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All businesses claim that they want to be leaders and to be seen as innovators. That is harder (and more expensive) than it sounds. Especially in the real estate business, which has a long-standing reputation for not being very innovative.

This apparent lack of innovation is unfortunate since real estate businesses will be part of the solution to many significant issues, such as infrastructure improvements, land use and the post carbon economy. It is not good enough to be somebody who stands in the way, like a Zak in the Seuss story. The world will go on without you.

With this in mind, a national initiative with a strong tie to Guelph is worth paying attention to. The Net Zero Initiative, led by the Canadian Home Builders’ Association, is trying to demonstrate how to build a home which is so efficient that it uses zero energy on net.

A recent open house by Reid’s Heritage Homes offered a glimpse at what is possible using, mostly, off-the-shelf technology. To use part of a speech from the event, the TV and AC were on plus lots of lights. There was also lots of hot air coming from a pair of senior VPs and still the house was producing more electricity than it consumed.

While there were some obvious technological things to point to, it would be a missed opportunity to not comment on how leaders overcome challenges on the way to making an innovation real.

First, not surprisingly, innovation requires working with partners. Especially in the real estate business, the notion of an innovator being a lone wolf is either inaccurate or impractical. It takes time, effort and skill to convince partners of something that they do not already believe, and that is the mark of a leader.

Innovating is not merely a technical process. Since somebody needs to pay the cost, and people already hesitate when asked to pay the price of a regular home, I think that there were some important lessons in the nuances of good marketing.

For example, it can be hard for people to evaluate things which they cannot see. How do you convince people of the importance of air leakage? The picture below convinced me. To people with more experience in the industry, this picture shows that Net Zero is the next step in a trend which is decades old.IMG_0850

Similarly, electrons cannot be seen. So, I was very impressed with a control panel that said when the house was selling power. When the living room is messy from the children living there and the kitchen sink is full of dishes, this panel will be seen more often than the mortgage bill; it should remind the new owners of the value proposition of a Net Zero home.

Net Zero control panelHow do you convince people to pay more now in order to save later? This problem is a frustratingly difficult, both as a practical dollar-and-cents issue and as the subject of much academic research. I was impressed by their choice of language: that buyers are “prepaying” for their electricity.

At the moment, Net Zero is a way to make a name for yourself in the industry. In time, the leaders will be followed by others. In time, what is seen now as an innovation will become the ante needed to be allowed to play in the game.

Our research aims to change people’s ideas by evidence and logic.  We try to teach students the new ideas, even if a 17 year-old thinks that they know almost everything. With care, encouragement and a bit of initiative, it is impressive to see how good our students can be. In other words, leaders find ways to overcome inaccurate perceptions of what can be done.

I am reminded of a quote from Douglas Adams:
“It is a rare mind indeed that can render the hitherto non-existent blindingly obvious. The cry ‘I could have thought of that’ is a very popular and misleading one, for the fact is that they didn’t, and a very significant and revealing fact it is too.”

PA

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