The Developer Client - 5 Tips for Success
The Challenge
Compared to ‘enabling’ or ‘partnership’ strategies, becoming a ‘developer’ client offers the highest degree of risk and control, with opportunity for the highest return. But that return is only realised when responsibility is taken for every aspect of the project over the full development cycle. As a consequence, being a developer is definitely not for the faint hearted client but when it works its fantastic.
On the plus side, the benefits realisation doesn’t just stop at the bank. There's building a reputation for delivery, being in control of your development pipeline, optimising your ESG outcomes, attracting great people and aligning your asset management and internal operating models with the development cycle to become a mature developer organisation.
On the other hand, becoming experienced and credible takes time, and guts. It can be challenging, particularly early in the learning curve where internal know-how can be low and the organisation itself is adjusting. But that doesn’t mean that it's impossible.
Having supported various public and private ‘developer’ clients to deliver complex programmes successfully, this post provides 5 tried and tested action points to do it effectively.
1. The Developer Client Team
A high performing development team needs to lead and manage from the outset as commissioing client. An assortment of risks will emerge daily. The more experienced the in-house team are, the better risk mitigation will be, and the more value they will add.
As the minimum, the team needs a background in the recognised industry professions such as architecture, planning, engineering, and surveying, together with delivery experience client side. If they don’t, projects may run into issues that more experienced teams would mitigate easily.
If you find people who can do every stage of the cycle (the hens teeth of the development world), mind them because they are rare. They have the potential to see around corners and add a lot of value at project and organisation level.
If you have bright people with non-industry backgrounds, team them up with others who have the professional backgrounds to optimise their chances of success. It will take time, but nothing is impossible.
2. The Business Plan
Any good ‘developer’ business plan is based on the sites owned or to be acquired, with a focus on what they give commercially. Development, resource, finance, sales and marketing strategies are then designed in support.
Before the plan is created, strategy work is needed to confirm that a site meets requirements, or otherwise. This ensures that projects are defined in commercial and development terms together with resourcing to deliver from the start. The merits of the development strategy itself i.e. market sale, affordable homes, commercial or industrial uses is also tested as part of the process and informs the business plan.
There is an element of double duty here. When a site is accepted into the business plan then, an informed programme is also created. This approach sets both the plan and organisation up for success. Updating it annually also becomes easier, as does adding further projects over time.
Alternatively, designing a business plan around engagement strategy, financial model or targets in isolation is likely to be fraught with difficulty, generating a need to quickly supersede the business plan when it becomes operational.
3. Blending Leadership and Management
Leadership has become a slightly overused term these days. However, to be a successful developer, the team need to lead and manage projects successfully, it's not a binary choice.
In management terms, that means being organised, being good at managing budgets, planning work streams well, challenging and confirming the design and delivery teams and providing a professional, collaborative degree of project control. Theres also managin the internal team and stakeholders too.
On the leadership side, it means establishing project direction with others, influencing stakeholders, winning project commitment, taking responsibility when things go wrong, motivating supply chain partners and aligning their outputs with expectations.
Both are critical skills to master and use, at once.
4. Being Strategic and Detailed
As a developer, there is a need to see the longer term, strategic context of a project plus, the detail required to get there. Like management and leadership, being strategic and detailed is not binary, or optional either.
Over the design and planning stages, this means having a strong understanding of what the project needs to do, and how it will be delivered(strategic), together with the ability to write good briefs to procure a consultant supply chain and manage them well to avoid fee overruns and scope creep(detail).
On viability, it means understanding the global appraisal position(strategic), and the assumptions that generated it (detail). Then you can ‘confirm and challenge’ them and run sensitivities to see the implications.
Getting the tender and contractual form right (strategic) is also critical. Approaching the contractor market with sensible tender documentation (detail) takes time. But it leads to a smoother construction stage with less cost overrun, particularly on ‘repeat’ projects with a similar specification.
5. Being Commercially Astute
Begin with the exit strategy in mind and work back, as per the business plan. There is only so much any site location can give commercially and any good developer knows it.
Taking market advice, looking at comparables and establishing the opportunity to ‘market make’ will form part of the commercial workstream at strategy stage. Then there’s establishing site capacity options and understanding the viability position they generate. Perhaps it's a runner, perhaps not.
Establish too how any shortfall can be addressed. Is there potential public funding available, will the project be phased or, will a reduced brief or value engineering assist?
What about finance? Equity, ESG investors and various debt finance models have their requirements - can you meet them?.
The best developers have an in-house team, competently running appraisals regularly to support strong decision making, while managing all other project aspects. Without it, there could be a blinkered focus on design and stakeholder engagement without the commercial acumen for delivery and development success. Outsourcing or having a solo specialist in-house is fine as a a stop-gap only. To be truly successful as a developer, all your people need 360 degree vision on their projects and that means understanding the apprisal and all commercial elements associated with it intimately.
What Next?
Setting up a high performing ‘developer’ client function takes time, effort and strategy. When it goes wrong, there is nowhere to hide. But when it delivers, it's brilliant.
As a RIBA Client Advisor and RICS Development Surveyor, I have been around the block for some time across residential and mixed use programmes in both the public and private sector ‘developer’ environments.
If you’d like some expert help to set up or implement it successfully, please reach out directly. I’d be happy to explore how you can best optimise its potential to unlock your projects and programmes successfully.
