HOW ANTIFRAGILE IS THE PROPTECH MOVEMENT IN TIMES OF THE COVID-19 PANDEMIC?
The COVID-19 outbreak forces us to take action and responsibility. Stability is just perception. What are the social, environmental and economic consequences? How resilient is the PropTech movement? Which new activities are we going to develop and what are the things we let go? Are we going to turn this outbreak into a social benefit?
The Turkey and the butcher
For a thousand days, the turkey is the butcher’s best friend. A relationship that can’t go wrong. An analyst will confirm this ‘with growing statistical certainty’ because for a thousand days the butcher has loved his turkey. Until a few days before Christmas. Then comes the day when it’s inadvisable to be a turkey. The world of the turkey collapsed – at the moment everything seemed to be going so well, the butcher loved him, life was ‘wonderfully peaceful and predictable’. The turkey was surprised by a Black Swan event: a large-scale, unpredictable event with far-reaching consequences. The stability in the turkey’s life was the only perception.
Benefit from disorder
Most real estate companies also lived in the perception that they were in a stable environment. But unnoticed, most real estate companies have increasingly let themselves be handcuffed and tied up in a fragile system over the past decades. Laws and regulations, chain systems, procedures and ‘analytical’ forecasts of future construction volumes, rental income and sales and purchase transactions contributed to this. The core problem is that the vast majority of ‘companies’ are no longer ‘enterprises’. The companies have become fragile, succumb to pressure and hate disruptions (e.g. drop in rental income, changing customer demand/ needs, new entrants, digitisation, new regulations) and seek certainty by trying to stabilise the environment, this is nothing more than an illusion of control.
Companies that ‘try to restore trust’ and implement top-down policies often do not thrive under stress and/or disorder and are therefore fragile. Antifragile – as Nassim N. Taleb describes in the book ‘Antifragile – things that benefit from disorder’ is more than resilience or resistance to Black Swans. Those who are antifragile love chaos and benefit from it. The aforementioned ‘enterprises’ have a process of discovery (aspiration, technological innovation and social and environmental progress) that depends on ‘trial and error’ – taking risks instead of trying to curb them. The (real estate) world has become too complex to believe in long-term stability.
COVID-19 OUTBREAK IS A BLACK SWAN
The COVID-19 outbreak is a large-scale, unpredictable event with far-reaching consequences. On 6 March, ING bank published a Dutch overview of the effects of the COVID-19 outbreak on various Dutch sectors. The construction sector did include ING in the analysis, real estate, on the other hand, did not, and technology is partly incorporated in e.g. business services. We saw how the events industry postponed or even cancelled major events such as Mipim Cannes, SXSW, Building Holland, World Workplace Europe for this year. Will Future PropTech and Provada be next? Sequoia Capital (one of the top Venture Capital companies in the world) recently published the blog “Coronavirus: Black Swan of 2020” to the founders and CEO of companies to give advice on how to ensure the health of their business while mitigating the potential business impact of the spread of COVID-19.
A lot of questions
I’m sure we still have several questions. A question that has occupied me for several days now: “What would happen if the world reacted to climate change as it did to the coronavirus? In any case, the coronavirus outbreak has a positive impact on China’s environment and people in Venice can see fish in the water (and other animals). Will this situation accelerate digital transformation? Will there be growth if companies start looking for efficiency and working remotely? Will innovation budgets be maintained if they are not considered part of the core activities? Will this COVID-19 accelerate SDG 3 ‘Health & Well-being‘? Will this situation accelerate the achievement of all seventeen sustainable development objectives? Or will we fall back into our old habits and become business-as-usual again?
How can we make progress?
The Chinese character “Wei Jie” has two meanings: it stands for a crisis, but also for opportunity and challenge. Even though the economy is struggling at the moment, it offers an opportunity to emerge stronger from it in the future. A setback such as this forces people to reconsider. Every illness is like ‘a friend’ who shows you the way to a healthier, happier life (and business) and makes you let go of what doesn’t fit. How can we make progress in a world that is fundamentally unpredictable and in which unexpected, random events will follow each other ever faster?
Turn your company back into a business. Once again, look for the value-adding role in a (new) company network(s), like Mother Nature – a constantly evolving system – is operating, and look for shared value creation;
Become digitally efficient and effective. Take some poison every now and then (in small doses this will make you stronger) instead of a whole cup – think of the financial crisis in September 2008 – and dare to act as a leader with skin-in-the-game. Don’t forget that you can also be a black swan in real estate;
Invest in the midterm. Of course, the train has to keep running this ensures the continuity of the organization. Seize this situation to study technological (real estate) solutions together with colleagues, make new connections and take ‘(re)thinking time’ to develop a vision on how to create a future-proof environment for everyone.
Change is a constant and we need to look differently at organizational development and value creation. To be able to exist in the future, strategic agility, the maximum stimulation of potential, continuous learning and curiosity are essential. What you do today is not only going to determine this year’s result. Your action today will have an impact on the next ten years. Take the time to choose. But take action. Take good care of yourself, your loved ones and those around you. I hope to meet you soon in person and online soon. The question remains: how antifragile is your organisation?