Announcement: It’s not Gen Y changing the workplace, it’s Technology!

[Editor’s Note: I hate the term Millenials so I use Gen Y to help avoid many of the common mental stereotypes that exist around the term.]

Everyone in the CRE space is familiar with the sensation of seeing articles talking about how Gen Y are changing the way work is done. They don’t like to go to offices, they don’t work from 9 to 5, they text instead of calling, they prefer social media to email. The tropes are many.

I get very frustrated reading this because it’s not a Gen Y thing, it’s a technology thing. Smartphones and internet connections on the go make it convenient to work whenever and where ever necessary. Social media platforms are a better communication platform than email. Text messages are more convenient than phone calls. This isn’t something that is true for just Gen Y – Baby Boomers and Gen X operate the same way when introduced to these tools.

Is it true that Gen Y has adopted these tech tools faster than others? Of course, they started using it as early as elementary school in many cases. It takes time for others to learn about it and time for developers to make the tools enterprise friendly. It takes even longer for organizations to figure out how to push it out and get unfamiliar employees comfortable with it.

This isn’t a generational battle, it’s a technological revolution. Don’t confuse the two.

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Technology should influence your internal processes but it should never dictate what you must do.

There is a lot of technology in this world that tries to get you to do things its way. You know the systems – the ones that talk about how you don’t need to customize or configure them and in 90 days you’ll achieve millions in operational savings. Let’s call them “Miracle Systems.”

Miracle Systems can almost always be spotted with one easy test: they promise tremendous value with a very short implementation window.

They usually start with a statement about how they have been designed by industry leaders that understand the process better than anyone ever has before. They’ve done the hard work of building your requirements in so that you don’t need any changes for them to implement quickly.

Here’s the secret: no technology will ever work unless you do the hard work first of understanding your processes and ensuring you can fit the technology into your workflow.

Most technology fails because users don’t use it correctly or at all. It’s usually not intentional neglect either. If a user is required to submit a monthly report to the COO showing the change in square footage but the new system doesn’t allow them to track the change in square footage, you likely aren’t going to get good adoption of the system. If the CFO requires a specific NPV calculation to be used by the new system doesn’t run it correctly, the analysis will likely happen outside of the system.

90 days is never enough time to implement any new process. It takes 90 days just to understand the current process. It can take a year to implement a new one. If it sounds too good to be true, it probably is.

Process drives Technology drives Controls drives Process

So much of the work that we all do is recursive. When you do Thing A, it causes you to do Action B. Action B dictates that you generate Report C which indicates that you need to do Thing A differently.

The trick to the entire process is to realize the truth in the above cycle. There is no process meant to remain the same forever. Processes are meant to change. Patterns in data start to shift. Growth curves eventually stop. Eventually, New York real estate will reach a peak (but who knows when?). Anytime we think that we have finally found a process that can just keep going we will find a surprise.

Once you understand the feedback nature of various tasks and outcomes, you can start to streamline and speed up the overall timeline.

Continue riding the horse that brought you or move to something new?

Over my career, I’ve had the privilege of creating some really cool tools. I’ve built a headcount forecasting model that was accurate to within 2% over 4 years. I’ve built financial models that have made complicated numbers seem simple. I’ve designed business intelligence applications for more uses than I can remember. I’ve designed software, created websites, implemented tools, and learned more than a few client systems.

But there is one that always comes back to me as the one I loved most. It was one that I had spent a year designing, pitching internally and then finally getting off the ground and released to clients. I brought it out from nothing and made it something. Unfortunately, a year later I no longer had an influencer role with it.

Selfishly, I can look at the trajectory and feel like I could have done much better than those that inherited it after me. It wouldn’t have been hard. Then again, hindsight is always 20/20.

Fundamentally, technology is hard. Getting an idea into implementation is hard. Getting implementation complete is even harder. Getting a client to use it is even harder. Getting traction to need to scale and then scaling is hardest of all. Building online systems is simply one of the toughest things in business.

I say this because it’s worth managers understanding what makes things successful. Some concept of “the market” is great but doesn’t do anything on its own. An “outside expert” may not grasp the vision of what is needed. Changing teams to encourage new ideas sometimes only introduces bad ideas. Sometimes the best horse to ride is the one that got you there.

Why the blockchain won’t save CRE Tech

I’m a fan of altcoins, crypto currency, digital tokens, etc. Bitcoin, ether, litecoin, and their like have a new business model for how they work and what they can do for people and businesses. The blockchain itself has so many possibilities as to be maybe the biggest invention since the iPhone. You can find new articles every single day on applications for the blockchain – insurance, contracts, credit/loans, purchases, etc.

Adoption of the blockchain will slowly occur across many industries and use cases. But I suspect that it will not be taken too seriously in real estate for a long time.

Why? Because real estate brokerages are struggling to use such simple tools as SalesForce. Convincing them to move to a researchable, relatively open, standardized deal tracking system will be a Herculean task. The sharing of any information is a hurdle that too many in the industry are struggling with which is hampering even commonly used tech in other industries. Trying to move to a platform that makes everything theoretically researchable would be a difficult sell.

Maybe there will be a sea change in CRE (commercial real estate) but it isn’t likely in the next several years. The way money works in the industry will continue to hamper technology innovation and adoption. Until someone disrupts the commission model I have little confidence in radical innovation being adopted.

Real Estate Technology is a thing of the past. Long live Technology.

It’s funny, every time I evaluate “Real Estate Technology” I almost always come away thinking “this other [non-real estate] system does that better.” There are a few exceptions – work order/maintenance management, lease administration, room booking – but those prove the rule as they deal with things that only real estate encounters historically.

Ironically, the new FASB rules will soon mean lease administration systems move from being real estate systems to corporate enterprise systems. Why would an organization choose a system that can only manage real estate leases when they will need to track every lease in the company to the same level of detail? This will soon be driven by finance and HR instead of real estate.

Some of the systems that are often touted as being bleeding edge for real estate include site selection/labor analytics, transaction/project management, energy management/smart building, CRM, and workplace forecasting. These aren’t everything but they are pretty representative. If we take a look through them:

  • Site selection/labor analytics: This often gets put into the real estate bucket because it’s tied to the need to identify and select a new building. The reality is that the data used is largely publicly available and the analysis techniques are generic. The real owners of the need are operations who will be occupying the site that understand the type of office they require.
  • Transaction/Project Management: There really isn’t anything so unique here that it has to be a real estate first tool. Sure, some of the data that needs to be managed will be real estate specific but budget/capital management applies just as well to IT, supply chain and some other operations groups. Systems like Slack, Asana and many more are building project coordination platforms that can work for real estate as well as they work for anyone else.
  • Energy Management/Smart Building: Ultimately, carbon reporting is going to be owned outside of real estate at many organizations. This is one of those areas that real estate will always be a critical stakeholder but just as often won’t own the system/data themselves.
  • CRM: This one always drives me up a wall. Brokers view their data as their own. It makes sense given the incentive model for 90% of brokers out there. There’s a lot of money to be made and the level of differentiation between any two brokers is relatively small. Most of the business comes down to owning relationships. SalesForce and others have built industry standard CRMs that stand on their own for every industry except Real Estate. Eventually, that will change because real estate will adopt standard tools more and more. But until then this is the best example of why real estate “technology” is often backward.
  • Workplace Forecasting: On the surface, this is as straightforward real estate as it gets. If I need to calculate the amount of space I need and how the workplace should be designed, that’s what real estate is. But if you look above, as more and more of the data and decisions of real estate move to common platforms, this will as well. Workplace Forecasting is a perfect application of Big Data/AI decisions out of a corporate strategy team. The AI group would bring in forecasts around future revenue, the success of work-from-home/agile policies, cultural trends on space, and work requirements to come up with an ever evolving target of how much space a business or group needs in a market. This becomes a feed to the real estate team to develop a strategy to move from where things are today to where they need to be. But, here again, real estate is the stakeholder instead of the owner.

I’m bullish on the impact that technology is going to have on the real estate industry as a whole. I’m much less bullish on the ability of “real estate technology” companies to survive on their own in this niche. Any system they built will likely be applicable outside of the industry with a few tweaks and generalizations while finding a larger marketplace at the same time. This will squeeze the real estate specialized groups out over time.

It’s good to have a focus today on the niche because real estate is not well understood outside of the industry. The thinking and specialization may turn out something truly unique and special. But to date that hasn’t happened and I don’t see it happening.

For the next 5 to 10 years there will be a strong and robust market for these real estate specific solutions. It’s the longer term that looks bleak.

An update on my level of contentedness with iPhone (4 month review).

Earlier this year I was forced onto the iPhone from several years with Android. At the end of January, I gave my thoughts at the nearly 2-week mark. I’m now past 4 months and able to give a more complete review.

Verdict: I’d really like my Android back but I can live with this until the next pure Android flagship comes along.

What’s the Same between Android and iPhone?

One- Apps. All apps basically function the same between Android and iPhone. Inside of any given app I can barely tell the difference in which OS I’m in. This made the switch process surprisingly pain free and simple.

Two- Unlocking. iOS fingerprint security vs. Android fingerprint security is virtually identical at this point. Really easy to securely get into your device.

Three- Cameras. This may cause debate but I’m not big into photography and the iPhone camera seems just as good as my most recent Android cameras. I don’t use this a lot so I may be missing something but it’s all the same to me.

Four- Messaging. iMessage seems to be really good but is it really all that different from any other SMS app (other than in making bubbles blue or green to differentiate between your friends)? I don’t seem enough difference here to call it a benefit or deficiency. I don’t use FaceTime so that doesn’t even matter.

Five- Design/Hardware. This may cause debate as well but I like the designs of the Nexus 6p or Pixel as much as the iPhone. I also can’t tell a significant operational difference between them in terms of performance. I’m sure there is a difference, I just can’t perceive it at this point.

What’s Better About iPhone?

One- Home Button. I got addicted to using this really early in the process. It’s really convenient to press or double-press this and go somewhere else. It basically combines the Android home and window buttons together to simplify things. Is it absolutely necessary for the real estate it takes up? No. But it’s easy and convenient.

Two- Corporate Email. My company has pretty stringent policies on email integration with mobile devices. It took more than a few steps to get things working on my previous Android device. On iOS everything was a snap and works through the default mail app.

Three- System Updates. Apple is much better at making their updates available because of the control they have over their hardware and software environments.

Four-iOS + OSX Integration. I don’t have a Mac but my wife does. It seems like magic to watch her get notifications on her computer and have the two devices work together fairly seamlessly. That’s something I would like to have.

Five- Encryption. Apple encrypting the hard drive by default is standout. This is a great move for users that most won’t really detect. I really appreciate Apple doing this and it goes hand-in-hand with their system update process. It’s possible to do this on Android but it’s opt-in instead of default.

What’s Worse About iPhone?

One- Charging Time/Apple Accessories. Apple accessories suck. Their out-of-the-box wall charger is horrific. It feels cheap and it works much more poorly than accessories you can get from Amazon. But I don’t want to have to purchase accessories just to reach a good operational level for my phone.

Two- Notifications. Seriously, Android has had a highly functional, very good notification bar system for a long time now. Just copy it. There’s nothing worse that non-intelligent notifications that you have to go into the app to use. Sure, maybe force touch can do something with it but that’s not the most intuitive system.

Three- Search. Most of what I do on my phone is search for things. Apple’s search functionality is the worst. It doesn’t search the web by default. WHY?

Four- No app drawer. If I have 100 apps, on iOS I have to remember exactly where I stashed it away to get to it (or search for it through Apple’s stupid search feature). In Android, you can do either of those plus have an app drawer listing them all in alphabetical order. My memory is not good enough to find where I stashed that app I use once every three months.

Five- Siri. Siri is not even in the same ballpark as Google Now. It’s not even close. They aren’t comparable. You can’t even pretend that Siri is anywhere near Google Now in capability. Google Now’s integration with Gmail makes quite a bit of magic happen that Apple cannot replicate at all.

Six- Back Button. Apple doesn’t have a back button other than it will let you go one step back at the top left of any given app if you got there from another app. This is because they only have the one home button at the bottom of the device whereas Android uses the three software buttons. That Android back button is pure gold and I miss it.

Seven- No Microphone Jack. This one is just silly. Basically, you can’t charge your phone plus listen to music on headphones at the same time without purchasing a surprisingly expensive dongle accessory. But none of the dongles look or function similarly so be careful which you get. Then you have to keep track of the headphone adapter because the Apple headphones are utter crap and why would you buy headphones that only work on your one phone and none of your other devices? It just makes no sense whatsoever.

Eight- Calendar/Default Apps. iOS is solid but it’s really frustrating that you don’t have many options for email and calendar outside of what they make available. Those options that do exist in these areas don’t have the ability to fully integrate into the OS the way they can with Android. This just makes each option subpar even when they have superior capability.

Nine- Keyboard. Apple’s keyboard is the absolute worst. This isn’t even debateable. No swipe capability. Common keys (comma) is hidden on the second level. Poor predictive capabilities. Even when you install a strong keyboard app like Gboard, iOS doesn’t let it work everywhere within the OS environment. It’s really frustrating to type on when you are used to a keyboard that actually works.

Ten- No Widgets. Android is focused on surfacing information quickly and cleanly with as few button pushes as possible. Apple seems more focused on getting you to go into apps as often as possible. That’s how I would summarize the operational concept difference between the two OS’s and also the best explanation I can think of for Apple not allowing widgets to be used. In Android, my calendar widget was probably my most used screen.

In Summary

In summary, if you started out using iOS you probably disagree with me on a lot of these as you have either built your processes around Apple’s way of doing things or found easier solutions than I’ve encountered over these past 5 months.

I simply find Apple’s approach to be overbearing and “father knows best.” They want you to do things their way which makes it easier to get started and establish a working rhythm but difficult to improve upon. Android is open to lots of ways of accomplishing the same things which makes getting started more difficult but makes you more productive and efficient in the long run.

That’s my 2 cents.