We need to think bigger and bolder when it comes to transformation

The age of change is the moment for brand transformation. The crises of recent years have shaped people and the economy. Brand managers have no choice but to respond.

The world is no longer what it was two years ago. Pandemics and war, technological leaps and consumer behaviour have unhinged the economy. It is the age of great transformation - with momentous consequences for brand management. Companies that do not rise to this challenge will have to bear the economic consequences. Those who recognise the signs of the times and move forward, have the best chances of being among the winners in the new real estate markets.

Who would have thought in the spring of 2020 that Covid-19 would still be a dominant topic at the beginning of 2022. And who would have thought that the pandemic would be replaced in the headlines by a war on European soil in the spring. Crisis thinking dominates world events and our minds right now. Supposed states of emergency have become the „new normal“ and, as permanent conditions, are putting governments, people and the economic system to the test. Life is changing at a pace that people have never known before. The second decade of the third millennium has become the age of transformation. 


Transformation as a system constant
Companies that have survived the crisis of the last two years economically or have even emerged from it stronger than before, can boast extraordinary resilience. Resilience became one of the words of the year in 2021 - and it was only logical in our self-image as the European Real Estate Brand Institute to pay special attention to this factor and its influence on brand work. The motto of the Real Estate Brand Value Study 2021 was „Disruption meets Resilience“ and the choice of words was already a preview of 2022. Resilience is still in demand, but the focus is now even more on the disruptive character of change. The challenge of the present and future is to have fundamental changes permanently on the radar screen in order to be able to react to them as quickly as possible - or, ideally, to act proactively with foresight. Disruptive, but also creeping and evolutionary transformation will no longer be classified as exceptional in the future, but must be included in the entrepreneurial equation as a system constant. This will have serious consequences for strategic brand work.

Digitisation is far more than simply thinking about electronic communication and saving a little time and money. It is about digitising businessprocesses as seamlessly as possible, both internally and across companies and countries. Digitisation is thus becoming a tool that is decisive forcompetition, on the basis of which new business models are emerging.

Crises as fire accelerators
The ideal is: a brand that is well positioned for a longer period of time and at the same time should be sufficiently dynamic to be able to adapt to external and internal changes. It is a balancing act between consistency and flexibility. The former shapes the long-term impact, the latter is required to react to changing markets and business processes. Stagnation is disastrous. If the market position is to be consolidated or expanded, a permanent transformation process of the brand must take place, sometimes carefully and sometimes radically. The right pace and the evolutionary or disruptive character are also determined by the change in the framework conditions - which could not have been more drastic and comprehensive since the outbreak of the Corona pandemic and the Ukraine war. So, are the current crises responsible for brand transformation becoming the omnipresent key term? What seems obvious does not necessarily correspond to the deeper truth. The pandemic, for example, may have been a trigger to put long-established practices to the test. But it was probably even more of an accelerant for all those who have remained in cosy, rigid internal structures for too long. Those who need crises to understand that permanent transformation is basically necessary and that topics such as employer branding, decarbonisation or digital technologies will determine the future have basically already missed the train of time.

Digital transformation
Now, at the latest, it is time to take a highly precise look at the actual issues of transformation, which are merely washed to the surface by crises of all kinds and in general, in order to become visible for those who have closed their eyes for too long. Digitalisation serves as the best example. On the one hand, the term has already been in quasi-inflationary use for many years. On the other hand, its real scope seems to have been lost or not yet recognised. „Many people simply think of electronic communication and a bit of time and money saving when they hear the word digitalisation. But it is about so much more. It is about digitising business processes as seamlessly as possible, both internally and across companies and countries. Digitalisation thus becomes a tool on the basis of which new business models are created. This is decisive for companies‘ competitiveness,“ says Helmut Fallmann, CEO of Fabasoft. The IT company, headquartered in Linz, Austria, is one of Europe‘s leading software manufacturers and cloud service providers and has subsidiaries in Germany, Austria, Switzerland and the USA. According to Fallmann, the process of corporate digitalisation primarily challenges the management level: „The entire corporate organisation must be digitally oriented. This transformation, in which the benefit of each employee is also recognised, is the task of the management. It must bring the topic into the company in such a way that it can be lived every day. 

The house from the 3D printer is symbolic of a world that, according to experts, will change more in the next ten years than it has in the last 100years due to digitally transported technologies such as 3D printing, artificial intelligence and robots.

Digital crossroads
In this context, the fact that the economy still seems to be at a digital crossroads despite the incipient digitalisation push proves to be problematic. „We have been observing a digital two-tier society for several years now: while large companies are fully committed to digitisation, smaller businesses are often hesitant,“ says Susanne Zach, Data Analytics Lead Austria, Associate Partner, Managing Director of EY. Zach refers to an EY study from 2021 on the topic of „Digital Transformation in SMEs“. 800 managers of medium-sized, non-capital-market-oriented companies with 30 to 2000 employees in Austria were surveyed. „While every second company (56 percent) with annual sales of more than 100 million euros nnual sales of more than 100 million euros attributes a very large role to digital technologies for their own business model, only every fourth (26 percent) of smaller companies (annual sales of less than 30 million euros) do so,“ says Zach. The difference of 30 percentage points - studies in Germany come to similar results - gives pause for thought. „Smaller companies must not be left behind and must dare to make the digital leap before the big competitors pull so far ahead that it becomes difficult to keep up,“ Zach concludes. SMEs in particular are currently challenged more than ever to integrate new technologies into their business model and not let the gap to the larger digital pioneers widen. According to Zach, the opportunity to do so is better than ever „because there is no alternative to digital transformation“. 



Technologies as value shifters
What is true in general is especially true in the real estate world. Digital technologies that fundamentally change business have long been ante portas. "Virtual reality (VR), augmented reality (AR) and artificial intelligence (AI): These technologies are also falling on fertile ground in the real estate industry. Both established players and startups are following the trend," says Levent Künzi, co-founder and CEO of the PropTech startup Properti. "The goal is to sustainably simplify processes through the interaction of artificial and human intelligence and to create a transparent relationship between companies, customers and service partners. In doing so, the use of innovative technologies should not only be a support in the real estate project, but also, for example, drive the progressive way of working of a new generation of brokers," says Künzi. There is no shortage of tools: VR glasses and 3D flat models for comfortable and efficient flat viewing, AI algorithms for recognising data patterns and evaluating them or for automating document management. Building Information Modelling, BIM for short, for networked planning, 3D printers for cost-efficient house construction, etc. And we can think further. Blockchain technology and cryptocurrencies also have the potential to become key technologies in the real estate market. For example, when it comes to faster and more secure transaction processes and more accurate property valuations. Or if the tokenisation of real estate creates new forms of proof of ownership and enables more flexible trading.

The idea of sustainability has developed over time into a guiding principle for political and economic action. The focus is on ESG - Environment,Social & Governance. From now on, companies are required to implement ESG criteria strategically on the one hand and to communicate themcredibly internally and externally on the other.


"Our world will change more in the next ten years than in the last 100 years due to digitally transported technologies such as artificial intelligence, 3D printing and robots. These changes will lead to massive value shifts in the markets," predicts Frank Thelen in this context. The German venture capitalist is one of Europe's most successful start-up investors. He has been making his experience with tech start-ups available to private investors for several months with his fund "10xDNA - Disruptive Innovation". The fund includes high-growth companies that, according to Thelen's team of experts, bring "ten times more innovative, ten times cheaper and ten times greener products" to the market. "We have to think bigger and bolder when it comes to transformation," says Thelen in his current bestseller "10xDNA: The Mindset of the Future", summing up the basic attitude that will characterise successful ideas and business concepts in the future.

Sustainable transformation
Analogous to digitalisation, the topic of sustainability must be considered. Again, we are talking about a term that has been on everyone's lips for many years, but whose meaning has apparently not yet been fully grasped by everyone. The fact is: the idea of sustainability has developed over time into a guiding principle for political and economic action. The focus is on ESG - Environment, Social & Governance. Accordingly, the fulfilment of ecological criteria is just as important as the observance of social parameters as well as a corporate management that meets ethical standards and whose measures achieve a positive and long-term effect on the environment and society. For companies, it is a matter of acting sustainably towards employees, customers and investors. With regard to employees, the realisation that, on the one hand, the next generation of skilled workers is increasingly looking for meaningful jobs and, on the other hand, companies must create the appropriate environment that is characterised by consideration for the environment and respect for the compatibility of family and work. As far as the essential impact towards customers is concerned, compliance with ESG criteria along the entire supply chain plays a central role. Finally, sustainable corporate governance is essential to attract investors. 

"To seize these opportunities, companies need to implement ESG criteria strategically on the one hand and communicate them credibly internally and externally on the other. A top-down process. CEOs and supervisory boards have a duty to take the lead on this issue. This cannot be delegated to downstream staff units," emphasises Erich Lehner, Managing Partner Markets at EY. In any case, green washing no longer has any place - and also makes no sense: "Companies want to exist and be successful in the long term. And people want to work in sustainable companies. Sustainability must therefore be a business case and not just a green marketing slogan.

The time of green washing is over. „Companies want to exist and succeed in the long term. And people want to work in sustainable companies. Sosustainability has to be a business case, not a green marketing cloak.“


Goodbye Green Washing
It is well known that the construction and building sector is responsible for about 40 percent of the carbon dioxide emissions that affect the climate worldwide. The results of the current RICS Sustainability Report, based on a survey of more than 4,000 real estate experts in 30 countries, are all the more astonishing. Although the demand for environmentally friendly buildings with corresponding certifications increased significantly, at the same time only 28 percent of the respondents stated that they measure the carbon dioxide emissions of their buildings during construction and operation at all. A corporate policy of empty words?

The 72 per cent of the rest who do not take ESG seriously enough can expect "nasty surprises" in the future. Because ESG is becoming measurable and the consequences are serious. In Europe, for example, the highly prominent members of the initiative "ECORE - ESG Circle of Real Estate" have already developed a scoring standard in coordination with industry associations to make sustainability in real estate portfolios transparent, comparable and measurable. In addition to ESG issues, the scoring also maps the required taxonomy criteria of the Paris Climate Agreement and the EU Green Deal. From now on, stakeholders will be able to see how well a property or portfolio meets the climate targets and ESG criteria based on a percentage value from zero to 100. This increases the competitive pressure on the industry protagonists many times over at a stroke. 

Measurable = testable
The scope of a scoring system that creates transparency for stakeholders across providers as to where properties or portfolios are on the path to CO2 neutrality is enormous. This is because in future it will be possible for investors, banks and insurance companies to classify real estate products in terms of their sustainability in the overall market as part of investment and financing processes. The consequences of cross-national international comparability of the performance of buildings and portfolios cannot be overestimated. Two conclusions are obvious: firstly, this development will promote increasing collaboration among all market participants, because the targeted expansion of the sustainability network between investors, developers, property, facility and asset managers - i.e. all ESG solution partners - as well as banks, insurance companies and relevant industry associations will form the basis for sustainable measures. And secondly, the concrete measurable comparability will become the basis for benchmarking in the industry.

Simply claiming to be sustainable will no longer be enough. You have to prove it - and the proof will be presentable and verifiable in figures. This is a game-changer for real estate companies. The time for glossing over half-baked ideas is over when companies must have high-quality, accurate, complete and auditable ESG data that provides precise information about their actual ESG performance. 

Consequences for brand management
Unlike after the global financial and economic crisis, this time the real estate industry will not be able to more or less return to business as usual. Since the spring of 2020, such drastic changes have taken place that there can be no return to the old normal. The economic standstill and the economic slump were, so to speak, only the side effects of a development that has led to a massive transformation to fundamental values. The pandemic and now the war have affected all areas of life and with it the value-oriented hierarchies of needs have also changed. 

Media planners cannot ignore this any more than they can ignore the prioritisation of new brand values such as safety and trust, security, health and sustainability. With media communication concepts from 2019, hardly anyone can be reached in 2022 and in the future. Those who miss the value train of the times and do not react to the new basic conditions will have to experience this in their sales figures sooner than they would like. On the other hand, those who adapt their brand strategy and pick up consumers at the new (value) stops of consumption will gain market share. The brand crisis - according to a GfK study, brand loyalty has fallen to its lowest level in 30 years - turns out to be a great opportunity for those willing to act who do not persist in old, outdated patterns. The transformation of values could be translated into the real estate sector as follows: The consumer need for security and a healthy lifestyle corresponds to sustainable construction in buildings and to an orientation towards ESG values in companies. And the war has appealed to the social side. In this respect, the implementation of Environment Social Governance factors is no longer a freestyle, but a duty. Also - and this is of great importance - in order to get or keep the best talents in times of a shortage of skilled workers and changing demands on the workplace and corporate vision.

No more excuses
When camouflage and (pre-)deception - keyword green washing - not only no longer work, but are even highly counterproductive, the hour has come for those entrepreneurs who underpin their credibility with concrete action. Fear of action is completely unfounded. Studies and statistics show: Companies with exceptional ESG performance are characterised by higher returns on their projects, lower investment risks, better resilience in times of crisis and increased employer brand equity. Whichever way you look at it, only benefits; as long as the corporate actions are also reflected in the brand.

The prerequisite for the strategy is - true to the motto: "You can only manage and market what you measure". - a strategy that is deeply anchored in the company and at all levels, which is also continuously reviewed for its effectiveness on the basis of data. The digitalisation push provides the necessary tools for this. Capturing the world in data, filtering out and analysing the system-critical data is proving to be indispensable. It is an attempt to master the accelerating pace of change. There are no more excuses. (CL)


Brand management must adapt to the new value priorities and pick up people whose values have changed. This does not only apply to customeracquisition, but also to a special extent - keyword employer branding - to the recruitment of the best talents available on the market.

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