Corporate real estate alignment

The other week the Real Estate Executive Board ran a webinar 2010 Research Recap: Aligning Corporate Real Estate (CRE) HR and IT. The intro to the session read:

The Board's strategic research for 2010 will help real estate executives align better with HR and IT, and realize a true competitive advantage from their portfolio assets.

In this teleconference learn how the best real estate shops:

• Create a workplace road map that resonates across all three functions, with a focus on mobility and enabling work
• Bridge the gap between disparate metrics and arriving at a dashboard that speaks as effectively to CHROs and CIOs as it does to CRE executives
• Translate workplace best practices into customized solutions and tool kits that business units can get behind and sell

As I listened, what it heralded for me was the fact that organization designers typically do not include 'facility managers' or CRE people in organization design work and alignment activities. It's an omission that can affect organizational performance – as the speaker pointed out. Talking from the real estate side he noted that organizations are increasingly concerned about their real estate costs.

To solve for this, CRE must show that it is not just working on space-based savings initiatives. It must demonstrate that CRE can help the business think about how work needs to be done in the future to avoid big productivity risks, capture productivity gains, and yes, drive savings.

This requires CRE to be more deeply integrated with the business, particularly when it comes to planning around future work-related changes.

The speaker went on to comment that achieving this integration is easier said than done, "and it is often the case that process and staff decision that have a material impact on real estate are made with no or very little involvement of the real estate function."

The speaker moved on to talk about 'future of work planning' that "refers to how the core elements of "work"-staff, process, technology, and space-collectively evolve to drive productivity in the future."

Then turning to organizations that have CRE functions that were both good at getting involved early in business decision making and informing the business of the full impacts of real estate-related implications of business decisions. (Described as Integrated Work Planners) the speaker noted that:

"As it turns out, Integrated Work Planners not only achieve deeper planning integration with the business, they are able to execute more efficiently and deliver better outcomes.

They spend less money reacting to business decisions after the fact without having to sacrifice on project timelines.

They are able to drive the bigger changes needed to improve productivity and drive savings (i.e. further shrink footprints) than their peers."

These Integrated Work Planners – McDonalds, Pfizer, Google, and General Dynamics were some – are adept at deploying four competences

  • Partnership-Facilitation Competencies
  • Engagement Competencies
  • Teaching Competencies
  • Value Demonstration Competencies

Those CRE function without these competences struggled with business skepticism, narrow perspective on real estate impacts, and capacity to engage.

Three approaches to overcoming these three handicaps were presented: the Executor Approach, the Advisor Approach, and the Challenger Approach – largely driven by the CRE functions, with evidence from company examples on how each of these produce real benefits.

What wasn't presented was an approach that involved redesigning the CRE functions across HR and IT. (In fact HR and IT were not talked about in any specific way – the term 'the business' was used in lieu of them). And this seems to me to be an opportunity for organization designers and for the businesses they work with.

Organization designers should a) start including CRE functions in ANY organization design project and b) initiate work specifically with CRE functions to help them integrate and align more effectively with the business.

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