Sunday, January 31, 2010

We Have Choices to Make

My wife and I are expecting again. Well, to be honest, our son and daughter-in-law are expecting again but at this stage of life we get to share in the joy too. And a joy she (our first “she”) will be. It got me to thinking. Here I am about to welcome my fifth grandchild into the world. Me! It seems like the last time I checked I was twenty-something and about to teach the world a thing or two.

There has been a lot of teaching since then and I’ve been in the student’s seat for virtually all of it. I’ve learned new things about love, loyalty, sacrifice, and friendship. I’ve learned that life is rarely as difficult as it sometimes wants us to believe, as long as we believe. With a reservoir of faith and strength greater than our own we can and often do overcome and achieve, usually in spite of the obstacles. This is not to say that life is easy, but we often make it more complicated than it needs to be. It is not easy, but it is really very simple.

Right now the economy and its various forms of fallout have us spiraling. While we say we think it has begun to turn upward again no one expects an early return to the old normal. That may never come, and why should it? In fact, why would we want it to? After all, the old normal led us to the current normal and frankly, it’s not so great.

So I asked myself, what would create a new normal that would restore and renew us? The answer is very simple. People would do what they say. Decisions would not be based on greed. Everyone would know that they are accountable and what that means. Value would be attributed to those who create real benefit. We would focus more on the things that unify us than on the things that divide us. We would teach our children that life, not things, have value. We would understand that behavior has consequences. We would know that we are responsible for each other and accountable to each other. We would act with the knowledge that ideals are powerful and can change the way we behave, the way we love and yes, the way we do business.

An idealist, you say? Unabashedly so, but also a pragmatist. I’ve lived the life I’ve lived. I’ve seen technologies and the seduction of success come and go. I’ve witnessed countless “next best things” and movements. And what I see left is people. I see me and I see you. I see that we have power to make choices and the capacity to choose those ideals that are good and reject those that are not. I see that we have a wealth of experience and knowledge and that new horizons call to us. Horizons that will excite us, challenge us, and reward us. I see that we have the opportunity to create something new.

As I look to our collective past I am encouraged. We are not the first to suffer hardship and turmoil. The fact that we are only proves that we are humans living in an imperfect world. What matters most, I believe, is what we decide to do about it.

It really is simple. Do the right thing, the right way, for the right reasons. Give each other the freedom to hold our own beliefs. Celebrate a life in common. Have the courage to succeed.

Simple. Not easy. Vital.

Sunday, January 24, 2010

A Green Lease Cautionary Tale

Imagine developing a new LEED certified building only to have the investment and competitive future of the property negated by one clause in a tenant’s lease. Think it can’t happen, or that it didn’t happen? Think again.

The anchor tenant in a new building caused a clause to be inserted in the lease which read:

“Landlord shall not be required to impose on Tenant or any other tenant of the Building, requirements for Tenant or other tenants to comply with any certification requirements under the USGBC’s Green Building Rating System or other green or sustainable design elements.”

Sustainable building, LEED certification and social responsibility all continue to be important elements in the commercial property maket sector. Achieving LEED certification and having a good sustainability program enhances market value and competitive positioning. More and more tenants have sustainability as a requirement because they recognize the long term financial and social benefits of doing so.

However, there is an expectation in the marketplace that buildings will improve their sustainability profile over time as new technologies and competitive requirements dictate. Doing so requires capital investment which must be borne in part by tenants, and there’s the rub. In the case referenced above the anchor tenant forced a clause into their lease prohibiting the building from requiring any tenants in the building from complying with any sustainable project requirements. Presumably this stance was taken to insulate the tenant from lease increases associated with capitalization of these projects. Once the clause is in place the building and its owner are effectively held hostage until the clause is renegotiated or the lease terms out. During the time the clause is in effect the building owner alone is responsible for capitalizing all sustainability improvements. Improvement which will benefit tenants as well.

A more rational approach would be to recognize that sustainability improvements over time will benefit both owner and tenants. Instead of negotiating a hostage clause like the one above the parties could have chosen to agree on a governance mechanism that would allow joint participation in decision making and an equitable cost / benefit sharing formula.

For more on this tale see

Sunday, January 17, 2010

Data Interoperability – A Dream Coming True or an Elusive Quest?

As building operations have increased in complexity over the years so has the data available from building systems and the need to analyze the data and make fact-based decisions. Facility Managers (FM’s) and their cohorts are challenged to make sense of and synthesize data from different systems to present a complete and rational picture of operations. Not to say that we have arrived at a juncture of data and rationality, but at least we can see the intersection from where we are today.

Expanding beyond the building envelope, managing portfolios of multiple properties only increases the complexity of the equation and the challenge of reaching that desired intersection. While there have long been portfolio management systems and building management systems the two have not often worked hand in hand. Too often, in fact, they have not been viewed as part of the same equation. The real estate folks have their systems and the operations team has theirs. Seldom are they integrated.

In today’s world that simply is no longer acceptable.

Large portfolios represent large investments. Investments that must be optimized in all realms to support financial health and strength. That means that real estate portfolio management and operational systems management should be viewed as part of one whole, not two separates.

Corporate Real Estate (CRE) professionals care about strategic planning, forecasting requirements and business drivers. They understand the financials of the deal but not the life cycle operating costs of the deal. They need to track inventory, utilization, depreciation and implications to the corporate bottom line. Like FM’s, their operational cousins, they typically deal with a number of different systems to accomplish all of this.

FM’s who are focused on building or site operations deal with a different set of requirements, systems and data. On the building side of their domain they care about operating costs, risk mitigation, compliance issues, energy efficiency, lean processes and meeting service level agreements.

The two worlds seem different but are interdependent. New generations of software will integrate them in ways that improve operations on both sides of the equation, making the interdependencies visible and actionable. Portfolio information about asset management and utilization will help operators understand building profiles. Service KPI’s will be tracked across the enterprise and integrated with financials. Energy management will be dashboarded and enable financial modeling and troubleshooting using the same analytical tools.

One of the positive effects of the economic meltdown will be an increased focus on efficiency coming out of the experience. Capital investment will flow to programs and systems that help to lean operations, improve performance and increase efficiencies.

Tomorrow is on the horizon. It will not look like yesterday. It won’t feel like yesterday. It won’t be yesterday. Crisis always leads to innovation and this one is no different. But it will require that you change as your company, your priorities and the knowledge you need to be successful change.

Change. There’s that word again. Don’t ya just love it?

I hope so. It’s the key to your future.