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Inaction May Be Your Last Action

Posted by David Osborn. in Return on Investment on March 29, 2008

There are no secrets to effective real estate management in a down economy…….. but let me tell you a few.  
While watching the stock market plunge, credit tighten, inflation creep up and energy push skyward, it is natural for property management professionals to want to cut back – cut back on costs, cut back on hiring, and cut back on all proactive activities. Most managers take the classic position of waiting and watching to see what happens before taking action, or making any decisions at all.  Resist the temptation to divest when the road gets rough.   Avoid going into “survival mode” - protecting your cash, carving out costs and waiting out the storm. This is a classic mistake.  Down economies present excellent opportunities for investment…yes investment.  Invest in your internal resources to ensure that they are producing at their optimum level.  Invest in the tools necessary to get the most out of your people.  The axiom “the best defense is a strong offense” applies here. 
Economic downturns reveal your communications weaknesses.  Like a strong wind in golf, they expose process imperfections and accentuate the consequences until you find yourself in the weeds or worse - out of bounds.  You need to communicate efficiently, effectively and as often as possible with your management and engineering staff.   Begin by reexamining your processes and then perfect them through tight, complete and accurate communication with each member of your team.  Open lines of communication previously closed.  Detail your organizational standards, your goals and your objectives to all levels of staff and don’t be afraid to reinforce your message over and over again. Strong economies are not so demanding.  They don’t require perfect communication because there is plenty of room for error.  The true test comes when margins tighten and payment windows expand.  So reexamine your processes and drive your message through tough economic winds with compact communications that get the ball where it needs to go.

Weak economies also require powerful technology tools.  In good times, the corporate body carries plenty of fat, allowing it to get away with inefficient practices and procedures while still turning a profit.  When times get tough, you need to make the most of your resources. Seek out and invest in process improvements and then reinforce them through technology.  Real-time communications, comprehensive controls and proactive activity monitoring and measurement through technology enable you to shore up the holes in your business processes and maximize your output.  Strong, Internet-based technology tools that mimic your management practices will protect you from costly error by giving you complete portfolio-wide visibility and empowering you to act quickly.  When you are busy and under-resourced, rapid problem recognition and fast action means everything. Technology tools will help you to see more with less effort – to optimize productivity when resources are scarce.  So don’t be afraid to invest during economic downturns.  Inaction may be your last action.  

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