archive: creativity

Redeveloping the Real Estate Industry

Wednesday, June 30th, 2010

The opportunity to redevelop the real estate industry such that it contributes to the solutions the world is seeking, instead of continuing to pile on to the multitude of challenges, is huge. Such challenges include the energy crisis, climate change, natural resource preservation, population growth, urban sprawl with ineffective infrastructure, and a lack of sustainable growth practices. Those with the courage to see these opportunities and act upon them quickly will realize tremendous competitive and economic advantages.

Indulge me for a moment as I try to integrate the big picture of how the real estate industry can play a significant role in addressing the challenges we face as global citizens. Then, I’ll offer some details and specifics that outline a new approach to real estate.

Tom Friedman says in his book Hot, Flat, and Crowded, “We Americans are in no position to lecture anyone. But we are in a position to know better. We are in a position to set a different example of growth. We are in a position to use our resources and know-how to invent the renewable, clean power sources and energy efficiency systems that can make growth greener. If we, as Americans, do not redefine what an American middle-class lifestyle is – and invent the tools and spread the know-how that enables another two or three billion people to enjoy it in a more sustainable fashion – we will need to colonize three more planets.”

Real estate investors and developers play a huge role in how communities and cities are constructed, how buildings utilize energy, and what infrastructure and transportation is necessary to connect where we live to where we work, shop, and play. Without drastic changes in how we construct and live in our communities, what’s left of America’s competitive advantage in real estate will continue to fade. Others will take the lead in creating the technology and investment and development models that allow populations and standards of living to grow in sustainable ways that are also grounded in the pursuit of happiness and wellbeing for oneself and the rest of the world.

The global economic crisis should represent the perfect opportunity and context in which to effect meaningful change, unfortunately little is different today than it was 5 years ago in an industry that has endured massive losses over the last 2 years. The only changes fund managers (who ultimately control where and how capital is deployed) appear to be making are to appease their investor base with executive musical chairs, token fee reductions, and maybe a claw-back clause. Their plan is to ultimately convince investors that the world will soon get back to normal. Some fund managers are even sitting out a round or two of fundraising in order to avoid setting a precedent of unfavorable terms with their investors. These kind of non-structural changes or avoidance strategies will, unfortunately, not bring a new mindset, new strategies, creative partnerships, and the innovative models that are needed in the dynamic and interdependent world in which we all now reside. The pace of global change is so great, that the concept of “normal” may eventually become obsolete.

Investors, on the other hand, realize they have been paying too much to fund managers who, quite frankly, have lost their edge, allowing their value proposition to shrink to an almost unrecognizable point because such a large portion of profits have been driven by extremely favorable financing terms. Because investors rely on the income from their investments to fund whatever it is that they do (pensions, universities, etc.), they need to make commitments and keep the economic wheel turning. And, with so few new choices, many institutional investors are forced to give in to what fund managers are offering.

Large institutional investors have more power today than they realize, and with the right leadership they could help re-shape the industry for the better. Relying heavily on a previous track record as an indicator of likely success, in a future that will undoubtedly look quite different than the past, may not be the best strategy. A better bet may be fund managers that are more adaptable to change, that are more willing to present structures which focus on creating long-term value, and have a desire to begin working toward sustainable and energy efficient strategies of investing and development. When assets are viewed in terms of creating economic, social, and ecological value, growth is more balanced and sustainable and less susceptible to large swings in the financial and capital markets.

Suburban sprawl with carbon copy retail centers, minimally constructed housing developments, and energy-gorging apartment complexes are all simply unsustainable and will not work for the future. They are also poor examples to set for emerging markets that have to figure out how to support a net increase of 3 billion people over the next 40 years and typically look to America for answers.

The real estate industry will have to evolve because we are rapidly approaching the tipping point where it is economically advantageous to create and embrace new types of value. The real question is who will be the first group to realize just how incredible this opportunity is for those with the courage to change. Detailed below are two areas in which I believe the real estate industry can make great strides and become the leader the world needs in building more efficient communities that promote healthier lifestyles and sustainable living.

First, we must start with an investment model that is focused on creating value instead of creating fees. The days of creating a majority of profits from financing arbitrage while collecting huge fees and adding very little value are over (or at least they should be over). Those who can design integrated investment models that eliminate the double promote and have a viable long-term strategy that includes some elements of sustainability will have a tremendous competitive advantage.

Second, we must build asset management strategies that not only address the needs of capital but also begin to address the energy and climate conundrum we are all facing, offer end-users options that help solve their daily problems, and are congruent with the direction local municipalities and communities are headed. Typical asset management models are based on a pyramid structure driven by a chain of command. An integrated asset management model, as depicted below, puts the asset at center stage and focuses on adding value by integrating end user needs, investor needs, social needs, and environmental needs into one cohesive strategy.

An integrated asset management model is all about adding value. For example a C class apartment complex that provides residents with free parenting classes, free money management classes, and partners with a local non-profit that provides a mobile medical clinic to families that cannot afford healthcare, will enjoy the highest occupancy rate in its market. Alternatively, a high end retail center whose tenants all relate to health and fitness, sponsors weekend community races and farmer’s markets, will be able to charge a premium, because tenants will insist on being where the action is. Or how about an office complex that caters to “green” businesses that are happy to pay a premium because the building is carbon neutral and net positive on energy. These are just a few examples of a multitude of creative strategies available in an integrated model that views value through a multiple lenses.

Posted in Innovation, business, creativity, global, real estate, strategy | 1 Comment »

Are You Settling for a Pale Version of the Possible?

Monday, May 31st, 2010

“Settling for a pale version of the possible” is my favorite line in Tony Schwartz’ new book, The Way We’re Working Isn’t Working.  It’s in essence the question that we so often avoid because it gets to the core of our most intimate desire to be the best that we can be.  Those with the courage to ask and truthfully answer that question, will be the ones who end up operating at their full potential and helping others to do the same.  Tony’s new book will help you find easy ways to ensure that your life is full of vibrant and endless possibilities.

I am often asked to review and blog about new business books coming to market, and only rarely do I oblige.  When Tony asked me to review his new book, I said yes immediately. His ideas around managing energy as opposed to time resonated with me years ago after reading, The Power of Full Engagement and plays a big role in my own consulting practice. The energy management concept, if explored to its full potential, can do more to transform an organization than any other single component.

The great thing about Tony’s new book is that it is full of sound research that reinforces what Tony is teaching and helps us to really understand why we do the things we do, even when they are counter productive to our goals.  More importantly, he provides practical advise on how to begin the process of change that will work for anyone in any stage of their career, or any organization at any level of health.

Not only will you find great information to help you become a better employee, leader, or manager, but you will also find that this book will help you become the person, spouse, parent, child, and sibling that your heart desires.

If any of the following statements resonate with you, then you should RUN, not walk, to the nearest bookstore and get a copy of The Way We’re Working Isn’t Working.

  • I always feel like I am behind in my work and will never catch up
  • I want my team to be more productive
  • I desperately want to find balance between my work life and home life
  • I want my team to be more accountable and responsible
  • I struggle with the daily distractions of email, phone calls, and endless request for my time and can’t get any of my own work done
  • My company does a poor job of retaining employees

What I personally love the most about The Way We’re Working Isn’t Working is how it very easily connects to my own work around helping organization find competitive advantages that work in the 21st Century.  Tony reminds us that, “In a fiercely competitive and rapidly changing marketplace, creative and big picture thinking, curiosity, and openness to learning and empathy are a largely untapped source of potential competitive advantage.”  Going from more, bigger, faster to richer, deeper, slower seems counter intuitive to most, but is in fact the best way to distinguish your company from its competitors.

I have asked Tony to give us his thoughts on a few more in-depth questions on this angle around competitive advantage.

1)   Why do you think it is so hard for organizations to fully grasp that strengthening their connection with and investing in the well being of their employees can be a tremendous competitive advantage?

There’s an instinctive tendency in all of us to default to the easiest solutions. It’s easier to demand more of people than it is to consciously invest in them. It’s also part of the short-term preoccupation that characterizes so many organizations.  If you view people as expendable and interchangeable, you don’t worry about investing in them because you believe they’re all replaceable.  Leaders with a more  long-term view recognize that when you invest in people they become more valuable over time.

We make that investment in ourselves in the years we spend in school. But many organization are too concerned with the next quarter’s revenues to think about investing in the future. But the best organizations do just that. Companies such as Apple and Google offer more to their employees than most other companies – not just in perks like the free meals Google provides or the fitness facilities Apple has, but also mentally, in terms of the environments of learning and growth they actively nurture; and spiritually, by giving employees the sense that they’re doing something that truly adds value to the world. It shouldn’t be a surprise, in turn, that these sorts of companies attract better employees and have great results.

2)   In your work with a vast array of companies, do you see more of a correlation to the age of a company and the age of its executive team and their likelihood to fully embrace energy management in their culture, or is it more highly correlated to specific industries?

There’s no question that a certain kind of company is more readily drawn to our work.  They tend to be more progressive, forward thinking and innovative than average.  We’ve had our greatest successes with technology companies and with creative companies, but interestingly, we’ve also had significant success with more traditional financial institutions.  I think that may be because the folks drawn to the world of finance are often fiercely competitive, and we’re offering a science-based way for them to improve personal performance.

Ultimately, though, we’ve been able to work in almost every kind of organization, because in the end it’s usually one or two senior leaders who make the decision about whether to bring us in.  The trick, we’ve learned, is to introduce them to our work first at a personal level.  When they see its impact in their own lives, they become evangelists for the practices we’re teaching, and the new way of working we’re advocating.

3)   What is the one piece of information that you provide to clients that seems to resonate with them the most when it is difficult for them to see how proactively managing the 4 types of energy can have a profound impact on personal satisfaction and corporate success?

In an era of overwhelming demand, what resonates first is the science-based case we make for the fact that human beings aren’t meant to operate continuously for long hours. We all know, intuitively, that the way we’re working isn’t working, and that it’s actually depleting us.   It’s thrilling for people to understand that intermittent renewal actually drives higher and more sustainable performance.  Our work gives people permission to work in ways that serve them better – and make them feel better.  And that ultimately serves their organizations better.

Posted in business, creativity, leadership, management, success | 1 Comment »

People Risk: What Most Companies Fail to Understand

Sunday, April 18th, 2010

Dare to be DifferentIf you read my blog on a regular basis, you know that I feel strongly that the global financial crisis and ensuing economic recession was not necessarily due to too much risk taking, but more to do with a glut of certain types of risk taking and a real lack of other types of risk taking.  People risk is one of those that I would put in the “lack of” column.

As an executive in two finance companies during the bubble years I became very familiar with the hiring process.  What I generally saw was that hiring managers were not interested in taking any risk on people and generally liked to hire people that were just like themselves.  I suppose they felt as though they were taking enough risk on their deals, that they wanted to avoid any in the hiring process (too much market risk, not enough people risk).  Or maybe, they were simply taking the easy way out.  Just find the person who is doing what you want somewhere else and offer him/her more money to leave.  This is unfortunately what the recruiting business had come to during those years.  The reality is, most hiring managers (especially in the finance arena) are great at deals, but relatively poor at managing people.  Therefore, it was much easier to hire people who have previously done the exact job that you are hiring for so that you can spend as little time as possible with them and have little risk that they are not good at the job you are hiring them for.  It’s relatively sound logic as long as you are not interested in adding any creativity, ingenuity, or loyalty to your business.  How loyal do you think employees are that go from job to job chasing money?

Hiring for what people have done and not who they are, gets you people who have the ability to do certain tasks, but does nothing for adding to the moral, innovative, and energy building aspects of a business.  As with most things I write about, this was fine and worked well enough in the 20th century, but will be far less effective in the 21st century where the world, and particularly business, is beginning to work differently.  Employees, especially the younger ones, want their careers to be about something, they want to feel as though they are making the world a better place, and they want to work on something that is exciting.  People of my age and older, we never thought those goals were possible or even plausible to attain, so we simply gave in and focused on the money convincing ourselves that it is the ultimate measure of success.  I personally, am rooting for the kids of today and tomorrow, hoping they have the courage to get what they want.

When you hire people for who they are, what innate traits they bring to the table, and how they think, then you can maximize their potential in ways that maximize your business success.  Earlier this year, at the Front End Innovation Conference in Europe, there was a graduate student presenting some fantastic research on the traits of an innovative person.  She did a great job on the research and a great job at presenting, and I found it fascinating that the discussion it sparked really showed what a novel concept this was for so many people.  Sure, there have been personality tests that have been used in hiring practices for some time, but they really only tell you a few things like can you manage people, and will you get along with the others in your group.  I don’t dismiss those questions by any measure, but I sure would love to start hearing questions like, “What do you want to create? What are your passions? How connected are you to your own internal wisdom?” used somewhere in the equation.

When I asked on twitter whether you should hire people for what they have done or who they are, I got some great responses.  My favorite from @KrisSchindler and one that I agree completely with is to look for “intellectual curiosity”.  This concept has largely vanished from large institutions, and in my opinion, is not focused on nearly enough in our education system.  It’s a skill all of us are born with, and some of us choose to use it and others do not.  Who do you want working for you?

People Risk is not only about taking risk that someone with a different background who can think from new and creative positions is going to be good for your company.  People Risk is also about allowing yourself as a manager or executive to find the unconditional value in each person as individuals and as they interact within the company.  This takes time, and even more importantly, this takes being vulnerable enough to make those really strong connections that inspire people to work at their full potential.  When people are working at their full potential in an environment where they are respected, they have no desire to go somewhere else.

Alex Pattakos, PhD, writes in his book, Prisoners of Our Thoughts:

“The transformation of work in the twenty-first century is, in many respects, a call for humanity—a new consciousness that suggests more than simply trying to strike a balance between our work and our personal life.  It is a call to honor our own individuality and fully engage our human spirit at work—wherever that may be.”

Posted in Courage, Innovation, business, creativity, leadership | No Comments »

The 3 C’s of a Successful 21st Century Business

Tuesday, March 30th, 2010

Success Failure

Overtime, many businesses end up evolving through the lens of problem solving and not through the lens of what they want to create.  When you take the time to focus on what differentiates a company from its competition, what value it brings to its clients and the world, and what it really wants to become, the problems will automatically solve themselves.  If you are driven as an organization to create a shared vision and something is standing in your way, you will quickly find a way to remove it.   All the while, still focused on a unified vision.

To be successful in the 21st century, companies must learn to get out of problem solving mode and into the mode of passionate creation.  When solving problems, you are by definition looking to the past and limiting the upside of your answer resulting in a real lack of creativity, innovation, and initiative, which are all forward looking characteristics.  Focusing on questions that matter, questions that lead to ideas and initiatives that create value, brings Courage, Collaboration, and Creativity to the table.  With those three ingredients, the sky is the limit in terms of success.

People ask me all the time HOW to bring more Courage, Collaboration, and Creativity into their organizations.  They completely understand the need, but are unsure how to make it happen in a meaningful way.  These are not the things they teach in Business School.  I tell them there is one key element.  If they can passionately embrace this one key element, the rest will fall into place.  The key is the leadership team being willing and able to ensure that the underlying business model (the core from which the company extends) is courageous, collaborative, and creative itself.  Because the majority of companies today are based on business models that date back to the 1800’s, this can feel like a daunting task.  In reality, it may require a lot of change, but it is also the ticket to phenomenal results.

The challenge of bringing real innovation into companies that are large and set in their traditional ways, is also what can give new companies a real competitive advantage.  Young companies can very easily and very quickly create environments where employees soar, that attract the best clients, and that ultimately enjoy greater success.  This gives a whole new twist to the question of, barriers to entry.  We may also need to ask, what are the advantages to entry.

Courage

If a company is willing to show the courage necessary to break out of a traditional models, try something new and more appealing and show its desire for collaboration through its core actions, then the employees will be much more likely to do what is necessary to engage the best clients, discover the best new product ideas, and work to their fullest potential.  Leaders must model the kinds of behaviors they are seeking.

Successful 21st Century Businesses will be those that are always searching for something new and rely less and less on the status quo.  Always searching for what has changed, what new questions have emerged, and how it all interconnects.   They will use change as the fuel for their business model because they understand that they pace of change will only continue to increase overtime and at greater and greater rates.  They will also have the courage not to follow the herd and not to allow fear to dictate business decisions.

Collaboration

So many companies fail to harvest the energy and creativity already available inside their firms because their business models are designed to promote internal competition and silos.  If you want to promote cross-pollination and tap into the additional intelligence that exists only at the intersections of knowledge bases, then the internal business model must specifically promote those behaviors.

Creating teams that cross departments, functions, and even regions to work on organization wide projects is a simple way to begin working toward promoting a true culture of collaboration.  Promoting relationships and interaction between people who wouldn’t normally interact is critical.  Collaboration also promotes trust which will is quickly becoming one of the non-negotiables of success.

Creativity

When people are fearful of the consequences of any type of failure, they automatically go into a safety zone where the chances of failure are as small as possible.  This is a place where creativity cannot thrive, because creativity requires a certain amount of risk.  When people are not afraid of failure and know that it comes with a lot of great knowledge for success, they will be bring their full arsenal of creative tools.

Creating is a very natural state for human beings and one that fulfills our hearts and passions.  Thus when employees are free to create, try new things and receive critical feedback, their productivity will naturally increase.  Based on my two decades in the corporate world, working all around the globe, I estimate that most companies are operating at about half the productivity that is possible when employees are engaged and operating at their full potential.  This is not something that anyone really wants to admit, but we all know it is true.

Posted in Courage, Innovation, business, creativity, success | 1 Comment »

Individually AND Together

Monday, February 1st, 2010

Karthik's Photo

“Individually and Together” — three words I heard this weekend from Will.i.am being interviewed as he fondly remembered the journey of success for his group The Black Eyed Peas.  Yes, I am over 40 and a fan of the Black Eyed Peas!  As a writer, sometimes you hear a group of words in one context and your mind instantly relays them to another and you know that somehow you must capture that connection on the page.  For me, these three words hold the keys to success in the 21st Century for any business, large or small, local or multi-national.  When I was growing up, if a member of a band did something on his or her own, it was basically viewed as defecting.  Today, the Black Eyed Peas show us that band members doing their own thing and great stuff with the group is actually great for business.  Maybe the Cold War really is over.

How does one reconcile the dichotomy between a world increasingly focused on the individual and simultaneously asking its citizens to work in greater collaboration for the greater good?  The problem lies in seeing the two forces as a mutually exclusive.  The minute we begin to see them as more alike than unalike we begin to tap into their power.  By individually pronouncing ones passions and desires and focusing on what really drives you forward, you are more able to contribute to joint tasks in a selfless manner.  It is difficult for many of us to see this because society dictated for much of the last century that you are either out for yourself or you are for the good of others, and never the two shall meet.  The missing link is the belief that somehow left to our own devices, we are pre-programmed for choices and behaviors that are unsuitable and against what is good in this world.  Based on my experience, this could not be further from the truth.

Leaders today are challenged with how to allow maximum individualism while maintaining a strong thread of common vision between every person in an organization.  It’s a bit like the challenge that search engine companies are facing today: how to put a context around what any individual is searching for (based on their individual profile) such that they find exactly what they are seeking and perhaps something even better that they didn’t know existed . . . all the while maintaining some semblance of privacy.  When the figure it out, it will be a game changer.

It’s about giving employees back their power of creativity, permission to fail in search of excellence, and the respect that every person on the planet deserves regardless of their role.  It’s about leadership with less ego and more personal confidence creating the skills necessary to embrace and lead any group of individuals to their highest potential.  It’s about tapping into the personal energy of every member of an organization such that the energy of the group expands beyond the sum of its parts.

In another part of the same interview, Will.i.am spoke of inspiration, indicating that when it calls, you don’t hang up . . . you give it directions to your house.  Unfortunately, most of us hang up on inspirational thoughts and chalk it up to another wrong number from Mr. Impossible Dream. When, in reality such inspiration can at any moment become a pivotal point in our lives leading us to create a life full of impossible dreams that come true every day.    It’s a mindset that I have been aware of in my own life for sometime now and have slowly been shifting toward, and I will tell you that its power is immeasurable.

So, what does it really take to be a successful 21st century leader that can relate to each individual and then relate them all to each other?  It takes courage to love who you are, to love who everyone else is (regardless of where they are in life), to believe your team can connect the un-connectible dots, and the sincerity and vision to bring everyone together.  It takes the courage to know when to go for it and when to do more research.  It requires a willingness to take personal risk by really putting yourself out there.

Be the energy . . .

Posted in Courage, business, creativity, leadership, success | 1 Comment »

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