Why we should care what people think about us!

The property world has always beaten itself up about its reputation and indeed I spent my time at the BPF campaigning long and hard to improve the reputation and standing of the industry – as has my successor at the BPF. But what progress have we made – and should we worry about what people think of our sector?

Much of British industry would agree that they require the trust of a wide range of stakeholders, and particularly the public, to maintain their licence to operate. For many people the only way of determining that level of trust is by looking at their reputation as presented through a wide variety of media, which means it becomes essential for a company to be able to maintain its reputation in a credible way that stands up to scrutiny. Research carried out by international strategic communications network AMO (now H/Advisers) in 2019 suggests that some 28% of a company’s value is accounted for by its reputation – that’s a lot to lose if a company gets it wrong! But we all know that reputation is something that is hard to earn and easily lost. The now legendary story of Gerald Ratner and the M&S prawn sandwich, rather proves the point.

Much ink has been spilt on the theory of reputation management. Adapting a somewhat Einstein like formula that I uncovered in the research for this article I have boiled it down to:

R = E ± P – where R is Reputation, E is Expectation and P is Performance

In other words, one’s stakeholders’ expectations can be ruined or enhanced by actual performance.

So how does all this translate to the property industry? The BPF conducted an extensive survey back in 2018 which suggested that only the banking and finance and energy and utility sectors received a less favourable rating - and that survey didn’t include journalists! To be fair, though, property had a substantially larger number of ‘Don’t Knows’ than any other sector – I will return to this point later. There is however a fair amount of less scientifically gathered evidence to suggest that the reputation of our industry is still, 20 years after my initial BPF interview, somewhat ‘flaky’. MIPIM and the scandal of the President’s Club was a low spot. The many criticisms levelled at the house-building industry over standards, executive pay and leasehold abuses have undoubtedly rubbed o on the property sector more widely. Development is still seen by many as providing excessive gains to just a small number of individuals. The diversity and inclusivity of the industry is seen as still sadly lacking despite the excellent e orts of many companies and umbrella organisations such as Real Estate Balance. And the fact that buildings account for some 40% of carbon emissions has led many to see us as the principal barrier to reducing the impact of climate change.

So does this not wholly favourable reputation matter to our industry or are we just part of the wider malaise that has caused a lack of trust between big business and ordinary people as evidenced over the last few years by the results of Edelman’s Annual Trust Barometer?

I would actually contend that our industry needs a good reputation and the trust that flows from our activities more than almost any other business sectors. This is because our ‘product’ is absolutely pervasive in society. Whether we are talking about homes, o ces, shops, warehouses or sports facilities, the built environment is absolutely everywhere. So that means society sees and experiences what we do at first hand and judges us accordingly. It also means that, through the democratically based planning process, ordinary people are able to have a say in what we want to do – and in many circumstances and often with some justification, prevent us from doing it.

It is also the case that popular pressure arising from a perceived piece of poor practice by the industry, often expressed through MPs’ postbags, can lead central Government into ill-judged and hasty legislative and regulatory change which impacts adversely on the industry The threat of the then Labour Government in the ‘noughties’ to ban what was perceived by the retailers, large and small, as the invidious practice of Upward Only Rent Reviews, was only thwarted eventually by persuading them that we weren’t all sharks and that through our voluntary Leasing Code we could be trusted to behave better!

So, if we accept that trust in our industry, based on establishing a solid (though probably never stellar) reputation across its various publics is necessary, what do we do about it?

Perhaps the first lesson we should draw from the conclusions of the 2018 BPF Reputational Survey is that whilst there were strongly unfavourable perceptions of our industry, the real problem was that 51% simply didn’t understand us. We are arguably a collection of very di erent industries and an individual’s experience of us will vary hugely depending on whether they are judging us by the quality of their semi-detached home, their rented apartment, the shopping centre they visit or the warehouse or small business unit where they work – even if they connect those di erent asset classes, which they probably do not. Most people are also totally unaware of the benefit that the property industry provides to the individual through their pensions. Explaining to all our di erent stakeholders just what it is we do and why we are an essential industry is a job that will never be finished and arguably requires more resource than the industry as whole has ever been prepared to invest. We need a genuine pan-industry alliance to agree a programme of awareness raising, of public presentation and of unrelenting advocacy and education which might perhaps start with better presentation for buildings, who operates them, who to complain to when things don’t work well, more creative displays about what a new building will look like and how it is being constructed.

A preview of a longer presentation on trust and reputation in the property industry to be delivered by Liz Peace for the The Chapman Barrigan Lecture 2023.

Public awareness could also be helped by a concerted campaign showing just what a range of great careers can be had in the property industry. This isn’t just about becoming a Chartered Surveyor, though that will remain the route into the industry for many, but about showing school leavers with limited qualifications that there are many di erent routes into the industry through apprenticeships, through the various service companies that support the industry and through a whole range of associated occupations and professions. And if we can broaden the type of people who come into our industry there will be more conversation in families, schools, universities and communities generally about our industry and what it does. But as with awareness raising this needs an industry wide push to broaden the appeal of our industry. Lots of individual companies and organisations are doing good work in this area but it is fragmented and less e ective because of that. We need a coming together of e ort, a burying of individual ambitions and an agreement to provide adequate resource to do this properly – under the auspices of the BPF, RICS, Property Industry Alliance or whoever can provide the unifying force.

Of course, at the end of the day, it is no good focussing on awareness raising through a great PR campaign if the product is deemed to be rubbish and the process for delivering it cavalier and disrespecting of people’s concerns. Don’t get me wrong – there are a lot of well designed, high quality buildings out there – but the obverse is also true. There are also a lot of companies who bend over backwards to engage in proper community consultation and engagement and who put considerable e ort into understanding the social and place ecosystem into which they are attempting to insert a new building. But similarly there are many who see the community view as simply something to be worn down to the point of grudging acceptance on the grounds of financial viability of the project – not exactly the best basis for establishing trust between the industry and its public.

And at a time when we are facing an existential global climate crisis the industry needs to understand that nothing less than the highest quality, net zero carbon building – be it a house, o ce, shed or shop will do. We are not great at innovation so we need to step up and exploit new technologies, creative ideas, better design to make sure that what we are building today will genuinely meet society’s expectations. We also need to work out a plan for improving the existing stock of both residential and commercial buildings. Our reputation will not be enhanced if we simply abandon them and leave them to be bought up by unscrupulous landlords who will try and make a quick profit out of some alternative low quality use. But once again, the fragmentation of the industry’s well-meaning e orts in this area works against an e ective solution. There are plenty of practitioners and commentators on our industry who absolutely understand the need for better quality, genuinely net zero carbon buildings, for proper and thorough community engagement, and for investment in wider social benefits as well as the basic bricks and mortar. But the process for achieving this is down very much to the individual developer/investor and we do not seem to have been able to develop an industry wide definition of what is necessary. Of course, even if we get the good guys to buy into something like this, there are also those property folk for whom environmental and social value is low on their agenda. Perhaps the only answer is some sort of genuine, rather than notional, mandatory licence to operate - on similar lines to the financial services industry. Yes – I can hear the howls of outrage at such a suggestion, but I cannot think of any other way of bringing the poor performers into line.

So, in conclusion, I believe that building a reputation that engenders trust in our industry is very necessary, and arguably more so for us than for say a manufacturer of baked beans. But despite our best e orts over the last twenty years, we still have a long way to go. We would be helped to some extent by simply engendering better awareness of our industry across our wide body of stakeholders. But we need to go deeper than that and look at the quality of the product we o er and the process for achieving it. And if we are serious about a new approach, then we need to get a lot smarter about organising ourselves to bring about real, fundamental improvement. Aristotle came up with a good philosophy for delivering service which he thought should be based on logos, pathos and ethos. But if I translated that into something a bit more modern, and less Greek, for our industry, it would be about expressing logically our role in society and the economy, showing empathy with the people a ected by what we are trying to do and then behaving ethically at all times in the way we deliver it. That way lies the path to good reputation and ultimately trust.