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Learnings from the Faithful

Recently a small group of men were nominated by their Summit leaders to attend a gathering to celebrate their faithfulness.  These men led the way in memorizing Scripture and preparing for the small group time in a way that proved their excellence.  At the event, we gave them a copy of Walt Henricksen’s classic book, Disciples are Made not Born. 

Below you will find some learnings and observations from this great book by some great Watermark Men.  Men that weren’t born followers of Christ but by the grace of God have been made one.

More of your Questions Answered.

Here are more answers to some of the excellent questions we received.

Q:  Will the next conflict resolution trip to Africa carry a different perspective?

A:   Don’t know what the ALARM and WMCC partnership has planned for their next trip.  However, having participated once in that experience in Burundi, it seems like the priniciples of  leadershp and conflict resolution are interchangeable for business here and conflict in Africa.  As ALARM deems appropriate it would make sense to me that they could benefit from some of biblical principles applicable to financial stewardship, use of debt, etc.  Those fundamentals apply to personal lives as well as business .

Q : When you say you deal with conflict biblically that is great, but how do we grow in this area?

A:  I have only grown thru actually engaging in the process….OJT and using the basic principles.  Everything from small things at home or in relationships, to big things in business or community, there are lots of opportunities if we are willing to engage with a humble spirit.  It has proven helpful to have the counsel of others in community while going thru the process.  The Lord of the Rings material is a great resource.  You can listen to this series here or download the PDF guide to conflict resolution.

Q :What is the true story about the tax payer owned hotel?  How will either outcome effect the average taxpayer?

A: Complicated matter that got pretty political. However, upon reading the proposition, it was actually broader than just being applicable to the hotel. Had it passed  I believe it was designed to restrict the city’s ability to provide economic incentives for growth.  Historically, Dallas and other cities have needed that right/tool to maintain the health of the core of the city.

Q: What did you do leading up to this crisis that you will never do again?

A : One clear thing I think we did was use debt levels to accelerate prospects for profitability.  That was inconsistent with many of the cautions in Proverbs regarding debt as well as the warning in Prov 20:21 that “an inheiritance gained hurriedly will not be blessed in the end”.  We certainly weren’t “blessed in the end”  The fact that some may have increased their profits using the strategy in the past should not in any way mitigate the reality that many warnings are still there.

Q : How do you balance the need for seeking counsel with the need as a leader to take action – avoiding analysis paralysis ?

A: Great question. I myself tend to over analyize. However, Prov 19:2 says ” its not good for a man to be without knowledge and he who makes haste errs with his feet”.  Thus, certainly we should gather facts first. Then if the answers aren’t clear from the facts or if the implications on others are large, seeking counsel will serve you well.  Don’t operate in isolation.

Q: What impact has current times had on family and marriage? How has it impacted communication with your wife?

A :  Might be better coming from my wife.  She summarized it by saying :  ‘We are communicating more and depending on each other more.  In the process, she has participated in some of the meetings with people I began to counsel with to help ensure she  had the benefit of their comments. She also has a greater and detail understanding of our family financial information, that she didn’t have before.    In the process , we have also given my kids (ages 21-28) the clear story of where I am and things that we should have done differently.  It has resulted in some great mentoring opportunities.  So I think it has been very healthy for our family relationships ‘.

Q :  We just experienced the great train robbery of all time by Wall Street, how can one invest with integrity in this market?

A : Lots of issues in the market place, in businesses and among individuals, not just Wall Street.  I think the starting place is for us to each lead ourselves well in every area of our life, including in our own financial stewardship and accountablility thru community.  As to investing in the future, I think the same biblical prinicples apply. Look for integrity and accountability, look at leverage levels, avoid “gaining inheiritance too quickly” by taking on too much risk , etc

Q :  What would you tell a person out of work who can’t get a job to pay the bills, would you suggest going to get a higher education degree?

A :   I would suggest counseling with some folks regarding your skill sets and the outlook in the job market. Also , they need to help you assess how you would pay your bills and get thru the higher education program .  If you have a undergraduate degree already and you already have some job experience, my personal opinion is that higher education is primarily helpful for a career change.  My experience is that employers prefer experience over higher education.

Q :  Bad things happen, but sometimes our decisions cause bad things to happen to us. Looking back over the past 24-36 months, which if any, core values did you compromise that have led to your current situation or made it worse?

A:  The fact that we did not heed the cautions in scripture regarding debt  in structuring our business and the fact that I did not “listen” to the wise counsel of others (Prov 12:15) made my situation worse.    There is a difference in hearing and ‘listening’!

Q :  What advise would you have for dealing with business colleagues that find their significance in financial security and as a result feel insecure and preoccupied with media coverage of the market?

A :  Certainly a great time to model where we find our hope and security. Everyone found out its not in our ‘genius’ or balance sheets !    Sharing my own ‘lessens learned’ and the truth of the biblical concepts regarding debt, anxiety, security in money have all given me opportunities to open up faith discussions with friends and business associates.

Q :  There’s a lot of talk about “credit” crunch. Why not call it a debt problem? Is it possible that we are rationalizing debt for business?

A :  Clearly that is the issue for many involved.  From the homebuyer and credit card user to the apartment developer to the major corporations. We all rationalized debt levels that could not be sustained in a downturn.  I suspect the market will reset at lower levels for some time.  Prov 27 :1 talks about presuming for tomorrow and not knowing what another day will bring.

Q : Does the “hunker down” mode tend to make you pessimistic and apt to miss opportunities. Furthermore, do you foster anxiety?

A:  I certainly hunkered down and was anxious early in the process .  That tended to lead to isolation, which is not a good thing  (Prov 18:1). ” he who isolates   himself quarrels with sound wisdom”… and lots of talking to yourself !    If you are living the journey with others and they are sharing the burden , the load will be        lighter and there is freedom in knowing others are sharing the responsibility for decisions.  Like Moses in Exodus 17 with Aaron and Hur on the mountain,  if   others are coming around you and “holding your arms up”, you will win the battle.   As to missing opportunities, that’s where good business plans and the counsel of others can supplement your ‘processing’ capacity and help you be more objective in a cloudy time.

Q :  How has your community group helped you process and lead through this environment?

A : Community, both thru my immediate community group and then the other wise “counselors” been very critical in the area of prayer, support and encouragement and counsel.

Q:  How do you balance exerting yourself and trusting God?  / How do you balance relying on God and Him being in control, with also being a man or woman of action?

A:   I think God gives us skills that he expects us to use in applications where we are following His principles.  Thus , exerting yourself in that backdrop is what He wants us to do and we can rest on the outcome.   I think its when we are ‘exerting self’ , to the exclusion of or in dirct contradiction to God’s word, that we have to worry about the outcome.( Phil 2:3-4 ; Ps 127)

Answers from Frank

Frank Schubert provides answers to several of the questions from last week’s “Leadership Lessons for Troubled Times” business lunch.

Q: What does capital structure look like in these current times.

A : Real estate is a capital intense business. Kyle’s comments about being cautious about debt are on point. Our company was hailed as having a “brilliant capital structure”, the lowest capital structure in the market. However, we were the “lender’s slave” (Prov 22:7)with our size and complexity before the market deteriorated, much less afterwards when our high leverage approach put us into default. Going forward, I would reduce leverage from historic levels, and increase equity to a structure that is not targeting profits thru financial genious, but through asset performance. A structure that can stand regular cylces every 7 years ( 4 downturns in the last 30 years) . Using leverage to accelerate profits can prove risky “An inheirtance gained hurriedly will not be blessed in the end ” Prov 20:21.

Q : I need to raise capital for development of apartments in these tough times, how do I lead out on accomplish this goal ?

A : A challenge in the near term markets. Use facts not emotion to make any decision. While construction costs are coming down, market research says that net operating incomes are coming down as well, 10-15% over the next 18 months.You can buy apartments below replacement cost for the next 18 months. If you are doing this for yourself , I would consult some advisors and consider if its wise going forward. If for a third party, I would be realistic in communicating the challenges to them and have them prepare a back up plan. You should make sure that they understand the risks and outlook so that there are no surprises, ” prove yourselves to be blameless and above reproach” Eph 2:14.

Q: How do you stay motivated on a daily basis and keep those around you motivated.

A : Honest communication is critical to dispel rumors and build trust. We must keep a good spirit and not complain , “Do all things without grumbling…” Eph 2:24. We are stewards of whatever responsibilty and “to whom much is entrusted, of him they will ask all the more” (Luke 12:48). In this environment the natural tendency is to move to a selfish survival mode. Phil 2:3-4 is a great template, “… do not merely look out for yourself , but for the interests of others.”

Q: How do you handle the anxiety

A: I am a worry wart and struggled with anxiety for a number of months early on. Then , reading thru Acts as part of The Journey I saw how Paul responded to hard circumstances. Imprisoned, shipwrecked…. it didn’t matter. He stayed on point and continued to serve God in everything he did, regardless of his circumstances. Joseph, though sold into slavery and imprisoned, continued to honor God and serve Him (Gen 39-41). And God was glorified , in spite of the circumstances. Those passages helped me realize that I should be focused on serving Him and being a good leader, regardless of my ’shipwreck’.

Q; How have you applied the principles on use of debt in your business and is it consistent with your personal application.

A: Great question. I did not apply the same principles to business as I did to personal finances. The business suffered the consequences. In our business, we became the ‘lender’s slave’. Many families were affected. “To whom they have entrusted much, of him they will ask all the more” (Luke 12:48). As a leader responsible for stewarding many employees, lenders and investors, the responsibilities are great. God doesn’t distinguish between the business or personal. We are to just follow His word.

Q: What are the greatest needs of your employees.

A :    I Tim 5:8 says ” if anyone does not provide for his own, and especially for those of his household, he has denied the faith”. The families of employees are high priority.   For an employee to fulfill this biblical responsibilty he or she needs to know what is going on and what the risks are to him/her as soon as the information is known. Employees have families to take care of and deserve to know where they stand and what the outlook is, even if it’s unclear. Never hold back information from employees if it has a chance to affect them. Don’t handicap their ability to plan and take care of their family.

Q : Is defaulting on debt to investors/lenders ever the “right” thing to do.

A : Whether the debt was the right direction to go initially , once you have Prov 3:27 says ” do not tell your neighbor “go and come back tomorrow” when you have it today”.  I take that to mean ; if you have the money to pay, pay it.  Seems like going into default merely as a ‘tactic’ is inconsistent with this verse as well as Eccl 5:5 where it says “better to not vow than to vow and not pay”.  If you can’t pay, you won’t control whether you are in ‘default’ and you are ‘the lender’s slave’.  If you can’t pay today or expect that at some point in the future you will not be able to pay , to be above reproach , you need to go the lender/investor explain where you are.  Take ownership that you can’t pay , apologize and ask for forgiveness ( Conflict Resolution) and then ask them to tell you how you can serve them with the resources that you, or the company, has. At that point you work for them.  As Joseph did, we are serve our master well and honor God, regardless of how we got to those circumstances. Give them all of the facts so they clearly understand all the issues and possibilities. Thereafter, you should continue to try to repay them, even after a default, so they don’t have a reason to characterize you as “the wicked who borrows and does not repay” (Ps 37:21).  If there is more than one creditor, you have to make sure that you don’t show partiality to one over another . That is how the court would resolve the problem and that is what James 2:1 calls us to do , treat everyone the same and not show partiality.  If it is in your business/company , you should consider getting all creditors who are pari passu in the same room and explain to everyone so they can see that you are committed to treating everyone they same and fairly under the circumstances. They will hold you accountable after that.

Questions from “Leadership Lessons for Troubled Times” Lunch

We received a lot of great questions during our time together for the “Leadership Lesson for Trouble Times” business lunch. Here are the questions that we received from you, so check back regularly as we begin to answer these questions.

  • I need to raise capital for development of apartments in these tough times how do I lead out and accomplish this goal?
  • Will the next conflict resolution trip to Africa carry a different perspective?
  • When you say you deal with conflict biblically that is great but how do we grow in this area?
  • Can defaulting on debt owed to investors ever be the “right” thing?
  • What is the true story about the tax payer owned hotel? How will either outcome effect the average taxpayer?
  • What did you do leading up to this crisis that you will never do again?
  • How do you balance the need for seeking counsel with the need as a leader to take action – avoiding analysis paralysis.
  • When Nehemiah was rebuilding the wall, he prayed for protection, and then posted a guard. Is there a parallel for leading in troubled times?
  • Debt is never smiled upon in the bible, but it is necessary in business (according to a “Modigliani-Miller” world). Can you talk about capital structure in biblical terms? What does you capital structure look like in these times?
  • What impact has current times had on family and marriage? How has it impacted communication with your wife?
  • We just experienced the great train robbery of all time by Wall Street, how can one invest with integrity in this market?
  • With all the media hype regarding the vote tomorrow on the taxpayer owned hotel… What is the truth about how it will affect the average taxpayer?
  • How do you personally stay motivated each day, and keep those around you motivated, when getting results in your collective business goals/initiatives can be difficult?
  • How do you handle anxiety in these tough times?
  • How are you sleeping and how do you protect your rest and your health?
  • What would you tell a person out of work who can’t get a job to pay the bills, would you suggest going to get a higher education degree?
  • How have you applied biblical principles on the use of debt/leverage in your business/partnerships? Has this been consistent w/ your personal application of these truths? How have you succeeded/failed in this area?
  • Bad things happen, but sometimes our decisions cause bad things to happen to us. Looking back over the past 24-36 months, which if any, core values did you compromise that have led to your current situation or made it worse?
  • What advise would you have for dealing with business colleagues that find their significance in financial security and as a result feel insecure and preoccupied with media coverage of the market?
  • There’s a lot of talk about “credit” crunch. Why not call it a debt problem? Is it possible that we are rationalizing debt for business?
  • Does the “hunker down” mode tend to make you pessimistic and apt to miss
    opportunities. Furthermore, do you foster anxiety?
  • How has your community group helped you process and lead through this environment?
  • How do you balance exerting yourself and trusting God?
  • What do you perceive to be your employee’s greatest need during this economic climate?
  • How do you balance relying on God and Him being in control, with also being a man or woman of action?

Leadership Lessons for Troubled Times

Join us today at 11:30 today at Watermark for our next Leadership series “Leadership Lessons for Trouble Times”. This year, panelists include:

Malcolm Holland, Colonial Bank
Frank Schubert, JPI Real Estate
Kyle Thompson, Dale Gas Partners
Todd Wagner, Watermark Community Church

We hope you’ll plan to join us for lunch.