Mastering Control: How Data Drives Utilities, Vacancy, and Insurance Wins in Property Management

Introduction and Personal Updates

Drew: Welcome back to Peak Property Performance Podcast, and this is Drew Hall, and Bill's with us. Hey, Bill.

Bill: Bill Douglas. Thanks, everybody. Appreciate you being here. Right. We've done it. We've done it. We've done it. Well, summer's winding down. How are things at home? Are you excited? Kids are going back to school?

Drew: I think I can... I mean, officially, am I supposed to say no? I don't know. You are. Officially or officially, the answer is yeah. Yeah. I really have enjoyed summer. I'm looking forward to the rhythm of school. So... Yeah, for sure. Yeah. No qualms there. Sorry to hop off the track, but we're both dads. It happens.

Bill: Yeah. My son just got his license 48 hours ago, so that's been kind of a, you know how it is when you know things are going to be a certain way, but then you don't know until you actually know.

Drew: You mean the learner's permit license or the license?

Bill: No, no. Like license, license, like disappearing by himself. Yeah.

Drew: Okay. Yep. I've done that a few times. Yeah. So football practices are made much simpler since two days ago.

Bill: Oh, I love it. I love it. Tell the parents out there. Yeah. Raise a glass to kids that drive themselves. Right. Yeah, exactly. Yeah. It's one of those mini life things where it's like, you know what it's going to be like, you know in your head, but you don't know with your soul, with your heart until it actually happens. Then you're like, oh, this is what I lowercase K knew was going to happen. Now I uppercase K know it.

Clarifying and Connecting Control Systems

Drew: Well, how about an uppercase C? Yes. Control. Yeah. Yeah. Clarify and connect. Right. And then we talked about coordinate. Last episode was control. I mean, last episode was coordinate, excuse me. I always forget the clarify at the beginning. Clarify. Yeah. Connect. Collect. Coordinate was the last amount. Control. This is control.

Bill: Yeah. And I agree. I mean, I think that clarify there at the beginning kind of hangs off the front because it's so introductory and it also, it doesn't start with that C-O. It kind of breaks the mold.

Drew: That's true. Yeah. It's just basically, what do you have? Do you know what you have? Do you know what you like? Do you know you have a problem? What do you own? What do you control? It's just basically, let's take a snapshot and study it.

Bill: Yeah. I tend to jump right into the action mode, but most of the time we have to walk. That's what the audit is about, walking through clarify.

Mastering Systems Communication in Property Management

Drew: Exactly. Yeah. Yeah. So in control, we're basically talking about mastering systems communication, right? Because these systems, again, you own them all. You're Mr. or Mrs. Client, Mr. or Mrs. Property Owner, not you, Drew, right now.

Bill: Right. Yep. Our clients, OpticWise's clients are the property owners. They own these systems. So how do you communicate with them? Like we talked about last episode, we have some clients that think that they're covered because the systems are talking to each other through integration and the data is still not being shared with the owner.

Drew: So another thing I'll throw out about systems communication is, do your systems just talk or do they listen? We cover this in the book too, because if all they do is talk, next time that system is up for renewal, maybe you upgrade it, maybe you change it out. It needs to listen as well and take advice because eventually there will be a master control system on your property. It'll make sense in due time it's coming and it'll be very easy for you to do because you'll have the data set. But there will be a master control system to handle all systems, not just a building automation system that handles air and water and power flowing in and out, everything. And you can own that system. So you need your systems to listen to the master communication.

Bill: Yeah, exactly. In terms of like where to focus, we provide some guidance here as well about like targeting those three big impact areas, which I think we might've even delineated these before with utilities, vacancies, and insurance. So those are some of the big needle movers.

Data's Role in Reducing Vacancy and Costs

Drew: Talking about them all the time. I'm often asked, how's the data going to help me with vacancies or occupancy? Occupancy is more optimistic way to say it, right? So how's it going to help me with occupancy? Well, if you can improve the tenant's life and use data to do it, you will improve occupancy. You will improve rent roles as well. So how could you use data for the tenant experience, resident experience, renter experience, whatever you choose to call the entity or the person that's signing your commercial real estate lease, that's who we're talking about. Data can improve their life and you control that interaction. You control that user experience. It's not a software user experience. Maybe it's technology, maybe it's warm, comfortable air, great lighting, super pool, easy parking. All of that is better with data. So you will absolutely increase your occupancy and your rent role by the proper application of data.

Bill: Yeah. I mean, one of the things that comes to my mind there, just as we talk about that occupancy vacancy thing is, how far do things have to go before you know that your tenants are experiencing dissatisfaction? It's going to happen ultimately, but how quickly can you identify it?

Drew: Right. Can you identify it before they go downstairs and scream at property management?

Bill: Exactly. So the quicker you can do it, the better, right?

Drew: Yeah, exactly. But the other big cost centers are on the expense side. So that's on the revenue side. The big cost centers that we like to call the big three place are insurance and utilities. Insurance has been increasing a lot, especially in the past five years. So anything you can do to keep insurance premiums from being double digit increase is a win, right?

Bill: Absolutely. We talk about leak detection as one of those, but there's a plethora of those. And then utilities, can you reduce your utility spend 5%? That's a heck of a challenge to put on your team. They're going to say, how do we do that? Well, start looking at what's wasted. Look at your data. When is this being used? We talked last episode about, are you looking at your data for this usage? Why is that air conditioner in that area on if nobody's in there? There's two data sets right there. You have occupancy data and you have usage data. So could I start throwing alarms off and have somebody look at it? Why are we cooling this room off at 3 AM? It's already cool outside. It doesn't need to be 68 degrees or 78 degrees, whatever. It's up to you. So those are big, big cost centers. And we consistently see our clients reduce their utilities upwards of 10% more in some cases where they were sloppy or they were buying bubbles instead of just water. That's always a big win. But insurance, just being proactive and displaying data makes the insurance company know you have control and you could prevent catastrophic losses. You're never going to avoid loss in total, but if you could keep your loss to one floor of water leakage instead of four, that might be a $300,000 claim difference. They might not whack your knuckles as much next year. We've seen wins over and over and over again on that. It all requires monitoring data flows. What systems are talking, which ones are listening, and where is the coordination effort coming from? And I'm going to use that to implement logic, whether that logic is manual intervention or simple limits, or it's genuine machine learning and AI to do active and forecasted controls. You have the ability to do all of those if and only if you have the data.

Drew: That's right. Which is what the whole premise of we're talking about is only control your data and only control your digital infrastructure. Sorry. I rambled on a bit, Drew. I see a knot in your head. I'll take it and add on some stuff. I definitely agree. No. I mean, it's true. It's just that progression from no data, any particular system having no data or some semblance of data, but just really making sure that you're excavating through that system, all systems and making sure that they're pushing the data. Like I mentioned before, that they're able to receive instruction because you're going to want to have that at some point, even if not right this moment. But then making sure that that data is flowing on an ongoing basis, like what you started to mention there, that you have a way to monitor it so that you know that the work that you just put in to get the data flowing, you have the ability to ensure that next week, next month, next year, the data is still flowing. All of those data points are still flowing and that takes monitorability, making sure that that's in place. Once you know that they're flowing, then you can figure out where you're going to implement the logic. The logic is the decision, right? The control is actually the action. So think about it like that. Where's the logic being applied to make a change that is going to require a control movement? A control movement would be a message to one of these systems to change what they're doing. That's all you're really doing. We learned as an engineering to have limits and controls. You bring something down to zero, not by cutting it off to zero, you bring it down so it doesn't break itself and it just gets lower and lower and lower and lower on its oscillations. That's a form of control. You do it on the other end to ramp it up. You don't just turn it on and let it blow up, it'll break itself. We have to do that with our systems too, ramp them down, ramp them up, and that improves the longevity of the system, that reduces the maintenance costs, upkeep costs, things like that. So we have to make all those little adjustments, but look at the key metrics. We talk a lot at OpticalEyes about valid KPIs, not just KPIs for the track of KPIs or not just have a dashboard to have a dashboard. I don't want to look at a dashboard unless it's something I can do something with. So I'm really not a fan of dashboards. I'm more a fan of active control, like map it out, set the limits and let the system do the control. And I want to see things that are alarms, things that are problems, right? We monitor millions of...

Anomaly Detection and Data Transparency

Solo episode: Endpoints for networks all over the world. We don't want to look at all those all the time. We want to look at the ones that are failing or having troubles or went silent on talking.

Drew: Yeah, exactly. And that is the alarm that we do something with. Otherwise, we not being me, I don't know how to do that, but I have seen the process.

Bill: Yeah, yeah. I mean, part of what you're discussing there or touching on is anomaly detection. Again, it takes data and it takes time of transmitting that data in order to define what normalcy is so that you can define what an anomaly is. That's obviously a big part of it as well.

Team Coordination and Celebrating Successes

Solo episode: We're talking about being transparent with data. I think we have to talk about being transparent with our team. Coordinate was a large part about team effort, coordinating people, not just devices and data. Control is the same way, not that we're going to control our team. That's a management decision of your own. So I'm not talking about controlling people, but giving your people control is empowering.

Bill: If I said, we have a couple of Dave's here, if I said, Dave at OpticWise, what do you think about this? And they got all excited about it. I said, well, why don't you do it? Why don't you go figure out how to do it? I don't know how to do it. We don't know how to do it. You figure it out. And then all of a sudden, not only are they excited about it, they have ownership in it. And they present it back to the team in a week or a month or a quarter or whatever the due date is. And it's phenomenal because it's so much better than we had. And somebody put energy into it where they were actually interested and had expertise. If they didn't have expertise, they wouldn't learn it. Otherwise, they would have never said, I'll do it.

Drew: So I'm not a big, my management style is not a whole lot of delegate unless it's just routine things that are late. But as far as our create cycle at OpticWise and our reaction to creating new things like we've been doing forever, decades, right? It's all about who knows about this and who wants to take it on, who wants to lead this. I've been on teams before. I don't need all the teams. It's fun not to lead.

Bill: So I'm encouraging everybody listening to get your team involved and share your excitement with it and ask them to drive something, to take one of these plays and do it. Do it to fruition. They're going to do it better than you could ever imagine.

Solo episode: Yeah. And right along with that too, sharing successes is important, I think here. Because it's just not reasonable to expect that you're going to get full buy-in from everybody on the team that you need. There's going to be some skepticism about, ah, is this worth it? I'm so busy as it is. Is this really going to make my life easier? Is this going to make my team work better?

Bill: So no matter how small it may seem, you share those successes along the way and it makes such a huge difference. That's true with anything, but we've definitely seen that to be the case. We're writing about that very thing in the book as we go through the power of getting all this data together, working together, making sizable, like we say, needle-moving differences for the property.

Drew: One of the core values, you know this Drew, but a lot of the listeners don't, the core values of OpticWise is celebrate the win. Don't just pick on what didn't work. When things work, we need to take a second, give each other a high five, I don't know, have a beer, play a ping pong game, go have lunch over or something, but celebrate the fact that we won.

Bill: That needs to be done in this whole implementation of data strategies, the whole implementation of AI in control or not in control. Let them really revel in the wins and that way when something doesn't work, that's not all you talk about. So like clear communication of goals and momentum, momentum goes both ways. Just because it's going down doesn't mean it has to stay there.

Solo episode: So there's always a way to say, how could we have done this different? The military, special forces especially, every mission they sit down and debrief. Mortician calls it post-mortem because somebody died. They try to add some levity here. They do a review of their mission and they don't just pick on what didn't work. They give each other accolades. That was awesome. I want you to do more of that next time or thanks for saving my rear on that one. All right, I screwed up and he got my back, yada, yada. They go through the whole thing. They visualize it and go through the whole thing. The more we do that with what we call plays, the better the team gets.

Drew: Yep. And then right in that same vein there, just making it a point to make it a regular thing. It's not just like, I mean, when it comes up, absolutely celebrate or talk about, hey, we're close. Let's keep pushing, whatever. That's obviously important, but scheduling those on regular intervals to make sure that you're maintaining that momentum.

Implementing Data Strategies and Continuous Improvement

Bill: Well, a project like this, implementing DVI strategies, data and digital infrastructure, I think they need at least a weekly cadence with everybody on the team that can do it. Sometimes there's time zones or whatever. Maybe you have some contractors that can't or some vendors, but I think a weekly cadence is needed. It doesn't have to be an hour. It could be a short, you could have wins, losses, challenges. Start with the wins and say, all right, what do we need to fix? And then have some things to talk about, have some issues to talk through. And then through that comes some to do's. So there needs to be a weekly cadence. I have found personally, if there's not a weekly cadence, the rest of the business gets in the way and the whole project loses momentum. But if every week, so everybody has some to do's, they show up next week with some to done's instead.

Solo episode: Yeah. Yeah, that's good. Yeah. So it's control goes to the control of the team, control of the success of the whole initiative of the DDI, of doing your peak property performance implementation. And it's not going to be something, you want it to be part of your culture.

Bill: Yes. And we'll get to that in Champion in the next chapter, especially, but we don't want it to be a project that ever gets done. Not to make it sound arduous, but there will always be something that could be improved. It could be improved with data and it could be improved with analyzation. And whether you apply AI on it, don't be scared about it. It's getting easier and easier to do it. You have to start with the data. So that's where the whole five C's came from.

Drew: Yeah. Yeah, that's right. Yeah. I mean, I get excited about the second half of the C's and you're used to dealing with the first half. I've seen them all. I've been involved in all of them, but when I actually see it come to fruition, I get huge smiles. Some people like to dive into the audits and they're interested on the very front end. And then they lose interest about actually doing the control and coordinate phases.

Solo episode: Yeah. And the cool thing is, it's like the capabilities are up and to the right constantly. Whether it be the capabilities of any particular system or whether it be the capabilities of even the GPT to interpret the results. There are so many things changing as time goes by that make the power of this constantly increasing as well.

Bill: So it's funny when you said just now, I don't remember how you phrased it, but essentially you're never really done, but that's not a negative thing. It's almost like your own personal health. You're never really done. You can't just coast because coasting means you're moving backward. And it's a similar thing here, but I would say the difference is that the system itself is getting better. And when I say the system, air quote, the system, it's all of the systems involved in this, whether it be that make and that model of that thing hanging on that wall in that building, or whether it be, like I said, the GPT itself, the interpreter, the ability to make quality decisions based on a new type of data or more data, different type of structure of data. It's pretty amazing. It really is changing quickly and for the better. For the better. And it's getting easier and easier to do at a lower expense point.

Looking Ahead: Championing Data Initiatives

Drew: Yeah. That's right. Yeah. Well, in the next chapter, that's the bonus chapter that we already did five Cs, but the bonus chapter is the champion chapter. We love our sports analogies, especially in the book, and we'll get to moving to the skybox instead of coaching from the field or on the field. And everybody in an organization can think like this, whether they do it or not, the organization will be a lot better should everybody think like a champion.

Bill: So that's what we'll get to on the next chapter, which is the next episode. And then after that, we will have some guests and we'll start sharing some experiences from multiple kinds of properties from multiple different CRE guests. Super cool.

Solo episode: Yeah. Maybe out of the theoretical and more into the reality, like shared experiences.

Drew: Exactly. But we had to go through the first six this way, or seven if you count Lane kicking us off with one.

Bill: All right. Well, everybody, I appreciate the time. Don't forget to like and subscribe, comment, reach out to us if we can help, or if you have a subject you'd like us to approach, happy to talk about it. If you want to be a guest, reach out. Thank you, everyone. Have a great day.

Drew: Thanks all.