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Real Estate Technology, CRE Best Practices, Change Management

Change Management in CRE: When and Why Change Becomes Inevitable for Owners

Commercial Real Estate has historically been resistant to change, especially when it comes to adopting new technology. However, according to the Business Learning Institute,

"In today’s climate of shrinking real estate portfolios, escalating mobile technologies, and competition for knowledge workers, it is critical that corporate leaders understand the importance of leading change in their organizations...Change Management programs that support the implementation of new workplace strategies are no longer optional."

Teams use change management, 

the process, tools, and techniques to manage the people side of change... 

when adopting or adapting systems, methods, or initiatives aimed at operational improvement. Business enact change to improve performance, acquire new opportunities or markets, or to address critical issues. Catalysts for change generally fall into two categories, choosing change, or having no choice. 

Do We Have to Change?

Does anyone look forward to change? Implementing technology is considered disruptive, extraneous, and expensive, making it a change to be avoided at all costs. However, with all the big bets being made on technology within commercial real estate, industry leaders consistently acknowledge that it will not be possible to compete effectively without the right technology.

Bisnow makes it clear,

"Traditional real estate knows PropTech will be big, just not what to do about it." 

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The Hype Cycle

The Gartner Group originated a principle called the Hype Cycle, identifying 5 key lifecycle phases:

  • Innovation Trigger
  • Peak of Inflated Expectations
  • Trough of Disillusionment
  • Slope of Enlightenment
  • Plateau of Productivity

The Gartner model places minimal confidence in technology innovation as well as its early adopters. This widely regarded cautionary principle supports several common myths about technology adoption. Finally, there is a misguided fear of technology as being disruptive to established workflows. However, making do with makeshift workarounds, and poorly-performing processes or outdated tools is counterproductive to creating long-term value and growing returns for investors.

No one is suggesting that commercial real estate owners lack the capacity or the resources to succeed. However, implementing purpose-built technology affords them the opportunity to:

  • drive complex processes,
  • digitize controls, and
  • streamline operations with transparency.

So, whether you are choosing change or it has chosen you, let’s identify the key indicators that: a) change is imminent, and b) how you ensure success.

Three Key Indicators that it is Time for Change:
1. Performance: Systems No Longer Responding at the Speed of Your Business

When teams are unable to access the data necessary for informed decision-making just-in-time, it’s time for change. No successful organization should be held hostage to PDFs, spreadsheets, and siloed departments that require digging for answers every time a question arises.

2. Scalability: The Growth of Your Customer Base Outpaces Your Capacity to Meet the Need

Scalability is among the most desired indicators of success, but as your business grows, can you keep pace? Inflexible legacy systems will cause you to lose opportunities and revenue. To be ready to scale, your systems, network, and teams must have capacity to support multiplying revenue at minimal incremental cost. If not, it’s time to consider upgrading.

3. Integration: Do All The Tools You Use Speak the Same Language?

Technology upgrades will fail if mission-critical information is not centralized and readily available to all necessary parties. No technology supports scalability and future success if the systems aren’t interfacing to send and receive data. Open data access, among appropriate departments and decision makers creates a single source of truth, eliminates duplicative work AND avoids data errors.

Finally, users are more likely to adopt and find credible the systems that speak their language and recognize their core needs and workflows.
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When it becomes clear that your enterprise cannot continue to succeed in its current form, change is inevitable. Change is inevitable; progress is not. Having an awareness of your organizational goals along with a collaborative approach to managing your transformation will help guarantee your success.

"Progress is impossible without change, and those who cannot change their minds cannot change anything." – George Bernard Shaw

Rochelle A. Carter-Wilson

Written by Rochelle A. Carter-Wilson

Rochelle is the Content Marketing Manager for Honest Buildings. She creates stories and other on-brand content to inform and engage owners and other members of the Commercial Real Estate industry.

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