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Commercial Real Estate

28 Feb, 2006

By: Dr. Prentice L. Knight III Ph.D.
The Rising Influence of Influencers on Development Projects

The growing influence of community leaders, government organizations, citizen action groups, environmental activists, and smart growth movements can stop a development project in its tracks – or help streamline hurdles and accelerate success. Today there are an estimated 28,000 activist and non-government organizations (NGOs) keeping a hawk’s eye view on business behavior. And that doesn’t even include the community groups that organize ad hoc around a particular development project.


To help developers determine what they can do to better understand what it means to build effective relationships with influencers, the NAIOP Research Foundation commissioned this study, in which they interviewed 30developers and “influencers” nationwide to assess what works in building effective working relationships, what doesn’t, and how to build in best practices. The influencers interviewed included representatives from smart growth, environmental, and community organizations, as well as local, state, and federal government organizations.

While other industries have studied how to practically manage organization-influencer relationships, this study is the first to do so for the commercial real estate development industry. Interestingly – and perhaps reassuringly – the findings from the NAIOP study are strikingly consistent with the latest, broader research on managing organization-influencer relationships. The study findings provide insights and practical advice in these areas:

  • What’s driving influencers to become more involved in development project?

  • Common obstacles to building relationships

  • The seven characteristics of effective developer-influencer relationships – and practical strategies for building them into business practices

  • Recommendations for NAIOP & its members: overcoming obstacles, building skills, investigating new trends, adopting new “influencer radar” tools


Experienced developers may discover that the findings and advice in this report resonate with their intuitive understanding of how to approach relationships with influencer groups. Yet because of the increasing success of anti-developer influencers in slowing down projects – or blocking them altogether – there’s benefit to documenting what does and doesn’t work in navigating relationships that are often adversarial.

The New Realities: It’s the Community’s Project, Not the Developer’s

Developers agree that there is more intense involvement from a larger sphere of influencers than ever before. The cost of complying with more – and more complex – government regulations continues to rise, as does the cost of litigation and “expert” services.

In many cases the first factor is driving the second. As activists and organizations have become successful in building coalitions and using the media, they’ve been able to exert their increasing influence to change regulations and permitting processes.

But why are so many people so passionate about development today? Diminishing open space is alarming people into action, as is the perceived poor track record of community planning and zoning in many areas. Many groups don’t trust government agencies or planning boards to make what they feel are the right decisions for their communities.

“If we don’t act, our communities are at risk. As it is, we have little margin for error in light of how developed our area already is,” said one East Coast influencer.

A Western developer was blunter. “We see how the folks in the East have pretty much ruined things over the years. No one in the West – environmentalists and developers alike – wants to see that happen out here.”

Put another way, one person explained, “It’s no longer the developer’s project. It’s the community’s project. Everything we do affects the fabric of a community. That’s why there’s so much involvement – and why developers today have to work closely, honestly, and earnestly with members of the community.”

What’s driving greater influencer involvement?

  • “This Land Is My Land”: diminishing open space alarming people into action

  • “Back to the City” movement: desire to create communities vs. erect or rehab buildings in context of urban population growth

  • Wake up call: our community vs. your project

  • Increasing government regulations

  • Greater & more organized community activism: people distrust both developers and government officials to do what’s in the community’s real interest

  • Environmental issues are more emotional than ever. “No growth, do nothing” is an ever stronger point of view and environmental groups are particularly sophisticated and well funded

  • Any development is more public

  • Media more aggressive in covering development, controversy

  • 24/7 communications society: anyone can publish an opinion and make it very public, very quickly

 

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