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.

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 21^st 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.

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 20^th century, but will be far less effective in the 21^st 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.”

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 21^st 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 21^st 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.

“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 21^st 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 21^st 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 . . .

Just as we must be careful of the words we use with ourselves, so as not to unintentionally sabotage our own motivation; we must also be careful with the words we choose to exemplify our commitment to excellence inside our businesses.  There is a big difference between a goal of being the best and one of constantly improving and learning.  On the surface one might guess that being the best is always the best option, but I beg to differ.  The difference is in the mindset.  Being the best is a place to get to while always improving is a place to come from.

If your goal is to be the best, then what is there for you to strive for once you’ve reached that plateau?  In the 20^th century, being the best was a title much easier to hang onto once attained because change occurred at a much slower pace.  Today, you could loose such a tile in a day from one disgruntled customer who was savvy enough and creative enough to reach one million viewers on you You Tube with a story of how he was wronged by your firm.   And the kicker . . . it doesn’t even matter if it is true.

If your goal is to be the best, then how do you and your employees feel when you are not the best?  You probably feel as though you are failing in some respect.  Sure, that bit of anger and resentment toward the one who is the “best” may fuel some extra time at the office, but it is also affecting your mindset and your ability to really come up with that next great idea that might in fact land you top of the heap.

If you goal is to be in a state of constantly improving and forever learning, then it really doesn’t matter who is perceived as the best on any given day, you and your team are always looking for that next edge.  There is no anger, no resentment, and no feelings of failure to cloud anyone’s mind, judgment, or motivation.

Excellence comes from doing the ordinary things extraordinarily well with energy and enthusiasm as if they were the most important job in the world.  This is the key to excellence.  Everything counts no matter how big or small a role it plays.  Little things add up to big things.  Your energy when you complete the ordinary will dictate your energy with the extraordinary opportunities come your way.  It’s the same reason why some people seem to get all the opportunities?  They don’t really; they are simply ready to greet them when they arrive.

Never loose your desire to learn, or tire of improving yourself ~ from artist Jane Farr who has joined Ancora Imparo (Italian for I am still learning) and Kaizen (Japanese for being in a continual state of improvement) in the beautiful drawing above.

Click here to read Realistic Impossibilities

The short answer is EVERYTHING. The long answer is what this post is all about.  These are three of today’s most pressing issues that are all too often discussed in a vacuum.  The best progress will be made at the margins where each of these pressing issues overlap.  When we begin to see them each as an integral component of global economic progress and prosperity and not discrete issues, much will be gained.

Perhaps the inclusion of 21^st century business models is a surprise to many lumped in with the other two that get a lot more focus and media airtime, but please notice that I use the predication “21^st century”.  If we want to do something about the ramped greed and selfish strategies that exist in many of today’s firms, then it must be added to the mix.  If created correctly, new and improved business models can be a large part of the solutions to climate change, global economic development, and their own perils of decreased employee morale and disgraced public opinion.

• They all require new, passionate, and innovative solutions. In fact, we must assume that the very best solutions are not yet known.  Thus, the solution frameworks that are being bantered around today need to accommodate the unknown solutions of tomorrow.  It’s beyond out of the box thinking and into a world without the constraints of boxes of any sort.  It’s about unleashing the mass of untapped potential and productivity that lies dormant inside people and organizations around the world.

• They are each integral to the success of the others. Slowing population growth in the developing world is one of the keys to avoiding a climate catastrophe down the road.  Economic development and the creation of a middle class is the most effective way to slow population growth in the developing world.  Private sector ingenuity is key to new technologies that will reverse the current trajectory of climate change as well as promote economic development in the developing world.

• Alignment is key to effective solutions in each case. Businesses are learning how to align their shareholders, employees, customers, and the public in ways that will dramatically increase productivity.  When transparent alignment and partnerships are created between foreign aid, domestic and foreign private investment, and public money, global economic development will become significantly more efficient and effective.  Unless we properly align the big players in the world on climate change soon, it will likely suffer the same fate as the Green Revolution in Africa.

The most successful businesses models in the 21^st century will be those that realize contributing to the creation of new markets is a winning long-term strategy, that focusing on something besides growth and profits is the key to engaging employees and winning the hearts of customers (yours as well as your competitors), and that how you decide to be in the world can be just as important, if not more important, than what you sell.

Too often when these topics are discussed in the media, there is too much focus (in my opinion) on the facts known today which narrows the conversation and too little focus on what we want to create.  In other words, discussions and potential solutions are being filtered based on what we know how to do today and not on whether or not they fit what it is we are trying to create.  All great movements start with an unadulterated view of what should be created, if anything is possible.  There isn’t much humans can’t do once they set their minds to it.  Some things take a few months and others a few generations.  The problem is that we sometimes lack the belief that it can be done, which ends up being the biggest thing that holds us back from succeeding.

QUESTIONS FROM THE WORLD BUSINESS FORUM 2009

Questions are so much more intriguing than answers!

We can’t create a new business model that will be effective in the 21^st century, accounting for its unique set of challenges, by “thinking outside of the box”.  It’s high time to obliterate the box!  As long as the box continues to exist, some form of the current outdated business model that has changed little in the last 150 years, will remain.  That was my biggest take-away from this year’s World Business Forum 2009 held in New York City last week.

The program was impeccably executed with a tremendous variety of speakers all with very timely messages.  And, Radio City Music Hall . . . well, it’s just hard to beat.  Rich in history and character and perfectly suited for this event.  If you missed the conference this year, be sure and sign up for next year, World Business Forum 2010.

So how do you go about getting rid of the proverbial box?  It is hard enough just to get people to think outside of the box, how can we possible get rid of the box?  The reality is, that the box is the very thing that is holding us back.  The box is a framework that is often hard to look past when it is staring you in the face.  We are stuck in a business model born 150 years ago during the Industrial Revolution, and it simply no longer provides what is needed for businesses to continue to flourish.  It felt to me as if the World Business Form was challenging us . . . challenging us to have enough courage to ask the following question, and the creativity to experiment with the answers.

Is there a better model for business success that provides an environment where creativity and connectivity flourish and capitalism can better align with the innate well being of humans such that its full potential can be realized?

Let’s explore a new era of capitalism and what a new and emerging business model might look like.  One that focuses on alignment and the inherent values and desires of human beings to not only be economically successful but also to be compassionate, responsible, and create connections to others in the world.  Through such alignment we will actually become better capitalists because we will have exploited its full potential.  When we realize that not using known medical technology to vaccinate children in third world countries against life threatening diseases because they cannot afford to pay full price is actually a choice, and not a permanent side effect of capitalism, then we are free to make a different choice.

Traditional business must adapt or it will perish.  It can either embrace the change and garner all the goodness that comes with it, or it can go down fighting.  Either way, a shift is in the making, and the corporate world will never be the same.  And do we really want it to be the same?  In fact, we’ll discover how a change in our mindset about business and capitalism is precisely what is required for the next wave of growth.

Without these changes, the next cycle of growth will be more like a small hill rather than the mountain we all hope it will be.  We can all do better and learn together, because the reality is that we are all locked into a global economy whether we like it or not.  An increase in productivity may be the only way to grow in the future for many industries, and we are not going to get there by any of the traditional methods.  In the past we have been able to rely on finding cheaper inputs, dramatic increases in consumerism, and population explosions.  In the twenty-first century it will take engaging an otherwise half engaged workforce who is secretly longing for the inspiration to put the pedal to the medal.  It will also require engaging your customers and the communities in which we all reside.

The world is made up of evolving societies.  As the desires and dreams of the individuals that make up those societies change, so must the businesses and economic systems designed to meet them.  At the moment there is a bit of a disconnect.  It is no longer about more stuff, but about deeper, stronger, and even emotional connections.  Population trends, the evolution of human psychology, and passing the peak of consumerism will dictate this new direction.

What will drive the next big movement in the world of capitalism?  What will create the next wave of competitive advantage in the market place?  What will the next Microsoft do better than everyone else?  What seems awkward now but will seem a no-brainer 20 years from now?  What will make going to work an adventure instead of a chore?  What will expand capitalism such that its benefits are more than we can currently contemplate?

An obliteration of the BUSINESS BOX and THE POWER OF CONNECTION!

What story?  That’s the problem . . . commercial real estate development in the past several decades has lacked a story.  A few have gotten it right, but many have not.  Most of it is boring, boring, boring and it is all starting to look the same.  When the commercial real estate market comes back, those who dared to be different and provide something new will be the clear winners.

Too many of the deals that were done in the past 6 years only made their investment hurdles because of the nice arbitrage that existed in financing the deal at a very high loan-to-value ratio and little recourse to anything except the underlying property.  I’m afraid those days are over, which means that new real estate deals are going to have make sense and work standing on their own.  If the financing isn’t going to get you over your hurdle, what will?  Stronger, better, and deeper connections to the users and their communities is what I would bet on.

Someone recently asked me what I would do if I had access to capital and had to use it to invest in commercial real estate.  My answer . . . I would focus on redevelopment and seek out opportunities where none of the competition has a story or something extra of value to offer.  I would probably also pay attention to the areas where a city transitions from urban to suburban.  There is a lot that can be done in a re-development in that kind of an area.  You have the opportunity to attract people from both the urban side and the suburban side.  The key is attraction.  Forget about doing the same thing that worked so well on the other side of town.  Find your courage and set out to do something unique and meaningful.  Get out and talk to people, find out what they want in an office building or a retail center.  Throw some ideas out; see what kind of reaction you get.  Study how people live and aim to give them something of value.

Suburban development has been fraught with big-box, poorly constructed, cookie-cutter, concrete havens that are only really attractive to the black birds because there are now 100 more small trees equally spaced in the parking lot to hang out on.  There is probably not going to be a lot of this stuff going up new for a while, but if you are thinking about it, or considering investing in one, please take a trip to Europe.  I’m certainly not advocating that we all start to model ourselves after Europe, but at least have a look around and realize that development can have a story, be interesting and attract people simply for its “hang-out” factor.  It doesn’t have to be extravagant or expensive to be appealing.  It just has to be a cool place where you’d like to hang out.

The reality is that we’ve all gotten over the “Wow” factor of being able to walk into huge stores and see merchandise stacked 30-feet high up to the ceiling.  Most of us are now looking for quaint, relaxing, different, more natural and smaller.  We want something that is inspiring and has more meaning.  We are tired of boring concrete . . . concrete . . . concrete.  We are especially tired of those stores where they try to fake you out with a fancy front.  Once you look behind the façade, you realize it was just a fake out; they were too cheap to build something with real character.  Have the guts to be what you are trying to be.