As the father of management theory and legendary business guru, Peter Drucker famously said, ‘culture eats strategy for breakfast’. Meaning that unless your culture supports it, even the best strategy will fail. It turns out the same goes for innovation.
The real estate industry has seen a great deal of change during the last few years and, with Brexit beckoning and the recent surge of interest in PropTech, it’s no wonder that many companies are thinking hard about their creative and innovation capabilities.
But how do you ensure that you don’t just generate nice ideas, but also manage to bring them to market? How can you, no matter what your size, build a culture that develops and nurtures the kind of game-changing ideas that are increasingly the only real competitive advantage you can gain?
The first thing to realise is that, despite what people might think, anyone can actually do it. Big organisations can be as nimble as a startup, and small companies can innovate without the resources of a major corporation. It does require the right attitude, the right culture, and the right leadership, but it can be done. What unites great innovation cultures are the following three things:
- A willingness to experiment and a belief in testing.
- Knowing when to nurture, knowing when to cull.
- A dedication to learning – especially from failures.
Now let me detail what this means, particularly in the real estate industry, with some comments from key players.
The Experiment Edge
Building a strong culture of experimentation is essential for innovation. When a company dedicates itself to testing ideas, or worse, launches ideas without testing, it has already become an innovator – even if the experiments fail.
A key understanding that every innovation leader needs is that the problem is never a lack of ideas in the company. Ideas are plentiful, so the challenge is to find the ones with most potential, and develop these from fledgling and often half-baked notions into something viable. A great way to do this is simply to try them out, and subject them to live testing. The data and the insights this generates can be invaluable. And let’s remember: almost all innovations stem from ideas that first look weak and misshapen, but which can later develop into game-changers. So an idea for the next winning PropTech venture can come from anyone at any time, and often may be harder to spot than those lightbulb moments suggest.
Thinking Like a Gardener
However, a culture of experimentation doesn’t mean that every experiment is continued. On the contrary, great innovation leaders balance a gardener’s nurturing care of new, fledgling ideas with being ruthless when it comes to experiments that do not pay out. They are quick to test, but also quick to move on to the next idea if something doesn’t work.
What is needed, then, is a culture of respect for the fragile “seedling” idea, where plenty of support is given to help it develop. Simon Sinek, the highly popular leadership consultant and author of global best-seller Start with Why wrote: “The responsibility of leadership is not to come up with all the ideas. The responsibility of leadership is to create an environment in which great ideas can thrive.” This resonated with me and has stuck ever since I read it in his latest book, Leaders Eat Last: Why Some Teams Come Together and Others Don’t.
Fail Fast Forwards
An innovation culture is a learning culture: one that is dedicated to learning as much from failures as it does from successes. In fact, often it is the failed experiment that teaches you the most. Like most global successes from SnapChat to FitBit, the really great ones often sound daft (admittedly, sometimes the bad ones do too!). Take radical US real estate agency OpenDoor for example; I can imagine that first pitch looked destined for failure as being far too ambitious and far too costly to pull off. And yet, it’s disrupting the US property market at great stride.
This is why cultures who care for innovation make sure not to assign blame to failed tests and ideas, but even to celebrate them. As Edison famously said: “I have not failed. I’ve just found 10,000 ways that won’t work.”
What your culture should celebrate, then, is not just successes, but the wide range of learnings that comes from trying things out, be these new products or changes to the way you deliver services. Of course, there will be failures along the way – but each one of these holds important lessons for you and your business.
Piecing It Together One Brick at a Time
The great thing about innovating is that you can just start doing it. Dedicating a small sum of money to experiments will not ruin your company, and can at times pay itself back a thousand-fold. Starting a conversation about the way we can learn from our failures won’t even cost as much as that.
Some of these things are easier in a small company, where there is less bureaucracy and new things can be tested out at greater speed. But this doesn’t mean that large real estate corporations can’t develop into innovators as well: heritage and innovation are great bed-fellows with the right people and environment carrying them forward. All it takes is a change in mindset, a desire to learn, and learning to love experiments.