Why the Future of CRE Should Include Reverse Mentoring

Commercial real estate investment and service companies have historically done business under a top-down operations model, often for good reason. In a highly regulated, procedure-driven business, those with the most experience and familiarity with the industry are often best-equipped to both steer the strategy ship and counsel the next generation.

But what if mentorship were a two-way street, where younger, Millennial and Gen Z employees could also advise upper management? These cohorts, known for their savviness with tech and social media in addition to their diverse upbringings, have a great deal to teach senior leadership.

Firms of all shapes and sizes have embraced “reverse mentoring,” adopting a series of both formal and informal programs where younger employees are given the ability to directly advise their higher-ranked counterparts about everything from marketing to human resources and IT infrastructure.

Industry executives we spoke to about their specific programs and approaches to reverse mentoring reported higher employee retention rates, more sophisticated tech stacks and even company-wide culture shifts and revenue increases as a result. At the same time, it’s important to understand the limitations of what reverse mentoring programs can achieve.

A leap into the unknown

For many companies hopping on the trend of reverse mentoring, their programs often start not by spending thousands of dollars to hire third-party intermediaries, but by a simple desire to innovate internally.

To best meet this vision, Hiffman adopted an internal committee system, with four separate branches centered around technology, talent advancement and company strategy, as well as culture and diversity. Each group is staffed and led by younger, newer employees who report directly to senior leadership and are tasked with reporting on and tackling problems.

Puzzles that the committee gets tasked with solving range from talent retention strategies to social media marketing. “It’s great for us to get help and make this company better, but it’s also for people in these younger generations who not only want to make a living, but make an impact,” Cannella detailed.

RREAF Holdings, a Dallas-based multifamily and hospitality investment firm, also has a similar, less formal, albeit equally organized reverse mentoring program. The company’s strategy takes root in the aviation industry’s concept of crew resource management, which accounts for leadership’s capacity for human error and its oftentimes fatal consequences.

“We recognize that the best ideas don’t always sit at the top”

“It’s not a life-and-death situation for us, but we borrow from that intellectual body work,” said Jeff Holzmann, the company’s COO. An airline pilot himself, Holzmann recognizes the importance of empowering younger employees who may possess fresher, more diverse viewpoints to speak up. “We’ve seen situations where the first officer knew that the plane would crash, and wouldn’t dare say anything because the captain was the captain.”

To avoid these more metaphorical crashes, RREAF makes it a point to empower its younger team members to talk at formal debriefing meetings following every transaction, aptly called ‘no jeopardy events.’

“This is very unusual, but you will have situations where somebody in their mid-20s is speaking up against their boss or their boss’ boss, saying they don’t think it was handled correctly,” Holzmann observed. “Without a program like this, would an asset manager, or your most junior analyst dare say to your CEO, (that) I think you’re wrong to sell a property at that price?”

Tech titans

Impactful, these programs certainly are. Hiffman’s tech committee, led by a mid-level employee, first put forward the idea to use Microsoft Teams for company functions instead of a remote server, and advises leadership on the most optimal uses of social media in marketing and company communications. “They’re not just telling us how to repost, share or use a hashtag, but how we can be more efficient with tech and make better business decisions with tools we didn’t know we had,” Cannella noted.

Holzmann has observed a similar trend regarding the tech savviness of younger employees and its real-time impact on his company’s functioning. Holzmann told CPE that he’s often been directly introduced to project management software such as Basecamp or even the Google suite by a younger generation who had used them in college. “Ten years ago, this would have been science fiction, but it’s always going to revolve around tech that the older, more senior crowd isn’t used to using,” Holzmann said.

For its marketing strategies, RREAF teams staffed by employees in their 20s and 30s will often pitch their strategies directly to senior leadership, who then authorize budgets. This happens in part because the senior group is more exposed to the most popular communication channels, as well as the best avenues for reaching employees and prospective renters alike.

“It’s a younger generation that works for you, (but) it’s also a younger one that you are approaching,” Holzmann pointed out. “You’re not going to get our CEO, who’s in his mid-60s, to start following influencers on TikTok. You have to use the tools that they use.”

Cultural shifts

Despite the benefits that using the latest and greatest technologies provide, the more meaningful impacts of reverse mentoring often manifest in long-lasting changes to company culture. With a more diverse array of viewpoints and upbringings than previous generations, the younger cohort of employees can often directly shape professional growth from the C-suite.

“It’s often about the spoken and intangible things, like learning about a different perspective or way of thinking about something,” said Nashunda Williams, JLL’s head of culture & employee experience. JLL’s approach to reverse mentoring is part of its GenAll Business Resource Group, an application-based program that pairs younger employees specifically with older mentors using metrics based on both their goals and business specialties.

“What makes this program unique is the intentionality,” Williams detailed. “The protégé sets the cadence, which sparks that two-way dialogue of deeper engagement.”

But cultural shifts can also be material. Hiffman’s reverse mentoring system has effected significant changes to its employee benefits and training, with expansions of its insurance coverage, parental leave and business referral programs originating from its talent advancement and company strategy committee.

The company expanded its paid time off offerings, giving employees a day to contribute to a philanthropic organization of their choice. “We know that Millennials and Gen Z want to make a living, but also make an impact,” Cannella said. “Having these things also make us more competitive in the market.”

“It’s not only about having that formal process, but having that open door”

Intentionality above all

Despite their vastly different approaches to reverse mentoring, the one aspect that the programs at Hiffman, RREAF and JLL have in common is their intentionality; the opposite of what Holzmann calls “design by committee.”

The biggest trap in this area, though, that a CRE company of any size or specialty can fall into is implementing a reverse mentoring program solely for the sake of having one. Such carelessness could even backfire on a company.

“As the COO of a multibillion-dollar company, I need to balance this,” Holzmann emphasized. “I can’t just say, ‘everybody, let’s stop whatever we’re doing, just tell us what you think,‘ because you will eventually get a bunch of people with very little understanding giving you their thoughts,” Holzmann cautioned.

To avoid these pitfalls, Holzmann, Canella and Williams counsel companies to build their programs from the ground up. “Hire a professional, some kind of facilitator who is well versed in all of the bodies of work that exist, and get your teams physically together, not over Zoom, to instill this knowledge in them,” Holzmann said.

It also helps to periodically update implemented programs to account for real-time shifts in company culture. “It’s not only about having that formal process, but having that open door,” Cannella said.