The Commercial Real Estate Revolution

Market leadership in today’s market flux guarantees one thing; time to reinvent yourself tomorrow. In Scott Anthony’s new book, The Silver Lining, he explains how companies can transform themselves – even in tough times. In fact, it takes a near death experience to appreciate a bit of transformation.

Scott comes with strong credentials. Clayton Christensen is the author of The Innovator’s Dilemma and sits on the board of Scott’s firm.

Here are a few points I walked away with:

1. You need a strategy that keeps a focus on your core business, invests in innovation and pursues transformation.
2. Innovation addresses the same markets and issues with new insight.
3. Transformation takes place when an organization does something fundamentally different. This happens most often when a company enters a new market. Apple, Interface, Google, IBM and P&G offer good examples.
4. A transformation strategy is essential in disruptive markets when the old rules and ways of doing business no longer produce sustainable returns.
5. Market leaders have less time than ever to take advantage of that leadership. Without a transformation strategy they are at risk and can be easily overtaken.

The mindshift initiative allowed fifteen organizations to explore both innovative thinking and transformation. Our industry will look and perform in ways that fall completely outside our current paradigms. We will create buildings and communities that we have just begun to imagine. Most of our industry, however, exhibits the same kind of thinking and behavior that brought both GM (see the David Brooks article) and Chrysler into Chapter 11.

I attended the AGC’s BIMForum in Dallas last week. During a lively debate between a panel of national architectural firms and the audience one member (we will call her Sally) in the crowd shared that their firm was creating 3D objects with enough intelligence to provide costing, logistics and provide ongoing operational data that easily ports over to a computer aided facility management program. Pretty cool!

Now for the fun. The moderator first challenged Sally stating it wasn’t possible to do what they were doing on the scale she claimed. Another member of the audience, a structural engineer, validated the claim and said they were on the same series of projects together. The moderator then questioned why they would put all that time and effort into doing so since “they were not getting paid to do it.”

Sally said that doing so reduces errors and reduces the schedule – so it more than pays for time in recouped contingency and fewer errors. She said the project was 18 weeks ahead of schedule which saved the client more than $700,000 in general conditions. The client likes that and has handed several additional projects to this firm without bidding.

Not to give up easily – the moderator finally said – “You should not be doing this kind of work in the first place. That’s not the role of the architect!”

At that last comment several in the audience got up and walked out – exasperated.

One would think that with a 30% drop in the market every firm would have their radar finely tuned for any sign of something new, innovative or better. Not so.

Take a look at this interview with Scott Anthony. If you want to learn how Sally’s firm acheives results that defy conventional wisdom – click here – and buy a copy of The Commercial Real Estate Revolution.