Magazine article Management Today

Dangers of DIY

Magazine article Management Today

Dangers of DIY

Article excerpt

The temptation for major companies to develop their own headquarters buildings is stronger now than it has been for years. Construction costs have fallen, professional fees have been slashed and land set aside for property projects in the 1980s can now be bought at a significant discount from distressed developers - or their banks.

But for any company considering the do-it-yourself option, there is a word of advice from those property companies that have survived the crash: don't.

Setting to one side for a while the accusations of self-interest that will follow this injunction, there is evidence that non-property companies tempted into development in the past have got it wrong - and sometimes very badly wrong. For fairly obvious reasons, they tend not to talk about it afterwards. And any suggestion of managerial incompetence that finds its way into print is likely to lead to litigation, or - at the very least - a fairly hefty rap across the knuckles. So journalists tend not to talk much about it either.

But anecdotes about those firms that built very expensive buildings they subsequently didn't need and then couldn't get rid of are among the property industry's favourite tales. And research carried out for Stanhope Properties by DEGW suggests that the chances of success are, in fact, probably limited.

A survey of 21 companies that had relocated revealed that most of them had made mistakes. Many of the mistakes resulted from weaknesses in the management of the professional team put in charge of the project; some were born out of a fundamental misunderstanding of the development process. Stanhope's conclusion was that professional development should be left to a professional developer.

This too clearly has a large element of self-interest in it, but it also contains a good deal of truth. Excellence in property development is obviously the result of painstaking, and often tedious, attention to detail and a firm hand in a process that will otherwise result in expensive claim and counter-claim. It may be overstating the case to suggest that the construction industry makes its money in the courts, but it is certainly a more complex and litigious business than it appears from the outside.

Developers who want to be taken seriously in this matter appreciate that they have an uphill struggle. …

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