CRE must embrace innovation and technology to thrive in the future, pundit says
The commercial real estate sector must embrace innovation and technology in order to thrive in the future, a pundit told CBRE officials this week.
Bent Flyvbjerg, a professor at Oxford University and at the IT University in Copenhagen was the latest guest of CBRE as part of its series of talks. He referenced material from his book, “How Big Things Get Done: The Surprising Factors that Determine the Fate of Every Project from Home Renovations to Space Exploration and Everything In Between” to buttress his point.
Compared to other sectors of the economy, innovation and technological development has
been “way too slow” in the CRE space, he said. “That’s something that I think the industry
needs to look at in order to thrive in the future,” he said.
Consider the ‘Thinking Slow Acting Fast’ approach
He touted his “Thinking Slow Acting Fast” philosophy in achieving results. “I really think this idea of thinking slow, acting fast is crucial; especially because most projects are done in the exact opposite way,” Flyvbjerg told CBRE. “People think fast and then they’re forced to act slow because there are so many things they didn’t think through that are going to come back and bite them during delivery. That’s what you typically see. So we actually say that think slow, act fast is the rhythm of a successful project and think slow doesn’t necessarily mean that you have to take years for it, even though some people do that. But it means that you have to take sufficient time that you actually really know what it is that you’re doing once you start on the expensive part of the project, which is the project delivery.”
Engineers are great, but….
With all due respect to engineers, he suggested, folks with insight into human behavior are a good fit for modernity in business: “And it’s actually a problem that if you look at it historically,
doing big projects has grown out of engineering,” he said. “And engineers don’t think a lot about psychology and behavior. They think about things and they’re interested in things, and not
so much in people.
“But there’s one thing that is not part of the education and that is understanding human behavior. So that’s the new thing we want to bring to the field – you’ve got to look at the behavioral side. If you don’t look at the behavioral side, you’re never going to be able to do projects successfully.”
CRE could take some lessons from Pixar Films
Those working in the CRE sector could take a page from Pixar Films in learning how to bring projects to delivery, he added. He calls the approach “Pixar Planning,” appropriately enough.
“So the two things that you need to have in place upfront is that you have to have a realistic
business case,” Flyvbjerg said. “So you need to know what it is that you’re doing and you need to know whether you actually have the money. So that means you have to have a realistic budget and you wouldn’t believe how often that is violated.”
Then there’s the second thing – an effective delivery team. “Those are the two lakes that
you need to stand on,” he said. “Once you have these things, then the question becomes developing your plan. And this is the thinking slow phase. And this is what Pixar is so good at. They typically spend two years before they even start shooting a film; two years in development
where they experiment, and they do trial and error.”
The Pixar process doesn’t end there: “They iterate the film and they spend those two years doing more and more sophisticated versions of the film,” he said. “They simulate the film before they do it, in order to be sure that they know what they’re doing when they start using the expensive equipment, when they start hiring the expensive actors to do voiceovers, when they start hiring the expensive composers to do the score, etc. So they assure that they don’t waste money during that phase and that’s one reason that Pixar is so successful. They really have to have that process down by doing it over and over and over again, not just within the single film, but also between films.”
The same approach could be applied to projects in the CRE realm. “Pixar is using this approach of iterating, iterating, iterating and getting better and better at what they’re doing. And it’s a huge success.”
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