Questions Every Growing Real Estate Business Should Be Asking

Why it happens

Growing organisations tend to add capacity where the pressure is most visible, which is usually the function nearest the bottleneck rather than the boundary between functions. Donald Sull, Rebecca Homkes and Charles Sull, in a multi-year study of more than 250 companies published in Harvard Business Review, found that only 9% of managers said they could rely on colleagues in other functions and units all of the time, with roughly half saying they could do so most of the time. Their central finding was that execution problems concentrate at the seams between units rather than in any single unit’s internal discipline — alignment processes inside a function are usually sound; it is cross-unit coordination that erodes as scale increases.

A real estate business experiences this seam problem in a particular way, because its functions are sequential and interdependent in a way many businesses are not. A site cannot be leased before it is built, cannot be built before planning is secured, cannot secure planning before due diligence is complete. Each stage has its own reasonable metrics — acquisition tracks deals sourced, development tracks programme adherence, leasing tracks void rates — and each function can be performing well by its own measure while the handoffs between them accumulate friction nobody is charged with noticing. Paul Rogers and Marcia W. Blenko, partners at Bain & Company, surveyed executives at more than 350 global companies and found that only about 15% felt their organisation genuinely helped the business outperform competitors; their research also identified that decision-making commonly stalls at one of a small number of predictable seams, including the boundary between a central function and a business unit. A growing real estate platform adds exactly this kind of seam every time it separates a function that used to sit with one person into a team with its own head, its own targets, and its own view of what “done” means.

There is a second, related reason the questions go unasked rather than simply unanswered: asking them requires someone to hold a view of the business that no single function’s reporting supplies. A leasing director can see leasing’s numbers in detail and development’s only at a distance; a development director experiences the reverse. The question “does the metric that tells acquisition a deal is good also reflect what leasing will find difficult later” is not hard to answer once asked — it is hard to think to ask, because it sits precisely in the blind spot each function’s own dashboard creates for the people running it.

The questions that tend to go unasked are rarely dramatic. They are ones like: does the metric that tells acquisition a deal is good also reflect what leasing will find difficult later? Does the programme that tracks development on time also flag when a site is ready for a function that has not yet been told to expect it? Who is accountable when a decision speeds up one function and slows down another, given that neither function’s own reporting will show the slowdown as belonging to them?

A related and easily missed variant is the question about what happens between functions rather than inside them — who owns a site during the weeks when it has left development’s reporting but has not yet formally entered leasing’s. In many growing firms that period belongs, functionally, to nobody, and the business only discovers this when something in it goes quiet for longer than expected. This connects to a broader pattern examined in Zoom Riddle’s perspective on the gap between strategy documents and strategy behaviour — a plan can specify what each function should deliver without specifying who is answerable for the space between them, and that gap is where growing organisations lose the most without ever finding a single culpable step.

Where this shows up

People working in real estate businesses will probably recognise this pattern first. The wider Asset and Production-Based grouping and the other sectors page show how it presents elsewhere.