Real estate CEO emphasizes the importance of ‘pivoting’

Sandeep Mathrani, CEO of WeWork. Photo: Courtesy of WeWork
By Michael R. Malone

Sandeep Mathrani, CEO of WeWork. Photo: Courtesy of WeWork

Real estate CEO emphasizes the importance of ‘pivoting’

By Michael R. Malone
Sandeep Mathrani, speaking as part of the Distinguished Leader Lecture series at the Miami Herbert Business School, discussed the importance of management flexibility.

Sandeep Mathrani, who has led five different firms during his career including the real estate company WeWork, counseled a virtual audience on the importance of management flexibility on Jan. 28 as part of the Distinguished Leader Lecture series at the University of Miami Patti and Allan Herbert Business School. 

Mathrani assumed leadership of WeWork, a commercial real estate company that designs and builds physical and virtual shared spaces and office services, 11 months ago in the midst of the spreading pandemic and following the dismissal of its former chief executive. The company and the economy were in free fall. The firm has since closed 130 of its 1,000 locations, renegotiated its leases, sold its noncore businesses, and trimmed its workforce and is now poised, according to Mathrani, to return to profitability in 2021. 

The executive highlighted how flexibility, knowing when to shift the direction of a business, and for leaders to admit—to themselves and to their companies—when they’ve erred as the keys to his success as a business executive and as a person. 

John Quelch, dean of the Business School, and Andrea Heuson, professor of finance and co-director of the school’s Real Estate Program, moderated the webinar conversation. 

“Pivot is my favorite word. I could be going down a certain direction and realize it’s the wrong direction. And it’s better to say, ‘I’m sorry; I made a mistake,’ and correct it,” Mathrani said. “Very often leaders are arrogant, and they follow their policy to the end because they are afraid to acknowledge their error.” 

Early in his career, Mathrani adopted the habit of embracing change and garnering varied experience within the field to become a well-rounded leader. 

“I wasn’t paying attention to, ‘Am I going to make more money with every pivot?’ I was more interested in gaining experience to being a wholistic leader,” he said, urging students to focus on pursuing a professional course that generates learning and expanded experience rather than simply a bump in salary. 

He shared how another learning experience taught him the value of self-reflection that has been instrumental in developing his understanding of turnarounds, both personal and for a firm. Eager to advance and to assume more of a leadership role, he approached his mentor—the firm’s owner—who told him he lacked the skills and counseled him to see a therapist. 

“I treated the advice constructively. And while I’m not sure what impact the therapist had, for sure it made me a better person, made me more confident, and exposed me to becoming who I am—and most importantly to understanding my weaknesses and insecurities,” he said.

Heuson asked if while he headed General Growth Properties, a commercial real estate company and the second largest shopping mall in the United States, Mathrani foresaw the change in the retail landscape.

“Amazon formed in 1994, so there was never a thought that this thing is not going to grow. So, what shocked me the most was how many retailers sat back and then were unprepared to compete, to use their stores as distribution centers for pick up and to ship,” he said. 

Those many companies that made the pivot to e-commerce are doing well today, he noted.

“Yet the success of e-commerce doesn’t mean bricks and mortar is going away. They provide an experience that people want,” he said, noting that the percentage of retail to e-commerce sales was reported at 85-15 prior to the pandemic. 

That percentage has shifted and will continue to shift, but Mathrani said it would stabilize and that looking to countries like China, which was well ahead of the United States in terms of e-commerce before the pandemic, could provide an indicator of where. 

He said that the pandemic had impressed on his leadership team the value of the physical workspace and of consistent communication. 

“Half of our staff comes in daily to the office” he said. “Ever since we’ve come back, collaboration, innovation, and decision-making have been much improved. I can walk into someone’s office, put the phone on hold, talk, and in 10 seconds we’ve decided something. When we were all working from home it was much more difficult, more work, and more stressful. 

“And during the pandemic, the level of communications that you have to do with your troops has increased vastly,” Mathrani said. “Because they don’t see you and don’t talk to you, they don’t feel connected. And there’s a fear of missing out. One thing we learned is that you can never overcommunicate.”  

For students pursuing a real estate career, he emphasized developing “touch and feel” for the industry. 

“Start out on the operating side of business; go into leasing, into asset management. Do things where you can learn the business from the bottom up,” Mathrani advised, “so that when you get to the next level, you’ll have the experience you need.” 

He said that, from a business standpoint, Miami had benefitted from the pandemic. 

“Miami’s been doing all the right things,” he said. “It’s always been a city that focused on Latin America, with lots of corporate headquarters. Yet there was little or no focus to attract talent to serve the United States. 

“The quality of life in Miami has been much better than it’s been in other cities during the pandemic—though how the pandemic was handled is another story—and that’s created interest and focus from North America, a focus that’s driving talent here,” said Mathrani.