What does the future hold? How do I prepare for it? How will I handle the unexpected?
You’re in business. So, you’ve asked yourself these questions thousands of times. Of course, in a world where change happens so fast, traditional forecasting methods and strategic planning tools don’t often work.
They couldn’t predict how Amazon, Uber, and DoorDash would drastically change consumer interaction within the retail sector, how we use ground transportation, and where we consume restaurant food. Traditional tools were also powerless in preparing manufacturers and distributors for the elimination of pagers, CDs, and iPods.
But you are not powerless. There is an experiential analytics solution with greater power to explore the future and anticipate change, even when emerging technologies collide in ways that eliminate products, services, markets – even entire industries. It’s a military technique called wargaming
What is Wargaming?
For the military, anticipating and preparing for the future starts with wargames. Wargaming is a tool used to look into the future, identify risks, and explore ways to meet them. Envisioning what the world will look like, where things will happen, and what events will occur enables military strategists to identify overarching needs, allocate resources efficiently, and optimize results.
What is Wargaming in Business?
Today, a wargame strategy is being used across many industries. By envisioning future risks and running simulations of them – varying the scenarios over time, applying lessons learned, and introducing unexpected events – company strategists can predict future opportunities and threats. This helps them better prepare by investing in the R&D necessary to meet future challenges and develop many of the products, services, and technologies we all use today.
So, what does this have to do with commercial real estate, specifically self-storage? Believe it or not, business wargaming was started in the 1980s by Booz Allen & Hamilton Inc., pioneering it in the energy sector, transportation, large equipment manufacturing, and other industries. Today, several other companies use business wargaming techniques to help prepare for a changing world.
Wargaming for the Self Storage Industry
As self-storage owner/operators look to the future, we think about what the consumer will demand. How will the technology that consumers are starting to use today change our sector?
Did we foresee that smartphones would overtake landlines? Or websites would put the Yellow Pages out of business? If we had, independent owner/operators would have adopted these technologies sooner, and profits would have increased faster and earlier.
Similar shifts are happening now in other sectors, with driverless vehicles, robotics, and online ordering/delivery services that circumvent parking lots, personnel, and storefronts. It is evident that these shifts will impact self-storage. Pushing things further out:
- How will 5G communication impact commercial real estate?
- How will social media or the metaverse impact sales and profits?
- How will the economy impact residential real estate?
- How will real estate technology (prop tech) change the way consumers rent space?
- How will prop tech change the way you negotiate deals and tap into investors?
Our industry’s recent past is replete with changes that impact your business today. Over the past decade, REITs required tenants to insure or protect their stored property, and they increased in-place rent on a regular schedule. Both of these revenue-increasing strategies were rarely used by independent owner/operators in the past, but since the REITs taught today’s consumers to expect it, we willingly adopted these REIT strategies at our stores. The REITs did us a favor by doing the heavy lifting for us.
What are the REITs doing now that we need to respond to soon to protect our assets and profits? What technology is built into the new stores the REITs are buying? How are they retrofitting their existing portfolio? How do the REITs use their online presence to offer a virtual office to today’s consumer?
Learn How to Wargame with Storelocal
Interested in team wargames to improve your self storage business? Get started with Storelocal! Many of the challenges highlighted here will be explored in our industry’s second wargaming exercise. Yes, there has already been one. The first was an acquisition-oriented wargame run by Storelocal Storage Co-op at the UnConference in Hawaii last October. The second will be an operations-oriented wargame at Storelocal’s Member Value Meeting in Savannah, GA, June 9-10, 2022.
What will your world look like in the future? And what can you do now to prepare? Join us in Savannah to take a look.