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General Session II
Overview: Corporate Real Estate 2010
Linda DeMarsVP Program Development
CoreNet Global
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GS II CoRE 2010
Today’s Conversation
• Introduction: About Corporate Real Estate 2010 (CoRE 2010)
• The Changing Business Environment
• The Rise of the Networked Virtual Organization
• Implications for the CRE Industry
• Your Call to Action
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GS II CoRE 2010
A Positioning Thought
“For the future is not what will happen; the future is what is happening.
The present and the future don’t abut each other, neatly divided between the five-year plan and
the great unknown beyond. Rather they are intertwined. Every enterprise is in
the process of becoming…”
Hamel and Prahalad, Competing for the Future
INTRODUCTION
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GS II CoRE 2010
About CoRE 2010
• Assembled 85 leading multi-national corporations• Convened eight research teams• Interviewed over 200 companies• Commissioned two surveys:
– Gallup survey of industry leader end users– Kingsley survey of technology providers
• Validated findings and interpretations• Summarized and synthesized results
INTRODUCTION
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GS II CoRE 2010
CoRE 2010 Research Topics
• Sustainability & Corporate Social Responsibility (CSR)• The Changing Nature of Work & the Workplace• The Role of Technology & the Web• Integrated Resource & Infrastructure Solutions• Solutions Delivery• Asset Management & Portfolio Optimization• The Strategic Role of Place• Enterprise Leadership
INTRODUCTION
Key Business Drivers
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GS II CoRE 2010
Time
State of the Economy
Long- Term Secular Change
Cyclical Business Change
Shocks
• Globalization
• Technology
• Sustainability
• Work & the Workforce
• Innovation & Change
• New Business Risks
THE CHANGING BUSINESS ENVIRONMENT
The Interplay of Key Business Drivers
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GS II CoRE 2010
Nature of Work
Technology
Globalization
Innovation
Corporate Social Responsibility& Sustainability
New Enterprise Business Models
• New Risks• New Opportunities• New Ways of Doing
Business
Role of Corporate
Real Estate
THE CHANGING BUSINESS ENVIRONMENT
The Networked Enterprise
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GS II CoRE 2010
• The networked enterprise is a business model that connects people and partners (the “network”) to the enterprise via information technology
• The Networked Virtual Organization (NVO) is a term coined by CISCO to describe the changing organization of business processes
• The networked enterprise integrates disparate organizations to work together as one entity
THE RISE OF THE NVO
The Rise of the NVO
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GS II CoRE 2010
Do you agree that network-based business models will fundamentally change the physical, human and infrastructure needs of the enterprise by 2010?
Gallup Survey N = 297
THE RISE OF THE NVO
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GS II CoRE 2010
2010 Forecast: Sustainability & CSR
• By 2010, 90% of the Fortune 500 adopts Triple Bottom Line Reporting– PEOPLE = social responsibility– PLANET = environmental sustainability– PROFIT = financial responsibility
• CRE is a sustainability leader – we impact many sustainability & CSR metrics
• Design awards:– Creative adaptation in the developed world– New construction innovation in the developing world
IMPLICATIONS FOR CRE
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GS II CoRE 2010
DJSI World – USD Performance and Risk December 1993 - October 2003, USD, Price Index
80
130
180
230
280
330
12/93 6/94 12/94 6/95 12/95 6/96 12/96 6/97 12/97 6/98 12/98 6/99 12/99 6/00 12/00 6/01 12/01 6/02 12/02 6/03
DJSI World (in USD) DJGI World (in USD)
• DJSI World / DJGI World:• Correlation: 0.9637 Tracking Error: 4.37%• DJSI Volatility: 16.19% DJGI Volatility: 14.97%
85%
57%
IMPLICATIONS FOR CRE
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GS II CoRE 2010
Sustainability & CSR in Australia
• Workshop IV:Driving Sustainability and Supporting Corporate Social Responsibility– Westpac Banking Corporation– Investa Property Group
• Site Visit I: VicUrban• Site Visit II: CH2• The Debate: Smoke, Mirrors & Sustainability – That
Social Responsibility is not Financially Viable
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Work
• The 2010 workforce is:– Culturally diverse
– Younger and older– Independent
• The work environment is CONNECTIVITY
• Work is mobile, not just workers
• CRE’s new role is workplace strategist
IMPLICATIONS FOR CRE
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GS II CoRE 2010
The Workplace Strategist
BusinessProcess
Knowledge
Workplace NetworkDesign
Integrated Resources &Infrastructure
=Worker
Productivity
IMPLICATIONS FOR CRE
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GS II CoRE 2010
Work & the Workplace in Australia
• Workshop II:Supporting Excellence through CRE at Ernst & Young
• Workshop VIII:Superworking ®
• Workshop IX:Accommodating Generational Change in the Workplace
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Technology & the Web
• By 2010, new technologies enable new and different
ways of working• Connectivity is ubiquitous,
secure and predictable• “Smart” buildings and communities accelerate
productivity• Integrated systems and tools
are a reality• Corporate real estate is a
knowledgeable, proactive technology ambassador
IMPLICATIONS FOR CRE
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GS II CoRE 2010
Technology & the Web in Australia
• Workshop X:You ain’t seen nothing yet! Leveraging Technology & the Web
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Integrated Resources
• By 2010, strategic real estate functions are performed in the context
of integrated resources• Convergence (consolidation)
dramatically reduces capacity and cost
• Worker demand amplifies the compelling argument
• In 2010, there is strong demand for skilled professionals to craft
integration strategies –how about you?
IMPLICATIONS FOR CRE
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GS II CoRE 2010
Integrated Resources in Action
• General Session III:Managing the 21st Century Enterprise: Is there a Role for Corporate Real Estate?
• General Session IV:The Employee Experience at Herman Miller: Successful Integration of Human Resources, Information Technology and Corporate Real Estate
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Solutions Delivery
• By 2010, traditional real estate services are
outsourced in the context of an integrated
solutions delivery network
• Two new roles emerge:– The Integrator
– Independent auditors
IMPLICATIONS FOR CRE
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GS II CoRE 2010
New Service Delivery Models in Australia
• Workshop VI:Leveraging Strategic Alliance Best Practice to Lower Operating Costs While Minimizing Risks
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Assets & Portfolios
• By 2010, resource portfolio optimization will replace real estate asset management
• In 2010, portfolio flexibility is widespread and quantifiable
• New financing entities enable portfolio level financial structuring with flexibility
• Portfolio optimization opportunities will transcend the enterprise and include the entire value network
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast: Place
• Enterprises and communities are waging a
global war for talent• Global Imbalance of real
estate assets• In 2010, enterprise
competitive advantage is enhanced by location
decisions that:– Deliver talent to the
enterprise– Mitigate new levels and
types of risk
IMPLICATIONS FOR CRE
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GS II CoRE 2010
The Strategic Role of Place in Australia
• Workshop VII:The Global Game is Changing: Cities and States Connect Clusters and Markets
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Forecast : Leadership
• The new skill set for effective 2010 leadership includes:
– A focus on the business of the business
– Use of integrated business case and financial analysis
– Cross-functional expertise (people, technology)
– Mastery of process and knowledge management
techniques• Your strategic role is that of an
advisor to the business
IMPLICATIONS FOR CRE
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GS II CoRE 2010
New Executive Skill Sets
Gap ?
CRE SkillsSkills for Credibility:Workplace strategy, RE finance, RE IT, program/project management
Business SkillsSkills for Management: Process management, corporate finance, information technology, customer relationship management, sustainability
Enterprise SkillsSkills for Strategy: Knowledge of the core business, change management, network management
Gap ?
Good to GreatCollins, Jim, 2001 HarperCollins Business
IMPLICATIONS FOR CRE
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GS II CoRE 2010
2010 Leadership in Australia
• Workshop I:Achieving and Managing Agility
• Workshop III:Reinventing Real Estate to Address the Unique Needs of Specialized Businesses: The Australia Post Story
IMPLICATIONS FOR CRE
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GS II CoRE 2010
CRE Value Creation in the Networked World
CRE ProfessionalWorkplace Strategist
Enabling Worker ProductivityOptimising Global Resources
Reduce Costs and RiskIncrease Productivity and Innovation
Increase Sustainability and CSR
IMPLICATIONS FOR CRE
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GS II CoRE 2010
Your Call to Action
• Be an advocate of integration
• Re-brand your value as workplace strategy
• Know your enterprise’s core businesses
• Nurture and develop a more robust skill set within the leadership team
• Develop metrics and measures to assess the capacity of the integrated resources to enable work and optimize the portfolio