A new report is shining a light on how and why the real estate industry is being disrupted. The report, titled Innovation in Real Estate 2018, discusses a variety of topics, including the fact that technology, customer behavior changes and economic pressures have all collided to the point where new business models must be adopted by real estate companies.
Setting out on a new path and moving away from the way it has always worked is a roadblock for some large real estate brokers, but as the report, which was put together by Collective Campus, so eloquently put it:
“The industry has long been accused of being a laggard insofar as the adoption of technology is concerned and some like to joke that not much has changed since humankind first picked up a plow 12,000 years ago. Nonetheless, the industry is on the cusp of significant upheaval.”
Collective Campus is a company that works with large organizations to help them adopt the mindsets, methods and tools required to survive new realities, and they nailed the disruption taking place in the real estate industry. The 45-page document dives into a lot of topics, but I wanted to focus on a few very specific takeaways.
Three Points to Disrupting Real Estate
Collective Campus outlines the following points that will need to be followed in order for real estate companies to support disruptive changes in the industry:
1. Streamline processes and communications to meet changing consumer’s expectations.
2. Invest in or create systems and technology to support disruptive innovation.
3. “Big Bang” transformation at the risk of changing the core business.
Seeking out problems and then deploying the necessary strategies, tools and people to solve them is at the core of corporate innovation. For established corporations, this may seem counter-productive, but it is done all the time by some of the most well-known, leading organizations out there i.e., Amazon.
As a specific example, Collective Campus discusses how General Electric, with its $120 billion market cap and 200,000 employees, adopted a Lean Startup mentality. The recipe for it was to empower and inspire each other, let customers determine its success, stay lean and move quickly, learn to adapt to win and deliver results in an uncertain world.
Lean Startup is another way of saying a company is using more experimentation to validate customer needs and develop products and services customers are willing to pay for, as a way to transform how they grow.
The best part about taking the road less traveled is that your competition is frightened of it. Act with intention and confidence, even if you have never traveled there before. The most successful pathways always look obvious, but only in retrospect.
The Innovation in Real Estate 2018 report highlights the fact that large companies shouldn’t be afraid of startups, instead they should embrace them and work together. That is because even though startups don’t have the size or market share of a large company, they do have the ability to work quickly, have the right technology, have talented people working for them and a willingness to experiment.
“Large companies have not been built to respond to the accelerating pace of change in a timely manner, and that short of restructuring the entire organization from the ground up (a big, hairy and audacious goal), partnering with startups who are unencumbered by bureaucracy, short-term shareholder demands and employee incentives, is an easier way to tap into emerging technologies, business models and talent.”
I believe this is vital to innovation. Large real estate and mortgage companies must partner with smaller disruptors to make sure they are staying on the cutting edge on behalf of their customers. Big corporations are just now coming to realize that they can no longer compete in this industry using old-fashioned tools and outdated programs. Innovation is a process that never ends and demands constant improvement. That’s why you must devote resources to research and experimentation to validate the needs of your customers.
I’ll leave you with this comment from the Innovation in Real Estate 2018 report:
“Real estate incumbents have two choices. Ignore these threats or respond to them in a timely manner in which case they become, not threats, but opportunities.
What’s timely? Now.”
(Image via venturescanner.com.)