Bottom Line: The true character of any business or industry is defined by the functional professionalism. In a broader sense, it is about process driven management practices, commitment to stakeholders and being litigation free. Track2Realty finds that with most of the real estate companies being non-listed and family driven businesses, functional professionalism is a casualty in the sector.
Functional Professionalism can be broadly defined as the strict adherence to courtesy, honesty, transparency and responsibility when dealing with individuals or other companies in the business environment. This trait often includes a high level of excellence going above and beyond basic requirements.
Work ethic is usually concerned with the personal values demonstrated by business owners or entrepreneurs and instilled in the company’s employees. The good work ethic may include completing tasks in a timely manner with the highest quality possible and taking pride in completed tasks.
Professionalism and the work ethics demonstrated by individuals in the business environment may be built around an internal moral system or code of ethics. Morality and ethics usually represent the personal beliefs individuals display when working in business. Common traits often include transparency, honesty and integrity.
These personal traits often display themselves publicly when individuals respond to various business situations. A professional work ethic may be seen as somebody “walking the talk” regarding their personal morality and ethics.
Ground realities of functional professionalism
Process driven management practices and commitment to stakeholders are benchmark of functional professionalism
Functional professionalism pretty poor across real estate companies
Functional professionalism reduces litigations, earns goodwill and keeps company ahead of competition
With most of the real estate companies promoter-driven, professionals are not allowed to take independent decisions
Corporate entry into Indian real estate is changing the eco system, yet way short of expectations
The very nature of real estate businesses makes it imperative to often use professionalism to help them establish a good reputation in the business environment. Since a larger number of them have limited capital resources for operations, an important strategy is word-of-mouth.
Unfortunately, they still don’t treat each customer in a professional manner and display a strong work ethic when completing business functions or responsibilities that can help develop positive goodwill with consumers.
There is absolutely no defined set of guidelines outlining company’s professionalism and work ethics expectations. These guidelines can help the developers translate company’s mission or vision to employees. These guidelines must be included in the company’s employee manual so that the developers properly train and educate individuals about the importance of company’s professionalism and work ethics.
Transforming an individual’s understanding of professionalism and work ethics may be a difficult process in real estate business. Many individuals may not have the same views on professionalism and work ethics as the developer.
Experience from other matured industries suggest that business owners may hire the individuals if they have technical experience or expertise in the business, regardless of the employee’s personal moral or ethical beliefs. But employees often adopt the professionalism of the organization and work ethic guidelines when working for a company, especially if they are well compensated.
The genesis of lack of professional ethics is the fact that most of the real estate companies are still promoter driven and professionals are treated as just the functionaries. When the going was good some of these companies even shifted management control at the operational level to the professionals. But the downturn in the last few years led to high churn out and the professional-driven management was back to square one where the promoter took the control onto his own hands.
Traditionally a family business, the manifold growth of real estate in the last decade and the emerging realities forced many companies to change their outlook. With realtors increasing their scale of operations from doing just one or two projects to multiple projects in many cities, and looking for foreign investment, most of the real estate companies went on a hiring spree of professionals. The downturn, however, made them question the role of many of these strategists on board who made the best of it when the market sentiments were bullish.
By and large the professionals are taken on board for the sector to compete in an increasingly global marketplace. It is believed that real estate markets are to a large extent intrinsically linked and inter-related, and hence there is little choice but to embrace such changes. This is all the more relevant for India, where even today the realty sector continues to be characterised by lack of regulation, transparency and a high degree of fragmentation.
Experts believe the lax in specialised education, has contributed significantly to the near absence of professionalism leading to a high degree of consumer dissatisfaction and a lacklustre image for the sector at large. These factors also affect the ability of the industry to perform in the future, in comparison to its peers.
However, there is a school of thought within the sector which suggests the nature of the business is more suitable to be carried smoothly as promoter-driven. Though officially no one wanted to be quoted but some of the developers admitted to Track2Realtythat the nature of real estate business demands more grounded entrepreneurs and not high flying professionals for whom more money in the sector is the only traction for job hopping.
“Most of the families now have second generation coming into the business and they are themselves well educated and qualified professionals. It is better to invest in them and groom them, since they are not coming on board as a stop-gap career choice of a lucrative sector. Of course, this second generation qualified promoter also prefers to have professionals around him, but then the management control must be vested with the promoter only,” says a Noida-based developer requesting anonymity.
By: Ravi Sinha
Next: Future of professionalism in Indian real estate
