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I came home last night to find a large brown cardboard box lying in the hallway.  These boxes always solicit beads of sweat from my brow. A large brown unopened box with a courier sticker typically indicates a sizable deduction from the family bank account. Anyway, to her delight, my wife informs me the box contains the latest retro mid-century-modern baby bassinet and I will be putting it together this weekend.

This piece of infant furniture (now in several pieces lying on the living room floor, along with  broken polystyrene all over the carpet) reflects the ‘Amazon’ retail phenomena of the last decade. My wife found the item recommended by a friend on facebook or babycenter.com, looked up an online retailer, purchased it by credit card and a courier delivered it a few days later. No visit to the store and no bricks and mortar real estate – except a warehouse and factory somewhere I guess.

I look at this item and there are four separate pieces which I have to hex key together. They are made of plywood, but could easily be made of plastic or some other composite without affecting the look or design. I look around the rest of the living room, a number of Eames replica items including a coffee table which is essentially 3 separate pieces and a kids table and chairs all with quite basic geometry arranged to give that slimline non-decorative 1960’s form. You can get the designs on all these items off the Internet. In fact I was about to attempt my own Rietveld chair based on replica plans freely available on the Internet. I haven’t yet made the commitment to visit the home improvement store and purchase the materials but it looks easy enough.

While reading the article ‘World Changing Predictions for 2014′  point number seven  ‘You will actually use a 3D Printer’ I had a penny dropping moment.

Wouldn’t it be great (i.e. cheaper) if I could just have printed this bassinet out? The components are all fairly simple forms plus some screws – and I have to put the thing together anyway.

That gets me thinking. Is 3D printing a mega-trend that in a decades time we will not know what we did without it? Does 3D printing represent a potential paradigm shift in how we manufacture and procure products. What does 3D printing mean for real estate and construction?

There are a number of visionaries attempting to commercialize  3D printing an entire house. Their progress looks promising but there are a number of complexities (like reinforcing, plumbing, electrical wiring and waterproofing) to be overcome. However, with funding from no less than NASA (who alledegly has an interest to build homes on the moon) the University of Southern California are making big strides with their Contour Crafting Robotic Construction System.

If and when 3D printing houses is fully commercialized and cost effective the construction industry could be completely transformed.
For example:
– speed of construction reducing finance and holding costs
– much less transportation costs, lead time and delivery issues
– quicker supply to meet demand
– significant decrease in skilled labour requirements (albeit creating completely new roles )
– less joins for more effective waterproofing and accurate detailing
– an increased focus on replacement (and recycling) over repair maintenance and demo approach
–  colour infused exterior facing material with inherent water resistance eliminating painting
–  emerging modular systems will either embrace 3D printing or be at its mercy, as on site construction benefits potentially leap ahead of off-site prefabrication and delivery
– new composite re-usable materials (inks) with inherent sustainability, bio-ecological, acoustic, fire and water proofing characteristics – even 3D printing in steel
– the potential for craft and personalised design to merge with industrialised processes without requiring standardization and mass production to reduce costs

In the interim, there are a number of smaller 3D printing initiatives that could have a much more immediate impact. Look around your bathroom, there are a number of objects where they are simple forms. Why couldn’t they be printed onsite using by a realistic portable 3D printer?

Currently you visit the plumbing store or peruse the internet for the style you would like and then have to wait for the next shipment from China or Italy if it is not a stock standard product.  The builder of the future simply downloads a pre-approved design and material ink spec into his site shed 3D printer, customizes the exact dimensions and material colour and texture and hits the green button. 3 hours later a towel rail and a toilet roll holder emerge.

Just look around your house – even just the simple forms – difficult component printing and assembly will take longer to commercialize. Imagine if you could go to a base design on the internet, customise for your (or your architect of the future) unique design tastes and have exactly what you want ready to be printed, just before installation is scheduled. Light fittings, electrical covers, hardware, vanity tops, benchtops, even the kitchen sink!

Another simple application is to print your own construction molds. Precast concrete is increasingly used in residential construction and one way to soften its appearance is to add texture. For example a residential apartment building recently completed in New Zealand uses weatherboard on the front building, because its timber construction but a weatherboard textured precast concrete on the adjoing rear building. You cannot tell the difference. The precast texture will have required a formwork mold, typically created by the time consuming task of framing one up in plywood, and limited to basic shapes. Molds that are 3D printed have practically limitless design potential. in a matter of hours you could have a custom printed mold to create very complicated textures for use on all types of concrete surfaces.

You can imagine all sorts of other benefits and effects on construction, but what about the potential fundamental shifts that will affect real estate and the logistics industry, including importing and exporting?

Rather than transporting finished components to site you are transporting raw ink (printer material composites or ingredients). That would mean significantly smaller required transportation volumes in total if you look at a whole house.

Rather than warehousing construction materials you are warehousing ‘inks’ or the component materials within. Or I guess they could be stored in big drums like oil. This may mean less demand for low impact warehouse space and more demand for heavy industrial style storage space.

Rather than going to a retailer to purchase goods, many of which are stored on site to meet lead time expectations, you are purchasing intellectual property (and emerging  issues) and then printing it yourself.

What would this mean for retailers of construction products and their real estate requirements? Does it mean less and less retail and warehouse space required as 3D printing gradually replaces successively more and more complex products that retailer’s currently supply?

Is the home improvement store with its shelves of ‘standardised’ generic products gradually replaced by 3D printing machines in everyone’s home?

How does this affect current business models of Internet retailers who generally make their money off sourcing, storing and sending you physical products? What about their warehouse demand?

What happens to courier companies who in recent years have been boosted by online retailing? – I guess to counter this courier demand could increase if neighborhood design-printing facility businesses as opposed to in-home printing offer a more convenient service.

How does this affect the massive production of construction materials in China, that still incur transportation costs to their end installation site?

If you can pay for a design off the internet, download it into your 3D printer and ‘bake’ your product at home, how does this affect importers and exporters ? (and brown cardboard box makers!)

What happens to the work subcontractors are involved in maintenance if construction is much more reliant on product replacement, and that product replacement comes from 3D printers owned by the client? Think of government housing associations for example whom have hundreds of thousands of items to repair/replace each year.

Do developers of the future need to design to a 4 bed, 2 bath, 2 car garage, plus 3D printing room specification?

Yes there is still a long way to go, a significant amount of hassle factor and as yet dubious cost efficiency but the technology is moving fast. The desktop 3D printer market is established and growing exponentially and you can already print architectural quality products in high detail.

Eventually 3D printing could substantially change the construction and real estate industries and much of the logistics they operate with. The applications of 3D printing appear limitless and the barriers are quickly being broken down. The MIT Mediated Matter research group are doing some amazing research in this area.

My best guess is that 3D printing will involve in ways few can think of at the moment, it will make some categories of business and their real estate needs redundant but also open up new opportunities.

Back to my bassinet, while I am printing that out in my 3rd bedroom/office/3D printer room, I might as well print a couple of stools for the bar and redo all the kitchen joinery door handles.

www.aenspire.com

Brownfield residential property development is a difficult gig. From the day you identify a site to the closing/settlement date of the last home sale, time is one of your most valuable commodities. The shorter the development cycle and the sooner you can turn outgoings into incomings the better. Throw prime bank lending, complex JV structures and mezzanine finance into the ‘leveraging up’ mix and time becomes paramount.

Except in a rapidly rising real estate market – where you may be tempted to refinance to cover cash flow betting on larger revenues down the track – the ideal development is to get in and out as quick as possible. For brownfield development – through New Zealand’s resource consent planning process – quick means at least 3 years before the last home is sold, if you are lucky!

Within this period, there is an important race to achieve pre-sales (the likely trigger for prime bank financing), a two steps forward, one step back, three legged race to get planning consent and the grueling final laps to complete construction on budget – hopefully without unearthing dinosaur remains  in the process.

Every day lost can mean thousands less to the bottom line and can even put the entire project in jeopardy especially where a sunset date kicks in or the market abruptly changes (been there and it’s not pretty).

Time is money and in brownfield development time really is of the essence.

Further compounding the need to push harder to reduce timelines, developers typically run many processes in parallel. The higher the developer’s risk tolerance and as available cash flow permits, the more work is undertaken on the presumption the development will move to the next stage. This means developed design and planning work may be undertaken during the conditional purchase period, building consent documentation is undertaken before resource consent is granted and design for the latter stages of construction occurs well after site clearance and foundations are laid.

All this adds to uncertainty with an increased likelihood of variations, modified briefs and additional work required to figure it out under compressed deadlines.

There is a lot to do, a lot of uncertainty to navigate and the developer depends a lot on others to get this work done. This usually results in pressure orientated situations where consultants and contractors ability to deliver are put under high stress and scrutiny.

So how hard do you push people?

I say to the limit of their contract or brief and then push them beyond that if the project is in jeopardy or they have not delivered.

This may not win you many friends if those who choose to take on this work can’t keep up. However, if your pushing is the difference between success and failure, those who cannot keep up should not be allowed to derail the project.

There is a lot of money at risk, whether it is a private developer’s, the corporate shareholder, the financier or the taxpayer. The project is only as strong as the weakest link. If the weakest link takes a week longer than scheduled to do something that can have significant repercussions down the line.

Development is hard enough without unnecessarily waiting around. There is simply too much at stake, including future fees for the consultants and contractors involved.

It is a tough line to take but in my experience it is an absolute necessary one for even basic development projects to get over the line. Either get with the programme and do what you promised or don’t become a willing participant in the first place.

Therein lies part of the problem; some take on roles and responsibilities, contract and consult beyond their capacity to deliver to a developers expectations. Too often in New Zealand they over promise and under deliver. Many are let off the hook because there are limited alternatives. Worse some will expect to meet their promises through non-client instructed variations.

My approach to someone who is out of their depth is to not let their commission drag on, potentially slowing down a project but simply to amplify the pressure until they either figure it out and perform to expectations or crack and I am forced to use alternative resource.

I don’t differentiate whether it is an internal department, an external consultant, a contractor, a direct report, a panel of decision makers or even myself. I haven’t swayed from this approach in property or business development whether it is working for myself, a private developer, a not-for-profit or a government department.

I have actually learnt this approach from private developers, boards and high level government decision makers.

Interestingly in my experience it is easier to push professionals in the United States as they appear to have a much more competitive and less complacent mind-set – they also are not afraid to say when you have overstepped the mark and are similarly much more legally literate. In Australia, it seems more people will simply say no – that helps prevent over promising in the first place.

Don’t get me wrong, there are many great consultants, contractors, and professionals out there who know how to push themselves to meet the deadlines required for successful development projects. I keep on learning from the best of them  – and if I am in the client position typically rehire them.

I also acknowledge the full frontal attack is often not the best approach and I learn (and can learn a lot more!) to improve upon that.

Here are 10 tips to help maximise your ability to push those involved in the project hard to make the project work:

1. Set clear expectations with consultants and contractors. If it’s going to be highly variable with multiple processes in parallel, make sure the project group is forewarned and dedicates resource appropriately. Consultants should be aware of implications of non-performance on the entire project (not just their fee). No one has to accept to do this work for you, but make it clear if they take it on, it could be a bumpy ride. Whereas you will set consultants tight delivery conditions, some of the best consultants will actually insert penalty clauses if you subsequently try to expose them to conditions beyond the expectations you set.
2. Try and keep the eventual construction contract as tight as possible, regardless of the uncertainty. This may mean separate out the contract to its highly variable stage or components and then it’s more stable stage with tighter conditions.
3. Exceed consultants, contractors and employees expectations for you getting back to them; practice what you preach. Be clear with direct reports to push back on you if they are out of their depth. Make sure you have top down agreement within your business for appropriate and timely resource to be dedicated to your project in other internal departments. You do not want an internal resource outside of your direct control to slow down your side of the agreement.
4. Ensure the decision making process is transparent (as much as possible). There is nothing like a seemingly left-field decision to derail a project team’s motivation. If such decisions are likely, let the team know accepting this changeability is a condition of the role.
5. Ensure as many ground rules are set before the project team gets underway. In a private development setting, this can be quite basic – we need 20% Return on Cost or there is not a project and nothing more for you to do. In a government or not-for-profit setting the ground rules can become very difficult to establish and subject to non-monetary considerations. Even so as developer for these types of clients you need to push the top decision makers to get firm upfront ground rules.
6. Make sure all your development processes and programme management are up to scratch. Monitor the project timeline like a robot so you know the instant you need to push harder.
7. Pay for performance, on time and as per contract. It is a double standard asking for high performance and then not paying in a timely manner.
8. Contract with incentives to improve the critical path – you will likely need any time buffers later on. Reward over-performance – this may be as simple as preferential treatment for future projects or other roles. This is a common expected outcome for a private developer (i.e. you typically stick with someone who over performs for you). It is more difficult to achieve when formal corporate or government procurement processes are involved but important to pursue.
9. Don’t let yourself become complacent and let others think your complacency gives them a chance to slow down and break their commitments. It is very hard to turn that around without losing ‘friends’.
10. Be prepared to step in if you push too hard.

My thinking it is better to push very hard early to meet what is necessary to make the development work rather than get into a messy litigation later when contracts are not delivered.

However, it is exciting to see when consultants and contractors do rise to the challenge and despite the odds and pressure make the project happen – a successful project will typically help their careers and bank balances as well!

Ironically so can dinosaur bones.

www.aenspire.com

To identify new opportunities that exist for your professional services firm a business development manager (BDM) may employ idea generation techniques. The resulting output is a business case describing each opportunity accompanied with research, costs and potential risks. This can then be used by executives of the firm to consider for implementation…..

Click to read full PDF (free, no gimmics)

IdentifyingOpportunitiesProfessionalServices.pdf

I found myself at the park during the holidays looking back toward the houses on my street. Each house has a characteristic ugly TV antenna rising from the roof line. There is a very steep hill with houses rising up it so in some cases the TV antenna is smack in the middle of the view for the house behind.

That is every house has an antenna on the roof except mine – more about that later.

Development is typically about looking at multiple options for a site to extract the one that will create the most profitable opportunity  Finding the best opportunity requires substantial analysis helped by experience, research and a little bit of thinking outside the box. Many developers by their very entrepreneurial and innovative nature seek to think outside the box, to find the new type of product that will sell out quickly and generate the greatest return on cost.

Yes there is substantial risk with trying something different and the uncertainty of success will simply be too great for many to try. However, for those that do and where the trial and error (hopefully not too much!) leads to something that really takes off the rewards are significant.

Written by two Boston Consulting Group experts in strategic thinking, the book ‘Thinking in New Boxes‘  found its way on my holiday reading list. They look at a number of ways to reframe your inherent biases, to doubt what you think should be and to explore alternative scenarios. This is all with the aim to prepare for and take advantage of prospective future business opportunities. For the strategically minded this book has a comprehensive process for executives leading a company to think differently.

A key part of their process involves ‘divergent’ thinking – that is exploring new ideas without rebuke. The rebuke or critique comes later as the ‘convergence’ phase when you must explore what is fanciful into something realistic.

One simple way to explore new ideas and think ‘divergently’ is to join words both from within your industry and other seemingly unassociated industries together.

For example in development you may chose to select all the different types of buildings and cross reference with concepts  from another industry – say aviation. Or you could choose to cross reference with verbs or types of customers or something completely random.  This will create a list of new linkages – some of which will make no sense but many should prompt different thinking in a slightly new (and hopefully profitable) direction.

From the resulting list you scan for any phrases that sound logical and warrant investigation for their commercial merit.

For example, lets take some word linkages from two basic word lists in real estate and aviation.

List one (Real Estate): Apartment, Office

List two (Aviation): Check-in, Flight-path

Combining these words generates the following matrix
– Apartment Office
– Check-in Flight-path
– Check-in Apartment
– Check-in Office
– Flight-path Office
– Flight-path Apartment

Now some of these linkages will be meaningless and some will mean more to those in development than in aviation and vice versa. However, lets take a look at four examples from the list:

1. Apartment Office – whilst not a particularly novel idea there has been a resurgence of live-work condo/apartment development in recent years.

2. Check-in Office – at some point in the past someone thought of combining check-in with an office environment for business people – ala frequent flyer lounges.

3. Check-in Apartment – could this be something developed by airports for the elite ? It could be place to stay even more accommodating than frequent flier lounges – and certainly more children friendly. Airport hotels often accommodate transit passengers but what if they were internal to airport security (and revenue for the airport) for the most discerning of travelers. Remember critique comes later !

4. Flight-path Apartment – this sounds like a stupid idea right? Well maybe not. Some house subdivision developers, who thinking differently,  have made living next door to the runway their number one sales pitch. Examples include the ‘house and hangar’ developments Pukaki Airport  in New Zealand and Skyranch in Arizona, USA.

So simply by linking words can open up a world of new ideas, puts you in a frame of mind to think differently and for some, may create significant opportunity.

Too easy you say?

Well sometimes its the discipline of actually making the lists and writing down the resultant combinations that is the first problem. However, help is at hand via this basic excel tool we developed – free for you to download and use (its very simple!).
www.aenspire.com/IdeaGenerator-aenspire2014.xlsx
Simply input some of your industry key words, borrow a few words from somewhere else and review to find your next big opportunity.

Back to the antenna on the roof. When I purchased my house, I did not even think about looking to see if there was a TV antenna but alas when we plugged the television in on our first night ready to relax after a big day moving furniture, there was only one channel: ‘No Signal’.

[Readers, New Zealand does not have typical cable TV, and whilst there are satellite operators and I had a dish on the roof below the ridge-line, I didn’t have nor want a subscription – remember don’t critique!]

The easy option was to call up a specialist and get them to sort out a new antenna on the highest point of my roof – like all my neighbors. However, putting an aerial up there would cause me a little bit of grief with my cross lease neighbor as it would impact on their view. I did call a few aerial installers and their solution was to buy a converter and stick to the satellite dish, however I wanted the full HD that digital signals now provided.

So I brought a big outdoor aerial from the local electrical store, pointed it in the general direction of everyone’s roof top aerials and placed it between the joists in the subfloor space under my house. Every channel works crystal clear!

It was only after the resident renovator expert at work said ‘that’s a bit different I would never think of that, roof space maybe but not stuck under the house’ that I actually thought I had done some of my very own ‘thinking differently’.

www.aenspire.com
www.aenspire.com/IdeaGenerator-aenspire2014.xlsx

A significant part of a managers day is following people up. This is especially so in property development and business development.

The ability to extract what you need – whether its confirmation from a client on new business or a report you have commissioned from a consultant to meet a deadline – is a core skill. It is usually fairly simple, just a note or a phone call to check-in and see how things are going. Possibly a little less pressure and more subtle when you are asking of your client, and conversely more pressure where you are the client asking of others whom you are paying. I have found to get things done, prompt follow up is critically important.

So I see the ability to proactively follow up as one of the fundamental responsibilities of a good development manager.

In recent years I have  interviewed a large number of people for roles. The roles are not limited to generation smartphone (or whatever the suffix is nowadays)  and are typically highly competitive with a range of candidates in age and experience.

Hopefully I am not getting too old and out of touch with common day communication techniques but I find it interesting to note that there is almost no direct follow up from candidates anymore.

Possibly some follow ups are taken by recruiters and never passed on, but there is nothing stopping a candidate emailing me direct – they all get a business card and are never told not to contact me.

It is so rare to receive a follow up note from as interviewee;  yes one who still does actually want the job after the interview! Rarer still is the candidate who follows up the same day as the interview, and then keeps in contact with further follow ups (which can range from asking ‘how the selection process is going’ to emailing something that may pique my interest like an innovative property trend from overseas or the like).

I just googled ‘follow up job’ and number one on the search list was this article, so I am at a bit of a loss why there is so little follow up.
http://jobsearch.about.com/b/2013/12/19/how-to-follow-up-on-a-job.htm

For something so simple, candidates who follow up proactively and directly, stick themselves well above the pack. Yes you may be the bees knees and think employers should be following you up not the other way round, but following up after an interview has made the difference to getting the job or not.

Following up is after all one of the things a successful candidate is going to be doing an extreme amount of when they work in property or business development.

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