Revisiting the HBR article in the new decade.

INTRODUCTION

10 years ago, Harvard Business Review published this brilliant piece, “What Every Leader Should Know About Real Estate”, that broke down the labyrinth of commercial real estate by outlining five maxims that business leaders should ponder upon to ensure success in the face of disruption and evolving business trends.

A decade later, as we face the opportunities and challenges of 2020, we go back to review the HBR article to discover in what ways the world has moved on and what timeless lessons it holds.

Home Blog
Home Blog

MANAGE THE PORTFOLIO

Then:

The article presents the first maxim – A company’s portfolio of real estate holdings should have more value to the enterprise than the sum of its individual sites. The underlying message to business leaders was to take stock of their company’s snapshot of real estate holdings – the locations, the land and building types, the utilization and condition of major facilities, the lease terms and operating costs, and the financial and environmental risks. Using this snapshot, the leader is able to determine which of their properties make sense and which contribute to future strategic growth plans. The analysis will also allow leaders to do-away with redundant assets, understand the total business cost vs. benefits of the holdings, and anticipate growth readiness.

NOW:

Over the past decade, not much changed in the Indian CRE scenario, but over the last few years of the decade, Indian business real estate portfolios experiences a massive shift influenced by global trends such as coworking, shared commercial spaces, flexible leases, etc. Today, businesses have an option of taking the route of not committing to long-term leases and deposits that once dictated real estate space. There is an option of choosing flexible workspaces with monthly rents, or even playing the Uber-model and not owning any real estate but working out of swanky hot seats and coworking rooms. We anticipate that this trend of making real-estate work for the modern businessman will last with even enterprise companies choosing to make the shift to a real estate plan that is built around flexibility and resilience.

Home Blog

BUILD IN FLEXIBILITY

Then:

The article defines flexibility in three terms – financial (leasing instead of owning), physical (designing modular space), and organizational (redistributing work).

Financial flexibility is allowed through manipulating lease terms in order to best suit the individual company. Shorter terms, renewal opportunities, lease clauses that permit expansion or subletting, and terms that are agreed upon by foreseeing business circumstances.

Physical flexibility is achieved through adopting modular design elements, generic spaces, movable interior elements, and accessible electrical infrastructure. Adopting flexibility at the beginning is the modus operandi of the savvy business leader.

Organizational flexibility can be adopted by encouraging alternative workspace arrangements such as work-from-home options and telecommuting.

NOW:

This is an area where the HBR article got it bang-on. In 2020, flexibility forms the crux of the business mindset. From lease terms, to modular architectural elements, to adaptable building-models, and a thriving work-from-anywhere mentality, business leaders have evolved to view results in terms of the quality of the work rather than the nitty-gritty of where and how.

Particularly in the area of flexible workspaces, the ability of business leaders to scale up their real estate resources to keep up with the pace of their business growth and at other times, the opportunity to sublease or convert existing spaces to suit business downsizing has led to enormous popularity of flex spaces. 

CULTIVATE INTELLIGENCE

CULTIVATE INTELLIGENCE

Then:

The article mandates that business leaders need real estate intelligence in the form of accurate data and insights derived from that data which helps leaders to connect the relationship between corporate strategy and real estate decisions. It asks leaders to be mindful of periodic calculations of occupancy costs, space utilization, and asset performance that link real estate to business economics.

NOW:

Today, this intelligence is ubiquitous and drives the success of firms. Technology is helping businesses manage efficiency of data collection and manipulation, and an increased awareness about the importance of data-driven decision-making is leading businesses to adopt advancements such as automation and predictive analysis. Real-estate leaders are now using tools available to anticipate space needs vs. space utilization and they are using the readily available intelligence collected from apps, online traffic, and space footprint to anticipate and drive real-estate related decisions.

Home Blog

TEAM WITH PROFESSIONALS

Then:

The article points out that the most efficient companies manage lesser of their real estate holdings and do more outsourcing when it comes to operating their business real estate. It states that when companies work with professional management partners they are able to use the partnership towards a strategic advantage in reducing occupancy-cost and also in increasing employee satisfaction.

NOW:

In 2020, teaming with professionals is the most successful business model for both small and large enterprises. We are at a point in time where managing and operating space overheads is not only time consuming but also demanding of large time, human, and investment resources. With the use of select professionals starting from trend savvy landlords, progressive interior architecture resources, and honest property management , enterprises are now able to shift the burden of space management to professionals who bring new perspectives and growth to this vertical. In addition, companies have noticed that the professionalism in handling spaces and the introduction of branding aimed at employee engagement has helped increase productivity and employee satisfaction.

Home Blog

EMBRACE SUSTAINABILITY

Then:

In 2009, embracing green spaces and building sustainable real estate portfolios was an option and an opportunity. The HBR article throws light on the carbon footprint of commercial real estate activities and the imperative that businesses face in going above PR gimmicks to contribute positively to the reduction of carbon emissions.

NOW:

In today’s business scenario, sustainability occupies a more central stage in company decision making. Businesses have realized their impact on the environment and have taken creative steps to become more green. A business that does not embrace sustainability will not be successful in the long run and this maxim has driven old and new companies to change their thought-process to incorporate more environment-friendly measures in the real estate activities. We do not see this trend taking a backstep anytime soon and we anticipate more emphasis on green business in the coming days.

Home Blog

WHAT TO EXPECT NEXT?

Next steps:

Clearly, business real estate has been keeping up with the trends in the larger market – it has changed and adapted to disruption in the field and at the same time held on to its core principles and methodologies. In order to run successful, efficient, and future-ready businesses, we anticipate that business leaders should watch out for this silent evolution in the real estate space, keep up with the trends of flexibility, branding, and sustainability, while also constantly updating their data intelligence.

Are you a business leader looking to incorporate modern real estate maxims in your enterprise? We can help! We are BRIC SPACES – a data intelligent space management company. We are leading the market in India in helping enterprises adopt data intensive, flexible, and future-ready workspaces. Get in touch to learn more!

"What Every Leader Should
Know About Real Estate"

Revisiting the HBR article in the new decade.

Home Blog

INTRODUCTION

10 years ago, Harvard Business Review published this brilliant piece, “What Every Leader Should Know About Real Estate”, that broke down the labyrinth of commercial real estate by outlining five maxims that business leaders should ponder upon to ensure success in the face of disruption and evolving business trends. A decade later, as we face the opportunities and challenges of 2020, we go back to review the HBR article to discover in what ways the world has moved on and what timeless lessons it holds.

Home Blog
Home Blog

MANAGE THE PORTFOLIO

Then:
The article presents the first maxim - A company’s portfolio of real estate holdings should have more value to the enterprise than the sum of its individual sites. The underlying message to business leaders was to take stock of their company’s snapshot of real estate holdings - the locations, the land and building types, the utilization and condition of major facilities, the lease terms and operating costs, and the financial and environmental risks. Using this snapshot, the leader is able to determine which of their properties make sense and which contribute to future strategic growth plans. The analysis will also allow leaders to do-away with redundant assets, understand the total business cost vs. benefits of the holdings, and anticipate growth readiness.

NOW:
Over the past decade, not much changed in the Indian CRE scenario, but over the last few years of the decade, Indian business real estate portfolios experiences a massive shift influenced by global trends such as coworking, shared commercial spaces, flexible leases, etc. Today, businesses have an option of taking the route of not committing to long-term leases and deposits that once dictated real estate space. There is an option of choosing flexible workspaces with monthly rents, or even playing the Uber-model and not owning any real estate but working out of swanky hot seats and coworking rooms. We anticipate that this trend of making real-estate work for the modern businessman will last with even enterprise companies choosing to make the shift to a real estate plan that is built around flexibility and resilience.

Home Blog

BUILD IN FLEXIBILITY

Then:
The article defines flexibility in three terms - financial (leasing instead of owning), physical (designing modular space), and organizational (redistributing work).

Financial flexibility is allowed through manipulating lease terms in order to best suit the individual company. Shorter terms, renewal opportunities, lease clauses that permit expansion or subletting, and terms that are agreed upon by foreseeing business circumstances.

Physical flexibility is achieved through adopting modular design elements, generic spaces, movable interior elements, and accessible electrical infrastructure. Adopting flexibility at the beginning is the modus operandi of the savvy business leader.

Organizational flexibility can be adopted by encouraging alternative workspace arrangements such as work-from-home options and telecommuting.

NOW:
This is an area where the HBR article got it bang-on. In 2020, flexibility forms the crux of the business mindset. From lease terms, to modular architectural elements, to adaptable building-models, and a thriving work-from-anywhere mentality, business leaders have evolved to view results in terms of the quality of the work rather than the nitty-gritty of where and how. Particularly in the area of flexible workspaces, the ability of business leaders to scale up their real estate resources to keep up with the pace of their business growth and at other times, the opportunity to sublease or convert existing spaces to suit business downsizing has led to enormous popularity of flex spaces.

Home Blog

CULTIVATE INTELLIGENCE

Then:
The article mandates that business leaders need real estate intelligence in the form of accurate data and insights derived from that data which helps leaders to connect the relationship between corporate strategy and real estate decisions. It asks leaders to be mindful of periodic calculations of occupancy costs, space utilization, and asset performance that link real estate to business economics.

NOW:
Today, this intelligence is ubiquitous and drives the success of firms. Technology is helping businesses manage efficiency of data collection and manipulation, and an increased awareness about the importance of data-driven decision-making is leading businesses to adopt advancements such as automation and predictive analysis. Real-estate leaders are now using tools available to anticipate space needs vs. space utilization and they are using the readily available intelligence collected from apps, online traffic, and space footprint to anticipate and drive real-estate related decisions.

Home Blog

TEAM WITH PROFESSIONALS

Then:
The article points out that the most efficient companies manage lesser of their real estate holdings and do more outsourcing when it comes to operating their business real estate. It states that when companies work with professional management partners they are able to use the partnership towards a strategic advantage in reducing occupancy-cost and also in increasing employee satisfaction.

NOW:
In 2020, teaming with professionals is the most successful business model for both small and large enterprises. We are at a point in time where managing and operating space overheads is not only time consuming but also demanding of large time, human, and investment resources. With the use of select professionals starting from trend savvy landlords, progressive interior architecture resources, and honest property management , enterprises are now able to shift the burden of space management to professionals who bring new perspectives and growth to this vertical. In addition, companies have noticed that the professionalism in handling spaces and the introduction of branding aimed at employee engagement has helped increase productivity and employee satisfaction.

Home Blog

EMBRACE SUSTAINABILITY

Then:
In 2009, embracing green spaces and building sustainable real estate portfolios was an option and an opportunity. The HBR article throws light on the carbon footprint of commercial real estate activities and the imperative that businesses face in going above PR gimmicks to contribute positively to the reduction of carbon emissions.

NOW:
In today’s business scenario, sustainability occupies a more central stage in company decision making. Businesses have realized their impact on the environment and have taken creative steps to become more green. A business that does not embrace sustainability will not be successful in the long run and this maxim has driven old and new companies to change their thought-process to incorporate more environment-friendly measures in the real estate activities. We do not see this trend taking a backstep anytime soon and we anticipate more emphasis on green business in the coming days.

Home Blog

WHAT TO EXPECT NEXT?

Next steps:
Clearly, business real estate has been keeping up with the trends in the larger market – it has changed and adapted to disruption in the field and at the same time held on to its core principles and methodologies. In order to run successful, efficient, and future-ready businesses, we anticipate that business leaders should watch out for this silent evolution in the real estate space, keep up with the trends of flexibility, branding, and sustainability, while also constantly updating their data intelligence.

Are you a business leader looking to incorporate modern real estate maxims in your enterprise? We can help! We are BRIC SPACES – a data intelligent space management company. We are leading the market in India in helping enterprises adopt data intensive, flexible, and future-ready workspaces. Get in touch to learn more!

Copyright © 2019 Bric Spaces. All right reserved