By Elizabeth Forstneger, Senior Director, Portfolio Practice Leader, Global Occupier Services and Shaun Jenkinson, Head of Transaction Management, EMEA
This is the first in a five part series titled Five Imperatives For CRE Leaders, which involves an in-depth exploration of different topics that are of vital importance for commercial real estate professionals.
1. How do we attract and build a comprehensive facilities strategy?
At the heart of any good strategy is the ability to create an advantage. In order to focus a strategy that will yield a competitive advantage, a multitude of enterprise-level factors and goals need to be considered. Corporate real estate teams of today are increasingly driven to elevate their role in the successful achievement of enterprise-level business goals by collaborating with, challenging, and leading the charge with other corporate services functions and business units. However, when the Real Estate Executive Board surveyed a cross-section of companies on the topic of Real Estate Strategy, it revealed only 18% possessed a long-term real estate strategic plan that aligned real estate with overall business goals. That statistic will improve as CRE professionals and their organizations realize the current and potential value of their contributions to enterprise’s goals and collectively set a plan in motion to contribute to an enterprise’s strategic advantage.
What is the value of a real estate strategy if it doesn’t contribute to creating a competitive advantage for the enterprise as a whole? While the context of each organization is different, the following steps are universal to the process of building a framework and strategy to drive toward enterprise goals.
Define the Strategy’s Intended Impact
The first step is enabling the CRE team to gain visibility into enterprise-level goals and align stakeholders on a shared vision for success. There are many ways to achieve this depending on the relationship between the business leaders and the industry experts. In cases where visibility and tethers between the real estate professionals and the rest of the organization are minimal, a more direct set of activities such as interviews of company leaders, workshops, or surveying may be needed. For a consumer products testing company, with a lean, FM-centeric real CRE team that meant pulling insight on enterprise goals and vision for the future of the business from its most senior leaders and translating this to real estate goals and ultimately, real estate actions. Whether enterprise-level plans are actively communicated and discussed with the team in the normal course of business or they need to proactively seek it out through the activities described above, this knowledge sharing stage and two-way feedback is critical to defining the intended impact. Once the impact of the enterprise strategy is known and related competitve advantage is understood, the CRE professionals can set priorities as it relates to real estate and build a framework.
Framework the Priorities
In most industries, a core challenge is aligning the long-term nature of real estate occupancies with the short term nature of business events. That is why a strategy cannot be a list of initiatives and hot button issues, but rather a framework for decision making needs to be constructed to support evolving external factors of the business. The framework should outline the guiding principles of the enterprise strategy, prioritize real estate-related goals based on the both the level of importance and ability to impact enterprise goals. For a large media company facing a potential acquisition, that propelled its CRE leadership put their entire team in a room for half of a day to discuss its strategic priorities as it relates to the guiding principles of the enterprise. The CRE team was guided through a workshop-style self assessment comparing their opportunities and constraints to best in class experts as it related to the guiding principles of the enterprise and their potential related real estate impact.
These activities mobilize the CRE team and partners behind a common set of goals and principles to form a real estate strategy aligned with enterprise goals. Leadership can then drive a strategy that includes tactical decisions regarding where, when, and how its real estate occupancies support enterprise goals and ensures employees and resources aligned against those actions to create a competive advantage.
Elizabeth Forstneger, CPA, CCIM, LEED AP, Prosci Certified Change Practitioner, is a Senior Director and Portfolio Practice Leader, Global Occupier Services at Cushman & Wakefield, leveraging her deep experience in business development, operations, consulting, strategic planning, and public speaking in developing and delivering solutions that drive growth.
Shaun Jenkinson is the Head of Transaction Management for the EMEA region for Cushman & Wakefield’s Global Occupier Services group.