustainability.”
And investor attention has shifted to it: “Oil and tobacco companies, as examples, may appear great investments but are really very risky. In 100 years, oil will not be our primary source of fuel. There is a trend now for investors to gravitate to renewable energy, as an example.” Real leaders can inspire businesses and NGOs alike to operate more financially sustainable operations.
For example, is it more worthy to donate food to people or to teach them how to plant and harvest crops? One enslaves societies into dependency, the other transforms and liberates. Real leaders, he says, are operating in a way that is wise and sustainable for people, planet and profits. But even that is not enough to weather economic storms; only ‘absurd’ ideas do that. Sperry Van Ness quintupled in size from 2001 to 2007. And then the storm clouds of the global financial crisis began gathering and Sperry Van Ness was struck by lightning. Volume in the industry dropped 80 percent in one year.
“The challenge was to restructure enough to be profitable, with only 20 percent of the volume. Two presidents insisted it was impossible. Finally I sat down with the executive team and a white board and said we need to start a new company, as if the old one went out of business.
“We started with a clean slate and the only member of the executive team to get the vision was promoted to president. Kevin Maggiacomo implemented the vision and restructured the company to be profitable at 10 percent of the previous volume and yet provide more value than before!” Yet again adversity presented a door, and Mark Van Ness saw it as an opportunity and had the courage to turn the handle. Mark suggests that the way to optimize the success of any individual or organization is to use a basic axis (pictured above). “Be on a path where you are moving toward the top right quadrant, where you are prospering by doing good for people and the planet. This is where life works with much less effort and the only place that is sustainable.
The (top left quadrant) traditional charity model has great intentions, but perpetuates dependency and is not financially sustainable. “Some (bottom right quadrant) are living in the old world that justifies short-term profit at any cost, and may be producing that which is unsustainable or profit while harming society, like tobacco. “Look at educational systems (bottom left quadrant) that are losing money and failing society; globally we are failing children with educational systems.
But what if we had video games that assisted with basic math, calculus or problem solving? In Los Angeles, ‘The Entertainment Capital of the World,’ there are more than 100 languages spoken in the failing school system. If the local entertainment talent was redirected from violence (to the top right quadrant), they could produce non-language based video games that are edutainment, done in a way that kids enjoy learning.
This could be transformative for education globally! “We are still trying to teach kids in conventional outdated ways. What if we transformed education from boring to fun and easy to learn?” Radical = transformative. The need to strike a better balance between people, planet and profit is everywhere, and it is compelled by population growth.
“Look at the population graph for the last 10,000 years, it is a vertical spike, but for the first time ever, populations have doubled in our lifetimes and will treble before we die. That’s another six billion people this one little island we call earth has to support. Imagine the impact of adding two more Chinas, two more North Americas, two more Indias, two more Europes all in your lifetime!
“Think of the earth as an organization that plods along with low growth for years and then suddenly triples in size; it puts tremendous pressures on employees, leaders and existing systems, which become ineffective under the added strain. That is what the human race is looking at; if we don’t rethink and restructure all our systems and way of leading with an eye toward long-term social, environmental and financial sustainability, we will go out of business as a species.”