Leadership + People:
Episode 08 - Cameron Gunter - Part 2 of 2
In this episode Peg Development CEO, Cameron Gunter, discusses the need to delegate. He reveals that mistakes are made by everyone but that should not diminish our trust in our staff or ourselves, but instead encourage us to correct them and learn from them.
- Accepting that as CEO of a growing company you can no longer make every decision and why you need to trust others [00:38]
- Making mistakes is a part of business. Do not fight this just learn from them and correct them [07:01]
- The logistics of delegation in weekly and monthly reports [10:04]
- The process of deciding on what your business’s next step will be [12:00]
- Let others remind you of the deals that went sour to prevent repeating those same mistakes [16:45]
This episode of Leadership and People
was originally released on:
October 31, 2017
Welcome to Leadership and People. This is a series that pulls back the curtain on leadership by interviewing CEOs, Senior Executives and Entrepreneurs who had large exits. We ask these experts about how they built trusted networks to rapidly grow their companies. And what advice they wish they knew if they could do it all again.
PEG DEVELOPMENT’S CEO, CAMERON GUNTER: “What I learned by letting go, is there’s a lot smarter people than I am… and you just have to trust that. They’re going to make mistakes because I made mistakes. We all made mistakes early on. We just corrected them. We corrected them usually ourselves.”
00:38 HOST – JESS LARSEN: Today is part 2 of our episode with Cameron Gunter. He’s the CEO of Peg Development. If you missed part one you should go back and hear about the 1.2 billion dollars in real estate they’ve built and all of the fun and experience that that’s been. And that’s actually what I want to start off with here as we jump into part 2. As you think about, you know, you’d been a city planner, you’d been a cpa. Your mid thirties you decided to get into this industry. You jumped both feet into a 32 million dollar project. And you said it was maybe a little bit bigger than you probably should have started with. What’s the difference from those early days. You’re doing 30 million you’re doing 50 million in real estate. Now where you’ve got 14 projects on the go. You’ve got probably that many coming up… you know you got 1.2 million in real- oh I’m sorry 1.2 billion in real estate. Slight difference there if you weren’t aware.…. There’s a slight difference. What’s different about doing at the level you know doing business at the billion dollar plus level versus the first 30-50 million.
Trusting Others Abilities: Delegation
GUEST – CAMERON GUNTER: Yes so the 1.2 million is much easier than the 1.2 billion. So… let alone 50 million to 1.2. But you know as we were early on and we were doing up to 50 million a year or that we had done 50 million or even smaller deals, at 1.2 or 3 million. The challenge we face now, and I’m sure every company faces this challenge; is as one of the founders of the business I was involved with everything. So because of my background as an accountant, CPA, I was CEO, CFO, COO. You know I was, you know, involved with everything. Even though we had, you know, 5 to 6 people helping and doing project management and doing different things….I was involved with everything. I knew everything that was going on. As we continued to grow I was less able to be able to keep up with that and it became, you can call it a kink in the hose. I became the kink in the hose or the bottle neck so to speak. And so, some of our people were trying to get things done, but they couldn’t because I was heavily involved and they relied on me to do things that needed to be done, maybe some of the challenging things. Maybe not so challenging things. Maybe one didn’t feel comfortable doing it. Or two felt like I needed to be involved because of the way it was before. As we now are at this 1.2 billion and are doing most of our growth has happened in the last 2-3 years, and so you know when you are doing 100 million versus now 500 million, you don’t have that ability to do that. And one of my biggest challenges was letting go; right. Having enough confidence in the people under me, to let go. And until I learned that- there’s that kink in the hose and… that kink in the hose will restrict growth. And it causes a lot of problems. The policies and procedures we have in place have gotten to where they’re scalable, right. And so with me being, even though I am a detailed… you would think an accountant is a detailed guy, I am probably so far from being a detailed guy that there is that you wonder how I was ever an accountant. And so I am a big picture guy. And I can get into the details if I want to. It’s not what I like to do. And so it really took somebody else, and understanding that, to come in and really implement policies and procedures that help us scale. Because I’ll just pass over them. Which is a lot of entrepreneurs. And I mean as I see CEOs and those people that are more strategic and I needed to step out and be more strategic, which we are still going through right now. Trying to figure out how to put the right people into place. We’ve got the team on board to go through that. Or to you know change organizational structure where I’m not in the details where everybody else is now making the decisions. And so I think that is also important as we move forward and is to know that I can be strategic and our other executive team can be strategic and then we have the project managers and, the asset managers and the accounting and the people underneath them, able to make the decisions based on the policies and procedures we have set up. And we can now be more strategic. Especially me as the CEO which has been difficult to learn. You would think that should be easy. People grow up wanting to be the CEO and just being up at the top and you know not.. You don’t think that they’re doing anything. It is a very very tough thing to to learn, especially starting a company where that’s your baby. You feel like look if you let go, are we going to have the revenues to support these 40 people. Now you gotta start thinking about their families. So it’s been a very challenging thing for me to do. And I’ve accepted that. I’ve moved on. There is still some anxiety with it but I think we’ve got good people in the company for that growth to happen.
06:00 JL: You know I think about that balance beam of..of letting go, right, and it’s the, you know…
CAMERON GUNTER: You’re going to sing us a song now right?
06:09 JL: the micromanagement right? So from, you know, falling off one side of the balance beam might be micromanagement and falling off the other side of the balance beam is abduction- Not, you know, not giving people enough of the tools to get their job done. Or having had the training or skill sets right. I think about my mentor who built that fund with me, and he used to talk- he grew up in a home full of entrepreneurs, and he used to talk about, how his dad instilled in him- this was a pep talk I was receiving, I was having all this anxiety right…
CAMERON GUNTER: I like pep talks.
06:40 JL: And he said that his dad talk to him- they owned a bunch of convenience stores and gas stations and stuff and his dad would say ‘Well here’s the thing. You just need to be ok with the fact that your staff are going to do a worse job when you come home because you’re gone. But here’s the advantage you get to eat dinner with your family. Because otherwise you just have to stay at the store all day’. You know.
CAMERON GUNTER: That’s great advice
07:01 JL: And It’s tough for me because I want it all done and I want it done yesterday. And I want it all done perfectly, right. And when you think about this letting go, I think you are right. It is very much folks who it’s their baby. And they are the ones with those skill sets, but now you know they are a victim of their own success and there’s not enough of them to go around. And they need to build a system. So advice for the rest of us who may be at a similar reflection point and trying to build a more robust system so it can be less of us. What kind of things would you suggest as a way, as a way to know if our system is robust enough? What can we be measuring, or what can we… what can we do to know if the system or policies and procedures are really going to keep stuff from slipping through the cracks and really going to deliver or not.
Allow Space for Others to Grow While Implementing Lessons Learned
CAMERON GUNTER: You know it…its… implementation. You have to go through to see if something is slipping through the cracks. And there’s going to be tweeks. What I learned by letting go, is there’s a lot smarter people here than I am. And you just have to trust that. They’re going to make mistakes because I made mistakes. We all made mistakes early on. We just corrected them. We corrected them usually ourselves. Or because we had a smaller group. Now we have a bigger staff that has more experience doing different things that can correct. And so you… we set the policies in place. We let them go through the current policies and if we need to change, we change. But we have a safety net and we’re- the executives are the safety net. From the standpoint of the CEO CFO and all the other executives who have had the experience, who grew with the company, with me or with another company. And so you can’t have a deep- the safety net cannot be so far away that you have to restart. But you can have a safety net that is closer. And you know an example is; Sunday night I’m watching- we love american ninja warrior. And so my wife sits and watches it. But now they have an additional course. The last thing on it is they… they are climbing with their hands, is they are climbing this 35 ft elevator shaft. And you get up to 35 feet and you go ‘ok what happens if his arms just give out how’s he going to fall’. But they have this safety net down below so if they fall they will only fall like 7 feet. So I use that as an example- is let’s let them go work hard and get everything they’ve done. They have the policies and procedures in place. but here we are, as this safety net to catch them when they get so tired that they fail. And then we will bring them back up to the top, so we don’t have to go start all over and maybe have a disaster.
09:50 JL: It sounds like you’re also saying, you know, not so close that you’re smothering them but not so far that it’s not going to do its job.
CAMERON GUNTER: Yes exactly. That’s a better way of saying it. A more sophisticated way to say it than how I said it. …
10:04 JL: [laughs] So thinking about what that looks like logistically- is this a monthly report that… is this a weekly report. Is this… what is that? You know, getting a bit granular for just a minute, what does that look like for the executives being a safety net?
Logistics of Delegation
CAMERON GUNTER: Yea so, here’s how we’ve done that. It is a weekly report. Mondays are our meetings with the executive staff, with the executives and their staff. And there is reporting. There’s the weekly reporting, and then each discipline on the executive team has a monthly reporting on their dashboard. So for example right now I am in charge of reporting on the equity and investments, or the equity side of that, of our investor relationships. So once a month I’ll bring a report in that shows that has the criteria. But I have people under me prepare that report. And they they have to give that to me and I meet with them weekly. But then I report to the executive team once a month. We have the same thing with our chief investment officer. He is in charge of all the pipelines and he has his analyst staff underneath him that work on, they have their weekly Monday meeting where they are reporting, and their doing their analytics. And so that’s the process we’ve gone though and it seems to work really well. They report up to their executive and and the executive reports to the rest of the executive team and the CEO. We’ve now hired a fund manager and another investor relations guy to take away that responsibility from me, so I can now get out of that role and they can now report to the executive team through the chief investment officer on how equity raises go on and just the…the goals and the dashboard items that we need to hit to make sure we accomplish the goals.
12:00 JL: Love it. Taking a bit of a right turn here, a different set of -kind of questions having been coming to my mind, thinking about this is, you know you brought up that so many entrepreneurs are kind of more big picture guys- gals right? When you think about the million things you could do next, my two part question is; one how do you feel like you know what the right thing to do next is, how do you come to that decision? And then two; any tips you have for keeping yourself disciplined for what you’ve decided the right thing to do next is even when there’s other shiny pennies that show up.
Deciding on the Next Step
CAMERON GUNTER: Yes so the first one how do we know what to do next? That…You know my mind is always thinking- whatever business you are in, I’m sure you are always thinking of that, the next big thing. So whenever I’m traveling and looking at different deals going across the country, whether it be a hotel deal or a new apartment project in a downtown market. What I typically will do is I’ll listen to a story or I’ll have a thought and I’ll bring it to our, for example our executive team or our chief investment officers and say ‘Hey, you guys will you do some research on this or find somebody to do some research’. So an example is that right now is we’re looking at… the old Residence Inns. So they have a Generation 1 Residence Inns.…. They are old. They are tired. Marriott likes a new urban- they’re even just a new upgraded Residence Inn that look nicer that are not just the walk ups, that feel like a better hotel to compete with some of the other competition out there.
So you know, as we’ve started to think through things. Of What would you do? Is there a business plan behind Gen 1s – generation 1s to convert them into apartments or do something else with them. And so we’ve… That type of thing we start strategizing as… It may first start with our chief investment officer or the COO or somebody and then we will formulate a plan and say hey let’s do some research on it. So we’ve now gone and had interns or other- sometimes we use byu students, sometimes we’ve used other college students. Just to do some research and then we formulate a plan. And if it makes sense then we’ll take it to the next phase. So we try to use interns, staff, the expertise around here to decide, what is our next step. And we try to keep current on what’s happening. So we don’t get caught in a situation where we’re going down a path that we shouldn’t be going down to so.. An example right now in the hospitality industry, I think we’re getting to a peak to where there’s, you know, there was a lot of opportunities over the last 3 years in hospitality. I think we’re now getting into that peak where we’re being very cautious and being very selective on where to go. And that’s because of some research and things we are looking at now. We can never guess where it’s going to be and there’s things that happen. There are trends. Same with multifamily. In areas and you look at this millennial generation and now your looking at this gen z, which we are heavily looking at now. Because the millennials are now going to start shifting their mindsets and are going to start shifting where they were. So we’ve got to make sure we’re following trends and we got to make sure we’re following that generation. And find as much information about them as we can. As an executive team and as a whole company. It comes back to this leadership. If we can listen to the new generation to see what they want, it’s going to help us shift to what the trends are in the future.
15:48 JL: Ok… I feel like a real value from what you’ve said is, that it sounds like you do a lot of empirical back up. And that regardless of how you feel about things you’re going out there and checking, you know, does the data support how I’m feeling. I know I’m kinda putting words in your mouth. But is that fair?
CAMERON GUNTER: That’s exactly right. And I think it’s because what we talked about before. I know my background is- I grew up on a farm. I am not super sophisticated but I know that…. There are people in the… in this organization that are, or any other organization. And so I think that’s not being as smart as most people…I think that’s a benefit to me even though it shouldn’t be a benefit to me.
16:31 JL: [laughs] You think about, you know, say one guy who’s at 95% versus ten guys who are at 90%, who would you rather bet on you know.
CAMERON GUNTER: Good point. I agree.
16:45 JL: Well let’s go for part 2 of this questions. So you do some research. You feel good about a direction. As the CEO where you’ve got the opportunity to shift the, you know, steer the boat differently if you want. And maybe you don’t have as much ADHD as me.. So maybe it’s not so bad for you. [laughs] But when you do have the shiny penny come along and you do have something that sounds fun and exciting and maybe emotionally have a desire for it, but you feel like you should stay the course. Any tricks that you do to help yourself kind of rain in and do what you think you should do instead of what you feel like doing?
Remember Your Mistakes and Learn from Them
CAMERON GUNTER: I’m still learning that. But one of the tricks-it’s a good lesson. Is I think back to the times that I fell in love with a deal, and I did the deal and we lost a lot of money. So I still do things like that, but it’s having a team around and knowing the process that I can’t make the decision any more by myself. Now I’ll push. And our executive team they say and one of my partners says, ‘Look you come in the room. We’ve got five guys around the table and you’ve got your boxing gloves on and we can’t get you down’. And so and they understand that and I understand that. And it’s healthy for us. And it’s like I said. The best thing I have- if they can remind me is ‘Look. Here’s a deal that we did- that we shouldn’t have done. We forced a deal to go that had the shiny penny and it didn’t work and we lost a lot of money on it. And that could have even taken us a different direction’. And so now as we look at these things it takes a team and that’s the hard thing. Even though I want to do some cool things and you know as an entrepreneur you get excited about some things. But it’s learning from our team and from other experiences and learning from my experience that when you do some of those things that don’t make sense and you lose money, it’s hard.
18:41 JL: Sure. I think I was just having slight PTSD as you were talking [laughs] as I was thinking about some of mine. Right. But I think it’s totally accurate, you know, you hear that thing wisdom comes from experience you know and it’s like ….oh I’m totally messing that up. It’s like oh ‘good choices come from experience, experience comes from bad choices’. [laughs] Right?
CAMERON GUNTER: Right. Exactly.
19:10 JL: Which is really unfortunate. I mean like as much as possible It would be great to learn from other people’s mistakes. But It seems like the ones we make are that much more poignant and longer term uh?
CAMERON GUNTER: Yeah, I agree. If If… I am sitting here thinking about if I didn’t have the team and the process that I have now, would I have forgotten those deals that I did that I shouldn’t have done. Would that experience that I had before cause me to think about doing that deal and I honestly probably still would do it because we have a short memory. And so as we look at that I say that that is what helps me, but I think it is the people around me that help me remember how that was. And so even if I was out on my own or as small as we were, where I was making the decisions. I still may be making the wrong ones, right? I mean… I hope not. But that’s a possibility because it gets sexy or it gets that shiny penny. So.. you know I like that quote but I think it really takes for me, I think it helps to have the group around me to help remind us – look that’s… you had this experience before.
20:26 JL: You know it’s not an exact comparison. But if does remind me a little bit if you read any of those like old … stoics or, like spartans or like the, a bunch of the samurai writings, they talk a bunch about like, think about your death, you know this is the thing the warriors- consider your mortality daily. You know so people don’t get a big head; basically. And I think not pretending that we haven’t made mistakes can really be a benefit of, you know, having that humility of- I’m a human. As good as I feel about this now, guess what I felt good about before, right.
CAMERON GUNTER: I think you are exactly right. That you have to recognize your mistakes.
21:10 JL: Well listen. We are getting close to the end of part 2 here. Besides people you know joining C4 at corporate alliance and coming to hang out at CEO events with us and calling you to buy into your investments. By the way, besides coming to the website- what’s the website?
CAMERON GUNTER: Website’s pedgev.com. PEGDEV.com
JL: Ok besides somebody just looking at the website, calling you guys saying ‘I want to buy into hotels with you too’. What’s a good way for people to get a hold of you? Email or whats good?
CAMERON GUNTER: Yeah. They can email me at email@example.com. Or one of my investor relations guy’s Brad Mertz at firstname.lastname@example.org
21:49 JL: Sure so ok. Glad we got that out of the way. Final question here.
CAMERON GUNTER: Is that the advertisement part?
21:56 JL: That’s the advertisement part. So, thinking about the difference between medium sized business versus big business. What advice would you give to folks out there who are really trying to make it into that billion billion dollar plus level.
CAMERON GUNTER: Thats a great question for us right now. It’s because we made that decision. From The medium business where, as I said earlier where I could be involved with a lot more. Versus going to that next level. You go to that next level, you now have to become a corporate structure. You have to really let go and be the guy or the person that is more strategic. And you’ve got to help your other executives and teach them that now they have to be more strategic more leaders and not the doers. And you’ve got to rely on the people under them. And hire the right people to do the things that they need to do and follow the policies and procedures. And you manage to those policies and procedures and this reporting- whatever reporting system it is, whether it be weekly or monthly. So in order to get to that next level; we hear about all the time in business- is scalp-ability. If you have the procedures in place and you have the right people you can scale. If you want to stay that medium small to medium sized business. Then its, there’s a point where you grow to a point where – one of my other partners says this all the time – you grow to a death, right? So you can either stay small or grow big. That medium gets in that weird spot to – is profitable or is it not profitable. And can you scale it. That’s always a challenge. And that’s what we just came from. We made the decision to go big versus come back to where we were, a small organization doing smaller projects.
23:52 JL: Great advice. Appreciate how much time you spent with us. Thanks for making time.
CAMERON GUNTER: Thank you. I appreciate the opportunity.