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Given at the CoreNet Global Summit in Chicago, May 1-3, 2011 by:
Moderator: Dr Barry Varcoe, Zurich Financial Services
Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics
Speakers: Michael Leone, Regus;
Tanya Penny, Verizon
The Relevance of Corporate Real Estate to Enterprise Success
1. #12: The Relevance of Corporate Real Estate to
Enterprise Success
Moderator: Dr Barry Varcoe, Zurich Financial Services
Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics
Speakers: Michael Leone, Regus
Tanya Penny, Verizon
2. Running Order
• Session Introduction
• The Research
• CRE Practice Findings
• Key Findings:
Panel & Audience discussion
• Conclusions
3. The Research
Is there a relationship between the capability of
CRE and Enterprise economic performance?
CRE Practices Enterprise Economic
Maturity Performance
Correlation
Tests
Identified
Relationships
4. The Sample
• Fortune 500 focus
• On-line survey live during October 2010
• 40 valid data sets on perceived CRE performance:
3.6 m people supported
221 m (gross) m2
US$72.6bn budget
5. 20 CRE Practices
Tactical
• Supplier management
• Operational and management
information
• Space and interior standards
• Governance and compliance
• Customer satisfaction
measurement
• Performance measurement
• Budget management
• Extent of outsourcing
• Telework policy
6. 20 CRE Practices
Strategic
• BU relationship management
• Sustainability
• Portfolio strategy planning
• CRE team diversity
• CRE/HR/IT collaboration
• Use of serviced offices
• Effective staff development
• Continuous improvement and
innovation
• Business strategy collaboration
• Capital release strategies
• Alternative workplace strategies
7. The Sample
5 Economic performance measures
• Revenue growth (last 3 years)
• Net sales per employee
• Return on Assets (RoA)
• Return on Equity (RoE)
• Tobins Q
22. Discussion Topic 1
Supplier Management…
Correlates positively to both RoA and RoE
Discussion points:
• What do you think the key
aspects of good supplier
management are?
• Is it the CRE’s or Suppliers
that are making a difference
(note: the extent of
outsourcing did not show a
correlation)?
• Only ¼ of respondents have
international/integrated
solution supplier relationships
– does this mean there is a lot
more potential to add value?
23. Discussion Topic 2
Operational and Management Information…
Correlates positively to both RoA and RoE
Discussion points:
• What is it about the MI that
makes the difference?
• What are the key challenges
in getting good MI?
24. Discussion Topic 3
Close CRE/HR/IT Relationship…
Correlates positively to both RoA and RoE
Discussion points:
• As an industry we have been
talking about this for quite a
long time, but have we really
done much?
• Who can take the credit for
this – CRE, HR or IT?
• What are the main
relationship areas that are
key?
• What are the big potential
gains in the future by doing
more of this?
25. Discussion Topic 4
Use of Serviced Offices…
Correlates positively to both 3 year growth,
RoA and Tobins Q
Discussion points:
• Use of serviced offices was
the least ‘mature’ CRE
practice…
• Why would this correlate? Is it
more a case that growing
enterprises are more likely to
use Serviced Offices?
• Do Serviced Offices offer
potential value in situations
other than growth strategies?
26. Discussion Topic 5
Continuous Improvement & Innovation…
Correlates positively to RoA
Discussion points:
• Which direction is the
‘causality’ likely to be?
• What continuous
improvement practices are
really effective?
• What are the main sources of
innovation?
• Do we invest enough as an
industry in research and
innovation?
27. Discussion Topic 6
Use of Capital Release Strategies…
Correlates negatively to both 3 year growth
and Tobins Q
Discussion points:
• What are the likely causes
of this?
• Is this likely to be a passing
phenomena of recessionary
times or more sustained?
• Should we stop this sort of
activity until we better
understand what it is really
doing?
29. Discussion Topic 7
Tactical Strategic
• Space and interior standards • BU relationship management
• Governance and compliance • Sustainability
• Customer satisfaction • Portfolio strategy planning
measurement • CRE team diversity
• Performance measurement • Effective staff development
• Budget management • Business strategy collaboration
• Extent of outsourcing • Alternative workplace strategies
• Telework policy
Discussion points:
• Any surprises amongst those that did not show any relationship?
• Which practices may make a difference as they advance further?
30. Correlations
Correlation Summary
3 Year Net Sales /
CRE Practice RoA RoE Tobins Q
Growth Employee
Supplier Management
Management Information
CRE/HR/IT/Collaboration
Serviced Offices
Continuous Improvement
& Innovation
Capital release strategy
31. Conclusions…
Is there a relationship between the capability of CRE
and Enterprise economic performance?
Yes… in parts!
Does CRE make a difference?
Probably
What are the consequences?
Good; Bad; Good
32. #12: The Relevance of Corporate Real Estate to
Enterprise Success
Moderator: Dr Barry Varcoe, Zurich Financial Services
Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics
Speakers: Michael Leone, Regus
Tanya Penny, Verizon