BC Business
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Despite today’s emphasis on contemporary strategic planning, few businesses actually think 'go long term'. Bigger market-listed businesses focus on the quarter to keep their stock up; small businesses are notorious for believing long-term means anything beyond next month.
This is largely because most businesses believe, deep down, that long-term thinking is a waste of time and money. But a Victoria green-building developer has proven that a company can incorporate large and long-term thinking, save money and produce a hot product at the same time. Problem Under the existing system of cyclical economics, business development often takes place in a very narrow time frame. As a market cycles up, businesses rush in to deliver as much as possible as quickly as possible before the market cools. But this kind of economic climate rarely encourages long-term thinking and certainly doesn’t encourage higher-cost activity. All players in a cyclical sector – any resource-based industry comes to mind – try to control costs and increase profits as much as possible because they know there will likely be a downturn eventually, during which profits will be very slim. Housing development is one of the sectors most affected by this kind of make-hay-while-the-sun-shines thinking. For some time in the cycle, no building goes on; then suddenly cranes spring up everywhere, pre-sale shows are a weekly event and buyers hand over cheques while units are still mere holes in the ground, hoping to get in before prices rise. This sales- and cost-containment atmosphere is hardly a conducive climate for a housing developer bent on producing a complex that emphasizes ultra-green thinking, because most builders today equate “green” with higher costs. Home building has become an industrial process ruled by project-management thinking – breaking projects into controllable chunks in order to get things done on time and on budget. Unfortunately, this kind of thinking also often means projects become a series of silos, separated from each other. Solution In 2005 Vancouver Island’s Windmill Development Group stepped into this frenzied atmosphere with a proposal to the City of Victoria to redevelop a piece of derelict and contaminated city land into Dockside Green, which would be built to the highest green-building standards in the world according to triple-bottom-line principles based on economic, environmental and social returns. It would, its backers insisted, produce an ultra-sustainable 1.3-million-square-foot mixed-use community that would not only be a showcase for green building but a city waterfront jewel. Vancouver City Savings Credit Union (Vancity) would finance this experiment in “future building.” The city bought the idea, but it was one of the few that did. Frankly, most of the development community was doubtful. Green building was trendy but still had the taint of looniness about it. Also, features such as its own sewage-treatment plant, green roofs, energy-efficient appliances, salvaged-wood products, eco-friendly tiling, carpets and other fittings and a centralized heating plant would make it slow, expensive and hard to market. But Windmill partner Joe Van Belleghem, a founding member of the Canadian Green Building Council, persisted in his belief that a triple-bottom-line approach would indeed produce results. He calls it integrated economics, or “whole systems costing.” Construction costs were higher, but because the community was consulted before plans were set, there was less cost involved in getting the project approved. Marketing costs are far less because design and word-of-mouth sell most units. Because the buildings are built to be sustainable, maintenance costs are reduced. Costly labour problems don’t exist because workers believe in the values projected by the developers. The project has drawn attention from all over North America, and the first building – the 95-unit Synergy, due to open in Spring 2008 – is already sold out. The second, the 171-unit Balance, due in January 2009, is selling briskly. Lessons • Look at the big picture. When undertaking a project, think about it holistically, not as a series of separate tasks. • Commit. If you’re going to challenge conventional thinking, you have to be persistent and creative. That means believing in what you’re doing. • Take your values to work. Walk your talk, and do as you say. If you believe in something, act on it. Click here for a list of previous Game Plan articles. Read Tony’s Blog on BCBusiness Online.