In a recent episode of the Walker Webcast, hosted by Willy Walker of Walker & Dunlop, Rob Finlay, CPM®, Founder and CEO of Thirty Capital and WSJ best-selling author of ‘Beyond The Building’, discussed the power of being data-driven and innovative, understanding and engaging your consumer, and how to create alpha in your organization. Topics discussed in the interview include the importance of being data-driven and innovative, the power of leadership, how to create alpha in your organization, and so much more
Watch the full interview on-demand here. Or, read below for highlights of their conversation.
Willy Walker: If you don’t look beyond the building, how and why will you be left behind
Rob Finlay: As we talk about beyond the building, it’s all about focusing and being aware. [You need to] take the inputs around you and make sure you can process and be open to those inputs so that you aren’t left behind.
Willy Walker: In the book, you talk about a PWC study that shows that data-informed companies are 3 times better at decision-making than those who don’t use data. Let’s talk about data a little further
Rob Finlay: Organizations have data all around them. You make decisions that are based upon artificial intelligence (AI), business intelligence (BI), or human intelligence (HI). You’re using some component of data to make decisions. The question is, “How comfortable do you want to be making those decisions?”.
Unfortunately, unorganized data is useless. Without structured data, you won’t be able to enjoy the benefits of data-driven decisions. [Ultimately], you can consume and use the data how you want. But be advised, if you’re not using data you’re [more than likely] going to go out of business. Now, because of how the market is today, is an absolute visualization of those who know what they’re doing and those who don’t.
Willy Walker: Talk for a moment about the operating data (OKRs, KPIs, etc) that make people better at running their business and making decisions versus using this data to be a more savvy investor or commercializing/making money off of the data. If you have to create a data strategy, which of these three areas would you first invest in?
Rob Finlay: An organization’s decision to become more innovative and data-centric has to start at the top. If you have this idea that you’re going to create and monetize a data platform, go spend your time somewhere else. When it comes to the question, “How do I start a data strategy and what do I do with it?”, it comes down to leadership and OKRs. What do you really want to do in your organization? Where do you set your goals? Where do you want to be as a company? Where is the leader going to take you? The data strategy should be built around that direction. A company without a data plan, OKRs, or a strategy is not going to create alpha.
Willy Walker: What do you suggest people do at this point in time as it relates to artificial intelligence (AI)?
Rob Finlay: AI is a buzzword. When it comes to AI, there are a couple parts to it:
If you don’t understand AI and the benefits of it, you should because it’s going to be incredibly impactful (and it’s impactful now). If you think it’s going to change or make you smarter in your business, that’s not going to happen right now.
The way I think about the data cycle is you have Artificial Intelligence (AI), Business Intelligence (BI), and Human Intelligence (HI). Each one of those platforms makes a data and intelligence strategy possible. Right now, there’s the availability for people to have BI and HI. But, before you can have BI or HI, you first need to have the data in order to make any decision.
If you want to create alpha in your organization, you need to look beyond the building and you need to look at data as one of the biggest assets that you have.
Willy Walker: Most people are using the same Business Intelligence (BI) feeds to make business decisions. How do you create alpha when everyone is getting data from the same sources
Rob Finlay: It’s not easy to create your own data strategy. A lot of these organizations take and manage their own data first and then make decisions based upon other data sources. Often, we’re not taking advantage of the technology to put data in one place and then visualize, forecast, and use it in different scenarios.
Being able to benchmark your properties next to other properties will answer “Is it me or the market?”.
Willy Walker: Talk to leaders as it relates to how to build the business strategy or the leadership to get your organization to where you just talked about.
Rob Finlay: It always starts with leadership. If you look at most real estate shops, the CEO or their partner set the pulse for the entire organization. That direction needs to resonate throughout the organization. If you, as a leader, want to create enterprise value to build and scale, then you need to have the organization understand the goal and direction. The leader is responsible for the “make or break” of the company.
Willy Walker: As you look at multifamily data today, what’s it telling you as it relates to the opportunities?
Rob Finlay: You have to understand whether you can operate these properties proficiently and create value. Do you understand debt strategies in order to put the appropriate leverage based upon the perceived cash flows going forwards? Are those the things that you’re good at? If you can answer that first, then you start the next steps. The next steps are a) what markets to look at and b) what strategies.
There are a lot of ways to make money in this market; just be smart about it. Have a plan and an infrastructure in order to execute on it. Otherwise, it’s a waste.