This article is sponsored by LaSalle Investment Management
Real estate managers need to consider two sides to technology: on one side, there are business-facing aspects, looking at user requirements and how best to help departments utilize core technology partners. On the other side, there is technological and application strategy, asking what the needs of the business are, where the industry is evolving and how to realize the potential of technology.
Sach Diwan, global head of product management and data at LaSalle, focuses on both. He considers the importance of understanding problems through partnership, seeking “that magic moment when you know what you want,” and then using the right solutions to generate operational alpha.
What are the most significant workplace innovations of recent years?
Oddly enough, something none of us could have predicted – the impact covid-19 has had on the nature of work, how we collaborate and even how remote working can reveal an untapped talent pool. Speaking purely from a tech standpoint, there have been several changes in the digital landscape, with the proliferation of the Internet of Things (especially in proptech), cloud computing, data lakes, AI and machine learning, robotic process automation and the clamoring for personalized digital experiences by clients and staff alike.
The essence of the question is: have all these technologies meaningfully improved how we work? Have these technologies made work more meaningful and satisfying? The answer is largely no, unfortunately.
All too often, the emphasis is placed on implementing a given technology, rather than focusing on what it will mean for the company five or even 10 years down the line. Is it going to make our firm a place where people want to come to work? Does it reflect the world today, or where we are headed?
I know companies that have spent millions trying to implement an enterprise data warehouse only to see their operations change, as new business lines emerge and older ones mature or start to decline. I emphasize a smaller, more incremental approach to transformation, which I call real innovation. To use a baseball analogy, how do you get on base and try to advance from there, rather than trying to hit a home run every time?
What are some of the biggest challenges that companies currently face?
For investment managers, it is reducing operational costs through efficiency and productivity, while attracting new investors by delivering a differentiated customer experience. There is a battle for talent in the investment management industry across all sectors and asset classes.
The challenge for a real estate investment manager is how to leverage advances in technology and digitization to recruit and retain the best people, all without breaking the piggy bank. And leaders want this done yesterday.
“Give voice to people involved in the day-to-day work and build momentum with quick, incremental wins”
To ensure value for money, companies typically turn to consultants in times like these, who will come in and lay out a very nice PowerPoint deck and strategy road map and say, “This is how you can use technology to transform your business.” The problem is that the emphasis gets placed on the technology initiative and the milestone dates and success is measured by how many milestones you can check off to say you have achieved your goal.
You then find out that people aren’t using the technology and they are not getting the value out of the investments you have made. So, you end up doing a sequel to the initial project, transforming the transformation you have just done. Sadly, I have seen this movie many times and I know how it turns out.
What is needed is a change in mindset. Find a creative visualization – a road map – but when it comes to implementation, take more of a bottom-up approach. Give voice to people involved in the day-to-day work and build momentum with quick, incremental wins. It is about swinging to contact the bat and get on first base, rather than swinging for the fences.
As an example, early in my career I was on the losing side of a digital transformation initiative. We were trying to migrate a legacy platform to a modern technology stack that would enable us to better service investors. We made a presentation to the board and set the timeline checklist with our consultants. A few months into the data migration, we got into a quagmire of poorly understood processes, undocumented business rules and COBOL code (a common programming language from the 1970s) that had been written 15 years before, which nobody understood.
This example demonstrates why so many transformation initiatives fail: we try to bite off too much. It is better to take things in phased approaches, ideally in three- to six-month increments, when you can celebrate successes. These help to build the case to continue to the next phase, or to have the courage to stop and course-correct.
In what ways is work set to change?
There are a couple of big trends. One change impacting investment management across the board, particularly in real estate, is the idea of access to data and to higher analytics. Millennial and Gen Z workers expect self-service business intelligence; they were taught how to write queries in Python in school, they want the ability to dig deeper and draw their own conclusions. It helps to unleash the creative potential of people, and that is why democratization of data is so important.
The other is intelligent automation. Real estate is still very much a document-centric industry. There is unfortunately still a lot of retyping and transitioning of data from PDF files or other unstructured formats. That is hopefully going to start becoming obsolete in the next few years.
Tools that can scrape data out of unstructured formats, route it and automatically populate structured databases are starting to take hold. But I caution against a ‘Big Bang’ approach. It is better to launch a pilot program and start to build success stories and publicize the wins.
What are the pitfalls for enterprises adopting new ways of doing things?
The biggest pitfall is always trying to do too much at once. If someone proposes a three-year digital transformation, that should immediately be a big red flag. Instead, look for three- to six-month incremental deliverables that give you the ability to course-correct.
If you are not getting those customer success stories, where people are giving you testimonials and championing you, then ask yourself: are you really improving the lives of people in the business? Maybe you need to reassess if you are focusing on the right areas.
How can companies attract the best employees?
People want to be at a firm that is perceived as innovative, inclusive and a market leader. That absolutely applies to operations and technology. Tech strategy should be reflective of the culture and values of the organization.
I don’t think that is sappy or far-fetched at all. It is absolutely the right thing to do because it helps you drive adoption. How do you do that? You start with smaller, more focused initiatives, where you engage the business and your team to participate in solutions.
We are a global firm with regional offices all over the world. If we want to adopt a digital investment committee decision workflow, for instance, we have to make sure we include folks from each region in the implementation process.
That requires an understanding of how each region operates. It is important to be cognizant of different languages and cultural decision-making processes.
“Real innovation means creating solutions that not only allow people to focus on high-value, exception-based processes, but also give them the time to think of ways to do things better”
It may be the style in Chicago to have that meeting in a conference-room setting, but in Asia, where there might be different voices spread across many countries, there could be less of a culture of speaking up on a call and more of a preference for voting online or in some less direct way. That is a cultural difference that would need to be supported to get the best result for the business.
So, you have to understand the preferred way in which people want to engage as part of your process. If you try to force digital transformation from the top down, it doesn’t stick because it feels like yet another corporate mandate.
What works when it comes to retaining talent?
People want to be empowered to do more value-added work. They tend to leave jobs where they have to perform a lot of manual, routine, repetitive tasks, such as moving data from one place to another.
Unfortunately, in the real estate industry that does happen. We must get beyond that and help to automate a lot of those tasks. Real innovation means creating solutions that not only allow people to focus on high-value, exception-based processes, but also give them the time to think of ways to do things better.
The best ideas often come from front-line staff. My challenge is to make sure we are offering our employees the chance to help guide the company at every level.
One of the most effective ways you can do that is by highlighting success stories of ideas coming not from consultants or management, but from employees. Elaborate on those examples and encourage more. That to me is the whole idea of real innovation.