n today’s extremely dynamic business environment profit margins are smaller and the line that divides success from failure has narrowed. This narrow line is enterprise wide, from operations to finance to human resources. This narrow success margin benchmark extends to service providers as well. The skills and competencies that once defined an outstanding or world class service provider are now the fundamental skills and competencies required of an average service provider. The performance bar has been raised and it will continue to rise as the needs of business evolve. Thus the characteristics of a world class service provider will need to continually evolve as well.
A real estate service provider could be a broker, attorney, site selection consultant, tax professional, etc.
Real estate service providers can bring a wealth of experience and depth of talent and skills to companies dealing with real estate issues. In the past, solid core competencies and skills separated the outstanding service provider from the average service provider. As the real estate industry evolved and the skill sets of service providers leveled, other factors were used to select a service provider, including cost, familiarity and trust. Today, there are additional traits that differentiate the world class service provider from the average one. Two of these key traits are flexibility and the ability of the service provider to understand how projects, decisions and results happen within the client’s organization.
After spending almost 20 years as a consultant I went to work for one of my clients directing and managing facility network strategy. It was during this period in my career that the importance of flexibility and an understanding of how things get done within an organization were driven home. Most service providers believe, as I did, that they understand the importance of being flexible with respect to the work they are doing for a client. But the fact is most service organizations are not set up for flexibility. Head count, bill rates, utilization rates, realization rates, chargeability, collection time on receivables, and revenue per person are not inherently flexible things. They are the measures and processes associated with how service provider firms make a profit.
For example, many times as a company begins a project, in this case a real estate project, the project sponsor and team have a “plan” for how the project will proceed. In many cases that plan is interrupted, side-tracked, materially changed or terminated. In many cases this occurs quickly and without notice. It has been my experience that very few projects actually end in the way they were planned at the beginning. In order to be able to produce the required/desired result, given the change in plan, the project sponsor and the project team including service providers must change direction or terminate the project quickly.
This can be a problem for the service provider who has put in time (utilization of revenue generating resources), and now the project is no longer the project they were selected to complete. Even without going into all the potential issues (and resolutions) that can arise with this change in project scope with respect to collecting fees, paying fees, etc., it is safe to say that now there is a dilemma. The project service provider has utilized revenue generating resources that could have been deployed somewhere else, and the project sponsor may have no results to show from the hours worked by (and fees paid to) the service provider. It is my experience that this dilemma is one of the biggest reasons companies opt to perform work with internal resources instead of engaging a service provider.
One school of thought is that internal resources are being paid a salary regardless of whether they are working on the project plan as designed in the beginning or some project alternative that occurs somewhere between the beginning and the end of a project. A world-class service provider is flexible and is able to look like and be an internal resource.
The second key trait is the ability of the service provider to understand how projects, decisions and results happen within the client’s organization. Every client organization is different from the standpoint of how projects, decisions and results occur. Is the client organization a consensus building organization vs. a hierarchical organization? If it is a consensus building organization, the service provider has to facilitate and perform his or her service in a very different way than if the organization is hierarchical. A matrix organization presents different issues and demands a different approach. Once this is determined, then the dynamics of the players, both on and off the team, need to be assessed.
Corporate executives often call upon one or many individuals with specialized expertise to assist with projects and day-to-day work load. In today’s business world, a quality service provider has applicable core competency/skill sets; the ability to build, develop and keep relationships; the trust of the client; honesty; integrity; and ability to work in teams. The world class service provider has all of the above characteristics as well as the ability to be flexible and the ability to understand how projects, decisions and results happen within the client’s organization.