The Real Estate Transformation Omelette: Five Essential Ingredients

I've written before about how the real estate industry needs to stop thinking of technology as something the IT Department deals with and needs to create multifunctional teams that integrate different skill sets to ideate and deliver new products or services. Which is exactly why, using a food analogy, this article refers to an omelette not a Battenberg cake. To transform Real Estate, as every industry is being transformed, requires a vigorously mixed up set of ingredients. Five in fact.

First, the RICS issued a report in July entitled ‘The Impact of Emerging Technologies on the Surveying Profession’. This contains a chart of 42 tasks required within the industry and a figure of how much they are or could be impacted by technology today and how much within the next 10 years. This is an excellent signpost as to which areas of your business might be vulnerable to value destruction or candidates for competitive advantage. Every ‘high impact’ task is both: those who ignore the vulnerability will suffer while those who address the issue and leverage technology to reconfigure services will gain an advantage. There will be direct causation here.

Secondly, it is vital to develop situational awareness vis a vis your own business and the technologies that you might build, buy or partner with a 3rd party to acquire. Every technology goes through a life cycle, from first use by innovators and early adopters, through to mass market take up and on to ubiquitous use by late adopters and even laggards. What is table stakes and what is a competitive advantage is defined by where each technology is in the cycle. Anything after early adopter stage is table stakes; it might be new to you but not to the market. Anything before early adopter is risky but potentially a source of competitive advantage. Knowing where the technologies you are looking at sit on this plane is vital. And bear in mind that anything that can be bought is by definition not a differentiation. Where your business sits, somewhere between start up and entrenched incumbent, will have a major bearing on whether this matters. 

Thirdly, and this requires strong human skills, analyse your ‘Domain’. Who is your customer? Who is your competitor? How does your customer want to interact with you? What part of your job could be done by a robot? What data do you have access to? I have expanded on these in another post, but this step really is pivotal. The transformation of modern business is required because the digital world and new technologies are upending our understanding of the answer to these questions.

Fourthly, there is no substitute for knowing what technologies are available now, or will be available within a year or two. Referring back to the first point, given your business focus, what technologies might you employ to allow you to either do things a lot more efficiently, or to do a lot more of what you do already. Being able to do X 50% cheaper is good, but so is being able to do 50% more of X. What is your business imperative? And how can technology help you fulfil it? Your new toolkit might include VR/AR, 3D Modelling/BIM, Chatbots, Podcasts/Video, Marketing Automation, Blockchain, Drones and 3D Printing. Or AI might be the key to 10X performance, but what subset? Voice Recognition, Image Recognition, Text analysis, Classification, Regression, Dimensionality Reduction? Each of these, the canonical problems AI excels at, suit different needs. Understanding what is possible, and how these tools could be utilised will be a critical skill within all businesses over the next few years.

And fifthly, none of the above matters a jot if your fundamental Value Proposition to your customers is not good enough. Get hold of the Value Proposition Canvas, a subset of the Business Model Canvas, and use it to rigorously examine each of your products and services, to each of the various customers you serve. Focus first on the ‘Job to be done’ by a specific customer, examine what ‘pains’ they suffer in efficiently and effectively getting this job done and what ‘gains’ could be developed that would make their lives easier. Then consider what you offer that helps them meet their goals and how well it accommodates their ‘pains and gains’. If you have a perfect match, that you can empirically validate, then just do more of that, but most probably the fit will not be perfect. With your new knowledge and awareness from the previous four steps you should be in a good position to know whether XYZ technology would make it perfect. Not that perfect ever exists, for more than a fleeting moment, so return regularly to the VP Canvas to assess where you are.

So, five steps to the Real Estate Omelette. Each disappears into the final product but is nevertheless a vital component. Each supports and underpins the other. Only five ingredients but you need them all.

Happy cooking!

Antony

In Conversation with: Six video chats about the future of Real Estate

I sat down with Rob Riley of TAP (Tenant Assistance Program - tap-in.co.uk) to discuss topics arising from my recent '10 ‘Signals’ of fundamental change in real estate' blog post.

Here is our conversation, in bite size chunks.

Starting with whether real estate people are the best people to run real estate. 

And then 'Space As A Service: the future of real estate?'

And on to Smart Buildings - or the myth thereof....

We then discussed the role of Brand and User Experience; essential in a #SpaceAsAService world but which Product focussed real estate companies will be able to adapt to a Service driven world?

Followed up by looking at whether new entrants will enter the real estate industry. If 'Software is eating the World' will it come for real estate?

And finally we considered what the people within the industry need to do to stay relevant in this new world.

I hope you enjoyed these. Why not now have a look at 'What I can do for YOU'.

How the Real Estate industry approaches technology - a tweetstorm.....

Desidia - Pieter Bruegel the Elder c.1556 - c.1560

Can't help but feel that real estate companies are fundamentally ducking the technology issue.

Repeatedly we see them 'joining up' with external orgs to 'expose us to the latest technology'

Effectively sitting there waiting for someone to show them something they can just buy. Shiny toy syndrome.

Expecting someone else to find them a silver bullet to transform their business.

But any silver bullet found for them will be available to anyone else - so where is the competitive advantage?

And besides, as spectators rather than participants, internal culture will remain the same. So alignment with tech 'mindset' will be low.

Just 'shopping' for tech is, IMHO, the lazy, easy approach adopted by followers, not leaders. The 'life is good' way to appear innovative.

The modern equivalent to CSR, a PR policy that fools too many in to thinking change is afoot. Without real commitment nothing changes.

I think the larger real estate companies should be building, not buying tech. They should be diving deep internally to understand...

.. what is is that would genuinely transform their value proposition vis a vis their peers. Not playing catchy up.

How we use real estate is fundamentally changing, and how we design, build, occupy, manage & transact likewise.

The whole industry is marching together, with a 'me too' attitude to technology. Everyone doing the same thing.

The smartest companies will know better than anyone else what will enable them 2 outrun the competition - and then build the supporting tech.

Because how can you stand apart when all you have is the same toolkit as everyone else? You can't, you won't.

That works when everyone is much of a muchness, like today, but that game is ending. The nature of supply and demand is changing.

The real estate business is no longer about real estate. We are moving, everywhere, from being a Product to a Service business.

And having the same old mindset, with the same, albeit new, tools as everyone else is a dead end.

Break free: reimagine 'your' company. Make it end to end digital with distinct technological capabilities. Build, don't buy!

Podcast with Estates Gazette

Had an interesting time doing a podcast with Dan Hughes of the RICS, and Sam McClary and Emily Wright of Estates Gazette.

We covered AI, the 'death' of Surveyors, Flexible Working and what is the point of Real Estate developers.

The recording also include a ten minute chat with Brandon Weber of VTS

Listen to it all here : http://www.egi.co.uk/news/techtalkacademy/

Update on The Stoddart Review

Short Video update from a Stoddart Review event at King's Cross last week