With business changing faster than ever before, what will it take to thrive in the future?
That’s the question posed by Macquarie Business Banking’s Perspective event – and while it saw over 400 real estate leaders gather in Sydney, the insights shared are relevant across every business sector.
Here’s a wrap-up of the first day’s perspectives.
1. Change is now business as usual
Through every session, it was clear that change is the new normal. And as Grenville Turner, former CEO of Countrywide UK expressed, that can be the best place to be – if you’re an incumbent willing to embrace what that might mean.
Every industry is at an inflection point. According to Head of Macquarie Business Banking Dean Firth, the potential opportunities are enormous for those prepared to change.
The exponential rise of investment in proptech is just one example: it’s projected that by 2020, US$22billion of capital will be allocated to property tech – more than the current Australian real estate profit pool.*
2. The rise of new models and competitive forces
In the past, business owners used to be on the look-out for major threats. But as Grenville put it, you’re now up against hundreds of ants rather than one big bear – and even if each small start-up takes only 1% of your market, it can add up.
From the panel discussion it was clear that the growth trajectory of tech disrupters can’t be ignored. Because, as PieLAB’s Chris Rolls explained, technology allows them to automate and scale a great customer experience. Although there are large upfront costs, the marginal cost is low.
So how do you combat this? According to Netflix co-founder Marc Randolph, you’ll never know who your competition will be. You need to learn how to disrupt yourself.
He suggested the best ideas only come through testing hundreds of bad ones – and that you can learn more from one hour of doing that than six months of thinking about an idea.
3. The opportunity in adjacencies
Countrywide’s strategy was to achieve 50 pence in adjacent service revenue for every pound in property sales. This underpinned its recurring revenue streams – through mortgage broking, general insurance and life insurance commissions, as well as conveyancing and surveying fees.
It was a great example of McKinsey’s three horizons of growth, simultaneously maintaining the core while nurturing emerging businesses and creating genuinely new revenue streams. And it sustained Countrywide through the UK property market decline post-GFC.
But Grenville noted that while property sales became just 20% of Countrywide’s profit, it was still the beating heart of the business – and without that branch presence and customer relationship, they couldn’t sell those other services.
4. Put customer experience first
The Perspective panel debated the role of technology – and agreed solving the customer experience is paramount.
We now measure every experience against the best experience we’ve ever had – whether it’s Netflix, Uber or Airbnb. And as Marc shared, solving this problem can only happen if you become an expert in looking for ‘pain’.
When you see the world as imperfect, you can solve the problems close to home, the ones you see every day in your work and your customers’ lives. He recommends falling in love with the problem rather than the idea, to sustain confidence through what he called ‘validation hacking.’
To succeed you need two key ingredients: a tolerance for taking risks, and a system to test hundreds of ideas.
So, are you prepared to embrace change, or let it go to chance?
Whether you see this as the most exciting time to be in business or a time of threat, ultimately depends on your perspective.
And that’s why it’s never been more important to look outside our own industry for ideas and inspiration.