Leadership in the built environment is changing. It has by its nature been fairly traditional, with bricks and mortar historically belonging to long-term investment strategy. While the crux of this is unlikely to change in the immediate future, the industry is being continuously disrupted.
As the gaps narrow between a brand and a business, or a tenant and a customer, the built environment has been forced to modernise or face irrelevancy: thus, tenants in corporate real estate are forced to make choices driven by trends and the changing needs of their end-users. Accepting this, and leading through it, is an increasingly unpredictable and complex for CEOs. Understanding the principles of data analysis, service design and user experience are no longer nice-to-haves, they are must-haves to real estate’s contemporary leader.
These are of course driven by transformation across the board: flexible working, mixed-use buildings, and automated services present both challenges and opportunities to real estate leaders. ‘Space As A Service’ – a term coined by PropTech expert Antony Slumbers – has radically transformed the property world. These days, unless obsessive customer care is woven into the very cultures of your firm, those who are disruptive and are customer-centric will end up wiping you out, Slumbers warns. Pointing to co-working space provider WeWork – still only seven years old – he adds whilst this might not happen overnight, the disruptors are rapidly winning over millennial consumers. Being curious around the ways people interact with technology requires a positive open-mindedness from our leaders, as it relates to decision making, business models and service lines.
These sophisticated market needs are particularly relevant to real estate companies in charge of valuable assets, needing to adapt to an increasingly international and diverse customer-base. With globalisation, international capital flows now bring inter-cultural sensibilities and operational complexity, as do sustainable regeneration, social responsibility and localised community focus.
With the high numbers of millennials preferring to back socially responsible, community-first and positive impact projects, a new value system has emerged in real estate investment schemes. For the first time in real estate, investors’ returns sit right beside stakeholder returns, placing an increased level of accountability and responsibility on real estate leaders who must demonstrate short-term wins with long-term impact. This requires leadership thinking to get in line with today’s triple bottom line of ‘People, Planet and Profit’.
Illustrating this is Argent, who since 2001 has planned, managed and delivered the regeneration of King’s Cross – one of the UK’s most significant urban development projects – and in so doing, set the bar to a new high. At Berkeley Group, around 95% of its holdings are on brownfield or recycled land; Imperial Wharf has been transformed from a derelict site into almost 2,000 homes, with a new train station and connected sense of community. To contemporary leaders, game-changing and socially responsible challenges are not problems, they are to be embraced and proudly showcased.
As conscious design-led developments continue to shape communities, so the appeal of the built environment lifts as a place to work. Clever use of fresh branding helps to projects such as British Land’s co-working space Storey stand out. Raising the profile of the industry not only attracts next generation talent to the industry but brings in a much needed level of diversity as the landscape of urban centres continues to morph with globalisation and demographic shifts.
A focus on diversity and inclusivity are arguably the truest markers of modern leadership in real estate. Only those with a clear, demonstrable commitment to diversity will be adaptable and forward-thinking enough to move with the world’s changing landscape, i.e. the world’s rapidly aging population. It’s believed that by 2050 people aged 65+ are predicted to form 22% of the global population, up from 10% today. This has tremendous implications for workforce demographics along with higher levels of mobile, educated workers from the new rising nations.
It’s predicted that by 2030, China will have more graduates than the entire American workforce, with India set to produce four times as many graduates as the US by 2020 – that’s just under two years away! With millennials forming half of the world’s workforce by 2020 they are becoming ever more central to cultural change in businesses around the world, with markedly different attitudes toward working and career development to those that went before.
What this means for leadership in real estate is simple to state, yet potentially difficult to do. They must learn to disrupt themselves and demonstrate adaptability around rapidly changing technology and shifting consumer desires. Modern leaders realise that diversity is no longer an optional extra – it needs to sit at the very core of your leadership and organisational cultures, because these days, it’s not about you anymore.
This article is featured in our full report A Very Modern Leader: Contemporary Leadership In Real Estate & Construction which you can download by clicking the link.