Branding is important to getting things done. Personal brands tell you about the nature of the people you are dealing with and how to get things done working with them. Product brands tell you the safety and risk associated with a procurement activity if something were to go wrong. Corporate brands tell you about the team and their goals, objectives and working styles.
Branding can, to a large degree, also be thought of as culture. The Google brand and culture often go hand-in-hand. Same for Apple and Microsoft. Look at the list of best companies to work for and you also encounter many of the best companies to hire.
The brand of your team will let people know when you will be easy or difficult to work with. It will tell them what kinds of projects you will endorse to move forward and which you will push back on. It will tell them what work is prioritized and which is delayed. Ensuring that this branding is clear both internally to your team and externally to your customers is important.
Externally, if you are sending conflicting messages about the type of work you do then you will constantly be stuck dealing with inefficient pre-planning sessions to get people to the right starting point. You will also constantly receive project requests that don’t meet your requirements that you have to send back. This will only lead to wasted time and organizational frustration.
Internally, if your team doesn’t understand the types of projects they are supposed to endorse they can’t be educating and training their customers. Also, at the end of the year, their actions will not have aligned with the team objectives leading to a lesser review or lost personal opportunities.
Branding and culture are ultimately about communication. If you are clear, direct and concise you will be able to position you and your team for increased success. If you leave things open to interpretation life will get a lot messier.
In the big picture of CRE, most people think about brokers, landlords, and leases. People think about the “big” commissions that are earned upon lease signature. The money tied to the lease and the number of years committed to are eye catching.
The reality is, the lease is a relatively minor activity in the scheme of CRE. It may be where the money is but it certainly isn’t the real star of the CRE show. Think of all the things that need to be figured out before you even get there (whether they are actually figured out or not is a separate question):
- Business operating model justifying a location in a certain location. Is the physical location important for hiring of labor or attracting customers? Or is the location important to mitigate risk by separating functions into multiple sites?
- How many people are currently expected to be located at this site? How many are expected to be there at the end of the lease? How is growth forecasted to come about?
- How will people work at the site? Will they require offices and specialized equipment? How much space is required to fit them in – minimum and desired space?
- Is this a new function or continuation of operations already underway? If new, how certain are we with our projections and do we need to minimize long-term risk by increasing short-term costs? If existing, is the business conditions that caused us to locate here still in effect?
- Many specialized questions based on the type of asset being leased (office, warehouse, call center, parking).
In the grand scheme of things, negotiating an extra dollar reduction per square foot of a lease is relatively small. It just happens that it can be measured while most of the other things above cannot. It also happens to be that that’s where the costs/revenues to third parties occur making it a big deal. It also happens to be tied to the lease that without means you can’t operate.
The lease is important but it certainly isn’t the real star of the CRE show.
I’ve worked in real estate for over a decade now. Every single year I have been in this industry I come across some new and novel approach to defining real estate’s impact on employee productivity. It’s always worth a laugh to me to see various workplace vendors trying to give a productivity increase number associated with sit/stand desks or collaborative areas. There’s simply no studies or numbers that can prove or disprove this effect while also accounting for all other variables. It’s just not possible.
Yet every year someone new takes a crack at it. It only makes sense. If you can be the one that cracks the code for proving the impact of real estate and workplace on employee productivity, you would be in line for millions of dollars of new business and global acclaim. If you can absolutely prove that your desk designs improve productivity by 10%, companies would be falling all over themselves to implement it.
But alas, that’s not how this world works. Productivity is such a nebulous and changing concept that has different definitions for every single employee in the company. What improves one person’s productivity may kill another’s.
What does this mean to you? Carefully question anyone that claims that can improve your productivity through workplace changes. It may happen, it may not – but it will likely never be proven. All you can really do is focus on making a workplace flexible enough to meet the needs of many different types of employees while also aligning the workplace with company culture. If you can achieve these two things, productivity should follow. Just be careful thinking you can prove it.
Flexibility. It’s an amazing word. The word so perfectly fits within the world of real estate. In a world where investment in the physical office and workplace is expected to last at least 5 years and most likely 15 or more, flexibility should be king in all decisions. An office that cannot continue to meet the needs of the business is a bad investment.
Flexibility is so important because the priorities of the business today will not be the priorities of the business 10 years from now. New technologies will come along disrupting current revenue streams. New geographies will rise changing where processing and customer growth is achieved. New leadership will be in place bringing new strategic objectives.
No matter what else happens, our priorities tomorrow will be different than our priorities today. What are you doing to ensure your real estate is positioned to keep up?
I’ve written a number of posts over the years discussing the state of CRE technology and, in hindsight, they may seem largely negative. I’ve talked about CRE Tech being stuck in the early 2000’s. About how there is no such thing as CRE Big Data. How it may not be possible to do CRE Technology right.
None of this means I’m not a big fan of technology’s impact on our industry. I’m a huge user of real estate systems such as LeaseHarbor and several proprietary systems. But more than that, general technology has a huge impact on everything that we do. Tools such as Skype, IFTTT, Wunderlist, Google Docs and many others are daily productivity enhancers. I also see huge potential for Slack and Github for a lot of what we do in our industry.
Our biggest weakness in CRE historically is our desire to silo communications and protect our data and networks. Most of the top tools in the industry still focus on the individual and controlling communications. Systems like Slack and the new Microsoft Teams will continue to urge us to break down our artificial communications barriers. Shared information makes people significantly more productive and makes our solutions significantly more robust.
It’s unfortunate that the way most money in our industry flow is through landlord paid commissions. That one single fact is what sets so much of everything else back. The ultimate disruptive tool will be the one that fixes the money flow.
There is a large and notable startup scene around CRE Technology these days. New York is the hotbed of most of it. There are companies trying to break into everything from leasing to CRM to lead generation to legal automation to site selection and many other real estate disciplines. And that right there points to the core issue that CRE Technology – it’s impossible to narrow the definition enough to make a single solution work for a broad section of the market.
In all of my years dealing with systems, there have been a handful of players trying to solve everything (Tririga, Manhattan, Accruent, FM Systems and others) and even more trying to deal with the individual pieces from Lease Administration to Contract Management to CRM to data management.
The biggest hurdle is one of data. Every discipline of CRE needs different data and different data definitions. Often the only connecting piece of information is geography (state, county, metro, zip, building) but usually data gets aggregated at varying levels but still needs to be tied back somehow. No one runs labor studies at a building level but they may run it around a drive time to a building. Few people look at absorption rates at a state level but the may at a zip level. Financial comparisons are almost always purely at the building level.
Add into this that CRE experts need to have deep capabilities in diverse areas ranging from data analyst, financial analyst, researcher, legal reviewer, client relationship skills, ability to manage a project over months or years. Finding one integrated system to handle all of this is a HUGE ask. Finding a product manager that can help a software development team get a solution off the ground is an even bigger ask.
There is a lack of people in the CRE industry that truly understand the diverse and complicated issues that need to be dealt with across the entire life of a corporate real estate team managing a property portfolio. It’s simply a matter of there not being a large enough population of people (today) to get things where they need to be for mass adoption. This isn’t to say that there are parts of the market to be captured which can lead to serious business growth but it won’t be broad CRE adoption (think Facebook level).
Many in real estate like to fall back on the idea that the best decisions are based on location, location, location. I’ll grant that once you know generally where to be that it comes down to location (and cost). But the decision tree to get to the general where to be is full of complex and difficult problems that usually have little to do with location.
In fact, the worst real estate decisions I have ever encountered always began with a decision around simply “optimizing location.” When you start with location, you also have a high likelihood of starting with false assumptions. Is the labor market really ideal in that metro? Is the long-term growth of your business causing a geographic shift? Should you have one distribution center or two or three? Do you need a new location at all?
Location, location, location is not the way to think about real estate.