Sunday, September 28, 2008

Top Priority CRE Value Drivers

This week I participated in CoreNet’s Southern California Discovery Forum, a small gathering of end users, service providers and brokers. It was a full day of open discussion about key issues, along with a couple of very interesting project case studies (I’ll think twice before accepting offers to manage development of a new technology site in Ukraine!).

In one of the discussion sessions we ranked the top current CRE value drivers. You probably will not be surprised at which issues rose to the top of the list.

Financial performance: Always a focus but especially so in tough economic times. A couple of the attendees operate large portfolios for banking companies - think they’re focused on the bottom line these days? The summary statement on this one is that the dollar rules and as much hype as all other initiatives may get, the financials will always rule the day.

Attracting and retaining talent: Eighty million Boomers departing the workforce to be replaced by 30 million younger workers creates a big problem, one that is already being felt. While many Boomers will have to work well beyond normal retirement age the problem is still huge. Discussion about what is important to younger workers not surprisingly centered around quality of life issues. Alternative Workplace Strategies, improved workplace amenities, changing workplace standards, and corporate responsibility are all viewed as key strategies to attract and retain the new generation of workers..

Sustainability and Corporate Social Responsibility: Green is here to stay, and it is here to stay primarily because it makes good business sense. There was a passionate discussion about the true cost of building Green, and not everyone believes that it is a cost-neutral proposition. However, a number of participants outlined strategies to assure cost control on Green projects. They included setting a Guaranteed Maximum Price including Green requirements, conducting rigorous Value Engineering reviews, and engaging project participants (including contractors, commissioning agent, and LEED consultant) early in the project before Schematic Design begins. It is also important to evaluate the project on a Total Cost of Ownership basis using life cycle valuation vs. first cost only comparisons. While Green is now understood to be good business from a financial perspective, it is also closely linked to social responsibility, which is becoming more important to market acceptance and recruiting.

Globalization and emerging markets: There was much talk about offshore projects and examples of how wealth is shifting out of the U.S., and the implications of that capital movement (data point: five of the ten wealthiest people in the world are Indian). We also discussed the affects this wealth is having in emerging economies, and globally. One example - the cost of labor in India has risen to the point that some companies there are now outsourcing work to the Philippines.

Tuesday, September 23, 2008

Tough Times

I don’t know about you, but I’m feeling like I’ve been here before. Hard economic times, financial institutions in turmoil, mergers and bankruptcies in every newscast. Many of you have probably lost your job in the past, or had to tell others they had lost theirs. Layoffs are no fun regardless of which side of the table you’re sitting on. As one who has experienced tough times like this before, I have learned through practice and observation that there are ways to overcome. More importantly, there are ways to increase the odds that you are not the one getting bad news.

Do not get depressed. I know, it sounds simplistic and you might ask yourself how you can’t. But attitude is everything. Make sure you keep yours ‘up.’ Enthusiasm and optimism that is genuine and reality-based will benefit the entire organization, not just you.

Recognize what is happening, and deal with it. When tough times come to a company there are those who try to ignore it in hopes it will take care of itself, those who let others do the hard work to help the company, and those who roll up their sleeves and jump in with a can-do attitude, energy, and perseverance. Guess which group is more highly valued, finds ways to succeed in the midst of difficulty, and gets rewarded?

Increase your customer focus. If you’re going through hard times they probably are as well. By serving them better, staying connected to them, and demonstrating that you have their best interests in mind you can increase loyalty and retain them when they have to make hard decisions about where they spend their resources. You help them, you help your company, and you help you.

Be flexible. Don’t expect that you aren’t going to have new demands placed upon you. Instead, embrace them. Recognize these challenges as opportunities to show all that hidden talent that your bosses were unaware of. I have known a couple of people, in fact, who used downturns to recreate their roles, coming out on the other side with new jobs, new respect, and higher value.

Understand that it’s hard for everyone. If you’ve ever had to lay off friends whom you respected as skilled and dedicated workers, then you know that it’s not easy for anyone. One way to separate yourself from the crowd is to recognize what decision makers are going through, emphasize with them, and find ways to help them. They will remember.

Here’s the bottom line in times like this. It is easy to feel that you are not in control, and maybe you aren’t in control of the big picture. But you are in control of your attitude. Changes will be required and resisting them simply adds to your stress and places you in the ‘problem’ category. Instead, embrace the changes as an opportunity to correct old problems and improve the company. Be energized by the changes and the opportunity to participate in them, and look for new ways to showcase your value.

Sunday, September 14, 2008

Attributes of Learning Organizations

In my August 17 post I listed “Be a learning organization” as a key value found in excellent enterprises. You might ask yourself if yours is such an organization, and might even wonder how you would make that judgment. I suppose that in every organization you will find those who are energized by the learning process, who make a point of seeking knowledge and turning it to wisdom. But is the organization a learning entity? Here are three signposts that will help you recognize a company, division, or department that has made learning a key value.

The environment supports learning. This doesn’t happen by accident, ergo, it must be an environment that is created intentionally. Doing so requires security and confidence on the part of leadership. They must be secure enough in themselves that they are willing to accept the role and risks, and confident enough in their team to allow them the freedom to learn, even if that sometimes means learning the hard way. This attitude at the top encourages staff because they know that every failure is not going to be emphasized. You will be hard pressed to find the “blame game” in such an organization. Naturally, diversity of thought is one of the important by-products of this atmosphere. Honest (and sometimes impassioned) exchanges of intellectual ideas, concepts, and individual perspectives are the breeding grounds of creativity. Smart leaders do everything they can to encourage this environment, not suppress it.

It’s all about Process, Process, Process. You will likely find that groups which learn well are structured in doing so - because leadership is purposed in the endeavor. Leaders who are intent on encouraging learning establish distinct processes that create learning. I pride myself on being a very good project manager. Yet, at the conclusion of every project I conduct a post-mortem (I’ve always thought this an unfortunate use of the term and ironic that it is shortened to “PM”). Further, at the beginning of every major project I conduct a team review of past lessons learned. Each of these exercises is a way of transferring learning and each is an open door to discussion and new ideas. At times I have also recruited experts from outside the organization to share their wisdom, and I have seen great benefit from informal “brown bag seminars.” The learning may be informal, but it is not unintentional.

Learning is reinforced. Repeating the lessons over and over is one way of keeping them in focus. There are lots of opportunities and ways to do so, but there are other reinforcement tools as well. Open ended and probing questions that force answers to cite facts and details both test the quality of the answer and burn the knowledge into place. The leader’s job then is to listen with open ears and to encourage diverse perspectives, challenging and giving opportunities along the way for learning to occur, be recognized, and transferred. One very important tool is to emotionalize the learning experience. Have fun with it and make “aha” moments memorable. This emotional connection with intellectual or experiential learning puts an exclamation point on the gain and helps to internalize new knowledge.

You may have been in companies where Friday is the best day of the week, where nothing new is ever tried, and where just getting the job done is all that is expected. I prefer having Monday as a favorite day - and being in a challenging organization that expects me to learn and allows me the freedom that learning requires. That makes work fun and adds a little adrenaline to the morning coffee.

Wednesday, September 10, 2008

Holy Cow! Is That a LHC I See?

As some of you may know, today saw the first successful attempt to circulate a particle beam through the Large Hadron Collider (LHC). Built by Europe's CERN particle-physics lab, the LHC is underground and straddles the border between France and Switzerland. It is an undertaking of immense proportions and import. Or, so physicists everywhere tell us. Not everyone agrees, however. There are doomsday theories and suggestions that it is a wild and very expensive goose chase that is not worth the effort. The airwaves are full of stories about it, but here are a few looks from different perspectives that you might enjoy.

First, a series of articles running on MSNBC. Here you will get a layman’s explanation of the project and positions of its supporters and detractors. Make sure you take the time to watch the slide show and HD vid.

Next, a rather humorous and educational bit of rap. I’m a jazz and blues guy, myself, but this rap has the triple advantage of being A, scientifically correct (they hope); B, written and performed by workers at the site; and C, funny. It’s been a huge hit on YouTube. Enjoy.

And lastly, for those who want “just the facts, Ma’am,” I suggest you wiki on over to

Personally, I’m just glad I don’t have responsibility for their safety program or utility budget!

Sunday, September 7, 2008

CRE/FM Standardization Is Coming of Age

The Open Standards Consortium for Real Estate (OSCRE) recently announced publication of the Work Request & Work Order Fulfillment Standard Version 1.0, designed to automate service requests, work order management and report generation between stakeholders with shared business processes, including occupants, service providers, suppliers and owners. The standard is applicable for Corporate, Commercial, Industrial and Multi-Family sectors of real estate. Read the entire OSCRE press release here

If you haven’t noticed the increasing momentum of standardization in the CRE/FM arena then you haven’t been paying attention. The explosion of applications, increasing demand for data-centric operations analyses and decision support, and increasing speed coupled with larger risk are all exerting pressure on existing systems and structures. For well over a decade now we have been cobbling together a series of semi-elegant solutions. Most of the time they are pretty good solutions, but they must be reengineered each time the architecture of relationships changes.

I once outsourced a large maintenance operation at an electronic manufacturing plant. We had nearly two million square feet of production space, test labs, robotic manufacturing, and fab space. In other words, there was a lot of risk. The outsourced provider brought with them a nifty work order and maintenance management application, proprietary of course, and immediately put all of our data into it. And the instant they did we were trapped. As long as we retained them as our provider all was good. But if we ever had to sever that relationship we knew our data would be lost. That was before interoperability standardization made its way into our little corner of the world. Thank goodness it has.

Fifteen years ago we were talking about HVAC interoperability, finally being able to monitor and manage different systems from different manufacturers, linking them in a fashion that allowed us to take a holistic approach to managing the entire system from a global perspective. Today, that same change is occurring in work processes and applications that we all use. Owners, landlords, tenants, contractors, and sub-contractors will all benefit from common and aligned processes and tools. Supply chain management will experience the same metamorphosis as HVAC interoperability did, eventually maturing into a trusted tool.

The key, of course, is the quality of the data in the system. As the new standard becomes institutionalized across the industry operations will become more transparent, efficient, and presumably more effective. It will, however, expose those who do not know their data or have reliable data. If you don’t have your data house in order then it’s time to get busy.

OSCRE is doing good work. It has taken a while to gather momentum but the progress this industry group is making is notable. Participants include a virtual Who’s Who of the real estate industry, often competitors in business but collaborating to assure consistent, fair, and beneficial standards are in place. Check it out at

Tuesday, September 2, 2008

Black Marketeering as a PM Tool

What, you ask? Can this be true? Would a professional who values his reputation actually go over to the dark side and become a Black Marketeer? Yes. Well....sort of. Maybe I should explain.

We had been buying new task seating in incremental increments for several years and it was a very good chair. By the time we moved into our new HQ building half of the staff had these chairs and half did not. With list prices north of $1,000 per chair even that remaining half represented “real money.” But, we had a dilemma. We knew that some staff who already had the good ergonomic seating did not like the product for one reason or another. Although this was a small number of people they were vocal at times. We knew the noise wasn’t going to abate. We also knew that we would not be able to manage a process in which every occupant was given a choice, and that without choice staff dissatisfaction with the outcome would be high. Further, this particular organization is one where staff feels a high sense of entitlement. Compromise on one issue would translate to pressure on others.

What do you think we did?

We became de facto black-marketeers, encouraging staff to make their own deals without expressly condoning it. We set this black market up through the project policy we announced for seating. In essence we said if you have one of the existing ergonomic chairs you get no choice and must live with what you have. No changes allowed. If you do not have one of the ergonomic chairs then you get to choose between the existing standard and the alternate (also a top of the line ergonomic task chair but from a different manufacturer).

What do you think happened as a result of the policy we announced?

Of course. People made their own deals, just as we knew they would. Some people who already had a good chair but wanted one of the alternates made deals with those who did not have a good chair and were entitled to choose. We placed the order as the entitled person requested, put the chair in their office on move-in day, and couldn’t possibly have cared less which office it was in by the end of the day.

We purposely established a set of conditions that encouraged the development of this black market. Why? Because we knew that doing so would increase the number of people who had choice, which would in turn lead to greater occupant satisfaction and overall acceptance of the project. They got what they wanted, and we got what we needed.

Sometimes you have to be creative in finding solutions. When you do make sure your decisions and actions are oriented towards maximizing customer satisfaction within the boundaries of your project and operational standards.