How has the COO role in the real estate fund management firm evolved?
The definition of the roles and responsibilities of a chief operating officer can differ greatly from firm to firm and even within a firm. In my experience, the role continues to expand and deepen to include a wider remit with greater responsibility.
New activities are taking greater prominence and can dominate, even in the short and mid-term. In the here and now, big data, data governance, risk management and an increasing fiscal and regulatory complexity dominate. ‘Operations,’ no matter the definition, are an increasing internal focus but equally an increasing external focus as evidenced by existing and new investors’ questions, due diligence and audit.
COOs should be able to look across all the horizontals within the business and have a balanced and ‘unbiased’ opinion across all business lines and disciplines. The cross-business knowledge can be invaluable.
In your role, what issue keeps you awake at night?
There is a sector impatience to have technology solutions today, but the real estate industry as a whole is playing catch-up in this particular area. If the perfect solution were out there, we would all be knocking down the door of the software or technology providers, but the silver bullet does not yet exist. This means there can be an inefficiency and a frustration.
How important is technology and data to your role now?
It is absolutely important but we should emphasize that it is critical to everyone’s role, not just to the COOs. The challenge is to make it high on everyone’s agenda. Technology and data can no longer be viewed as a back-office responsibility, but as the responsibility of everyone. The good news is that the subject is certainly making its way up the agenda for our industry and getting more senior leadership attention and focus. I talk to peers and fellow COOs, we share experiences across companies and across regions, we share frustrations and successes and we try to educate and encourage the technology providers on what we need. It isn’t easy, though!
There are huge benefits in efficiency and having confidence in the completeness and accuracy of data for quick and effective decision-making and reporting to clients. The biggest challenge, however, can be to find the time over and above everyone’s day job. ‘Big Data’ needs focus and time to drive forward. This can, in itself, lend weight to the argument to finding the correct outsourced partners and exploring solutions that leverage third-party platforms and their investment in technology.
Are investors asking to see you personally now during due diligence? What is the one question they keep asking you?
The subject of ‘operations’ is high on the agenda of any investor or consultant due diligence process. While they might want to see and hear from the COO, they want to meet the direct team even more so. This illustrates their want to understand the detail and explore that detail with those who are doing the ‘day to day,’ and I would encourage this. In my experience, questions around controls and risk management are the most frequently asked, and cybersecurity is an increasing point of inquiry from investors, and one we have spent a lot of time planning and implementing around our business.
What lesson have you learned in your role?
Never to be complacent, always over communicate and share. Try to lead by example with an enthusiastic ‘can-do’ and ‘glass-full’ mentality. Always be inquisitive.
Looking forward, what do you see as the single biggest challenge to COOs in real estate?
There is an increasing pace of change, and the need to be innovative, agile and nimble prevails. Learning agility is a must, with a curiosity for change and to embrace the brave new world.