Principal Stays Ahead of the Curve

Skin in the Game... It was fun last week speaking with Jay Vogt, a Director at Principal Capital Management, about the process of technology adoption. "You can't overestimate the importance of senior management having skin in the game. That's because you inevitably run into those horrible moments implementing new technology. You need real leaders, not just sponsors or budget authorizers, to calm people down when it's not easy to calm people down." Hey, computer rage can be dangerous.

Principal, headquartered in Des Moines, Iowa, manages over $20 billion ($15b in debt, $5b in equities) in commercial real estate assets primarily for institutional clients in seventy markets across the U.S. For property management, Principal does not use a narrow list of preferred providers. It does have some national accounts, but frequently retains "the strongest local shop." Currently, Principal's property managers use a variety of property management software. However, to standardize the reporting process, "Principal is currently reviewing its strategy to roll out and support centralized MRI usage by its independent property management providers."

According to Vogt, Principal is two to three steps into a four-step process technology adoption process. Step One: Build a web site to enhance the Principal brand. Step Two: Build a communications platform for internal communications. Step Three: Develop online reporting for clients. (Mortgage reporting is further ahead than equities reporting.) Step Four: Web-enable transaction management. (This is quite a ways down the road.) Currently, Vogt thinks that Principal has moved from well behind the adoption curve to slightly ahead of it.

--Peter Pike