It would serve this community well to learn from the best practices of other service-intensive fields, such as hospitality, financial services, and other consumer industries.
When was the last time you used a typewriter? How about a home movie camera or dial phone? These are a few examples of technologies that have become obsolete due to newer innovations. So it is with best practices.
According to the Merriam-Webster Dictionary (online of course, because when was the last time you used a printed dictionary?) a “best practice” is: “a procedure that has been shown by research and experience to produce optimal results and that is established or proposed as a standard suitable for widespread adoption.”
An Industry of Change.
The keywords there are “experience” and “optimal results.” We work in an industry in the midst of dramatic demographic, technological and cultural change that scream for innovation and the use of new tools to address a new set of needs for a changing tenant and client base. Therefore, what we define as best practices must also change.
As an example, in 1947, IREM’s textbook, “Principles of Real Estate Management,” suggested four ways of marketing a property:
- outdoor signs
- direct mail.
Imagine if we as an association still offered only these modes of communication as best practices? By comparison, the 2017 edition modifies that list to include website and social media and other electronic marketing means—new tools for a new audience.
Learn From Others.
It would serve this community well to learn from the best practices of other service-intensive fields, such as hospitality, financial services, and other consumer industries. A lot of experts in those fields have made a science of customer service—and occupants and clients alike, exposed to that level of service, will judge your service against those standards, and not just how you compare to your competitors.
Such advancements in best practices demand a similar advancement in our thinking. Here are just a few examples:
- Traditionally, we promoted our properties in terms of square feet or units owned or managed. More relevant today is our number of customers—including occupants and owners—who are recurring or their level of satisfaction.
- Similarly, some multifamily companies were governed by the rule that increasing rents to market rate was more important than keeping a current resident. This despite turnover costs that were potentially higher than any rental increase.
- Finally, it used to be the best practice to maximize rental income and occupancy. Today the focus is or should be, on maximizing the value of the property. I have written often in this space about the need for property managers to think more like asset managers and less like rent collectors.
5 Key Principals of Best Practices.
- These three examples all fall within what I consider five key principles of best practices:
- Embrace innovation and technology to meet evolving customer expectations.
- Understand the owner’s objectives and manage to meet them.
- Build your brand and find ways to differentiate yourself from other companies to clients and occupants alike.
- Communicate with owners, occupant, and staff. This is a relationship business, and you can’t build a good relationship without communication.
- Embrace change. As Jack Welch said when he ran GE, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
Our annual Real Estate Management Excellence awards embody these five principles, spotlighting companies and individual practitioners for their innovative, leading-edge business practices and initiatives and sharing successful programs and fostering further innovation within the real estate management industry.
Lead by Example.
The REME Awards celebrate greatness in real estate management through exceptional practices and initiatives that improve the quality of their work environment, the experiences for their clients and their communities at large. This year’s finalists include SL Green Realty Corp. in New York City, which has implemented “EnergyDesk,” a real-time energy management platform that regularly manages building systems and provides valuable performance diagnostics across 20.5 million sq. ft. of its portfolio. SL Green has committed to a 30 percent reduction in greenhouse gas emissions from base-building systems and common areas across seven buildings. The REIT has also developed an automated web-based tool within EnergyDesk to calculate, track and create monthly emissions reports.
As another example, Cushman & Wakefield, AMO in Washington, D.C. created a “cwED” initiative as an internal education program, developed and delivered to personnel on multiple levels and aimed at enhancing career development, identifying future leaders and creating a network of resources for asset services members. Core classes include: How to Prepare Operating Expense Reconciliations; Disciplines of Engineering; and Lease Administration. To date, cwED has provided education for almost 3,400 employees through core offerings and Lunch and Learn programs and has assisted 25 employees with obtaining industry designations.
One final example can be found in finalist Weigand-Omega Management of Wichita, Kan. Through its “My Neighbor’s Keeper” program, Weigand-Omega asks its associates, apartment residents, commercial tenants and vendors to help their neighbors via three primary channels: a Stewardship Mission, supporting charitable organizations that participants believe in; The Pulse, serving associates and their families who have encountered difficult life trials; and Cause Champions, helping associates personally grow through service to others and aiding their communities through collective service. This initiative has expanded the “family feel” of their business to on-site property teams in the 13 states where Weigand-Omega operates.
Modernize, Maintain, and Implement.
It behooves all of us in commercial and residential real estate to modernize, maintain and implement best practices that are indeed innovative, trendsetting and competitive. Yesterday’s solutions no longer yield results, certainly not the results defined by the new culture in which we work. This involves education at the individual, corporate and association level. When it comes to best practices, knowledge is indeed power and knowledge shared, in corporate meetings and association networking, advances the industry as a whole.
But there is education, and there is the application of that education. It is most important to connect constantly with your clients, occupants and potential occupants. You have to be aware and able to respond to their changing needs and concerns. Your clients and tenants are changing how they do business. Are you?
Michael T. Lanning is 2017 president of the Institute of Real Estate Management. In addition, he serves as senior vice president and city leader for the Cushman & Wakefield, AMO, office in Kansas City, Mo.