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Professional services firms have undergone dramatic shifts in the last 10 years, and many are predicting complete disruption in the next 20.

As automation, broader access to information and other trends converge, smart professional services firms are looking to aggressively transform themselves.

Perhaps one of the more ambitious firms in this regard is KPMG. My guest today is Fiona Grandi, National Managing Partner for Innovation & Enterprise Solutions at KPMG.

In this conversation we discuss how KPMG organizes itself internally to pursue innovation initiatives, how they embrace a bottom-up approach to surfacing and executing on ideas, the impact things like automation will have on professional services in the future, and much more.

(Full disclosure, KPMG has been a client of Digital Intent, and we’ve been able to see first-hand how Fiona’s team thinks about enabling consultants to use technology to deliver better work. After seeing our team interact with theirs, it was fun for me to hear directly from Fiona on the why behind what they do and where she sees them heading. It was a fascinating conversation and I think you’ll get a ton of practical value of out it.)

• Innovation at KPMG
• Unified Theory of Innovation
• Extending Your Business Model
• Designing Your Innovation Portfolio
• How to Incentivize Innovation
• Embedding Innovation Into Your Company DNA
• The Politics of Innovation
• Balancing the Need for Efficiency Improvements and Billings
• Innovation Benchmarking Study
• “Overnight Successes” and Failing Fast
• Bringing innovation back into the core
• The future of professional services

Innovation at KPMG

DI: Why don’t we start with your role and your mandates at KPMG? What’s your group charged with doing?

Fiona: I’m the National Managing Partner of the Innovation and Enterprise Solutions group at KPMG. I lead our research and development function on a national level.

One of the cool things about KPMG is that we define innovation as one of our firm’s strategic objectives. Our CEO sets our mandate in our Executive Committee. Innovation is directly tied to our growth, our brand and our culture.

I have a national team in all parts of the country. We do research, solution development, and a lot of education of our professionals and partners at large. We also do quite a bit of enablement, we try to bring what has been built into the marketplace. So, I have a pretty cool job.

Extending Your Business Model

DI: One of the things that you’ve talked about before is extending from the core and building from what you’re best at, rather than just completely doing new to the world, blue ocean types of things. There’s a ton of value in taking what we’re already good at and finding more ways to profit from them.

Are there any particular approaches that you’ve found to be particularly effective? Whether that’s pursuing new segments with existing service offerings or, layering complementary products in or even just awareness internally around cross sell initiatives. How do you how do you think about extending the core broad layers? 

Fiona: It’s important for companies to stick to what they do best, while still trying to innovate the ways in which they do things. By that, I mean there’s not much that KPMG truly focuses on, outside of our core business model.

That’s where our network comes in and is really important. If you think about it, there isn’t a Fortune 500 business that KPMG doesn’t understand, because we serve every one of them in some way, shape, or form. We’re seeing companies approach us saying “we’ve got a new product” or “we’ve got a new angle to attack the market” and often, we have to turn those away and think about where we can leverage our assets, which really come from our people.

Some of the best success we’ve had is when we partner our domain expertise with our business understanding, and excellent tech skills, then we can build something really cool.

DI: In an organization where you have such broad exposure to client problems in every industry, it would be easy to do things that seem relatively close to your business model. But then, you wake up ten years later and realize that you went down these rabbit holes.

Are there and rubrics or statements of value that you’ve codified to say “here are the frameworks we use to avoid the subtle pivots that can potentially take us down a bad direction?”

Fiona: We certainly use guiding principles around innovation.

Strategy from the top level helps make those guardrails. We have a really strong committee of very senior leaders who help jump in when we’re making some big shift in innovation. That keeps us honest.

We’re also pretty good at unpacking where it hasn’t worked well. Thinking back over the last decade, there have definitely been some things that didn’t impact our overall annual performance, but a couple things that we explored and thought “that’s not really in our wheelhouse. Let’s not do that again.”

Designing Your Innovation Portfolio

DI:I want to dig a little bit into portfolio design. Embracing a portfolio approach is something that a lot of folks talk about when they’re trying to be innovative. It’s something we do ourselves at Digital Intent. For us, it comes from our background in venture capital, but there are a whole bunch of different views on it.

How do you think about portfolio design, allocation, and balancing incremental innovations with more transformational innovations. How do you approach constructing that portfolio?

Fiona: I’m a huge advocate of the portfolio theory and the best way to describe it is that KPMG is really multidimensional.

For example, we have the build, buy, ally strategy. We do a combination of those three things as opposed to just going down one path.

There’s also other dimensions, for example, dimensions of our network. It is really important for us to have relationships with startups and accelerator networks because they inform us on what we’re doing. Sometimes we identify targets we want to acquire, sometimes we identify businesses where we want to jump in and make investments.

But we can’t just network with the startup community though. We also have to have ties to big global enterprise companies, and all the companies in between.

Another dimension of taking a portfolio approach is the fact that we do big innovation work streams, but we also do ground level innovation with our more junior team members.

We try to innovate in really small ways. It’s amazing how micro-innovations can bubble up and springboard an idea that we never would have seen from a high level.

Embedding Innovation Into Your Company DNA

DI: KPMG has thousands upon thousands of people trying to do these micro innovations. How do you determine what you’ll roll out more broadly to embed into the larger KPMG DNA?

Fiona: Innovation happens in all parts of KPMG, not just in my group.

In my group, when we make an investment of dollars in some way, it is well governed with stage-gates. We have a committee of senior leaders who represent all aspects of the firm and help make the decision about whether we’re going to spend money on something or not. That works really well.

We try not to put too much governance in the grassroots activity or the innovation that’s happening out in the functions. We have innovations that are happening out on engagements everyday, and rather than trying to govern it, we’re more concerned with trying to capture it.  

For example, on a transfer pricing team, say someone comes up with a better way to do something. Once that engagement is done, my fear is that it’s lost and not taken into consideration for every future transfer pricing engagement. We have governance on the bigger bets, but on the grassroots side, we’re really just trying to gather those insights and share them out. 

The Politics of Innovation

DI: I know you’re interested in the politics of innovation and the myriad ways that folks can derail great ideas. What are some of the more common things you see, and do you have any suggestions for how other teams can try to navigate them successfully?

Fiona: The “It’s Not invented Here” syndrome is a very real thing.

I was recently at the Innovation Leader Conference in San Francisco and we talked about this in some of the groups with representatives from a broad set of companies. It was amazing to see how everyone related to this.

There’s two parts to it. One is that you end up with trying to launch something and people don’t accept it. That’s the antibody effect.

The other thing is that you have groups within an organization that just don’t talk to each other, and you end up innovating the same thing or tangents of the same thing in many places, and that’s so inefficient compared to collaborating as a team.

In the Benchmark Report, 52% of people said the politics of innovation was their biggest impediment to successfully innovating.

Building consensus is a balancing act. If you spend all your time building consensus, you’re going to lose market speed.

On the other hand, if you plow ahead too fast and people don’t buy in, you’ll never launch. We try to find that common agenda to avoid what I call “foot draggers.” Don’t expect people to jump in and help you with your innovation for no reason. Everybody is running around with their task lists and packed schedules. You must articulate what’s in it for them, and what they’re going to learn from it or how they may benefit from helping you down the road.

The real differentiator for us is our senior leader committee support which gives us a lot of buffer and permission to do what we want to do. 

DI: When folks throw out the word “incentives” their mind often goes to money. When you’re talking about equipping some of the more junior team members who don’t have a lot of political clout, there’s a lot of organizations that don’t necessarily have the power to provide that. What are some of the other types of incentives that people should be thinking about when they’re trying to recruit internal allies?

Fiona: We do a lot of different things. For example, if you were to file an application for a patent, trademark or copyright, that gets or national attention. Our CEO will spend time with the partner who lead that initiative because it is so important, and you can’t get better recognition than your CEO having a meal with you and thanking you for the work you did.

Another thing we do is really try to celebrate success. We do give monetary awards, we call them spot awards. Awards are great, particularly with the younger professionals. We’re pretty liberal in sharing those as well. We don’t just tell one person “you did great, here’s your Spot Award” but we announce it to the whole group. We’re not just trying to encourage one individual, but rather the whole team, department, or network. We want our employees to know this is the kind of behavior that we really celebrate.

Balancing the Need for Efficiency Improvements and Billings

DI: Along the same lines of running incentives and finding tension there, you mentioned automation awhile back. When you’re more junior, the incentives to innovate a process are in alignment because you’re doing most of the delivery work that will ultimately be automated. When you get to the senior or partner level though, I imagine there’d be some hesitation because it’ll either bring your prices or your book of business down.

Do you see balancing the need for efficiency improvements and billings as a problem in professional services firms?

Fiona: The reality of professional services, particularly public accounting, is that parts of the things that we traditionally do for clients are being monetized or eliminated with the advent of automation, machine learning, deep learning, artificial intelligence, all of it.

We’re not really worried about that. We’re embracing it. I started out 24 years ago as an auditor and I shudder at the work that I used to do. A phrase that I love from a colleague is “soul crushing work,” nobody really wants to do that. Our younger professionals are excited instead of being concerned that they’re going to be out of a job because of all these enabling technologies.

I worry that we get digital natives coming out of college and that we’re brainwashing them with our old methodology. I’m trying to do the opposite and give them access to the software and programs where they can explore. We’re asking them to help us find a better way of doing things.

It’s almost a reverse mentoring concept, the bigger issue is actually at the senior partner level. The younger professionals have to teach them some things. 

DI: It seems like you’re not eliminating the junior positions, but rather you’re elevating them and getting them to think more strategically faster. This may allow the average book of business per partner, or however you measure success, to grow considerably larger from scale. But are there any implications in terms of how corporate ladders work inside of a professional services firm?

Fiona: I think there are some implications from that. When I started out as a professional in our audit practice, audit partners were considered kings or queens in term of their knowledge. I never thought I could ever be as smart as they are.

In some way, that’s still true today. Some of those partners have amazing relationships and embedded trust with their clients, and they’re solving some really heavy challenges facing very large organizations.

Some of those partners might know what a solution looks like, but they can’t put it into practice because the people on the ground are the ones who have that technical knowledge. We’ve been spending a lot of time ensuring that we can bridge that gap.

I’ll give you one quick example: This happened earlier this week. A major news publication is connecting with KPMG to hear about a technology we built, they want to demo it in one of our labs.

While I was reviewing the team on board, the lead is a young woman (who I think is just awesome). We have this huge presentation where we’re going to be quoted and published, it’s a huge moment. Who are we putting forward? That young professional.

It’s interesting because we’ve shifted and we see a lot more training at younger ages now because we know these digital natives can describe how we’re building things in a way that some of our partners or senior professionals just can’t do. We have to train them in public speaking and coach them on confidence and presence, so it’s a really interesting dynamic. There’s a huge opportunity as we continue to bridge this gap.

Innovation Benchmarking Study

DI: changing gears a little bit, you mentioned that Innovation Benchmarking study. From your perspective, what was the most surprising thing you learned from the study?

Fiona: There were a lot of findings that made sense, and it’s interesting to see specific data to support those findings. But there weren’t a lot of things that made me think “oh wow, that was shocking.”

The thing that was surprising to me was the percentage increase in the transformational efforts. Transformational as opposed to something that’s just adjacent or incremental. It wasn’t a big jump. Last year, it was 20%, this year it’s 25%. For the role model companies, companies that are more mature in their innovation processes, that number actually went up to 35%. 

But, what I noticed was that many of the participants of the report talked about some of the things companies have stopped or slowed down. There was a lot of acknowledgment that there’s less tolerance for those “third horizon,” long term efforts that take time to go to market.

So, if you put that together, companies are taking bigger risks, but at the same time, they’re only looking at horizon two or one. They’re expecting faster results. I think that’s indicative of the vast disruption we see across the board in the market.

“Overnight Successes” and Failing Fast

DI: In the startup and SaaS world, an “overnight success” is really a 10 year journey. It sounds like there might be a misunderstanding of how long it takes for some of those initiatives to see fruit. What do you take away from that?

Fiona: It’s hard to unpack without digging into sort of individual companies and individual strategies. I think it’s indicative of the increased pressure. The stakes are just getting higher.

I don’t think we’re seeing massive business model shifts, at least in larger companies. But in midsize companies, where the fringes of their business are eroding from startups and some of those ventures, they’re the ones that are starting to take the bigger risks to try to get faster results, maintain a speed of growth, and not lose their market share.

DI: One of the things I thought was interesting was this idea of failing fast. You don’t know which initiatives are going to succeed. Failing fast became a very common trope within that universe, if you’re going to fail, you might as well fail quickly.

But one of the things you all found was that failing fast was not something that your role model companies valued. Why do you think that is and what did you learn instead that the role model companies did find to move needle?

Fiona: I personally don’t love the term “fail fast.”

KPMG is a great example of what we saw with some of the respondents from the benchmark survey. We talk more about pivoting fast and learning fast. The reality is, our teams don’t want to talk about failing. Of course, we analyze failure to learn, but we don’t want to dwell on it. It’s not something we celebrate.

What we’ve found at KPMG, and what was indicated in the report from other participants, is that failure doesn’t drive the innovative culture we want. What does is focusing on clear strategy and top down support. 

Bringing innovation back into the core

DI: One of the big pitfalls that we’ve seen in the past is the propensity for organ donor rejection when you try to fold something back into the mothership, whether it was developed in an incubator or an acquisition.

What do you think are some of the reasons are for that? What are some of the things that you will do to try to increase the likelihood of success when you are trying to pull that back into the larger organization?

Fiona: The issue is that we have such a strong culture in our way of approaching things. However we acquire companies because they’re different, not in spite of it. They have something we don’t have.

We fear that a small entity will lose its uniqueness in a big enterprise like KPMG. We’re hoping to absorb, not overtake.

We call rolling things back out into the business “graduations,” and they’re really difficult. We’ve worked really hard and improved a lot and I believe that if you’re doing innovation the right way, there shouldn’t really be a “rolling back out into the business.” It should be an organic merging of things. We try to graduate mature parts of an area of innovation one at a time, as opposed to hard flipping something over and hoping that it lands softly on the other side.

DI: We’ve seen in the past the sheer difficulty of assessing the performance of these initiatives. There are obviously differences between what you’re doing in the core and these very nascent initiatives that take time, but how do you assess them differently? Is there any advice that you would give to organizations when they’re going through an ugly duckling phase and they don’t know what it’s ultimately going to be?

Fiona: We evaluate everything in some way. We use a lot of balanced scorecards, so a lot of quantitative measures, but qualitative measures are also super important.

We’ve really worked to get our leaders to understand that if we’re investing in something that is truly a long term commitment, we can’t talk about return on investment by default. If we’re getting a return within 12 months, was it really transformational?

We make sure that we’ve got the right expectations aligned with the right horizon. I think a lot of leaders get hung up on “how much is this going to make us?” “How much is this going to save us?” That erodes development.

The Future of Professional Services

DI: It seems like a lot of those Lean Startup techniques lend themselves really well to horizon one or horizon two activities. Things like customer development, design thinking exercises, and customer journeys.

But some of the transformational activities seems like they often happen as a result of a new technology coming out. Folks try to wrap their heads around what they can do with it, like a solution in search of a problem. Blockchain is a really good example, everyone was psyched about it in 2018, but there’s still a bit of darkness around it.

How do you advise an organization who wants to invest in something like this to poke around these emerging technologies? 

Fiona: Blockchain is an excellent example, it applies to all emerging technologies. Technology itself isn’t the solution. When a client asks us to implement blockchain or something like a distributed ledger and they give us specific parameters, that’s not the type of work we want to do. It’s not business enhancing or game changing. It’s a hammer looking for a nail.

A lot of clients approach us and tell us they’re looking for blockchain because they’re looking for immutability and trust. We might tell them that we understand they have a problem, but blockchain might not be a game changer for them. Instead, we provide other scenarios where technology can help. You can combat problems with a design thinking mindset. Blockchain is perfect for things like contract management, but it’s just one component of a larger solution.

DI: Specifically as it relates to professional services, what do you think the professional services firm of 2030 looks like and what are some of the things that you think emerging tech is going to potentially be able to enable there?

Fiona: I think a lot of our traditional services will be automated. We’ll be doing what I like to call the higher purpose work. I think people are our asset. The skillsets of our team is changing dramatically. I really think the mix of our people is going to change dramatically.

A lot of companies will become more automated and systems driven. At the end of the day, humans are tweaking the numbers that get into the books, no matter how they get into them. We’ve got to understand what the humans are doing. I think processing speed is going to change a lot, whether it’s quantum or 5g. It’s hard to even fathom what it’s going to look like, but it’s super exciting. 

Many of the students in my class at Kellogg come from the world of big consulting, but have been bitten by the startup bug.

But how do you successfully leave the relatively stable, comfortable, prestigious walls of corporate America and successfully launch your new venture?

My guest is Jennifer Fitzgerald, and after helping financial services organizations as a consultant at McKinsey, she are her colleague took the plunge to start Policygenius, an online managed marketplace for insurance.

In this episode we discuss the genesis of Policygenius, how she systematically de-risked the idea early on, how she managed to build both sides of her marketplace business without heavy reliance on paid acquisition, and much more.

We also get into her advice for folks lookin to take the plunge themselves, strategies for executing at a high level, for recruiting early team members, and for leveling up yourself as your organization starts to scale.

Nearly everyone is in agreement that healthcare is an industry that desperately needs transformative change. But the legacy technologies, interrelationships between providers and mayors, and other systemic issues typically keep such transformation from happening. 

One exception is Jefferson Health, which has transformed itself dramatically in dozens of ways in an extremely brief period of time, embracing various emerging technologies and reinventing the way they approach training clinicians and delivering care. 

My guest today is Dr. Stephen Klasko, CEO of Jefferson Health and one of Fast Company’s most creative people.

In this discussion we dig into how he went about transforming Jefferson into a nimble, tech enabled organization, how he managed to drive culture change so quickly to make these initiatives stick, and get into a number of fascinating, counter-intuitive initiatives he’s spearheaded to facilitate that change.

For most organizations working on innovation, their emphasis is on incremental, horizon one types of initiatives. Far less common are truly disruptive, moonshot initiatives that can transform industries if successful.

My guest today is Kathy Hannun, and for 7 years she was a product manager for the rapid evaluation team at Google[X], tasked with product development and diligence for their biggest moonshot initiatives.

One of those initiatives she eventually spun out into Dandelion Energy, a home geothermal company where she now serves as CEO. Kathy was recently named one of Fast Company’s most creative people.

In this conversation we discuss what Kathy learned during her time at X,  and how organizations can be more successful with disruptive technology. We also get into detail on Dandelion and the massive opportunity geothermal presents in changing the way we heat our homes.

Privacy is a hot topic these days, as people for the first time are starting to realize the extent and magnitude of the data companies are gathering on them. And not everyone is okay with it.

My guest today is Richard Stokes, founder of Winston Privacy. And in this discussion we talk about the genesis of Winston and how he’s trying to help consumers address their privacy concerns in the simplest way possible.

We also get into a super interesting discussion around how he built a hardware business and the landmines you can run into and how he de-risked the business early on. And coming on the heels of one of the most successful Kickstarter campaigns of all time, he dives into a bunch of tactics and strategies for how to make the most of crowdfunding. 

How do you innovate inside a company with decades of rich history, with business models that are firmly entrenched, delivering on a product people have consumed effectively the same way for centuries?

My guest today is Maja Thomas, Chief Innovation Officer for Hachette Livre, one of the largest book publishers in the world, and the Director of the Hachette Innovation program, focusing on the intersection of publishing and digital innovation.

In this conversation we discuss some of the challenges to innovation in the publishing industry, the rise of voice interfaces, the future of augmented reality, how publishers leverage big data to improve the publishing process, and much more.

One of the most consistent issues with organizations looking to innovate is the idea of change management. How do I get an organization that’s used to doing things a certain way to embrace change and bake innovation into its DNA?

My guest today is Jillian Chown. Jillian teaches at Northwestern University’s Kellogg School of Management in the Management and Organizations department, and her research focuses on change management, most recently focusing on healthcare organizations and the use of incentives to drive change.

In this discussion we dig into the various challenges preventing companies from changing, the role of leadership at different levels of the organization in driving change, how incentives can play a role, and the different strategies and techniques necessary to drive incremental vs. disruptive change.

One of the largest trends in enterprise innovation has been the adoption of large platforms like SAP and Salesforce. But many organizations don’t realize the full potential of what these platforms are capable of, and don’t know how to extract that value.

Salesforce has tried to help their top-tier customers innovate more effectively with Salesforce Ignite, which is effectively an innovation consultancy within the company.

Brian Vellmure was previously one of the partners of Ignite, and is now the Global Lead of Execute Thought Leadership for Industries and Senior Director in the office of innovation.

In this episode we discuss the origins of Ignite, how it differs from typical design thinking processes, as well as some of the more common mistakes Brian has seen innovation groups when embarking upon innovation initiatives, and some of the technology trends he’s most excited about.

Many organizations talk about improving customer experience as one of their primary innovation initiatives.

But what does it look like to create a truly transformative experience that is orders of magnitude better than anything else out there, and to do so at scale?

My guest today is John Padgett. John is the Chief Experience and Innovation Officer at the Carnival Corporation, and his team has created arguably the most complex and successful implementation of an IoT driven guest experience platform in the world with the Ocean Medallion. Carnival was named one of the most innovative companies in the world by Fast Company due to the work John and his team have done.

He was also one of the masterminds behind the Disney MagicBand and FastPass Plus experiences, which completely transformed the way guests experience The Walt Disney World resort.

In this episode we dig into how John thinks about creating the vision for such massive undertakings and the tools he’s used to successfully drive disruptive innovation.

The vision he’s created to provide a truly personalized, adaptive one to one experience at scale is pretty incredible, and I think you’ll find the conversation fascinating.

The Design Sprint methodology has spread like wildfire, both in the startup community and the world of enterprise innovation.

My guest today is John Zeratsky, one of the creators of the Design Sprint methodology and coauthor of The Sprint Book and Make Time. In this episode we dig into how the Design Sprint methodology came about and how it’s evolved over the years.

John shares dozens of practical suggestions for how to structure sprints and get the most out of them, as well as some lessons he’s taken from the Sprint process and applied to his own life.

The common wisdom around creating a marketplace business is to start with supply. The logic is that without the supply side you can’t capture the demand side, which is typically how a marketplace business monetizes.

Jessica Messinger is the head of growth at Cameo, and previously grew the supply side of both Uber and Twitch. And in this episode we go into a ton of detail around how to grow the supply side of a marketplace.

Jessica has a ton of insight and some fantastic stories, and I think you’ll find this one super interesting.

The LEGO Ideas initiative is perhaps the most famous example of successful community building and open innovation.

In this episode we talk with Tim Courtney, who helped run the LEGO Ideas community for over 7 years. We discuss:

• The history of the LEGO Ideas movement
• The characteristics that make community building efforts successful
• The pitfalls to avoid and much more.

Chad Curry is currently the Director of Technology Partnerships for eXp Realty, and formerly the Managing Director of CRT Labs, the think tank for the National Association of REALTORS. And in this fascinating discussion we discuss:

• How autonomous vehicles will dramatically alter the places people choose to live and work.
• What will happen when consumers become net producers of energy.
• How blockchain, augmented reality and other technologies will impact the home purchasing and living process.
• How agents are taking advantage of all these technologies to reposition themselves in the marketplace.

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DI: How do you describe your job?

Chad Curry: I’m the director for a group at NAR that looks at emerging technologies in real estate. Where is the industry going in the next five to ten years? How are these technologies outside our space going to impact us?

The seed for that was big data. So things like IoT, predictive analytics, smart homes and smart cities, blockchain, blended reality. All these things that would generate copious amounts of data and could in theory tell us a ton about how we were living and what we could do to improve our quality of life.

So my job is to look at the trends that are coming and how they will impact real estate and what we can do to improve quality of life using those data points.

How real estate agents use technology to sell differently.

DI: Are agents sort of luddites with this stuff? Are they excited by the technology, nervous for their jobs?

Chad: Well we have 1.3 million members so it depends. Our average age for a membership is around 56. But their main concern is helping people find homes. I would say that the smartphone has been very transformative to their business. A lot of members rely on their phones heavily – not just for calls and texts, but for organization, for their CRMs, for their analyses, their comps, and providing better service to their clients.

DI: It seems like for the most part the business model has been the same. Every five years or ten years, I reach out to you and it’s one big transaction. Then you don’t hear from me again. At a business model level, is anybody proposing or thinking about alternative models where agents can provide more value on an ongoing basis, or develop a more regular relationship with buyers?

Chad: A lot of our members work on specializations. They’ll work on differentiating themselves by being an expert in a specific area.

There are realtors who will work specifically with teachers or in schools, and work with PTOs to become better acclimated to neighborhoods. There’s a realtor in Nashville, and she’s the “biking realtor”. She rides bicycles everywhere to give people perspective on their communities. She’ll have her clients ride bicycles with her around neighborhoods.

If you’ve got over two million real estate agents and 1.3 being members of us, you have to figure out ways to specialize and differentiate yourself and offer better service. There are agents that specialize at international real estate and use FaceTime and video chat apps to show properties.

Green is another big one too – thinking about sustainability. We have agents trying to specialize in smart home technology, and help people think about the savings they could get with thermostats, the safety they can have with smoke detectors or water leak detectors or smart cameras, and help people in that part of the process.

As an agent, you can’t think of a home as a one and done anymore. Those clients are lead generators. They refer. So the services you can offer post-sale can really help differentiate. If I can help them have a better quality of life, that helps me with my transactions later on.

How have convenience apps and platforms changed the way we live?

DI: You’ve obviously seen the rise of things like e-commerce, ordering online, coupled with platforms like Peloton and grocery delivery, all of these products and services oriented towards making my life more convenient. How is that changing our decisions about where and how to live?

Chad: I think walkability is becoming a huge thing for people. By walkability I mean amenities like parks and green spaces are becoming more and more important. If I can order things on demand I have less of a need to be close to them, so things like proximity to grocery stores are less important.

I’m sure we’ll get into this later, but with the rise of autonomous vehicles, we could see impacts on values of homes close to transit. Maybe people who live in the suburbs will want to stay in the suburbs and not necessarily live in the dense urban areas. So home values could be impacted by these technologies.

One other side effect with convenience has been the impact on retail. And with stores and malls closing, we’ll have to figure out what to do with all those spaces. There are people now building luxury homes and low income homes in malls to make them more purposeful.

People can really live where they want to live in the near future. They won’t be tied down by jobs or proximity to things like grocery stores or malls or shopping. It’s going to be really interesting to see what happens in the next five to ten years.

Smart Homes

DI: You mentioned smart homes. Obviously people are getting Alexa devices or Google Smart Assistant or whatever. Where do you sort of see that headed over the next few years – do they have any impact in terms of the types of places that we choose to live as those things start to become more and more embedded into our lives?

Chad: One of the things people need to be concerned about are the amounts of data coming off these devices and the ownership of that data. Privacy is definitely an issue. But the upsides I think outweigh the downsides.

Three years ago we demonstrated for MLSs at our Real Estate Standards conference how this data could be used to show how somebody has owned a home over time. So CO2 levels can be controlled by the fans in the home and filters. Humidity levels can be monitored and managed to keep ahead of mold and bacteria growth. How these devices could help you get ahead of home problems.

They can be used for security. Water leak detectors are a big interest to our members because if they have a property that’s vacant they could monitor and make sure that there’s no mold growing in the basement, or any water leaking in there while it’s not being lived in.

I think where it’s going is your home will be able to get ahead of any maintenance issues. Your HVAC system will be able to monitor how long it takes a fan or cooling system to cool a home within a certain cycle and watch that grow longer over time. It can know when a piece is about to be end of life and send an order manifest and schedule an appointment before you actually have a problem.

I think your home is going to service itself more than you’ll need to service it, and remind you of things you need to do.

DI: It seems like there is an interoperability piece to really unlock some of that potential.

Chad: