Shayne Skaff, Co-founder & CEO
Recently, I was posed with a question about the main challenge facing us as a technology firm catering to the commercial real estate sector. Not surprisingly, I reached for all the obvious answers: lingering challenges from the pandemic, inflation, interest rates, bank closures, and so on. No sooner had the words left my lips, I realized that while these things had certainly posed material challenges to the industry and our business, there’s a much larger issue at play. The real challenge is far more nebulous and requires much more than lower interest rates to fix.
The challenge I’m talking about is “culture”.
Now, before you roll your eyes, I’m not talking about the way people treat each other in CRE. I’m talking about how most of the space treats the work that they do within CRE. The culture I’m talking about gets at the bigger picture of how people do what they do day to day and their appetite and willingness to change it. We may not like it, but the cycling of the economy is something we can expect with absolute certainty and there are winners and losers in every season. What makes the difference in how resilient firms are to economic stressors comes down to the culture that rules them and unfortunately for most, the mindset around change and innovation is as rigid as it’s ever been.
“It’s so easy to say ‘…a machine can’t help do what I do’, but in every case where our users have given Blooma the time to implement and learn, we’ve come away with believers.”
The days of excel modeling, manual entry, and analysis are alive and well all across CRE. To be clear, it’s not that everyone is unwilling to utilize technology to make their lives easier, it’s that the processes and systems used to buy and implement technology are so far from being efficient compared to other industries. Many CRE teams have cut head count to a point that when interest rates start to fall, they will never be able to keep up without both hiring people back and bringing technology in to help them scale more efficiently. Those organizations that don’t retool during this massive downturn will be left flatfooted when the inevitable upswing hits.
But it’s more than just technical debt. The old ways of work are dying…This new generation isn’t addicted to work and they’ve been disillusioned about the glorification of being busy. They need much more than my GenX and my parents Baby Boomer generation needed from their jobs. Say what you will about this new generation being lazy, soft, and unfocused, they’re onto something when it comes to the concept of work life balance and they’re forcing all of us to sit up and pay attention. More importantly, the shorter work days and work weeks that are integral to this new order of work demand a level of efficiency that most industries are simply not prepared for – CRE being first among them. It’s so easy to say “…a machine can’t help do what I do”, but in every case where our users have given Blooma the time to implement and learn, we’ve come away with believers.
As employers, we can either stay on the drug that says “the old way works so why change it?”, or we can take the withdrawal now and disrupt our businesses in the short term to implement innovation that takes us into the new way that work must move to in order to stay competitive and relevant. As Peter Druker said way back in 1985: “Innovate or die”.
So what does the road to an industry-wide culture shift look like? Well, it starts with leadership.
Many organizations have already made the decision to innovate and shift their culture around technology adoption from stringent and slow to flexible and willing to innovate. In some cases, organizations have put innovation change teams in place to drive the discussion and adoption of new technologies. The piece that is still largely missing from CRE is the education of the business management on how to adopt software platforms within their businesses in a meaningful way. Most of the management in CRE has never bought and implemented new software into their organization. The biggest problem lies around false expectations. Software will never do everything that a human is doing out of the gate. It takes patience and persistence to drive new software platforms into an organization that has largely been using the same tools and processes for 50 years.
The last mile really sits with the purchasing process. Technological innovation is happening faster than ever in history and the rate at which these changes are occurring increases exponentially every year. Unless organizations have the processes in place to acquire and upgrade technology in real time, all of the good intentions and willingness on the business side will be for nothing if they can’t buy and adopt as quickly as possible. Some sectors are more nimble in this process, and others – due to stricter regulatory hurdles – are moving much too slowly to see any real benefit. For instance, commercial banks are probably the farthest behind the adoption curve and that’s not for lack of trying. Still yet there are too many people, too scared to adopt for fear of regulatory scrutiny. 15 years ago, this would have been a more valid concern, but the reality of what the cloud has provided is much more secure than traditional on-prem solutions which can often suffer from security threats because of lack of software upgrades, firewall breaches, internal hacks,…and many other threats that legitimate SaaS companies care for in their core business extremely well.
All that said, change is hard. As someone who’s been in the technology industry for quite some time, I’ve never seen the process of disruption go smoothly. There’s a quote by Tony Robbins that says change happens when the fear of staying the same is greater than the change and I’d say that, for the most part, that’s true. This isn’t meant to be a rag on CRE. Instead, I’m calling out the technology companies to recognize the clear friction points in the adoption process that our buyers are struggling with. It’s incumbent upon those driving change to help adopters get on the curve and ride it to new heights.