One of the most prolific subjects in today’s business literature is that of digital disruption. It is effecting almost every profession, business and entrepreneurial pursuit in the North American economy. It is so prevalent that business journals across the entire political and economic spectrum are suggesting that business planning and marketing execution must assume its impact.
Given this situation the logical starting point for this piece is to ensure that every reader has a clear sense of what digital disruption is and how it functions. Sometimes information of this importance is best provided by outside multi-media sources and so it will be with this month’s contribution. In order to ensure that each Real Trends reader has a handle on the concept of digital disruption it is highly recommended that they take eight minutes (total) to view the following two videos on YouTube.com.
Smarter, Faster, Togther – A Total Disruption Trailer
With this task in hand it is next recommended that readers access the following 18 minute video -
Disruption In Banking
This video features banking expert Brett King and reflects both his amazing knowledge about digital disruption and the strong parallels between the consumer aspects of the real estate and banking industries. With the expertise provided by these three videos readers will be ready to proceed to the specific subject of this article which is what changes must be made in a real estate brokerage’s marketing program following disruption; what adjustments must be made in a brokerage marketing program following digital disruption.
For the real estate industry digital disruption can be found in the consumer and market response to the third party listing portal. Readers who have experienced the above videos will understand that this type of disruption is a natural part of any industry’s existence and history. It is not something that “someone” does to another person. It is not personal nor is it malicious rather it occurs in the ordinary course of industry events. During its history since WWII the current real estate industry has both experienced and caused disruption.
Accordingly problem one with disruption occurs when those within an industry being impacted by disruption treat it as a personal assault on their right to maintain the status quo of that industry. Instead of recognizing the inevitability of change this industry response features efforts build a wall around that status quo with companion efforts designed to accuse the disrupting entities as somehow being disloyal and/or tainted. In many sectors of the current North American real estate industry that is exactly what is happening today.
But such is not the subject of this discussion. This article assumes that disruption is currently impacting the real estate industry and attempts to provide information on how brokers should respond to this disruption through their marketing programs.
Some of the best expertise on this subject is currently being developed and distributed by Bain and Company an American global management-consulting firm headquartered in Boston, Massachusetts. Aditya Joshi and Eduardo Gimenez from the Bain organization are being featured in a number of business journals and corporate presentations. While this article may be the real estate industry’s first exposure to this team’s expertise it will certainly not be its last.
The essence of digital disruption is the speed with which it disrupts its target industry or marketplace. One of the most important characteristics of all disruptive forces is that they are primarily driven by clear and compelling consumer expectations and demands. Much of the impact caused by digital disruption is not caused by the fact that disruption changes many traditional operating and management traditions of targeted industry but rather because these changes occur so quickly. It is important to note that disruption doesn’t have to take the time and resources to change how consumers think because it is already a response to how they think. The portal movement currently impacting the real estate industry didn’t have to convince consumers that they represent an improvement in the experience. They simply had to point out to the consumer that they were the change the consumer was waiting for.
It is this speed then that causes the confusion. It is the natural response of many impacted entities to attempt to stop or blockade the change rather than either join it or, better yet, develop another even more powerful “consumer” responsive or unique change. These “holding” actions take up precious time and appear silly and non-productive in the minds of today’s empowered consumer.
Assuming for the moment that an entity being impacted by digital disruption wants to lead with it’s intellect rather than it’s emotions the first responders must immediately address both the operations and marketing side of the brokerage’s day to day operations. The operational side must first validate the disruptor’s findings visa vie consumer demands and then must set about designing, developing and implementing changes that respond to those consumer driven demands and expectations that that are giving impetus to the disruptor. At the same time the marketing side must move quickly to given notice to the marketplace and consumer that these changes are taking place. It the face of disruption there is simply no time for the delays and cumbersome coordination required to effect a traditional evolution based course correction.
For the marketing side of the brokerage such maneuvers will require immediate collaboration with the operations side even as the response implementation process is taking place. The luxury of launching a grand marketing plan and concept will be lost in this process in favor of a more metered and collaborative approach. Critical to the success of this concept will be a close and respectful interaction with those “operations people.”
This approach will require senior management to be much more active in their efforts to break down the traditional barriers that exist between the operations and marketing players. Senior management efforts must be focused on quick response planning, strategic and tactical alignment, and cultural adaptation.
The real estate industry has, over the past eighteen months, discovered another basic reality regarding digital disruption. Disruption is not a single act such as slicing bread or enclosing an automobile. Disrupters know that their tactical advantage is best exploited through launching a constant stream of innovations, each one designed to cause the targeted entity additional distress and discomfort. They recognize that while some traditional entities may recover from a single act of disruption, few can withstand the constant assault of multiple and/or phased disruption. The evidence of this phenomenon is clearly being reflected in the disproportionate energy that is currently being given to non-responsive and non-productive efforts rather than in responding to clear and compelling consumer demands and expectations.
The benefits of realigning the relationship between marketing and operations are both immediate and long lasting. Not only will the brokerage’s management, operations and marketing processes be realigned to deal with the immediate disruption but also, more importantly, the brokerage’s culture will be re-engineered to exist in a permanent state of change management, creativity and innovation. We can do this!