Networks will transform corporate real estate, industry research says

By Ed Sullivan  

In the early 1990s, a series of reports about then-exotic concepts like alternative officing arrangements set the real estate industry abuzz. The CRE 2000 reports, published by the International Development Research Council, were a pioneering attempt to provide real estate and facility executives with an in-depth look at ideas and challenges reshaping the field.

Today, many top real estate executives see a new force transforming corporations: the emergence of a truly networked business environment. And the impact of that development is at the heart of CRE 2010, a research effort looking at what it will mean to be responsible for real estate in a business world where the meaning of “place” is undergoing profound change. CRE 2010 is an initiative of CoreNet Global, an organization formed by the merger of IDRC with the International Association of Corporate Real Estate Executives.

A key responsibility of corporate real estate executives will be to enable work in a networked world, says CRE 2010. The term “network” means more than just the corporate IT network. But regardless of whether a network involves employees, workplaces, partners or service providers, technology is a key. That fact, according to CRE 2010, will have profound implications. Among the most startling: The corporate real estate function may cease to exist.

Convergence Seen

Marc Golan is one who sees corporate real estate merging with IT. “It’s really about the workplace environment,” he told attendees at the CoreNet Global Summit in May of this year. Golan is vice president of worldwide real estate and workplace resources for Cisco Systems. The real estate and information technology aspects of workplace projects should be designed and delivered together. But today even projects designed collaboratively must go up separate chains of command for approval, opening the door to changes that could undermine their effectiveness.

Many participants in CRE 2010 expect a functional convergence of corporate real estate, human resources, IT and other functions that could cut costs and time to market while boosting quality and customer service.

Leadership Skills

In the changing business world, corporate real estate executives need broad new skills. Fundamental skills like workplace strategy or program management won’t be enough. Neither will higher level management capabilities like process management and knowledge of corporate finance.

Already, corporate real estate executives are seeing the need for strategic skills like change management, customer relationship management and in-depth knowledge of the core business. The latter is especially crucial.

“We don’t say you have to know more about the business than business leaders,” George Bouris said at the CoreNet meeting. Bouris is a corporate real estate consultant with Deloitte. “But you have to be able to articulate the corporation’s value proposition and explain how you contribute.”

That means understanding what goes on inside the minds of top executives. “What is their currency?” Frank Robinson, vice president, corporate real estate, McKesson Corp., asked at the CoreNet conference. “What do they relate to most?”

A big-picture focus doesn’t reduce the importance of details. “Not having enough toilet paper in the bathroom will kill you,” said Christine Garvey, former global head of corporate real estate and services for Deutsche Bank.

In that position, Garvey led an initiative to transform real estate operations; centralizing real estate responsibility was key to the effort. Her team set a goal of substantial cost savings to establish a corporate agenda for change. Then corporate real estate worked collaboratively with business units, setting up real estate steering committees that included top business unit leaders. The goal was to prepare customers for change and to get them to buy in.

In all the talk about new real estate strategies, however, Garvey didn’t lose sight of smaller details, like getting plants watered. “Facility management is not sexy,” she said. “But facility management costs represent a strategic lever that can have a positive and stable impact on profit and loss.”

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  posted on 10/1/2004   Article Use Policy

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