4 Easy Recipes for Real Estate Companies Facing the T-Rex of PropTech Innovation

“We need to become less like an elephant and more like a customer-friendly Tyrannosaurus rex”

That's how John Kotter put it. The number of PropTech companies adopting this approach is multiplying, taking the real estate corporates by surprise, when they learn about new technologies becoming available. PropTech startups, especially the ones well equipped with industry knowledge and ample support from venture investors are ravaging the traditional business processes, leading the long-term corporate digital strategies astray. What do the real estate companies, whether be it advisers, valuers, institutional investors or private equity fund managers, need to do to keep up and make a right choice when it comes to selecting and adapting a new technology?

Based on my experience, when it comes to facing the challenges connected with the imminent technology implementation and the re-engineering of business processes, these are the top 4 things the corporates must pay attention to:

1. Take care of your people (because they take care of your customers) to minimize the 'Luddite' effect and dysfunctional efforts - when too many initiatives and innovations paralyze daily work. I've seen this happen too many times, when companies impose so many imperatives with regards to new systems usage and suppress critical feedback, that they end up losing their most precious asset, i.e. their employees, and as a result, risk jeopardizing their reputation in front of customers. There is no single correct answer to how this should be managed, but most successful practice is to engage and properly incentivize a special unit (one or a few people) to lead the change inside a team. Incentive is important, because without short-term wins, employees tend to give up or even join the resistance. They must know technology and business (avoid hiring 'professional change managers' for this role!) because their main role is to soothe the natural hostility toward the new and be the communicator between the technology vendor and the in-house team. Of course, most vendors offer sufficient tech and user support, but it always works best when it's 'one of us'.
2. Conduct data & systems inventory if you have not done so yet, and do it quickly. Hire an external adviser, if you're a multi-national corporation to have an internal due diligence of your systems. With all due respect, if you're a business manager, don't trust your IT, always get a second opinion. The result of this should be a clear high-level understanding of the most critical systems in place, the critical data, who owns it, where it's stored and which business processes depend on it. It's important not to overload the data map with too many details, focus on the critical points only. Having a comprehensive data map will not make you immune against sweet-talking from the vendor's side, but you will be far more confident about how much control you have over the coming changes. And this will also help you understand (and successfully defend in a board meeting) the real (though deferred) value of the new technology being implemented.
3. Get things done. The often failures I've seen when corporations try to implement a new technology are usually associated with the severe underestimation of difficulties of the change. It's very important to have a strong guidance to produce a viable change. I know of a successful implementation of a CRM solution in a real estate firm through imperative, despotic management (penalties for employees, overtime working hours, threats of firing, etc.) - and you can say, it works! However, in the long run you need to get the change really accepted and not simply tolerated, besides it can have toxic effect on the team spirit (see point 1). So, you need a plan and clear assessment criteria, but also, and more importantly, real estate corporates must acknowledge the need for strong coalition. Whoever does it first will be the true leader.
4. Lead the change. PropTech is the transformation process, and when it meets the real estate corporates, they must handle it with the right tools. One of the most common misconceptions is that corporates want to manage this. Management is good for systematic work, but what transformation requires is leadership. What is implied here is the courage to take a leap, as banal as it may sound, into the future. This is a challenge in itself, because one cannot make a step without losing balance for a split second. The growing PropTech community is here to support real estate companies in making that step - so choose a PropTech partner in your area and dare change before you have to!