Enterprise Alignment - CoreNet Global Jun2013 Intro1 FINAL... · MCR Enterprise Alignment Page 1 Enterprise Alignment Bryan Berthold, Dan Boutross, Gordon Hurrell, Larry Ebert Dearborn,

© 2012. CoreNet Global. All rights reserved. MCR Enterprise Alignment Page 1

Enterprise Alignment Bryan Berthold, Dan Boutross,

Gordon Hurrell, Larry Ebert

Dearborn, MI June 2013



Enterprise Alignment Agenda DAY ONE

7:30 AM Continental Breakfast

8:00 AM Welcome: Agenda, MCR Overview, Theme,

Group Exercises, Your Personal Objectives

(Tab 2)

9:00 AM What do you align with? Understanding your

customer

(Tab 3)

10:00 AM Refreshment break

10:15 AM Pfizer Case Study, Aligning real estate strategies

with the R&D Business

(Tab 4)

12 NOON Luncheon

1:15 PM Bank of America: Portfolio Rationalization,

Transition & Outsourcing, Case Study

(Tab 5)

3:00 PM Refreshment break

3:15 PM Measuring Success; Benchmarking

(Tab 6)

4:00 PM Technion Case Study Slides, Small Group

Meetings

(Tab 7)

5:00 PM Class Ends - Reception

DAY TWO

7:30 AM Continental Breakfast

8:00 AM Technion Case Study:

Small Group Meetings, continued

8:30 AM Technion Case Study:

Group Presentations and Discussion

10:00 AM Refreshment Break

10:15 AM Bank of America: Enterprise Program

Management, Case Study

(Tab 8)

11:05 AM Pfizer Case Study: Facilities Optimization

(Tab 9)

12 NOON Luncheon

1:15 PM Vested Outsourcing and the Integrator, Case

Study (Tab 10)

2:30 PM 10 Key Issues Facing our Industry

(Tab 11)

Summary / Wrap Up

3:30 PM Seminar Ends

3:30 PM

+10 Days

Seminar Ends

MCR Assessment – Link Goes Live


MCR Overview MCR Professional Development Program

Provides essential skills that focus on urgent and critical business issues. Become an MCR to broaden your knowledge and deliver ever-increasing value to your enterprise

In a peer-to-peer learning environment, led by industry experts, you will enhance your essential management skills and obtain useful “take-aways” with immediate applications

Addresses the effective management of CRE functions from a strategic perspective that focuses on the mission of the CRE organization in relation to corporate goals

Valuable for those at the mid-management level in CRE and those positioning themselves for mid-management level, including service providers.

Has a strong financial component, which emphasizes the critical need for understanding corporate real estate's linkage to the corporate bottom line

Strategic approaches in portfolio management, aligning real estate to business strategy, outsourcing and partnering, technology and workplace strategy are included in the Series.

Candidacy Qualifications

3 years experience in CRE and a masters degree, or

5 years experience in CRE and a bachelor's degree, or

10 years experience in CRE


MCR Overview

MCR Designation

Communicates special competence and successful experience as a corporate real estate (CRE) expert

Contributes significantly to the professionalism of CRE.

To earn the MCR designation, candidates must complete three required seminars, two elective seminars and a Capstone within a five-year period. An assessment will be given at the end of each seminar and a passing grade must be attained to receive credit for the seminar. You must be a registered candidate to receive the designation.

To receive certification, you must register as a candidate using the MCR Candidacy Application Form. If desired, you may take the MCR seminars without becoming a candidate.

Continuing Education Requirements

Continuing Professional Development activities are essential in today's rapidly changing world

To retain the MCR designation you must earn a total of 50 points of continuing education every three years and submit a completed MCR Designation Renewal Report Form.


Master of Corporate Real Estate

Required

Seminar 1

Elective

Seminars 2

Required

Seminars 3

FO

UN

DA

TIO

N

CA

PS

TO

NE

ELE

CT

IVE

S

CRE Technology

Portfolio Management

Sustainable Strategies

Advanced Lease Analysis

Performance Management

Advanced Real Estate Negotiation

Managing Effectively in Global Markets

New Survival Tools for Industrial Operations

Developing Workplace & Mobility Strategies

Creating Corporate Value thru Workplace Strategy

Portfolio Realignment: Restructuring Corporate RE Assets

Service Delivery & Outsourcing: Implementing, Managing & Delivering Partnerships

Enterprise Alignment

Capstone:

Leadership

& Strategy

Real Estate Transactions

CRE

Finance


MCR Assessment

CoreNet Global’s Professional Development program has gone “Green.”

At the end of the last day of class (3:30 PM Thursday), the Assessment link will go live.

CoreNet Global suggests that you return to your hotel room to complete the online evaluation and

assessment in a more comfortable atmosphere. You may refer to your class notes.

You have 10 days to complete the evaluation and assessment. It is best to complete the

assessment while the concepts are still fresh in your mind, so do it as soon as possible.

Please allot two hours from the time you login to complete the evaluation and assessment because

you will only be able to login one time. You must respond to all questions in the evaluation first

before you can access the assessment.

We highly recommend you read the General Instructions Page of your assessment before you

begin. This page has valuable tips to help you navigate the process.

If you encounter technical problems or need help, please send an email to Gayle Crew at

[email protected]. We sincerely appreciate your cooperation and participation in “Going

Green” with CoreNet Global!

mailto:[email protected]


Theme “The business of corporate real estate is the business of the business.”

Knowing the changing business environment, the business’s core drivers and processes; and the changing nature of work are the foundation for developing and

aligning real estate portfolio and workplace strategies with those of the business.

To be successful, CRE executives must become more proactive, process-oriented, strategic, and

linked to business unit goals. Effective CRE management today goes well beyond delivering facilities on time and within budget. It requires understanding how the real estate portfolio of the enterprise can match and serve the corporation’s business model, work, and culture.

Effective CRE management develops asset portfolio scenarios and workplace

strategies based on an understanding of the relationships among physical space, worker/business unit productivity, corporate strategies and corporate culture.

To accomplish this requires extensive client relationship management with business

units and integrating occupancy (CRE), connectivity (IT), financial acumen (FIN) and management policies (HR) based on a firm understanding of how individuals and teams actually do their work, and how that work may, in turn, be influenced by this bundle of infrastructure and support services.


EA Test 1: What Is This?


Supply Chain Strategy Supply Chain Vision involves the alignment of business requirements with cost targets and current available platforms

Chilled DC

(Region TBD)

Chilled 3rd Party DC

Region N

Chilled 3rd Party DC

Region A

Broker DC

Region A

Customer DC

(DSD 3PL)

Region A

Customer DC

Region A

Stores

Stores

Stores

Stores

Copacker 1

Copacker 2

Copacker 3

AND maintain or improve delivery

service levels:

• Order lead time

• On-time delivery

• Delivery frequency

• Fill rate

• Order completeness

• Damage-free receipt

• Reliability

Range of Optimal Values

Annual

Cost Transfer

Freight

Fixed

Cost

Store Freight

Number Of Facilities Few Many

Total Cost

Inventory Carrying

Cost


And the Answer is….. Not sure of the answer?

Don’t Know the answer?

Know the answer?

• But the circumstances change every time…

• But there is no single answer?

• But don’t want to commit to it?

Where are you?

• On the Know / Don’t Know Matrix?

KNOW

DON’T

KNOW

KNOW

Know

What You

Know

Know

What You

Don’t

know

DON’T

KNOW

Don’t

Know

what you

know

Don’t

Know

what you

Don’t

know


Core Business

Strategy Ranking

2001

04

07

Facilities/Real Estate

Strategy Rankings

2001

04

07

Overall Mission, Vision & Strategy 1 1 1 CRE/FM Alignment with Core Business 1 1 1

Finance & Investment 3 3 2 CRE Mission, Vision & Strategy 4 2 2

Competitive Position 2 2 3 Portfolio Position & Value 2 4 3

Customer Innovation 4 5 4 Site & Facility Flexibility 5 6 4

Product & Service Innovation 6 4 5 Co-location of Groups / Business 6 5 5

Growth, Change, M & A 8 9 6 Finance and Investment 3 5 6

Environmental Sustainability NR 11 7 Sustainable Design 12 9 6

Recruitment & Retention 5 6 8 Globalization of CRE/FM Functions 7 3 7

Globalization 9 8 9 On / Off-Site Workplaces 9 8 8

Work-Life Balance 12 7 10 Facility Locations re: To Workforce 8 7 9

Brand Identity & Innovation 10 10 11 Group Workflow & Layout 11 11 10

Process Innovation 11 12 12 On / Off-Site Amenity Functions 12 12 11

Core Values & Culture 7 12 13 Facility Image & Identity 10 10 12

COMPARISON OF THE TOP 12 STRATEGIES

FORTUNE 1000 COMPANY SURVEYS


CLEAR ALIGNMENT BETWEEN CORE BUSINESS & FACILITIES / REAL ESTATE ELEMENTS

Top 12 Core Business

Strategy Elements

Top 12 Facilities / Real Estate

Strategy Elements

Mission & Vision • Overall Mission, Vision & Strategy

• Competitive Position

• Finance & Investment

• CRE Mission, Vision & Strategy

• Portfolio Position & Value

• Finance & Investment CRE/FM

• Alignment w. Core Business

Customers & Markets • Growth, Change, M & A

• Globalization

• Customer Innovation

• Product & Service Innovation

• Size & Facility Flexibility

• Globalization of CRE/FM Functions

• Co-location of Groups / BUs

• Group Workflow & Layout

Products & Services • Process Innovation

• Brand Identity & Innovation

• Environmental Sustainability

• Recruitment & Retention

• On / Off-Site Workplaces

• Facility Image & Identity

• Sustainable Design

• Facility Locations re: To Workforce

Values & Culture • Work-Life Balance

• Core Values & Culture

• On / Off-Site Amenity Functions


Changing Business Environment

Solutions Delivery…..Technology…..Enterprise Leadership

The CRE Value


Changing Business Environment

Climate change, rising oil prices, war,

terror, market turmoil, threat of pandemic and other risks are redefining life on an individual and societal level. The state of the World’s economy is a result

of globalization’s pervasiveness.

More open markets and free trade combine with travel and technology to flatten the world. (Thomas Friedman)

Still, the migration to an integrated global economy is at least another 25 years from being fully realized. (Alan Greenspan)

Geographic and political boundaries are, in turn, blurring with the pronouncement of cross-investment, knowledge work, e-commerce, and other forms of “rampant change.”

The characteristics of today’s fast-

changing business environment also extend to escalating risk and the resulting need for greater degrees of flexibility, transparency and

now corporate social responsibility.


Changing Business Environment The changing business environment is

leading to a stakeholder mentality, one through which

consumers, employees, investors, suppliers, media, communities and other constituencies critical to the growth and profit of corporate enterprises are

viewing governments as less effective in dealing with global

issues.

Brand reputation is

increasingly at stake.

Companies that invest in this

mindset will reduce risk,

increase reputation and

enhance profitability. (Dr.

Noreena Hertz)

In 2008, Harpers Bazaar chose Hertz as "one of the most powerful women in Britain" and described her as "one of the greatest communicators of our generation."


© 2007. CoreNet Global. All rights reserved.

Drivers of Change

Long-Term

Cyclical Economic

Shocks

Time

And Where does CRE fall among these 3 Types?


A Possible Timeline to Recovery


+PLUS+

$500

Gift Card

UNDER CONSTRUCTION – INVENTORY MUST GO


2009-13 Economic Impacts to CRE CRE ‘long-term’ is ‘day-to-day’ survival

Jobs on the chopping block

Corporate stock price slump

Cut space, cut costs, real estate holdings, tenant leasing way down

Transformation now underway for companies and their CRE organizations: To be more aligned Strategic Drivers are now enabled directly

by CRE

Downturn Extends across a wide range of sectors,

and impact is worldwide Deeper than the anticipated shallow one Longer than anticipated, perhaps through

4Q2013+


SOTI March 2010 Which term best describes current business conditions

at your company

74%

33%

41%

55%

15%

29%26%

19%

33% 34%30%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Aug '08 Nov '08 Apr '09 Oct '09

Growth

Flat

Contraction


SOTI March 2010 How do you expect your CRE operating budget for 2009

to change compared to 2008?

43%

33%

24% 25%26%

20%

30%

45%

11%

56% 56%

31%

0%

10%

20%

30%

40%

50%

60%

Aug '08 Nov '08 Apr '09 Oct '09

Increase

No Change

Decline


SOTI March 2010

How do you expect your CRE capital budget to

change compared to last year?

30%

15%19%

43%

18%18%

67%63%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Aug '08 Apr '09 Oct '09

Increase

No Change

Decline


Strategies companies are using to reduce portfolio costs

0%

20%

40%

60%

80%

A B C D E F G H I J K L

Oct '09 Apr '09

A Deferment of capital projects

B Restructure leases

C Redesign office space/densify

D Reduce/defer maintenance

E Early lease termination options

F Accelerate project reducing cost

G Move to lower-cost facilities

H Implement telework programs

I Cancel capital projects

J Sale of owned properties

K Shift to lower-cost locations

L Other

SOTI March 2010


SOTI March 2012


Alignment: Who Are You? Senator, MP or Police Officer?

Governance Role Policies

Guidelines

Standards

Best practices

Benchmarking

Processes

Performance metrics

Strategic Role

Understand and tie into alignment process / information flow

Read the “tea leaves”

Establish influence policies

Relational leadership

Be a key contributor to business investment decisions

Understand and apply value based management


Alignment: Objectives Being able to:

Align with the Core Competencies of the Business

Demonstrate how CRE adds value to the business

Articulate plan in the language of the business

Explore occupancy and workplace strategies and their impact on productivity

Viewing real estate:

As a productive resource

As a business investment

Not Overhead expense

“Come with me. I’ve found

someone who’ll talk square

footage with you.”


Ways of Working

TRADITIONAL WAYS OF

WORKING

Focus on place

Performance based on “time in”

or ‘face time”

Management by Supervision

Presence by team members co-

located

Space planning rationale:

Design based on status, hierarchy

Empty space held “just in case”

THE EMERGING WAY OF

WORKING

Focus on work

Performance based on results

Management by Mentoring and

coaching

Presence by virtual team, mobile

individuals

Space Planning rationale:

Design based on functions / tasks

Space provided “just in time”


KNOWING WHAT IS IMPORTANT


KNOW YOUR STRENGTHS & WEAKNESSES


IDENTIFYING TOP CRE STAFF PRIORITIES


INDENTIFYING TOP INTERNAL CUSTOMER PRIORTIES


Alignment: Transformation

It was about…

Facilities

Projects

Tactics

Growth

Work

WorkPLACE

Transactions (Customers)

Tasks/Silos

Checklists

Reaction

It’s now about…

Facilitation

Outcomes

Processes

Efficiency

Worker

WorkHOW

Relating (Relationships)

Interactivity/Integration

Continuous Improvement

Driving


Corporate Real Estate 2020

Bricks and Mortar Take a Back Seat

• Corporate Real Estate 2020 thought leaders are proving real

estate isn’t so much about bricks and mortar as it is about

enabling work and finding ways to help the business stay or

become more competitive in a complex, dynamic global

economy


SOTI March 2012


SOTI March 2012


Sic transit gloria mundi: (How quickly fame fades)

3 Performance Metrics?

• Walks on Water

• Floats in Water

• Drowns in Water

3 Measures of Success?

Sits at the table

Purchases the table

Cleans the Table


Parking Lot: Your Personal Objectives

Who are you?

Which company do you work for and what do you do?

Why are you here?

What do you want to get out of the class?

What makes you a pain in the …….?

Documents

Enterprise Alignment - CoreNet Global Jun2013 Intro1 FINAL... · MCR Enterprise Alignment Page 1 Enterprise Alignment Bryan Berthold, Dan Boutross, Gordon Hurrell, Larry Ebert Dearborn,