Emma Hendry – The Property Council of Australia: Digital Disruption Panel
Q1: From your perspective, what is digital disruption? What do you see as the key opportunities and threats of digital disruption to your sector and business?
When we are looking at a term such as ‘digital disruption’, it is important to understand fundamentally what it is we’re talking about. We are talking of course about the digital revolution or “industry 4.0”, and I think that’s something important to fundamentally understand; we are on the precipice of witnessing this movement but it’s a series of events that are going to get us to our end result. This is a journey which is changing not only how we do business, but the ways in which we interact, live and work.
Experts are saying that the digital revolution is actually going to have more of a significant impact than The Industrial Revolution. It is shifting us from an ‘input’ based society into an ‘output’ based society.
McKenzie Global Institute surveyed a pool of publicly listed entities and found that only eight per cent of respondents believed their business models would be relevant in a fully digitized state. And yet, only sixteen per cent of those surveyed said that they had strategies [for the future]. Returning to the point of ‘first movers’ and ‘fast followers’, there is information surrounding the fact that incumbents will only increase their return on investment (ROI) by six per cent, but ‘digital disruptors’ coming into our sector are projected to have a return on investment of around twelve per cent.
These are quite scary figures when you start to consider that if you are a ‘fast follower’ you’re only going to re-boot your revenue by six per cent, while new pioneers will outpace you at the higher twelve per cent. Information from other sectors tells us that if you aren’t currently on that road (as a ‘first mover’) you are going to be disrupted [by competition].
Disruption doesn’t have to be negative, it can also be positive as there is such opportunity that can come with disruption. Bringing this idea back to Hendry and our sector; we’re a very traditional field of statutory compliance and risk mitigation based area of business, and so what we sought to do was to say ‘The hypotheses needs to be ‘in a digital state, what value and what data needs to come out of what we do, across the ecosystem members in the property sector? What information will they need?’ and I think that is what’s been most important for us in engaging in the digital space, is transforming what we do into an optimised platform. We’re enabling our ecosystem members to create more value than the cost of our services. Our business model is reliant on creating value and opportunity – and as such – that is what we deliver.
For example, the smart cities industry is estimated to be worth $2.6 Trillion by 2025. This is an industry which did not exist ten years ago, so when you discuss disruption, profit and revenue erosion, you’re not necessarily talking about new service lines that are being created. In addition, this is leading to a diversification of the talent pool within the sector, at Hendry we are now employing across diverse skill bases, including; UX Specialists, Coders and the like, which was almost non-existent in the past.
It is also about doing things in a smarter way. When we are producing Emergency Planning and Training programs for example, we can now ‘gamify’ our programs and run them in an Augmented or Virtual Reality state. It is in this way essential to disrupt from within and not to be disrupted externally.
Q2: Given we have many young property professionals here, what do you think the effects of digital disruption have or will be to the various property sectors and why?
Digital disruption is an opportunity creator – for example, the majority of our workforce are technical-skill based, however when evaluating the needs of our clients we employ to suit those needs. We up-skill and cross-train to not only meet those needs but to innovate our solutions offering to meet the hypothesized future needs of the market. In many instances these might be newly created roles in the industry, as opposed to traditional, static roles.
We’re creating way-finding apps that can help people get to their seat, for maintenance workers to know how to access a site, and all of a sudden an industry which was focussed on statutory compliance and risk mitigation is in a very interesting space for innovation. This is what everyone in this room today needs to understand, your skillset is required and it is valid in the modern day. It is the intellect of what you’re going to with [an idea], not the manual task itself. We’re moving from an ‘input’ society to an ‘output’ society. We therefore need to focus on the transition of skills, and what Hendry’s been doing in this space is bring in people from different backgrounds and skillsets to present a range of points-of-view and create healthy debate. Division in this area is not acceptable. The most important factor is how we grapple with this digital transformation and the skillsets they will require in the future.
I would therefore say that at an individual level, if you want to position yourself for future opportunities, you must become familiar with the digital landscape and how that is relevant to what your clients want from you, what your industry is looking to do and develop a sense of what are likely to be emerging trends. Skills and awareness are everything and you don’t have to sit in a course for three years to figure this out. There is a wealth of accessible ideas and knowledge even on YouTube and through micro-credentials courses. This progress really needs to start on a Government level which can filter into industry, corporate and at an individual level. We have to be ‘digital ready’ but our skillsets are not going to become obsolete, and instead will become more important.
Q3: We have seen a power shift from the retailers to the consumers, especially with the rise of e-retailers such as Amazon. WA has one of the highest ratios of leakage to online spend. What can we do (or are we doing) to adapt to these changes?
We’re looking at this in all aspects of our life now, we’re constantly seeking something. We’re wanting information to come to us. We want the experience to feel welcoming and tailored to us, that you’re an individual. People don’t just go to retail centres to shop, they go to satisfy their needs for education, entertainment and social aspects and this experience is really going to take that to a higher level of involvement when adding technology. Adding that ‘fourth dimension’ through augmented reality and the analytics which support explaining where people go and why they want to go there, we are able to have an interaction wherein it’s a completely personalised experience. I think that is a very exciting prospect for retail and where we predict it will go – as it will become focussed on the individual and not treating them like a number any more.