the relevance of corporate real estate to enterprise success
DESCRIPTION
http://www.regus.com/?utm_campaign=slideshare 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, VerizonTRANSCRIPT
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#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
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Running Order
• Session Introduction
• The Research
• CRE Practice Findings
• Key Findings:
Panel & Audience discussion
• Conclusions
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Is there a relationship between the capability of CRE and Enterprise economic performance?
The Research
CRE Practices Maturity
Enterprise Economic Performance
Identified Relationships
Correlation Tests
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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
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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
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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
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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
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Industry Sectors
Market Sectors
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Sample Variance Tests
• Portfolio size • CRE team size • CRE&FM operating budget size • Professional membership • CRE organization structure • Industry sector • Enterprise size (annual revenue) • Enterprise size (No. of employees)
= No significant differences
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Organization Structure
CRE Organization Structure
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Budgets
Budgetary Control / Recharging
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Reporting Line
CRE Reporting Line
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Suppliers
Use of Suppliers
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Telework
Telework / Telecommunications Applicability
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AWS1
Alternative Workspace Strategies (Current)
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AWS2
Alternative Workspace Strategies (Future)
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Sustainability
Sustainability Practice (Future)
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Self View of Executive Opinion
CRE View of Executive Opinion
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Key Findings… Maturity and Correlations
CRE Practice Maturity
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Industry Maturity
Comparative Industry Maturity
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Key Findings
• Correlation vs Causality
CRE Practices Maturity
Enterprise Economic
Performance
?
6 CRE Practices correlated to Enterprise Success Measures
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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?
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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?
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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?
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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?
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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?
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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?
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Correlations vs Maturity
CRE Correlation Practices vs Maturity
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Discussion Topic 7
Tactical • Space and interior standards
• Governance and compliance
• Customer satisfaction measurement
• Performance measurement
• Budget management
• Extent of outsourcing
• Telework policy
Strategic • BU relationship management • Sustainability • Portfolio strategy planning • CRE team diversity • Effective staff development • Business strategy collaboration • Alternative workplace strategies
Discussion points:
• Any surprises amongst those that did not show any relationship?
• Which practices may make a difference as they advance further?
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Correlations
Correlation Summary CRE Practice 3 Year
Growth Net Sales / Employee RoA RoE Tobins Q
Supplier Management
Management Information
CRE/HR/IT/Collaboration
Serviced Offices
Continuous Improvement & Innovation
Capital release strategy
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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
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#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