Proptech is not a new phenomenon; it has just been pushed further forward and at pace, particularly with the zero carbon agenda beckoning. For example, our clients are starting to hire leaders who can drive volumetric modular building using digital twins and using technology to ensure the end product is sustainable, with lower emissions and better energy consumption.
The competition field is more open than ever, and, in order to win, organizations will have to find their way faster to a superior customer-centric business model. They will have to be able to anticipate better what customers will need in the future, in a sector for which long term has a different meaning: decades rather than three- to five-year cycles or months, weeks and/or days.
The way real estate companies shape up for technology is one of these critical choices. In a recent survey we conducted, 83 percent of senior leaders consider digital and technology important to the future of their business, but they consistently placed technology last on a list of priorities behind culture, employees, growth, investment, return and transformation.
Some executives explained that technology is intrinsic to everything they do today, rather than viewing it as a standalone priority. This may go some way to answer the disparity between the two figures, however that’s an approach that works only when companies reach a certain level of digital maturity, not before.
Our survey found that too many companies did not have the digital readiness to embark on a major transformation project. This could be an insurmountable hurdle. The success of digital transformation rests in finding the right leaders and shaping a
Valuing tech-savvy leadership
The truth behind the aggregated survey data is that even in the same sector, same country and similar company profile, the need for technological talent and governance will have a different blueprint, depending on the level of a company’s maturity, digital fluency, and ultimately its strategy and purpose. We need leaders to lead real estate companies through an intricate process that rests on educated guesses on how customers will want to live, work and entertain decades down the line, and factor in sustainability, wellbeing and mobility patterns.
While the vast majority of the leaders I talked to consider themselves tech-savvy, they don’t necessarily see this as a critical capability for today’s real estate CEO. The more common view is that CEOs need to understand enough for decision-making. The closest roles to the CEO, CFO and COO also need to factor in the technological and digital skills needed to take decisions for their respective remits.
An increasingly important skillset at leadership level is data analytics fluency, as decision making will increasingly depend more on data sets than instinct. New and continuous data feed is vital and needs to be easily accessible and in real-time.
Our research shows most businesses in real estate are still at the point where they are collecting their own data, and are working through making it consistent. Accounting systems are being implemented with new detailed and “intelligent” reporting, for instance, alongside shared information systems on best-practice for process.
Those with operating platforms are further ahead, often focusing on getting a building’s infrastructure and WiFi right first, knowing new technologies can then be easily added in after, including networking buildings together. Such tech attracts employees and creates a more dynamic environment and culture, which leads to happier customer experiences.
Finding and attracting top tech talent is still an uphill battle, which makes a two-prong approach to succession planning critical. Internal succession should be addressed several levels below the leadership team, with a holistic view on what the leadership pool should look like and what skill set or diversity gaps need to be addressed at each level. Internal training and development programs should narrow the talent gaps, but if companies want to safeguard their pipelines, they have to widen their search externally and understand where the best talent is, and what it takes to attract them in their organizations.
In order to build a customer-centric business model companies will need a cohesive culture, with a clear purpose and built-in safety nets to allow a
fail-fast mindset. Perhaps it’s worth leaders asking themselves what’s the next thing they are afraid to try or implement in their business and be brave enough to do it. The crisis could be a perfect time to explore innovating.
As companies progress through digital transformations, their focus will shift more and more from technology to people, in effect making digitally-driven change the central element of thriving cultures. Putting the right leaders in the right roles and building a strong digital culture could provide organizations the competitive advantage to win in the new post-crisis marketplace.
Chantal Clavier is a partner in Heidrick & Struggles’ London office and head of the real estate practice for Europe and Africa. She is also a member of the board and CEO practice.