How to work “in the midst of the fog”?
Having arranged the strategic development plans at the beginning of the year, since spring, the majority of companies have been living in suspension, when it is difficult not only to rely on their available experience and reliable contacts, but also on economic laws. In a turbulent business climate, there are still certain fundamental principles that do not divert companies from the beaten path, even in the most difficult of times.
Audrius Masionis, director of Baltisches Haus, a commercial real estate development and management company that has been operating in Lithuania for 25 years, says that companies that have been relying on these fundamental principles for many years will always have a competitive advantage in the market, especially in times of uncertainty.
“I think unexpected situations such as the first quarantine announced in spring, in the absence of developed action plans prepared in advance, show what the real cornerstones of business are for finding their solutions”, Masionis says.
Two guiding principles
The manager of Baltisches Haus highlights two main principles that ensure long-term and successful company functioning – namely, close partnership-based relations with customers and openness to change.
“A company intending to stay successful for a long time should maintain close and partnership-based relations with their customers and ensure timely and appropriate responses to their evolving expectations, be constantly open to change, to have an insight and take advantage of emerging business growth opportunities. But one has to do it sustainably, i.e. in pursuit of long-term value for all stakeholders of business interests, and by assuming measured risks”, Masionis believes.
As an example, he mentions discussions in spring, during the quarantine, on compensation of rent paid for premises.
“In spring, we had to make a number of very rapid but also well-thought business decisions. One of them was compensation of rent for our tenants. When quarantine was introduced, out of our 1,200 trade and service points with operating tenants, about 700 of them were closed for a month and a half, i.e. about 57% of all points”, the manager recounts.
He said that in the very first week of quarantine, the company had already received requests from tenants for partial reduction or even full compensation of rent. Within two weeks, without waiting for government decisions, the company decided to take action, and presented an offer: not to take rent from tenants who could not operate at all because of the quarantine, for the entire period of their inactivity.
“On the one hand, the decision seemed risky, but on the other hand we are aware that our business is based on long-term relations that are built over many years. We understand that we are in the same boat as our tenants. We hope this decision will help us further strengthen relations with customers”, Masionis shared the story.
The second principle – openness to change – is illustrated by changes that took place in Lithuanian business over a couple of decades, and the way Baltisches Haus has adapted to them.
“For more than a couple of decades in business, we have had to repeatedly adapt to changing customer business models, technological innovations and consumer habits. Bank services moving from shopping centres to electronic space, electronic goods stores replaced by gardening and animal shops and little bakeries. With healthy lifestyle and private clinics gaining popularity, our shopping centres accommodated local sports clubs and clinics. With the growth in popularity of self-service car washes, they were installed near supermarkets. Growth in electronic trade, particularly during quarantine, encouraged us to dedicate more space in shopping centres for parcel machines. Comparing the first three quarters of 2019 to the first three quarters of 2020, our parcel machine business income grew by 61%, but today, it still does not account for a significant share of our total income”, Masionis says.
Read more in the article Verslo žinios.
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