How can we help?
Michelangelo: Hands of God and Adam, Detail from The Creation of Adam. The Sistine Chapel. 1508-12
‘How can we help’ is not a phrase one hears all that often in the real estate industry. Which is not necessarily a criticism, because it applies more in service industries than it does in product based ones. And historically real estate has very much been a product based industry.
We built or bought real estate and we then tried to sell it or lease/rent it. Preferably for as long as possible, with the minimum of obligations or responsibilities after the deal was signed.
But that was then and this is now. ‘How can we help’ needs to become our new guiding light. For real estate is now a service industry. Like it or not, either our customers no longer need our products, or the only way to generate strong or outsize profits is by getting much much closer to our customers.
Adapting Steve Job’s famous phrase we need to ‘start with the customer and work back to the real estate’.
Whatever asset class you deal in, your customers wants, needs and desires are fundamentally changing. The last two years of a global pandemic has uprooted more than we can comprehend. From supply chains, to the constitution of the labour market, how people shop, how they work, and indeed how they think. The world has undergone a reset. And we cannot be sure what comes next.
So second only to starting with your customer, we need to figure out how we can operate more flexibly. How fast can we redirect our efforts based on changing market dynamics, how can our business models flex and/or be redesigned. And in terms of our real estate how can we ensure it can enable our customers to do what they need to do.
Can we ‘build, measure, learn’ and behave more like software than hardware? How do we design our spaces and places so that they can be repositioned or reconfigured in an iterative manner, and in response to changing needs? What software do we need to remove friction from our customers lives, and to enable them to easily find whatever they need, when and wherever they need it? And what services do we need to develop, to make the most of our hardware and software. As a business, what do we need to do to enable our customers to be happy, healthy and productive?
Our customers spend more than 90% of their lives inside real estate. Mostly, work, rest or play happens inside real estate. No other industry has as much contact with their customers as does the real estate industry. But historically we have only involved ourselves with providing them with four walls and a roof. But this is no longer enough. The real estate is necessary, but no longer sufficient.
What is an office? What is a home? What is shopping? What is entertainment? The meaning of all of these is morphing, and these asset classes are increasingly merging into one another. The real estate industry has built silos where we need integration. We need to re-evaluate what the purpose of the spaces and places we build is. What are the ‘jobs to be done’ of the people we are building them for? What is required for them to be happy, healthy and productive. What will give them pleasure? What will entice them? What will they pay a premium for? What mix of ‘asset types’ is needed, and what would that look like? What would it feel like?
The answer to all these questions is not obvious, or easy to compute. There is no single piece of technology that will give you an answer. Real estate is the ultimate human + machine industry. Humans alone don’t have the answer but neither do ‘the machines’. We need better machines and better humans. Success in real estate over the next 20 years will come from deep understanding of human needs coupled with deep understanding of what technology enables.
As an example, let’s take a workplace. To create, and then curate an environment that enables people to function at their maximum cognitive ability, whilst also looking after their emotional, social and functional health, is an art that requires multifunctional skills. It requires real estate knowledge coupled with IoT and data analysis, but also workplace, hospitality and HR skills. All of these are inputs to the output we are trying to optimise for our customers. Today though, they are buried in six silos, with minimal integration. Tomorrow they need to be parts of a whole, that is designed to think, feel and do. Only when we synthesise technology with the full gamut of human capabilities will we create something outstanding, memorable and deeply desirable.
What does that look like? Who knows? That is the point. After two years of a global pandemic we have the unprecedented opportunity to build new business models, with new products and services, that align with the real rather than the mandated or presumed needs of our customers. This is a time for innovation, imagination and great ambition.
How can you help?