Real estate decisions by nature are drawn out affairs. No matter how quickly you decide what you want to do, there will be a minimum time to negotiate with all parties and eventually get to a final decision. It’s a lot like steering a large ship on the ocean….actions take time to propagate through the system.
As a real estate decision maker the best thing that you can do is be process focused in your decisions. Not using a process will usually lead to over-thinking and getting lost in the weeds or under-thinking and looking only at the financial impact. Either direction will generally lead to a sub-par outcome.
So, what’s the process that should be applied? The Six Sigma DMAIC process is always a good one to start from (Define, Measure, Analyze, Improve, Control) with a focus on the D, M and A. When I go through the process, most of my time is spent on the Define stage and specifically making sure that all of the stakeholders in the decision agree on what factors will influence the final outcome. Measure is the negotiation phase where the details get worked out along with some analysis depending on the decision factors.
More tomorrow on the Define stage for real estate.
I agree that the Define stage is probably the most important — the same is true in software. Getting the initial set of requirements from the customer and making sure we know what the goals of the project are. But often in software, we run into changing requirements, and many techniques (eg, agile) have been developed over the years to deal with flexibility in the project. Does this happen in real estate, and if so, what strategies do you use to cope with it?
Happens all the time! Usually once people see or touch a building and they fall in love with the actual structure but forget about everything else (non-building related) that comes with it. This is why it is important to get buy-in and consensus on how the decision will be made by the entire team before anything begins. No site search, no discussion of possibilities, nothing. Simply figure out how the decision will be made.
What this accomplishes is that it changes people’s perception of what they are looking for. Instead of falling in love with granite when they walk on site, they think about how long the commute is to get there or how small the floors are. You take away a person’s ability to justify a bad decision because you don’t let them get to the point where they decide what they want ahead of time.
Of course, there’s a lot of flexibility along the way to account for the unexpected or the suddenly possible. But those are different animals entirely….