Why Wartime CEOs Need an Agile Real Estate Strategy

by Knotel: May 09, 2018

In an ideal world, every leader would be a peacetime CEO in perpetuity — fortifying his/her company’s strengths and accelerating innovation.

The reality, however, is that most startups go to war on Day 1 and keep fighting for months or years. Likewise, even the most established and successful organizations are forced to make the transition from peacetime to wartime, sooner or later.

Maybe the economy tanks, forcing you to rethink your business model. Maybe an impressive new competitor opens its doors, stealing a significant slice of your market share. Maybe a vendor in your supply chain raises its prices, taking a big bite out of your margins.

Whatever the case may be, when a company enters wartime, it needs to be led by a CEO who can nimbly navigate unwelcoming waters and emerge victorious on the other side.

Succeeding as a wartime CEO is hard work, requiring a different set of skills than the ones peacetime CEOs need to be similarly successful.

If there’s one thing wartime CEOs don’t have, it’s the luxury of time.

Wartime CEOs are “too busy fighting the enemy to read management books written by consultants who have never managed a fruit stand,” Ben Horowitz, co-founder of Andreessen Horowitz, writes.

This lack of time forces many wartime CEOs to make critical decisions quickly. 

Regrets can be numerous among this type of company in flux. When CEOs enter wartime mode—whether they’re on offense or defense—they need a way to stay agile, particularly when it comes to real estate, so they can avoid getting burned by high consequence decisions.

That “great sublease” you signed in a pinch might not end up working out so well once any number of hidden costs—e.g., taxes, maintenance fees, and insurance—are taken into consideration. You’ll end up burning through a ton of money in a year, making it that much more difficult to win the war.

During wartime, agility is essential to success.

CEOs in need of new office space during these difficult periods can’t afford to spend a ton of time and energy scoping out several properties. They also can’t afford to sign long-term leases that end up making their companies inflexible when success requires them to be increasingly agile.

To thrive during wartime, CEOs need an agile real estate strategy that solves their office space problems, quickly, without forcing them into long-term commitments they have no way of knowing will work out.