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Brand building is the icing on the cake

Construction activity has remained stereotyped for very long and there is huge resistance to change. Ability to construct and deliver was the only core competence required for real estate business a few years ago. It is no longer possible that one core competence can drive a real estate organisation of the future. The concept of developing many core competencies is still in an ideation state in this sector. There are no visible signposts to conclude that there is a concert ed effort taking place to differentiate from the competitors. The first step that the organisations must take is establishing the core competencies that their organisation would like to develop and be differentiated in the market. The ideation barrier needs to be crossed and strategies have to be put in place to develop these core competencies.

Innovation is the second step in the path of evolution for real estate organisations. Earlier, the industry has been largely insulated from the impact of various environmental factors. It has to start thinking and acting differently. Innovation at the organisational level is the key to future growth and sustainability. Innovation in terms of cost reduction with use of better technology, use of new and cheaper materials, global sourcing is the need of the hour. Creating the right structure for the organisation and improving the cross functional approach, interdependence and teaming in the organisation is equally important.

Creating an effective mechanism for cash flow management is the third step in the organisational evolution. Huge project investments and staggered in-flows of cash make it imperative that a robust mechanism must exist in the organisation to manage the cash flows effectively. A live wire supply chain coupled with strong cash flow management mechanisms are signs of mature organisations.

The next step in evolution is creating transparent processes and systems in the organisation. Real estate business needs an image make over if investors have to pump in money. Strong systems and processes are a sign of good corporate governance which comes through appropriate checks and balances. Systems should be allowed to drive the organisation. Dependence on processes without compromising the speed and quality of decision making is the key to the evolution of real estate organisations.

Another important domain in evolution is building brand, creating customer orientation and maintaining customer relationships. The organisation should be seen as not only investor-friendly but also customer-friendly.

The most difficult step for the real estate organisations is to create and sustain the cross functional teams in the organisation. As a result, it will have more managers outside from the basic domain of construction. Bringing in managers from more matured sectors and blending their expertise is a tough call. Construction being less organised than other sectors, blending the managers would create serious change management issues in the organisation. However change management and competency development programs would help create leadership pipeline that can tackle the challenges over a period of time.

The long gestation periods for the projects generate a high amount of risk and risk mitigation needs to be addressed in a systematic manner. A specific process for risk management which exists in evolved organisations has to be established as a part of the evolutionary process.

After identifying the series of steps towards the possible evolutionary path, it is important to decide on the time frames for implementing each step mentioned above. The companies will be requiring domain specialists in areas like risk management, Brand building and customer relationship management. The composition of the people in the industry is bound to become cross functional and leadership that excels in managing the cross functional teams is essential.

On the issue of time frames, one needs to remember that human systems take more time to evolve. Human systems do not evolve under duress. They evolve when the evolutionary path is chosen voluntarily. The time frames thus depend on current state of the organisation, composition of people and also on the adaptability of the organisation to change.

Real estate and construction industry is the second largest employment provider after agriculture in India. Employment generation in this segment keeps growing when organisations conduct their business in a sustainable manner.

The social relevance of the real estate organisations gets enhanced when sustainable business practices and long term goals are pursued.

That is the true Corporate Social Responsibility!

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