This article is not about property development. It is about property development companies. Specifically it is about how property development companies can transform themselves towards world class performance.
So why the attention to the world class concept? Discussions with real estate executives reveal a growing sense of urgency to have local companies match up to the standards and criteria of multinationals. The tough, competitive and rapidly changing business climate is putting real estate companies under increasing pressure to adopt more professional, robust, transparent and effective business practices. To attract the right investors, customers, staff and suppliers companies will have to perceived in the business community as excellent operators and good corporate citizens. In short, they will have to be the best to attract the best.
Before you read this article I have one very important question. Are you courageous enough to seriously embark on the world class journey? Are you prepared to adopt some radically different and very challenging concepts to transform your organisation?
About organisation culture
Organisation culture refers simply to ‘how we do business around here’. It reflects the core values, beliefs and ideology of the company, which often stems from the business owners. It determines what we pay attention to and what gets lip service. It determines our business practices and how we behave as a company. It is the driving force that determines whether we become truly world class or fail dismally. This is why the concept of organisation culture receives enormous attention and why informed companies strive to manage it.
So to better understand world class culture we have to look at world class performance and organisation attributes.
What does world class actually mean?
World class simply means being able to compete very successfully against all the other market sector players in the global market. Think of companies like Microsoft, Apple, GE and a few other world leaders. They are truly world class players. The term is often not used in this purist fashion. It frequently refers to competing successfully against other companies that operate in your particular space and markets. There is a strong argument that real estate companies wishing to attract international investors, customers and staff had better be able to compete with the best internationally.
Why strive to be world class?
What are the most compelling reasons for organisations to strive to be world class, as this comes with a significant price tag in terms of time, effort and investment? All the research consistently indicates that world class companies:
• Are substantially more profitable than their mediocre competitors
• Enjoy high levels of customer satisfaction and retention
• Have longer term business sustainability
• More easily attract, retain and engage high quality people.
• Have high levels of shareholder and investor confidence
• Are recognition as ethical and socially responsible corporate citizen
You can bet your bottom dollar that world class companies like Microsoft, Google, Boeing, Toyota and many others see huge benefit in being world class, including being very, very profitable.
Is there a compelling case for Indian real estate companies to be world class? I would argue a very strong yes! How can any serious organisation not aspire to be ‘the best’ in its market sector?
What does world class look like?
So if we want to develop a culture that drives world class, where do we start? A logical starting point is to define what world class looks like. What are the attributes or characteristics that differentiate these organisations from the rest?
This has been the topic of enormous research over many decades. It started in the 1980s with Tom Peters publishing his book “In Search of Excellence”. He studied a number of “excellent” organisations and then identified the management practices that he believed made them exceptionally successful. Many researchers have adopted a similar approach which culminated in the recent research publications titled ‘Built to Last’ by Jim Collins and Jerry Porras (2001) and “Good to Great” by Jim Collins (2002). These were very robust studies and regarded as classics. In “Built to Last” Collins and Porras studied organisations that thrived for over 100 years and identified the practices they believed contributed to their success. In “Good to Great” Collins identified what it takes to make ‘good’ organisations into ‘great’ organisations.
A word of caution about research studies. They sometimes advocate a ‘silver bullet’ approach, whereby if you follow their prescription you too will be just as successful as the companies in the study.
Firstly, there is no such thing as a ‘silver bullet’ that will always work in with all companies. Secondly some of the ‘excellent’ or ‘great’ companies have failed dismally after the studies took place. On a positive note, these studies do undoubtedly offer us very valuable insights into the behaviours and practices that can help improve organisation success enormously.
‘World Class’ themes
In the diagram below, I have summarised the research results and theory on themes and practices that do correlate strongly with exceptional organisation performance. In order to achieve world class performance, you will need to effectively address all the themes which are also very closely interrelated with each other and with organisation culture.
The practices identified in the world class organisations also completely destroyed many commonly held myths about what generates organisation success. These include:
• Myth - A great idea is needed to start companies. Reality – First start with right people, ideology and values.
• Myth - Excellent organisations need charismatic leaders. Reality – Humble leaders with personal integrity, passion and influencing skills do much better.
• Myth - Maximising profits is the dominant goal with great companies. Reality – They strive to serve and be good corporate citizens.
• Myth - Visionary companies focus on beating competitors. Reality – They focus on outperforming their competitors in all important ways.
• Myth - Hiring outsiders as CEO’s is the best way to spark an organisation. Reality – Most CEOs are home grown.
How many of these myths or incorrect beliefs still drive our business operations today and with what result? What we have observed in some real estate companies is the almost exclusive focus on maximising profits, which is impacting very negatively on overall performance and sustainability.
While it is way beyond the scope of this paper to explain each theme, I will pick up on a few. As you look at the diagram, I would encourage you to assess your own organisation on each of the themes and see how you stack up. It is often a scary but rewarding exercise.
Ron McLuckie is Chief Executive of Leadership Focus and the World Institute for Action Learning India. He is a highly experienced international consultant and Action Learning authority. He has held senior executive management, lecturing and consulting roles and worked extensively with major organisations in South Africa, New Zealand, Middle East, USA, Australia and East Africa. His speciality is improving business performance through developing skilled leaders. Ron is based in Gurgaon. His contact details are email; email@example.com Mobile; +91 7838928103 Landline +91 12 4400099