by Brianna Crandall — September 2, 2016 — For growing small and large corporations, the temptation to enter markets outside of one’s original home is overwhelming and will be even more so in the future due to increasing global connectedness. As companies define themselves as multinational, and maintain physical operations in regions around the globe, corporate real estate (CRE) executives will need new skills to master the changing dynamics of the global economy, according to a new report released by CoreNet Global, the worldwide professional association for corporate real estate executives in multinational corporations.
According to the report, globalization can easily also mean localization, as governmental regulations and cultural norms vary by region. Even If most markets are open to competition, the rules governing that competition are not always the same. And, the openness of global markets means that problems in one city or nation are very likely to impact another in some form.
While these dynamics are by definition unpredictable, there are roadmaps for success laid out in the report:
Flexible corporate culture: Balancing local cultural norms and global corporate culture is a challenging aspect of opening and maintaining a new office. Having a “one size fits all” global strategy is not a recipe for success, but a country, or market-based approach is important. There has to be a balance between company culture and local sensitivities. Offices may look different in each country, with hours, workspaces, and even dress codes impacted by local cultural norms.
Planning: Conditions may change rapidly due to a variety of unforeseen circumstances: local economies, financial markets, natural disasters, and political or security crises. Preparedness initiatives enable the company to respond to changing market dynamics, by adding or removing capacity based on customer needs, currency fluctuations, and other factors.
Emerging markets: Companies learned a few decades ago that they could reduce the cost of talent and real estate by putting support teams in less expensive markets. But emerging markets are just that — emerging — and as they become more attractive as customer markets, they lose some of their desirability as labor markets.
Effects of automation: Robotics and software are gradually replacing people for the kinds of tasks that do not require human interaction. These developments will usher in new opportunities for companies to operate complex networks of production, distribution and sales across multiple geographic locations, leveraging the power of data to drive value creation.
These and other underlying forces are changing the way business is conducted and therefore the skill set of the CRE, according to the report: “CRE executives need to watch these changing dynamics carefully in order to be prepared for a changing profession on an evolving global stage.”
Several CoreNet Global Gold Strategic Partners contributed to the report: CBRE, Deloitte, ISS, JLL, Newmark Grubb Knight Frank, Sodexo and Steelcase.
The Bigger Picture: The Future of Corporate Real Estate is available for free download with log-in on the CoreNet Global Web site.
