Attacking the Learning Curve... In a move described by the Wall Street Journal as "unusual in a clubby industry," Jones Lang LaSalle announced the selection of outsider Colin Dyer as its CEO last week (Jul 21, 2004). Dyer's most recent position was founding CEO of WorldWide Retail Exchange, "an international consortium of retailers that uses business-to-business Internet technology to squeeze efficiencies out of the supply chain."

By coincidence just the day before, Charlie Rose interviewed CEO legend Robert Nardelli of Home Depot (The Charlie Rose Show, July 20, 2004). Like Dyer, Nardelli came from a totally different industry (in his case GE's Energy Division, a long way from retailing). Nardelli argues that 65-70% of management skills are "portable" between industries -- with the remainder requiring unique industry knowledge. During his first two years on the job, he successfully climbed a "vertical learning curve" for his new industry.

So in the spirit of education, here are three unique elements of the real estate industry for the new CEO of Jones Lang LaSalle. First, the bedrock value of a real estate enterprise is the relationship of its professionals with its clients. While fees, market coverage and technology tools are important, they pale in comparison to the value of these personal business relationships.

Second, the cultures of service providers around the world differ dramatically -- framed by the stark contrast between the American commission-based model and the British chartered surveyor model. For decades people have speculated that the industry might move toward a salary-based compensation system similar to other professional services (like your new company). But it has not happened.

Third, setting industry standards is incredibly difficult. As a member of Project Octane, your company has pushed hard for common industry software. The idea is that individual companies will not become truly efficient until the entire real estate industry becomes more efficient. Sounds logical. But it has been hard to convince other players to cooperate. ... That's my two cents. Now, readers, what would you tell the new CEO of Jones Lang LaSalle?

--Peter Pike

Break Time... The next Dispatch issue will be Tuesday, August 3.