Real estate professionals see future in management consultancy

Copyright: David Lawson – Property Week 2000


When the RICS set up its new faculty structure, a remarkable secret emerged. Deep within the ranks it found around 7,000 management consultants. Suddenly the future looked bright. After all, these are the very people touted to be the saviour of  property consultancy.   For years critics have complained that surveyors are too narrow in outlook, too confined to their little specialist patches, far below the status of other professionals like accountants, solicitors – and management consultants.  The future lay with those who could offer ‘total business solutions’.

   Ten years ago a senior partner of one of the top three property consultancies revealed privately that the big names were so frightened of losing ground that by the turn of the century they would evolve into  multi-disciplinary partnerships to compete with giants like Ernst & Young and PwC . Instead, they formed global alliances, and surveyors still rule the roost. 

  So where are these hidden management consultants? Some are behind enemy lines in firms like Ernst & Young, which has a dedicated real estate division. But that employs fewer than 40 surveyors. Others lurk in corporate real estate departments being set up by large property consultancies. They have been trumpeted as the way to providing ‘total solutions’ by looking beyond the confines of traditional skill areas such as agency, valuation and investment. But all the top firms together would not match a fraction of the number declaring themselves to the RICS.

     As applications to join the faculty inexorably continued to climb beyond 10,000, the RICS realised it had to do some more digging. ‘People had been asked which faculty they wanted to join and they opted for several,’ says Peter Jenkins, a veteran at Ernst & Young and deputy chairman of the faculty. ‘We needed to know the order of preference.’

   Preliminary research shows about 1,500 made it a first choice and around 1,000 are doing the work every day. But the fact that so many see themselves as part of the group, even as second or third choice, is highly significant. It indicates how many want to spread their wings.

  ‘Perhaps only 25% of them will do something about it but that is still important,’ says faculty chairman Paul Winter. But what is that ‘something’? How do you get into management consultancy? Take two years off for a full-time MBA? Spend five years working nights and holidays on a part-time course? Or is it as simple as taking the ‘surveyor’ label off your business card as one former RICS president has done?

  One fundamental problem is that no-one seems to agree just what management consultants do. Nor does everyone view them with glee. Jenkins admits this shadowy area suffered in the past from the perception: ‘Lend us your watch and we’ll tell you the time’. But occupiers are increasingly turning in this direction for advice. Bright youngsters and disillusioned veterans are also seeing this as a better career.

  The RICS picked up the changes five years ago and set up a practice panel, then the new faculty.  But the new faculty’s introductory literature admits the concept is so new that  managers and clients still have different perceptions. That is one reason why so many surveyors were able to tick the relevant box. They felt that what they do qualifies them for membership.

  In a bid to clear the air, Cranfield School of Management was commissioned to dig deeper into the whole area of attitudes to management consultancy in property and why surveyors should become more involved. One point is already agreed – at least among the converts: the need for a wider knowledge of economics, business and management skills to help surveyors perform a more modern function and raise their status among fellow professionals.

  First results show what the pioneers have already discovered, such as a change in the balance of what clients want.  ‘Technical skills like investment, agency and building surveying are still important,’ says Jenkins. ‘We are not trying to convert everyone. But as property becomes recognized as an important asset – often the second or third highest cost – it is being included in  strategic business plans and needs the right people to handle it.’

   Jakes Fergusson is less diplomatic. ‘Occupiers are caught like pig in the middle of this industry,’ he says. ‘On the one hand they have landlords squeezing them with long leases but on the other they have advisers who are not really acting for them.’

  He speaks through experience after training with JLL and then seeing the other side of the equation with Arlington. Finally, he jumped ship, did a part-time MBA at Reading, and now runs Property Dynamics as an occupier consultancy, working for big companies like Fuji and Mitel.

  But what about the corporate real estate departments being set up within property consultancies to counter that kind of  criticism. Luminaries like Alan White, who moved from BT to DTZ Pieda, preach the same sermon about handling property as a part of business strategy rather than an isolated asset.  Fergusson is dismissive. ‘Occupiers just don’t see them as independent,’ he says. ‘That may be a false impression but it is why consultants like me get work.’

  Winter goes even further, saying these new departments are new labels applied to existing services. Occupiers remain suspicious that property advice may be tainted by the possibility that a firm is seeking other business like disposals. Chinese walls can be notoriously weak when the power – and money – lies in brokerage. He, too, benefits from this suspicion. His company, Corpra, wins clients by not having an agency department.

  ‘Occupiers can be hyper-sensitive to handing over confidential information and then find it leaking out,’ he says. This is a danger if consultants on property issues look for advice from agency colleagues.

  So does this mean surveyors should scrap their traditional role and turn into clipboard carriers. Not quite. Winter  says there is a ‘third way’ somewhere between the two. Corpra’s  mission statement probably sums it up: ‘Our people know more about real estate than management consultants and more about business than real estate brokers.’

How to become a property management consultant

 The dreaded initials MBA rise like a cloud as soon as management consultancy is mentioned. But it is not necessarily the entrance fee  to this newly emerging sector of the property industry. Less than a quarter of those joining the new RICS faculty have higher qualifications. ‘It’s very useful. It teaches you to look down the other end of the telescope,’ says Jakes Fergusson, who took time out to do a part-time MBA before setting up Property Dynamics.  ‘But it is not essential. The important thing is to have a wide ranging knowledge. You have to get out into the world.’

   Paul Winter, chairman of the RICS management consultancy faculty, also has a master’s degree, which he says can be a ‘huge advantage’ when discussing business strategy with an occupier.  ‘Not every MBA can understand property, but they have a better chance of coming up with the right solutions because of their knowledge of the business world,’ he says.

  Anyone aspiring to this filed will need to work towards some kind of extra qualification but the  critical entry fee is breadth of knowledge. Modern advisers need to be not just trained in business techniques such as financial analysis but knowledgeable about all property sectors. The problem with surveyors is that they specialise too early and then stay in that area, says Peter Jenkins, faculty deputy chairman.

  He proves the point that an MBA is not essential, moving into Ernst & Young from a grounding as a building surveyor. ‘We have a limited number here but the critical factors we look for are aptitude and breadth of knowledge,’ he says. Anyone with ambition to take this path should find a firm willing to shift them around – and that may mean going for one of the smaller ones.   But not too small. ‘Find one that can pay for the training,’ says Winter.

 The RICS is trying to help by encouraging education changes right down to undergraduate level. Jenkins  hopes to talk to department heads at all the main surveying courses  before the next academic year about introducing extra business elements which will give new entrants  a better start.

  For mid-career movers,  the management consultancy faculty is oiling the wheels through APC training in what  it calls the five ‘competencies’: business management, strategic property consulting, consultancy skills, option appraisal and insolvency.   Jenkins suggests this may lead to a new qualification called management consulting surveyor.

   One nagging fear is that this could lead to a fresh young graduate doing two years training with a property firm, pass the APC or qualification proposed by the RICS and then consider himself a management consultant.  ‘That is not what occupiers are looking for,’ says Fergusson. ‘You can’t talk to a chairman at equal level if you haven’t been out in the world.’

  Jenkins is adamant that experience will continue to be seen as vital. He has been impressed when recruiting for Ernst & Young by  those who have gone an extra mile to widen their knowledge. Like Fergusson, he believes surveyors should try moving to work for occupiers, getting a view of the role property plays in their businesses.

  ‘You have to open up your mind,’ he says. But at the end of the day, you also need an aptitude for the job, and that may not just be an aptitude for property. ‘Don’t be misled into thinking corporate real estate is the be-all of consulting. There are wider areas like e-business, information technology, inward investment and relocation that all stretch beyond conventional bricks and mortar,’ he says.

  He takes on non-cognates to mix-and-match disciplines in Ernst & Young. Winter has also turned conventional recruitment on its head at his firm, Corpra, by taking on business graduates and sending them off to get an MSc at university then collecting their RICS letters while finish their property training on the job.

  Mid-career surveyors might fear they will be cut out of the equation when they cannot time or money to compete with these chosen few. But Winter points out that like any qualification, the returns can be worth the sacrifice. A surveyor is 20% to 30% more valuable when they can work as a management consultant.

  He sums up the changes under way in the industry by pointing out that the three most important things always quoted in property are location, location and location. ‘They are not. The three most important factors nowadays are knowledge, knowledge and more knowledge.’