by Fran Ferrone — Originally published in the September/October 2015 issue of THE LEADER—Despite the well-known fact that (after employee costs) corporate real estate (CRE) is one of the top three largest expenses to an organization, executives continue to leave both money and opportunity on the table by failing to take a broader, more inclusive approach to portfolio and workplace planning. This topic was the focus of a panel discussion held in June at the new A&E Networks headquarters in New York. The event was sponsored by the Strategy and Portfolio Planning (SPP) Committee of the CoreNet Global New York City Chapter. The evening’s discussion centered around the results of the SPP committee’s recent survey exploring how technology, mobility and sustainability align in the service of creating dynamic and relevant portfolio and workplace strategies.
The SPP Survey
The genesis of the SPP Survey was the Committee’s 2014 Roundtable on multiple aspects of portfolio planning, in which it became evident that 1) both qualitative and quantitative metrics are essential to effective planning, and 2) the softer, qualitative measures (like those pertaining to attraction, retention and productivity) can indeed have huge impacts on a company’s profitability and growth. Respondents were comprised of 44 C-suite and executive level real estate and workplace decision-makers drawn from the CoreNet Global New York City Chapter membership and representing a broad host of industries, primarily finance, insurance, consulting and media. Most were responsible for portfolios of significant size and scope: one-third managed portfolios of five million square feet or greater, while nearly a quarter managed portfolios in the two million to five million-sq.ft-range.
Survey Findings
- The larger the organization, the less integrated the real estate and workplace teams. This presents an added challenge to the combined 80 percent of respondents who reported plans to expand their portfolios in the U.S., Latin America and Asia over the next 12 to 18 months.
- Despite emphasis on the importance of building operational costs as it pertains to sustainability, only 24 percent of respondents said their company currently uses technology to track building performance and resource consumption.
- Although 88 percent of respondents said that the company’s technology strategy was linked to employee productivity and 64 percent said they track sick days, only 36 percent use technology to track employee turnover and downtime.
The Discussion
Allyson Hajdu, of Equifax, kicked off the discussion of how to align real estate and workplace by noting that because the departments inform each other, it’s important to have a flexible and inclusive process. Panelists agreed that the key to developing flexibility is creating relationships with the businesses that enable you to understand how different entities within an organization work. Brian Schwagerl, Esq., BGS Advisory Services, added that it’s incumbent upon real estate and workplace professionals to prove their value to the enterprise, stressing the importance of good listening and leadership skills in doing so.
In terms of managing growth, Schwagerl noted that regardless of the size of the portfolio, growth and change can best be managed with the help of service providers acting as extensions of the real estate team, along with a combination of hi-tech/low tech approaches—advanced technology and old fashioned “bed checks.” Additionally, emphasis was placed on the importance of bringing multiple disciplines together to review data regularly for the purpose of making better-informed decisions.
On the topic of resiliency, the panel was asked about the interplay between sustainability and mobility initiatives and their ability to support resiliency. All agreed that while both are largely culture-driven, sustainability and mobility initiatives must be led from the top in order to succeed. Attendee Chip Logan of BNY Mellon then addressed the panel, suggesting that the aftermath of Superstorm Sandy proved a need for resiliency around multiple, potential failure points in order to ensure business continuity.
The evening’s final topic, performance metrics, was framed by Denise Strong, who stated that “ultimately, our role is to understand the voice of the customer.” Yet SPP’s survey results belied this approach, showing an emphasis on operational costs as key performance indicators. This suggests room for improvement might include balancing quantitative data with more qualitative human factors as future measures of success. Interestingly, this emphasis on quantitative measures—at the expense or exclusion of qualitative metrics—was a similar theme in last year’s Roundtable. This fact, borrowing from current popular culture, begs the question: If the Oscars can expand the best picture category from five to 10 entries, might it not be time for portfolio strategy & planning to update its scorecard, as well?
Sources
- (1) Magic Quadrant for Integrated Workplace Management Systems. Gartner, June 26 2014. https://www.gartner.com/doc/2781117/magicquadrant-integrated-workplace-management
Fran Ferrone is a Senior Associate, Director of Workplace Innovation, Mancini Duffy.