Saheed Kehinde Yusuf

OKRs in CRE to Improve Results and Your CRE Bottom Line The Superior Alternative: Leverage Key performance indicators, or KPIs, have long been the reigning standard amongst real estate companies to hold their employees accountable. KPIs are intended to function to clearly outline a company’s goals,; the reason why those goals are their importancet,; who will be in charge of their implementation and execution of those objectives;, and the timeframe for their executionhow soon they need to be accomplished. The challenge, however, is that most firms adopt attempt to use the samealmost identical KPIs even though their operations — and sometimes industries —each organization are markedly divergentis very different. Increase assets under management by a 100,. cClose at least 50 deals,. or aAcquire a minimum of 15 new Class C multifamily apartments. These are ubiquitousall examples of key performance indicators KPIs that appear impressive on PowerPoint presentationssound great, but do no’t metamorphosetranslate into actionable steps. Unsurprisingly, An unsurprising result is thatalthough the indicators are clear,, but few results are actually achieved. These limitations of KPIs in the context of companies’ immediate and future targets demanded we explore an alternative — i.e., better — metric for tracking deliverables and implementing phases of a project, especially within the commercial real estate sphereFor this reason,. Fortunately, John Doerr and Andrew Grove introduced OKRs, or objectives and key results (OKRs), developing this superior, more realistic evaluator of progress. can be a better solution, especially within the commercial real estate sphere. In this article, we begin by discussing what OKRs are and, how they improve your bottom line. Then, we propose as well as how you can steps for creatinge a set of OKRs that are aligned with your investment ambitions thesies. The brainchild that works: What are OKRs? OKRsbjectives and key results areis a metric system for establishingin which goals are set on a micro level, for a team, department, or individual, to communicate and evaluate success in more meaningful ways. Commented [1]: Perhaps we could consider something along the lines of "measure employee deliverable" or "measure individual employee's contributions to the organization's subsistence or the execution of a project" to give this a positive spin. Commented [2]: Thank you for the excellent work, Dominique. Could we update this definition? From my cursory search on the internet, this sentence leans toward OKRs, not really KPIs. Commented [3]: A cosmetic change to sound a bit fancier. We could consider "evolve." The mainkey difference between KPIs and OKRs is that the latter structurestranslates goals into more specific, measurable activities and desired outcomes and action steps. For example, a commercial real estate firm's objective may aspire to become the leading owner of Class A assets in South Florida. Crucial milestonesKey results wcould then be organized intolook like the following: ● Ddaily meetings with the acquisition team to review deals in the area. ● , or iIncreasing the numbers ofe in letters of intent sent out each week. Basically,As you can see OKRs such as these offer a better, more tailored action plan than a generic KPI would key performance indicator. Invigorating the bottom line: How OKRs boostincrease results outputs Firms are able to improveincrease their results brand, financial, and operational results with OKRs because their goals are more realisticaspirational in nature, and easily structured intoprovide room for creative actional plans to achieve them. This collaborative tool for goal-settingThey require challenges teams within a commercial real estate firm to stretch and challenge themselves to accomplish the objective at hand, but permits flexibilitywhile at the same time providing certain freedom and creativity in the actions oriented toward its executionhow it’s done. Additionally, the simplicity and clarity of OKRs’ milestonesOKRs keep the team and company focused and committed. More importantly, a company that embraces OKRs instead of — or alongwith — KPIs chargesBecause each individual person becomes individual personnel with their own OKRs and empowers them to make efficient decisions and accomplish more responsible for their OKRs they are empowered to make more efficient decisions, and accomplish more. To illustrate the tangible results, consider the story of Peer Streetthe story of Peer Street, a real estate platform that democratizes investing in debt. After the founders began implementing OKRs across their teamimplementing OKRs across their team of 25 people in February 2016, within a few months they attracted over $100 million in new investments within a few months and were awarded Innovator of the Year in Lending. Formatted: Outline numbered + Level: 1 + Numbering Style: Bullet + Aligned at: 0.25" + Indent at: 0.5" Everything considered, Aas the owner or operator of a commercial real estate firm, adopting OKRs has a direct, positive impact on your bottom line. How to set the right OKRs When setting OKRs for your company iIt is crucial thatimportant you to adopt these following best practices to enhance the efficiency of your OKRs:make sure they work. Calibrate short-term objective to match overall vision #1 - KeepAlign your objectives aligned with the company’sthe greater vision of your company. The objectives must match your overarching business goals to motivateensure top buy in from employees and deliver results that advance, or at least consolidate, move the company forward firm’s position in the market. Ignore OKR overload or insufficiency #2 - Avoid setting too many OKRs. Disproportionate simultaneousThe biggest mistake companies make is setting too many objectives tend toand desired results. These overwhelm the company and the team, undermining lead to lower morale and lower performance. At the same time, too few OKRs would delay the timeframes for accomplishing goals. For optimal OKRs, experts recommend a maximum of five Stick to creating at most 5 concurrentactive OKRs at a time. Formatted: Underline, Font color: Auto, Not Highlight Formatted: Heading 5, Border: Top: (No border), Bottom: (No border), Left: (No border), Right: (No border), Between : (No border) Formatted: Underline, Font color: Auto, Not Highlight Formatted: Font: (Default) Arial, Font color: Black, Not Highlight Formatted: Indent: Left: 0.5" Contain procrastination and soft-pedaling #3 - Keep the Maintain awareness of OKRs top of mind. It is the usual practice for managers to Avoid the temptation of setting OKRs, only to leave them unattended until close to the deadlinesthe end of the quarter. To counter this commonplace neglect, Incorporatedraft and paste regular reminders of the objectives and desired results in your company’s public space, perhaps the old-fashion notice board. Make them an essential key agenda item in your weekly meetings. The greater the focus management places on OKRs, the more priotyfocus teams assign place into them. Streamline the metric #4 - Avoid turning Simplify OKRs and resist the urge to condense them into glorified task lists. While important milestoneskey results in OKRs need to be specific, they must still allowhave to allot a certain level of flexibility in how they are reachedaccomplished. For instance, “Give Acme PR firm a call” is a less effective indicator and should be replaced with poor key result compared to “increase company awareness by 10%.”. Formatted: Font: (Default) Arial, Font color: Black, Not Highlight Formatted: Indent: Left: 0.5" Formatted: Underline, Font color: Auto, Not Highlight Formatted: Font: (Default) Arial, Font color: Black, Not Highlight Formatted: Font: (Default) Arial, Font color: Black, Not Highlight Synergizing the criteria: Accountability and clarity begetleads to results Ultimately, no matter the organization, clarity and accountability often breedleads to quality results. And results guarantee success. A commercial real estate firm that By incubatesadopting a system of metrics that fostersleads to tangible actions will , a commercial real estate firm better positions itselfthemselves to achieve itstheir goals, whether those be to raisinge capital, acquiringe new assets, or expanding itstheir footprint within the community. Moving forward, consider what OKRs you could adopt that have the potential to impact your company forever.