Despite the cut-from-the-same-cloth executive blueprint and the near certainty that Schall was the right man for the job (the board did not seriously consider any alternative candidates and certainly didn’t interview any), Essex took a formulaic, measured, and patient approach to its succession planning. Even with the preplanning and established time line, however, the executive team encountered its fair share of challenges and doubts. Essex’s preparedness serves as an instruction manual to any multifamily apartment firm considering a changing of the guard in the CEO’s office. What’s more, their story shows how readiness at the top can help overcome obstacles and improve operations, despite troubles in the larger economy. And going forward? That means a steady, smooth course ahead for a firm coming out of transition.
RELATIONSHIPS ARE KEY
“I didn’t expect Keith to retire,” says Schall of the half-decade-long process that began when Schall was moved from the CFO to the COO post at Essex in 2005 but was accelerated after Guericke informed him in late 2009 that he planned to step down within a year after filling the CEO role for 22 years. “I was perfectly happy being COO, so when Keith announced that he was going to retire at the end of 2010, I just smiled and thought, ‘Sure you will.’ Keith has always been completely engaged and has such a passion for real estate that I believed his retirement to be unlikely, so I kept asking if he had reconsidered. Finally, the press release announcing his retirement was being drafted, and I said, ‘This is your last chance; you have only one week left to change your mind.’?”
Guericke didn’t balk. In fact, he had already been redirecting CEO-centric requests made to his office over to Schall’s since April 2010, when the senior management team was quietly under way restructuring Essex. While Guericke officially remained president and CEO to the public as well as the majority of Essex’s personnel, behind the scenes he was unofficially sharing the CEO role with Schall, who began running the company’s weekly executive meetings and making mission-critical decisions with Guericke only weighing in as counsel.
