Agility: The key to survival in the ever-changing world of commercial real estate
The commercial real estate (CRE) landscape is in a state of flux. Current trends and technological disruptions have shaken traditional assumptions to their core. In this era, only one thing is certain—business agility is essential for survival and success.
What is business agility?
Business agility is a company’s ability to respond rapidly and effectively to change—both internal and external. It involves being able to sense market shifts, make quick and informed decisions, and reconfigure strategies as needed. Agile organizations are flexible, resilient, and customer centric. They thrive in uncertain environments because change doesn’t paralyze them; it fuels them.
Traditional organizations suffer from four critical issues that inhibit business agility:
- Poor visibility into active work reduces the ability to analyze the impact of their strategy.
- Organizing around functional specialty instead of value delivery lengthens time-to-value realization.
- Functional silos result in rigid and inflexible structures that offer poor adaptability.
- Risk management. Risk is carried and managed instead of being actively mitigated or reduced through experimentation.
Addressing these four issues requires a concerted and conscious effort to transform to enable business agility.
Transforming for business agility
Undergoing a transformation requires a fundamental shift in mindset and operations. It is important to prioritize value delivery and outcome centricity. By aligning cross-functional teams around business value creation (value streams) and synchronizing the rhythm of business, organizations can reduce the dependencies and delivery bottlenecks that are ubiquitous in most traditional organizations.
In addition to organizing around value delivery, businesses should be willing to embrace a culture of experimentation for calculated risk-taking and learning from successes and failures. Lasting transformation outcomes require a long-term focus characterized by iterative improvements to products, services, processes, and structure that is based on data-driven decisions and feedback. This long-term view can often be measured by the reduction of hidden costs.
Uncovering hidden costs
Every company faces hidden costs that drag down their profitability and impact their reputation. Hidden costs are those costs that do not show up on a balance sheet or profit and loss statement; however, they impact them in a very real way. Hidden costs result from a lack of organizational steering, lack of synchronization, lack of negotiation, an unwillingness to clean up old processes and procedures, and poor information systems. These information systems are not just technical systems, they also include communication and misunderstood expectations. In some organizations, more than 50% of an individual’s time is spent working through organizational issues. These hidden costs represent ineffectiveness and inefficiency; they take time away from delivering customer value and outcomes, which can also lead to low employee morale.
Embracing business agility and continuous improvement
As outlined in a recent article by JLL titled Adaptability is at the heart of portfolio management, the real estate industry has acknowledged the crucial need for greater agility. JLL’s research highlights the importance of building stronger connections between real estate teams and broader business goals to unlock value in a rapidly shifting market.
To navigate the complex landscape of CRE and remain competitive, companies need to embrace business agility and a culture of continuous improvement. This requires focusing on creating adaptable spaces that foster innovation and collaboration. It also requires using data analytics, predictive modeling, and tools like artificial Intelligence to inform decision-making and streamline operations. Finally, it requires fostering a culture of continuous learning, encouraging employees to develop new skills, challenge assumptions, and innovate to keep up with industry changes.
Building resilience for the future
In a world of relentless change, adaptability is no longer an optional “nice to have.” It’s a mission-critical survival skill for CRE companies. Those who embrace business agility, continuous improvement, and a customer-centric mindset will be well-positioned to not only weather today’s challenges but seize the opportunities of tomorrow.