The best of the best
Any group contains outstanding performers. Some always exceed expectations and a select few rise above everyone else. This is particularly evident where performance is measurable and comparable. For example, in professional sports. It is fascinating to ask why individual athletes such as Roger Federer and Tiger Woods or teams such as Bayern Munich (which, even as an Austrian, I have to concede) have stood out from the pack for decades. What makes the difference? Talent, willpower, unbridled ambition, team spirit, fortunate circumstances? Is that enough of an explanation for you? Not for me. One crucial factor is missing. Let me give you a specific example. From a sport that has more in common with big business than any other.
Perfecting data culture
In 2010, after a long hiatus, Mercedes decided to re-enter Formula 1 with its own team. The goal: to become the undisputed leader in the top class of motorsports. After four years of strategic development, the team won the World Constructors’ Championship for the first time and also won the Drivers’ Championship. The Formula 1 crown has been theirs ever since. Six years in a row, they have claimed both World Championship titles (team & driver) and broken almost every major record. While the six-time world champion Lewis Hamilton has become the face of team Mercedes, for one of the Mercedes Formula 1 team’s most important insiders, the technology director Mike Elliott, Hamilton is of course only one of many (replaceable?) components. According to Elliott, the reasons for the team’s systematic success lie elsewhere: “What distinguishes us from all the other teams is our approach to perfecting our data culture, which has become the DNA of our company. You can imagine it as a data scientist sitting next to every engineer and driver. What we do best is generating data, evaluating it and turning it into knowledge.” Ultimately, the fastest lap time is just the logical consequence of using data analytics.
Measuring the world
What applies to the Mercedes Formula 1 team can be seamlessly transferred to other economic sectors. It is only necessary to replace the phrase “lap time” with “return on sales” or “brand performance.” Whatever the business, gaining new insights and making well-founded decisions requires the best possible generation and evaluation of relevant data. What can be measured must be measured. And what cannot be measured accurately today must be made measurable. The best example of the latter in the real estate industry is the current effort to develop a comprehensive scoring model for ESG performance. While sustainability has been an ill-defined term in the past, a points system – based on the global standard proposed by the ESG Circle of Real Estate initiative founded by Union Investment and others – is set to make the terms environment, social & governance both more transparent and measurable. A milestone on the way to a sustainable future.
Data-driven brand strategy
In the digitalized real estate industry, those who want to anchor themselves in their customers’ Relevant Set cannot afford not to evaluate and analyze weaknesses and strengths – both their own and those of their competitors – based, of course, on valid data. How large is the gap between the target and actual values for the key performance indicators? How successful are communication measures in marketing your products and services? How is your company perceived internally and externally and what do these self-perceptions and external perceptions say about its position in the complex market structure? None of these questions can be answered conclusively if they are not evaluated on the basis of measurable variables. Strategic brand management is impossible without facts and figures. Without data, trying to measure the impact of your brand management strategies is virtually meaningless. If you don’t know where you stand or cannot express this in figures, you are essentially groping in the dark – and you lack the basis for strategic decision making. After all, brand management is not just about increasing brand awareness by screaming into the void. A strategy only becomes sustainable when the brand’s profile is precisely defined, recognizable and measurable.
The last ounce of performance
In Formula 1, Big Data and Data Analytics have long been a reality. Each car has up to 150 sensors that deliver around 400 GB of new data every racing weekend. No racing car leaves the pits without IT support and analysis. “Every team has highly capable people who are extremely dedicated to the job,” says Mike Elliott. “Ultimately, it’s all about getting people to work hand in hand on data and processes to squeeze the last ounce of performance out of the car and driver.” This is the same approach we need to take in the real estate industry. We see ourselves as pioneers in this respect, for example with our REB Brand Value Model, which allows us to collate and evaluate all the data we need to fine-tune a brand profile and take it all the way to the winner’s podium.
With branded regards
Your Harald Steiner