There is a popular English idiom for incentivizing action called carrot or a stick. However, Andy Poppink has a different take on motivation which could be used towards the Real Estate Industry… “I like to say you can also whack someone with a carrot… so let’s take the good and remind them how good this can be again and again”. After years of working in Silicon Valley, Andy Poppink takes with him a new vision and ethos of change to the Real Estate industry.
When compared to other industries, the real estate industry has lagged considerably in adopting new technologies. It has only been within the last five years or so that wide scale adoption of Proptech applications have seen a rise throughout the industry. But it is more than just technological changes that must be adopted. The pandemic created major challenges for the Real Estate industry and the Office Real Estate sector took a tremendous hit with the workfrom-home policies adopted by many companies. To tackle these changes, companies must be resilient and forward thinking in their planning.
According to Poppink, JLL has adopted to this new environment by prioritizing four areas of focus for their investments and decision making. They are Digitization of Real Estate, Back to Office, Sustainability, and Data Collection.
The company incentivized innovation by creating JLL Spark which is an incubator for new technologies and ideas, backing cutting-edge founders who are pioneering the future of commercial real estate. It has recently developed new Proptech products, which now operate under a new division called JLL Technologies. This effectively makes JLL a player in the Proptech space (JLL’s Proptech Report).
However, as he emphasizes, not all ideas are marketable ideas, and a concrete metric needs to be in place to determine which ideas should move forward and which should not, and this needs to be done in a manner that still encourages the employees interacting daily with customers to provide solutions to everyday problems and or inefficiencies they may encounter in the company or the industry.
Over the last year alone, JLL has been very active in the Proptech space with the acquisition of multiple startups to include: Hank Acquisition, a Sacramento-based Virtual platform, Building Engines Acquisition, a Boston-based building operations platform, Skyline AI Acquisition, a leading Artificial Intelligence company focused on CRE, Minor investments in Roofstock which provides innovative Proptech and an online market place.
The keys to success for the adoption of new technologies are Communication, Connection, and Creation of Revenue. JLL has learned that it is better to communicate what a new piece of technology will do for a customer rather than explaining the workings of the technology or how it was derived. This requires making a personal connection to the end user letting them know how it will improve their everyday lives. Lastly, new technologies need to create a new source of revenue. Being a novel useful idea is not enough for success in the Proptech space, these new technologies must also provide a new source of revenue in order to have wide scale
As many corporations have embraced a hybrid approach between work-at-home and working in the Office. Poppink suggests a different strategy, one which he calls Elastic Work.
I prefer to use the term Elastic Work, because to me the there is always going to be a relationship between a team, a person, and the rest of the organization and how they operate. – he said
The hybrid approach could potentially be culturally divisive for a company, where one team works in the office and others are working remotely. For example, workers who are seen more may receive favorable promotions or reviews over those who are working from home. This hybrid approach could have a negative impact socially on team dynamics and cohesion. This is something that CEOs need to communicate to their organizations. This, however, does not negate the benefits of mobility which is why it is considered Elastic Work. In this case, workers meet as a group on designated days or times as needed. Communicating expectations will be the key for Elastic Work’s success.
Sustainability and ESG are the new drivers of the real estate industry and Poppink is a strong supporter of this initiative. “I’ve been very impressed with ESG, in particular in Europe… and I see such a great investor sentiment around ESG it’s really encouraging, and I think that continually trying to bring those together, the investor and occupier sentiment around ESG is going to be really important to ultimately achieving the objectives.” He also sees it as a key tool to dedicate time, energy, focus, and investments to issues that historically would have been
hard to prioritize or act upon.
With visionaries like Andy Poppink at the helm of Real Estate Technologies, expect to see vast technological and cultural changes across the industry in the near future.
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- Article about “Urban living is for sharing” with a quote from Gemma Kendall, head of multifamily investment – EMEA, at JLL
Article with Paul Rostas, co-CEO of Plus X, about the changing needs for workspace, the role of innovation hubs and how real estate takes time: “Plus X brings the innovation factor to UK workspace”