It's Not Just a Strategy, it's a Mindset: Oxford Properties 4.0
The avalanche of new PropTech solutions hitting the market is without a doubt a great thing for the real estate industry, but it requires a complete overhaul of how real estate owners and managers think about and run their businesses. In the past, property/asset managers made decisions at the local asset level for most technologies that they purchased to operate their building. While that led to quick and nimble decision making, it created a mishmash of disparate systems in each building that provided all of the functionality that the building needed, but prevented the portfolio from leveraging all of their assets in a single cohesive way. If a decision was made to roll something out portfolio-wide, it was nearly impossible because it would require integrating a hodgepodge of platforms that do not speak to each other. That may have worked in the past, but not any more. To activate some of the amazing new technologies which are hitting the market - everything from occupancy measurement, to flexible offerings, to energy efficiency and more, portfolio owners need to tie their portfolio together to get the benefits that they can only fully realize if everything is interconnected.
It’s not as simple as just centralized decision making. It requires a fully coordinated effort of every division working together: from IT, to cybersecurity, to leasing, and operations. The other vital piece of the puzzle is the tenants. Solutions and amenities are worthless if they aren’t what tenants actually want. Real estate is part of the hospitality industry, and COVID has shifted the balance of power to tenants. Vacancy creates options, and tenants are going to lease space in portfolios that provide them with the experience that they are looking for. It’s fair to say that real estate companies were not always known for customer service. Once a lease was signed, there was not much interaction with the building. The game has changed and the winners are going to be the ones that are obsessed with customer service.
It’s one thing to talk about instituting a customer service obsessed culture. It’s another thing entirely to actually make it happen. Oxford Properties, the massive real estate leader with over 150M SF of real estate across just about every asset class in the industry, has aligned their company in a way that I believe will become the blueprint for how this industry needs to operate moving forward. The team at Oxford were kind enough to agree to a roundtable interview with leaders from different divisions of the company to discuss exactly how they are approaching the new world. I found the collaboration across teams with a focus on a single experience to be fascinating.
Anushka Grant – VP, BTO & Platform Services
James Ki – VP, Data & Architecture
Ron Cirillo – VP, Cyber Security & Service Excellence
Claire McIntyre– Head of Brand, Marketing & Communications
What is Oxford 4.0, and how does each team contribute to it?
“For us, 4.0 isn't a destination, it's a mindset. It's a better, more flexible way to work. And that mindset helps all of our colleagues across functions, sectors, and geographies to really understand the impact they can have in their respective roles. We are focused on ways to enable our talent with technology. We use technology, data, and analytics to add precision to our decisions and to scale our business and create positive economic and social impacts. Our teams are challenged to untether themselves from the way things are done today and to instead think about how they should be -- putting our customers, occupiers, residents, and guests at the center of everything and really reimagining our future. The 4.0 mindset means that we need to constantly learn, experiment, and adapt”.
“I run cybersecurity and technology operations, the kind of stuff that keeps the lights on. From a tech perspective there are a few components to 4.0. As we're evolving, growing, and innovating, we need to make sure that everything that functions continues to function as it needs to while we adapt our operating patterns to take advantage of new technologies. We have shifted from an in-house software development organization, to focus much more on the integration with 3rd party solutions. It's really about stitching together those services in such a way that they provide value while continuously operating seamlessly and remaining highly available. We can work from anywhere in the world on any device in the world and get access to the things that we need when we need them.
On the cybersecurity side, we've suddenly got an influx of new technologies. We have sites that are rapidly evolving from very simplistic analog based technologies to much more smart building based IP technologies. We need to make sure that as we do that, we develop these complex webs of partnerships with third parties and that we're putting an appropriate security model around that. We're enabling flexibility and at the same time ratcheting up cybersecurity”.
“From my perspective, digital transformation is core to 4.0. We need to prepare for what is coming, not just next year but 5 years down the road. We're looking at everything through a technology lens and asking, ‘what building blocks do we need to support those ambitions’? We need to make sure that we're building them efficiently. We are building leading technologies, not just rehashing the way we have done things historically. And that's all in anticipation of the scale to support the growth of the business with a focus on data, analytics and automation technologies. This alone doesn't really become 4.0. They are building blocks leveraged by the business to evolve into that 4.0 mindset. When we think about data and analytics, some of the areas that we are investing in from Oxford’s perspective are about making data accessible, organized, and governed simpler and more automated from an end user’s view as the focus on our internal customers is just as important as our external customers. We create the agility and flexibility to adapt to our business team’s needs and reduce the time it takes to get the solutions to market and outpace our competitors. The same thing goes with automation technology. As we reimagine business processes we need to make sure we have a solid and robust automation technology platform that can be plugged into what our team wants to do, so that we can remove some of the manual efforts that require significant amounts of time and energy today. And so these are some of the pillars on the technology side that we're working on that is creating that 4.0 mindset”.
“In my world, I'm responsible for the business transformation office and operational support. These groups contribute to 4.0 by partnering with the business. The business being defined as development, property management, asset management, and sales. We enable that transformation that moves from the current way of doing things to more of a future state that is more globally scalable and digital. We have processes that are more standardized based on commonality globally where leading practices are now applied and they're ready for digitization and automation opportunities. And once the projects are completed, they are operated by the business and supported by my group. So that's how my two worlds come together to really support 4.0”.
The 4.0 mindset appears to be deeply ingrained across every fiber of the company. What was the genesis of 4.0?
“The vision for 4.0 came from Michael Turner (our president) when he was speaking with the global business about the building blocks of our future success. He challenged us all to think about how we could ‘go to 4.0’. To think beyond the business and customer needs of today. To think where we should be for our customers in the future and to start building the flexibility and resiliency to form the foundation for the business to get there. Then Dean Hopkins (our COO) joined the organization and a really significant part of his role has been bringing that philosophy to life and enabling it across geographies, functions, and operating models. We have a vision and a disciplined approach to pursuing it, we have defined success metrics, and we have an amazing team around the world that embody the mindset and come together to do great things.
“We are anticipating exponential growth in the size of our portfolio, and one of our drivers was how we can sustain that level of growth. The number of transactions is going to grow. The number of properties we're going to manage are going to increase. But we didn't want to significantly increase our operating costs. Driving innovation through digitization of our buildings and operating processes are some key areas to enable Oxford’s growth. That’s driving 4.0, and this group within the COO organization has a very diverse skill set to help realize the vision”.
Is it a fair statement to say that before 4.0, if a property manager wanted to make a technology purchase, they went out and they bought whatever it is that they wanted without considering the impact on the rest of the portfolio? What has changed with the selection process for new technologies”?
“In the past, building technology decisions were largely federated, so every site would buy anything that they wanted and deploy it any way that they decided. One of the challenges that we've had is that we don't want to spend a lot of time, effort, or focus on legacy technologies. Ideally, we want to standardize on next generation technologies. At the same time, from a cybersecurity perspective we've got to make sure we've got the right model around those technologies. We've been working back through the technology, looking at each site and trying to catalog everything. We look for commonalities, and then try to figure out how to build a roadmap from the legacy disparate technology solutions that existed. There was very much a decentralized decision making model. I’m coming from outside of the real estate industry, and it seems to me that a lot of the properties operated like little fiefdoms. Decisions were made based on what local managers felt made sense for each individual asset. I'm not criticizing the decisions that were made, as they were all made with the best intentions, and in a way that made sense for individual sites. What's changed, and I think James has done a good job putting a governance model in place around these things, is that we now look at technology holistically. What does it mean for the portfolio? What does it mean for the company? And then what does it mean for the delivery model that we want? So yes definitely, people ran out and bought lots of different tech. And those days, I think, are thankfully coming to an end”.
“In order to centralize decisions, you need to have a vision of where you're going. We put an extraordinary amount of time and effort into understanding what matters most to our customers, occupiers, guests, and residents; what drives their decisions, and the ways we can enable that and create value for them. Having that vision helps give us the discipline and focus to understand the building blocks and to make those decisions that have the most positive impact. Otherwise, you succumb to that which is pitched to you. You have shiny object syndrome: ‘oh my gosh, I need to have this thing’. Now we are able to say well, wait a second, what is your long term vision? What are you building towards? Is this a part of it? And that is where the technology organization can really help by understanding the company's strategy and priorities and know what matters to our customers. It's just a much more thoughtful approach since we’ve defined the outcomes that we need to achieve. Technology isn't enough for me to drive those outcomes. Technology isn't what we are after. The outcome is what we are after. Technology is what will enable us to get there”.
What technologies are you considering now? What problems exist today that make you think: ’You know what, I wish we had technology to solve this issue’?
“There's a lot of different technologies that we're looking for. And the problems that we're generally trying to solve require us to understand what our customers want going forward. We want to anticipate what customers’ needs are and serve them in the best possible way. There's a host of tenant engagement apps that can track all sorts of different features and provide different services to our customers. We are also further digitizing the sustainability and energy management side of things. We're always keen to better understand occupancy and match occupancy to the kind of systems we are running so we can be as efficient as possible while delivering on the ideal customer experience. Customers care about things like indoor air quality now more than ever. We want to have the systems to understand these trends at the individual asset level and then compare these trends across our portfolio, all in pursuit of delivering exceptional service standards..
“While we are focused a lot on technologies to meet our customers' needs from a sustainability and human experience perspective, it is also important that we focus on technologies designed to improve the lives of our colleagues and help us remove some of the mundane tasks in order to increase capacity for the truly interesting work. James is doing some really great and interesting work to free up time so colleagues can solve the bigger, better problems that talented people are equipped to handle, and let some of the more mundane tasks just happen in the background through automation. We have a tremendously talented organization. So putting their minds to work on big interesting problems instead of things that are repetitive is also a big component of the processes and technologies that we put in place to achieve 4.0”.
Tenant Engagement Apps and Collaboration
As I have written about in the past, one of the key technologies which is designed to tie all systems together is Tenant Engagement Apps. Oxford went through an extensive process of analyzing the different solutions on the market and made the decision to partner with Lane as their portfolio-wide Tenant App. What I found so interesting about the decision was what created the deciding factor to go with Lane. Oxford did a ton of due diligence on the different players, but it was ultimately the endorsement from another huge player in the market - Brookfield - that convinced them to decide on Lane. When I think of all of the portfolio owners in the market, I tend to think of them as competitors - all trying to attract the same tenant/resident base. As it turns out, many of the largest real estate companies are members of a group called the Real Estate Owners Council. In addition to Oxford and Brookfield, other giant players such as Rudin, Hines, Durst, Blackstone, British Land and Boston Properties are members of this networking group where they work collectively to evaluate technology and share best practices. When I questioned the Oxford team about concerns of sharing ideas with competitors, Claire was very concise with her answer: “I think that collaboration is critical, but first you need to have confidence in your own platform. I have confidence that Oxford has extraordinary buildings, experiences, people, and platforms. And so we should be able to collaborate with people and perform at the top of our category because of who we are and our people.”
During our conversation, the Oxford team shared their views on a host of topics. Claire explained that even technologies which have been around for a while are considerably more complicated than they appear to the end user. One example she highlighted was access control. “We have 400 buildings. Getting digitized access to work through an app when you have different hardware and software in each building is incredibly complex. It’s not just getting into the building, but also bike lockers, destination dispatch elevators, and then the customer’s suite”. In regards to the future health of the office sector, the entire team had a bullish outlook. Anushka was particularly confident in her opinion that people will return to the office: “I am bullish on a rebound. I think people have been quite flexible and resilient during this time and adapted to different ways of working and we've all done a great job. But now that we see the economy start to open up in the US and in various parts of Europe, you can see people really want to get back into the office and return to some sense of normalcy. They are meeting their colleagues face to face, working in a meeting room together, collaborating, sharing ideas, and building culture. Oxford's got a tremendously strong culture, and I think that's primarily because of all of the in person interactions that have been forged over the years. And that is pretty magical”.
It’s a common feeling across the real estate sector that COVID accelerated the pace of new technology and in order to survive it's imperative to change the way things are done. What really intrigued me about this conversation was the level of coordination and thoughtful planning Oxford is dedicating to getting this right. Real Estate has never been known as a high-tech industry and it is common for divisions to be very siloed. I believe that all owners realize that the old way of doing things won’t work in the new world, and I left the conversation convinced that Oxford has laid the groundwork to continue to be a market leader for the next generation.
I am excited to announce that we will be holding our first PropTech Pitch Competition. The competition is free to join and is open to all Pre-Seed, Seed, and Series A Startups. We have lined up an All-Star judging panel of leading PropTech VCs and PropTech Executives who will be providing feedback and selecting the winner. There will be a lot more info in the coming weeks, but please feel free to reach out if you are interested in learning more about either entering the competition or becoming a sponsor. If interested, please contact me directly at firstname.lastname@example.org.