THE SECRET TO HEDGING NIMBY RISKS

Not-In-My-Back-Yard (NIMBY) opposition is a qualitative risk that’s rarely factored into the investment calculus of sustainable real estate projects.  This absence of risk management practices has caused a NIMBY Law of Attraction that exposes an untold number of sustainable real estate investments to political and social liabilities around the globe. 

This “rolling of the dice” paradigm directly inflates the risks that leads to billions of dollars in quantitative losses for investors, shareholders, executives, and developers.

We get a sobering example with a 2011 U.S. Chamber of Commerce study, Project No Project, which looked at 351 energy projects that were delayed or denied by NIMBYism. The sample study found that NIMBYism cost the American economy $1.1trillion in economic losses and 2 million new jobs – that’s just for one sector!

What if I told you that as a real estate investor, you could significantly reduce the risks and losses of NIMBYism by as much as 80 percent? No more betting on status quo forces mobilizing to delay, disrupt and defeat your real estate investments.  No more Russian roulette uncertainty. No more black eyes to the reputations of corporations and partners.

It’s a matter of understanding how a broken system and outdated business models consistently alienate communities and empower angry opposition with an “us vs. them” posture.  Once you know how to correct these self-inflicted practices, then you can take action.

That action is fostering community goodwill for your sustainable project, which is the secret to proactively hedging your investments from NIMBY risks and losses

Prologis has been an outlier in this area, demonstrating how building bridges in the communities that grant the license to operate is the pathway to greater success.

I will highlight more of Prologis’ success, but first, we must understand how theNIMBY Law of Attraction is created and why anti-development agents are costing investors billions of dollars in lost capital, shareholder value, revenue, and market share.

DENYING THE REALITY OF RISK

The uncertainty of status quo opposition is the white elephant in the room that no one wants to recognize or address. More often than not, the community-at-large is relegated to local project managers and consultants who believe their sustainable projects will win the license to operate within their time tested “legal, logical and sustainable” constructs.

This is a false reality that enables hundreds of thousands of real estate professionals to blindly ignore, overlook and underestimate the community-at-large. This short-sighted perspective is what causes the perception of contempt that increases risks and losses associated with NIMBY opposition.

There’s an aversion toward community engagement, which creates a NIMBY Law of Attraction that emboldens anti-development opponents (alienated citizens, professional activists and competitors). These groups freely and adeptly manipulate social perceptions that influence “political, emotional and ego-driven” constructs.

As we all know, political anxieties nearly always trumps rational narratives, especially when it pertains to controversial land use projects during an election year.

This partly explains why a lone individual with a smartphone and an axe-to-grind, can single handedly defeat an international corporation’s multi-million dollar project. It’s not an isolated case.  There are thousands of reported media stories featuring the David vs. Goliath genre that almost always ends in political defeat of good real estate projects.

THE SECRET IS COMMUNITY GOODWILL

The secret to hedging NIMBY risks is securing community goodwill.

The cultivation of community goodwill has become more prominent in corporate sustainability practices.  A small, but encouraging number of corporations are embracing “top/down solutions for bottom/up success” when it comes to neutralizing NIMBY related risks and conflicts.

Prologis is leading the way on corporate sustainability practices that are the result of the REIT’s E.S.G. (Environmental Stewardship, Social Responsibility and Ethics/Governance) standards.  In its recently published 2015 Sustainability Report, the company included both community and government stakeholders as part of its priorities for fostering community goodwill.

Under its “social responsibility” section, Prologis reported community “meetings before, during and after the development of properties.”  The word “before” is a significant step forward in the development of new risk management standards and practices.

Prologis is not waiting to see if a project comes under attack before it engages a community to cultivate goodwill. By the time the NIMBY genie leaves the bottle, it becomes less likely and more expensive to secure stakeholders to support a demonized project.

The fact that a global, public company, such as Prologis, has formal practices that require community engagement increases the odds of winning the approval of more projects, in less time, less cost and less uncertainty.

EXORCISING THE STATUS QUO

What do real estate developers and anti-development professional groups agree upon?  Neither wants to see the “legal, logical and sustainable” way of doing business changed or altered.

Anti-development groups know that without establishing community goodwill, the perception of greedy, arrogant and wealthy developers comes into play.  These DC-centric and local anti-development groups have published “playbooks” on “how-to” exploit the time-tested blind spots reliably exhibited by developers beholden to their status quo business models.

Real estate thought leaders need to come together to fashion risk management standards and best practices that will help shift industry perspectives toward proactively and confidently securing community goodwill.

If we can overcome the status quo attitudes within our own industry, then we can begin hedging NIMBY risks and losses that will turn the NIMBY Law of Attraction into an attractive record of success and greater return on investments.

In the meantime, what are you doing today to secure community goodwill for your real estate investments?

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Patrick Slevin is one of few national speakers, trainers and consultants considered a “NIMBY Expert”.  Mr. Slevin is a former Florida mayor, who for three decades has spoken, consulted, and written about mitigating the risks associated with status quo opposition.  Mr. Slevin provides “top/down solutions for bottom/up success” for corporate clients who want to secure community goodwill for sustainable and controversial real estate projects.  Go to www.PatrickSlevin.com for more information.

10 SIGNS OF SILOS FROM C-SUITE to CUBICLES (by Patrick Slevin)

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Silos manifest themselves on a daily basis, undermining profits, performance and productivity costing a corporation millions. The secret to breaking down silos is accepting the fact you have a silo problem. To deny that you have silos obstructing growth and performance is in fact creating a silo. Once you accept the problem, then you can begin to reduce losses and optimize your potential.

Silos have different meanings to different people within the organization. Senior executives it’s profits – management it’s performance – employee it’s productivity (or paycheck). Here are the 10 signs of silos from “C-Suite to Cubicle” that provide a glimpse into the not so mysterious world of silos.

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1. I’m Giving My Two-Weeks Notice (Turnover): If you’re losing your top tier talent to competitors or they fail to meet expectations, it’s a sign of a silo. If top talent is leaving or you cannot recruit top talent, then that’s an organizational by-product of several silos that constrict a talented workforce from hiring to firing.

2. The Company Thanks Me with a Paycheck (Bureaucracy): If you have too many employees who feel disenfranchised, then they are working for a paycheck. Often doing their time of 40 hours a week, coasting and undermining employee morale and culture.

 

 

3. Those Guys at Corporate Don’t Get It (Step-Child): The farther your associates are away from HQ, the more silos come into play, causing non-compliance, ineffectiveness and inconsistent practices.

Big Deal

4. Those Guys Outside of Corporate Don’t Get It (Potomac Fever): The closer to the top you get, the farther away you are from solving problems. The powerful silo is executive hubris that creates blinders. More formality, more reports, more meetings, and less feel for the workforce will give birth to silos.

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5. Another Employee Survey? (Night Light): Too many surveys look for satisfaction, but rarely solicit meaningful input to help employees find more meaning and purpose in their work. Most employees see the survey as a night light trying to illuminate the entire house. Therefore, surveys, for the most part, just reaffirm negative perceptions of corporate being out of touch and the survey is covering someone’s backside.

6. Meeting About Meetings? (Double Jeopardy): Wonder why you have so many meetings? It’s obvious – silos. Getting into the same room together and directly communicating keeps the silos outside the room, but in fact, it only strengthens them. When you get to having too many meetings, then work suffers, deadlines are missed and stress fractures performance.

Meetings

7. Employee of the Month (Shooting Stars): Recognizing employees who went the extra mile is good, but a formalized, predictable program is counter-productive. For every employee showcased in the EOM, there are nine employees who feel overlooked. Perceptions of brown nosing, gaming the system and “managers’ pet” just builds silos. Randomized recognition breaks down these type of silos.

Employee of the Month

8. That’s Not How We Do It Here (Step-Child): Whether you’re across the world, country or department, corporate policies are too theoretical when you have to perform your job. You call it improvising or just getting the job done. Which came first, the silo or the egg?

9. That’s Not in My Job Description (Anti-Hero): Ever come across someone who is more focused on what he/she is not supposed to do versus focused on doing what needs to get done? It’s either a clunker of a hire or it may be an achievement-minded employee who has taken on way too much work from other folks and simply burnt out. Regardless it’s a silo that started with the job description and hire.

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10. Can You Resend the Email? (Machine Gunner): Sent an email days ago and it never got looked at or you didn’t see it come in your Inbox? Ever happen? If so, that’s evidence of a silo. There’s always someone who professes that they get over 200 emails a day, maybe you. Yes, it gives the impression that that person/you are very busy, but it also is a warning of key information getting lost or overlooked. This leads to delaying productivity and meeting deadlines.

These 10 signs of silos are the most basic evidence that the corporate structure needs a renovation. There are almost as many silos as there are employees, so leaders and managers must identify the systems, processes and practices that fail to empower the majority of people make up the workforce.

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Thankfully, the solutions to silos are found within the organization. Yes, it’s about the organizational culture, but silos have several beginnings from command & control to punching the clock. So where to begin is key and depends on the type of organization framework you have in place.

The more you notice the silos that act like the devil on your shoulder, the more ability you have in breaking them down. The key is putting a system in place that empowers and engages. Look for more in the Secret Silos Series by SL7 Communications. Go to www.PatrickSlevin.com for more on the series and services.

Public Relations Trumps Lobbying: Study Reveals PR Paradigm

Government relations professionals refusing to acknowledge and leverage public relations as part of influencing public policy are falling behind the times.  A new study by The Center of Public Integrity found that some of the nation’s largest trade associations spent nearly twice as much on public relations than lobbying.

According to the study, of $3.4 billion in contracts reported by the 144 trade groups from 2008 through 2012, more than $1.2 billion, or 37 percent, went toward advertising, public relations and marketing services, more than any other category. The second-highest total, $682.2 million, or 20 percent of the total, was directed toward legal, lobbying and government affairs.

Public relations is more than just creating a persuasive storyline. If done correctly, PR educates the public, which creates credibility.  It humanizes the legal jargon that goes into statutes.

The study singles out American Petroleum Institute. It stated, “The oil and gas industry trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to four public relations and advertising firms to, in effect, lobby the American public — including $51.9 million just to global PR giant Edelman.”

“From 2008 through 2012, annual tax filings show, the API paid Edelman a staggering $327.4 million for advertising and public relations services, more than any other contractor.” (source PRnewser)

What happens in DC, typically follows in the state capitols.  Every year, more contract lobbyists, state trade associations, corporations and special interests retain public relations firms to elevate their narratives.  Strategic communications and messaging target a coalition of stakeholders ranging from the news media to thought leaders to activists to public officials.

Some would argue it’s a black eye on American Democracy, while others argue it’s educating the public on the merits of issues that impact their daily lives.

I’m the first to admit that PR is used to persuade minds and influence public policy.  That’s a given.  However, I disagree with the study’s premise that it’s about manufacturing misinformation.  In today’s Digital Age, people are media savvy, so if PR looks like spin, smells like spin, and feels like spin (a.k.a. Astroturf), then it often backfires and becomes a liability.

I would counter that it’s not how much PR is being used to influence public policy, but rather, the absence of public relations.  When there’s no PR, that’s when the red flags should go up and the public made aware.

About Patrick Slevin

Patrick Slevin heads SL7 Consulting.  Go to www.PatrickSlevin.com for more information.