In 2019 we advised a company on some rehabilitation works. When he came to us, his project was running over schedule and he didn’t know what the payoff would be two months from the start of the work. The fund was new to Spain and was beginning to organize its procedures on the basis of the first projects it had undertaken. Management was carried out by personnel external to the company. During our initial analysis, we found that this team was not aligned with management’s objectives. Increases in lead times, costs and quality were observed of which neither the CEO of the organization nor the investors were aware.
Value-added analysis of a property examines the business processes, activities, and materials of each component to identify value-added steps, i.e., those that change the nature or form of a property to achieve a higher price, such as a renovation procedure. However, once these steps are determined, it is often found that many of them do not provide any benefit. Our goal should be to eliminate as many as possible of those that are not needed. This way, the process will be more efficient and faster, which means you will get more performance without additional resources. In order to achieve this, it is essential that each of the parties involved share the same objectives and needs and, in order to transmit the company’s values and know-how to each of the components of the organization, we need to have a well-structured system in place.
In practice, most companies involved in the purchase and sale of real estate assets consider that in order to optimize resources and unify efforts, it is important to clarify the processes following certain guidelines:
- Systematization of internal purchasing, transformation, operation and sales procedures. That is to say, to put in writing the company’s methodology in each one of them. This is the DNA of our company.
- Establishment of measurable key performance indicators. Some examples may include:
- Acquisition and renovation cost improvement
- Improved management time
- Improved quality (reduced errors and omissions)
- Improvement in supply contracting
- Improved license management
- Improved risk forecasting
- Automation of processes, which will allow us to have greater control over errors.
- Digitization of projects.
- Management of lessons learned from previous projects.
- Energy efficiency analysis.
- Analysis of technology applied to operation and maintenance.
- Improved supply efficiency.
- Processes for selecting collaborators, constructors and consultants.
Some people think that systematization and automation are detrimental to creativity in business. My opinion is the opposite: creativity arises when we don’t have to spend so much time and energy thinking about how to do tasks that should be automatic. Creativity is possible when our minds are free to think about the important things and not the urgent ones. In short, systems not only help us to be more efficient, but also more creative.