Viewpoints

If Amazon can use process optimization, so can real estate managers

Posted on April 5, 2019 in Viewpoints by Zoe Hughes

Process optimization is a stodgy topic popular mostly among supply chain savants and tech nerds. But companies such as Amazon and Apple have ridden process perfection to dizzying market cap heights, so surely investment managers could benefit from applying the same thinking across their real estate portfolios.

Washington, D.C.-based National Real Estate Advisors, LLC (National) took on this challenge and, through detailed process mapping and visualization, created positive impacts on operations and communications, saving time and resources while fostering a cultural change across the firm.


Download National’s story here


Tech and manufacturing giants have built empires maximizing output and profit by carefully studying their stakeholders and deliverables against their complex interdependencies, constantly perfecting productivity to reduce ‘bottlenecks’ and improve performance. National, a real estate investment manager with $3 billion net in assets under management (as of 12/31/2018), seized the opportunity, using their monthly and quarterly reporting as a launching point for their Process Collaboration Team (PCT).

“What I’m concerned about is providing our investors and consultants timely and accurate information about the performance of our fund as well as our individual investments,” says Sam Bendix, Managing Director of Investor Relations for National.

National first ran a preliminary test of updating their quarterly presentation deck. The review resulted in a proof of concept that became the basis of the PCT’s work model. Importantly, the project – and subsequent processes – was backed by the CEO who is focused on the firm’s continuous improvement and was willing to give the PCT bandwidth to figure out solutions.

Jeanne Ayivorh, Managing Director of Portfolio and Asset Management adds: “We recognized our final dates of quarterly client deliverables are often triggered by the first dates of third-party deliverables. Let’s say a third-party property manager has a financial report due by the 10th of the month. Not only does data have to come in on time, it has to be loaded into the portfolio software system in a timely manner for review. If these first steps are delayed, everybody else’s production timeline along the line is in jeopardy.”


National established a ‘traffic light’ system – visible to the entire company and to visitors to the firm’s headquarters – coloring key parts of the process to indicate whether they are hitting goals or are stalled. 


The PCT’s first step was to interview key team members from areas such as research, portfolio management, asset management, accounting, operations, and investor relations, from leadership to the analyst level, encouraging them to share written narratives of their workflows, requirements, and deliverables.

Using this information, the PCT visually mapped out the production process, the deliverables, and the groups involved so as to focus on areas where they could optimize results.

“Everybody has their own piece of the puzzle that they have to complete in order to finalize key deliverables by the end of the month,” says Cameron Lees, from National’s investment analysis team. “We broke down parts of various material processes to assess how they were working.”

Through this understanding, the PCT was able to create transparency and build standardized instructional documents and checklists. Importantly, based on guidance from the CEO, the team established a ‘traffic light’ system – visible to the entire company and to visitors to the firm’s headquarters – coloring key parts of the process to indicate whether they are hitting goals or are stalled.

This level of transparency not only helped create accountability, but also helped to foster buy-in from all levels of the organization.

“For many people it’s a motivator. As team members adjusted their priorities, performance improved,” adds Lees.


“Not only does data have to come in on time, it has to be loaded into the portfolio software system in a timely manner for review. If these first steps are delayed, everybody else’s production timeline along the line is in jeopardy,” Jeanne Ayivorh.


In less than 24 months, the new processes enabled colleagues to better understand and appreciate each other’s workloads; addressed gaps and issues in processes; added a more transparent level of accountability; and finally, provided another training tool for onboarding new associates or for cross-training. Teams are better positioned to self-manage and regulate their own work using the PCT’s system to benchmark their performance.

Ayivorh explains: “The PCT helps us unpack processes for senior management and our partners as well. Specifically, if senior management’s support is required to improve a process, the issue and proposed solution are more transparent so that leadership can support swift corrective action.”

Since launching, PCT has sought to address seven mission critical processes. While every company has standard processes underway even without a PCT, Bendix notes, “We have found that once someone takes the time to put pen to paper on a process that they think they know inside and out, they often find a missing step or a better step. We are fortunate that with the CEO’s support and belief in process improvement, our culture of collaboration makes a PCT an easy fit within our organization.”