The evolution of CRE metrics that matter
Metrics that matter have evolved significantly over the past six-plus years. There is a vast array of metrics across industries, with enterprises exploring a variety of topics and amassing large amounts of data to support their businesses. Historically, commercial real estate (CRE) has been somewhat narrow-minded with metrics, simply measuring standard things like cost performance, operational performance, and maintenance performance. But not anymore.
In a post-pandemic world, the types of metrics CRE organizations are looking at has changed dramatically, with hybrid work playing a big part. Today, measurement is not just about numbers, it’s also about stories.
When Dr. Marie Puybaraud, global head of research, future of work for JLL, began updating JLL’s Metrics That Matter research, she and her team looked at 450 metrics across other industries to see how we could transfer the learnings from those sectors into the world of real estate. They also looked at how other industries are pulling in data and pushing it out to users, customers, and team members, providing them with the right amount of information to make the right decisions. As a result, Dr. Marie and her team applied 50 of those metrics to CRE. Some of the highlights include:
- Breaking bad: Competitive intelligence key performance indicators (KPIs)
- Loyalty funnel: Member activation, early repeat rate, customer loyalty
- Rotten apples: How unpopular an item or product (or legacy building in CRE) is, which leads to underperformance and under target results
- Breakthrough performance: New innovation used in projects, leading to over-performance or above-target results
- Lifetime value (LTV): The revenue a customer generates over the course of time
Part of the evolution of CRE metrics that matter over the past few years is moving from value creation to value measurement, which requires the right data. Organizations are looking to:
- Go beyond traditional KPIs and uncover new metrics
- Reinforce an ROI culture to measure performance
- Introduce a global model of performance measurement
- Establish a link between CRE performance and business objectives
- Measure what really matters
- Create a data-driven decision-making culture
There has been a major shift in expectations due to new imperatives and challenges, most notably, the COVID-19 pandemic. Traditional drivers are losing ground, new drivers are emerging, and post-COVID drivers have a higher reliance on enterprise data. CRE organizations are aiming for business resilience and future proofing. Successful organizations are adaptive, agile, and responsible—and those that build a high level of elasticity into their CRE strategy will be able to adapt quickly to continuous shifts.
Our updated Metrics That Matter research identified three core categories of focus:
- Operational excellence and agility
- Human experience and performance
- Responsible real estate and sustainability
Building a metric-driven culture to empower data-driven decision-making in real-time will help CRE organizations future-proof their businesses and drive the future transformation of their portfolios.
Real estate is a strategic enabler that creates value across stakeholder groups. The new ecosystem of stakeholders, including CRE, HR, IT, allows organizations to pull in data from different parts of the business. This helps bring the business and real estate worlds together, side by side, to create a data-driven decision-making culture. But many organizations are still not prepared.
- 62% of organizations lack the technology to effectively analyze workplace data
- 70% of CRE organizations maintain multiple systems and data sources to manage their portfolios of people, places, and things
- 100% of enterprises have more data coming from more sources, which makes it increasingly difficult to deliver actionable insights
Is your organization ready for data-driven decision-making? Michael Thompson, head of JLLT data and BI advisory, offers great advice on what you need to do to prepare and get data ready.