Might we turn a ‘disaster’ into an opportunity?

by Stijn van de Sande

Commercial Director Buildings Nederland

Published in 2001, Jim Collins’ book ‘Good to Great‘ bore the subtitle ‘Why some companies make the leap… and others don’t‘. Based on a long-term analysis of companies in the American Standard & Poor’s 500, the book seeks to establish the drivers governing their success or failure. The circumstances we are currently facing reminded me of the lesson to be learned from the book’s account of U.S. Admiral Stockdale, who was taken prisoner during the Vietnam War. He accepted the fact that life is unfair, and that it sometimes works out in our favour and on other occasions to our disadvantage. The vital issue, however, is the way we that we deal with such circumstances. The eponymous Stockdale Paradox is based on the admiral’s experiences, which led to the following conclusion:

‘Keep believing in ultimate victory, regardless of the difficulties encountered, while simultaneously accepting the harsh reality of your current circumstances, whatever they may be.’

Having carefully considered the above, I am frankly amazed at the knee-jerk reactions of various stakeholders in the field of construction and real estate as expressed in the media. Their basic point of departure is usually to compare the current situation to some previous crisis. A comparison that, in my opinion, simply does not hold water. In the first place, healthy real estate and construction companies are not in the eye of the storm in this case. They should, in fact, consider themselves lucky that they are not operating in an industry that is 100% dependent on personal contact. While I certainly wish to avoid downplaying the gravity of the situation, we in the Netherlands are able to continue with our (construction) activities provided we comply with the measures imposed by the National Institute for Public Health and the Environment (RIVM), as opposed to firms in countries that are in total lockdown, such as Belgium. It is therefore entirely up to us how we arrange our affairs, while there is no point whatsoever in complaining and continually questioning the measures in place. We have to look for solutions closer to home.

So, what about the Dutch government? Well, it has acted highly adequately to prevent people from ending up in the wrong crisis mode. In addition to providing active financial assistance, it has implemented mainly secondary measures, such as emergency legislation, which allow administrative bodies to continue to remotely manage affairs, while rendering resolutions and procedures such as participation and objection, etc., legally valid. Despite the various impediments they entail, these measures nevertheless allow developments to proceed, provided those involved are prepared to depart from their hackneyed perception of a crisis.

The maxim ‘Cash is King’ needs to be reconsidered in these circumstances. It is now the turn of the construction and real estate sector – in cooperation with professional investors and banks – to come up with constructive proposals aimed at both maintaining momentum and speeding up the start-up of new works. I am convinced that, should these parties succeed in devising a broadly supported concrete proposal in which we also have a hand, the government would support it. For example, lowering the sales threshold for owner-occupied houses to a level below the rent subsidy threshold in combination with guarantee arrangements concluded between the parties and the government regarding the 20% shortfall, together with the postponement of the collection of municipal charges until construction commences, would ensure that building can start at a considerably earlier juncture. Furthermore, it would benefit sustained progress of the launched construction flow if the introduction of new legislation – including implementation of the Environment and Planning Act – were to be postponed until one year after the official end of the Covid-19 pandemic.

Let us spend our time wisely in this regard, in the spirit of Lao Tzu: ‘What might appear to be a disaster often turns out to be an opportunity.’