Corporate Real Estate 2.0

Welcome and thanks so much for visiting my new blog. I’ve held lots of jobs in corporate real estate over the last 20 years and here’s the thing I’ve come to realize: it’s not about the bricks and mortar. Not at all.

There’s a wonderful saying that goes something like this: To a man with a hammer, everything looks like a nail. I think in the world of real estate we sometimes get so obsessed with building and dealing and managing and operating that we forget what we’re doing it for. We think about the bricks and mortar because we’re real estate people, but why are we doing all this stuff in the first place? We do it because we’re enabling people to work, to serve their own customers. Everything we do is supporting a means to that end.

A friend of mine once said he wanted to drag the real estate industry kicking and screaming into the next century: the 20th century. He’s right. We might be using new(ish) tools but we’re firmly rooted in the 1800’s when it comes to the way our industry works. Look at the way we do deals. The way we operate buildings. In this flat, virtual world we’re still tending to the bricks and mortar. When it comes to resisting change we’re better than the buggy-whip makers, but not by much.

I’m kind of obsessed about ideas in workplace, especially when it comes to the powerful integration of technology, real estate and human resources. I think integration of those three forces will be the key to dynamic change (and maybe to survival?) and ideas will drive that integration.

Please visit me regularly. I’m going to interview some thought leaders in our industry and share some cool ideas about changes and challenges. I’m passionate about some things (sustainability) and plain curious about others (the power of advanced analytics). I’m suspicious and skeptical, interested and engaged, but always thinking about how we can make things better.

If you’ve got ideas or questions of your own I hope you’ll let me know. Let’s explore this thing together.

This is going to be cool.

Reducing Your Power Consumption: Unplugged

There are lots of simple, free steps you can take to reduce your energy consumption and lower your power bills. You’ll be reducing your company’s carbon footprint and making your CFO happy by lowering expenses, all without investing capital. A the same time you’ll make your co-workers happy by engaging them to make their workplace greener.

Kind of like an analog to Reduce - Reuse - Recycle mantra, when it come to energy you should reduce the amount of energy you use, and for the power you DO need you should make its sources as green as possible.

The “Reduce” step is dandy because it can be free: no investment is required to start realizing significant savings. Your father yelling at you all those years to turn off the lights? He was onto something. Here are five suggestions to start you out, but I bet you can look t your actual workplace and come up with a lot more:

• Turn off lights in conference rooms, bathrooms and other common areas that are not always in use. If you want to get a little fancier you can install motion sensors but we’re trying to stick to free measures here
• Turn down your thermostat. Set the temperature a little higher in the summer and lower in the winter
• Turn off your computers overnight
• Power off any unused AV equipment. HD TV’s are notorious energy hogs, even when they are sitting idle. Plug them into a power strip and then turn off the power strip overnight
• Use less stuff. If you are part of a big company you should explore server virtualization and other measures to reduce your IT load. If you are a smaller operation unplug those appliances in the breakroom. Your local soft drink distributors all have programs to reduce power usage in vending machines.

In a later article I’ll talk about “Reduce” steps you can take that require a small investment but have pretty quick paybacks. In the meantime, I’m going to go unplug something…

No Caves for the Cavemen

In his book The Future of Work Thomas Malone described an environment where knowledge based businesses would be run as loosely based hierarchies or self-managed democracies. Highly skilled workers would group, disband and regroup based on the different project challenges. The focus would be on the work product and ad hoc teams would be created based on each player’s expertise for that specific product.
We can see that happening, more and more, as companies adopt virtual work programs with associates free to work when, where and how they need to so they can produce the best work for the company.

What will the physical workplaces look like to best support that approach? The companion book to Malone’s might be called The Future of the Workplace.
Seems to me they’ll have to be as nimble and flexible as the workers and projects themselves. The workplace itself will become virtual, and be defined less by bricks and mortar and more by technology. That workplace of the future will need to have the following characteristics:

• Lots of different types of workspaces for teaming, individual work, brainstorming, relaxing and so forth
• Super flexibility. It can be quickly reconfigured (in hours or days, not weeks or months)
• Green. Workers, customers and shareholders will demand more sustainable work practices and the environment to support them.
• More seamless integration of bricks and mortar and technology. They’ll really blend to become “the work environment” and cease to be separate teams/components.

The corner office ideal may never go away; it’s in our lexicon just like “9 to 5.” But who works 9 to 5 anymore? Just as they way we work is changing, the places we work in will need to change, too.

Why Go Green? A Clear-eyed Manifesto for the Anti-Tree Hugger

Put aside for a minute those arguments about environmental responsibility and doing the right thing. Silence your inner tree-hugger. There are some hard core, red-blooded reasons that you and your company should be considering the option of going green. Here are seven reasons to act:

1. You can increase your revenue. According to real estate studies cited in the 11/13 issue of NREI corporate users say they would pay a 3% premium for rent in a green building. In addition to charging more to your tenants or subtenants, you can also take advantage of government incentives and tax advantages and rebates from utilities.

2. You can reduce your operating costs. You can lower your utilities costs by investing in projects with a quick payback. There are simple measures you can take (such as installing LED lighting) which have same year payback, and other, more exotic measures which take longer but save you money and reduce maintenance costs, too. Some insurers (e.g., Novato) offer lower rates for green buildings.

3. It’s a hedge against energy cost volatility. This point is the companion to the one above. We all remember $4 gasoline prices and many experts predict greater volatility of oil prices gong forward. Goldman Sachs predicts oil will rise to $95 a barrel in 2010, an increase of about 25% vs. today’s prices. The reasons for this increase are simple: surging world economies mean greater demand for oil, increased volatility in the Middle East, and reduced production from OPEC.

4. Government regulation will require it. It’s coming and we all know it. There are major federal initiatives making their way through Congress (cap & trade, and the Kerry-Boxer bill) and some states have already passed tougher requirements (California’s new CALGREEN legislation.) Local building codes are changing, too.

5. Associate productivity increases (and they care about sustainability). Studies show that absenteeism decreases, turnover declines, and associates self-report greater productivity when working in green workplaces. These factors translate to lower labor costs for companies. Also, employees care more and more about their employers’ commitment to sustainability. In the war for talent, sustainability can be one of your secret weapons.

6. Your competitors are already doing it. The number of green buildings was up by 47% in 2009 according to USGBC and the pipeline indicates the number of certified buildings will quintuple in the next year or two. If you aren’t becoming more sustainable you are losing ground to your competition. How does that impact your brand? Your earnings and stock price?

7. It will help our country become less dependent on imported oil. The more we increase our energy efficiency and migrate to renewable and low carbon resources, the less we depend on a few volatile countries to supply us with the energy to run our economy.

Improving sustainability is one of the few win/win opportunities readily available. There are lots of arguments to be made for going green but if you’re one of the pragmatists who has resisted being swept up in a swirl of green euphoria please consider these real-world benefits and act now. It’s in your company’s best interest.

Rigor, Not Rigor Mortis

A lot of people in real estate cast a suspicious eye on six sigma discipline. They either think it is the flavor of the month and will soon be displaced with some newer, flashier substitute, or they think you need to be some kind of math wizard to understand and use it. They also associate it with factory floors and the production of widgets, not something you can use in the workplace. They’re missing a great opportunity.

Six sigma is just this: common sense, rigorously applied. You can use these techniques to dramatically lower your costs and improve the quality of your services.
In six sigma you use a common sense framework for defining the problem, gathering information to help you understand it, analyzing that information, coming up with a solution, then tracking to make sure that solution actually worked. There are off-the-shelf six sigma tools to help you in each of those phases.

Like all management disciplines, it should be deployed with balance and care. You don’t need to deploy a green belt team for six months to invent a new process for changing the paper in the copier, you just need to whip out a fresh pack and drop it in the drawer. On the other hand, if it takes you too long to move a team from point A to point B then this discipline might help you.

I’ve seen six sigma discipline used to discover some amazing things and to debunk a lot of pre-conceived notions. I’ve personally been involved in leading or supporting initiatives which saved millions of dollars and turned conventional thinking on its head. Here are some tips I often suggest for those who are new to the discipline:
• Read the thinnest, shortest book on six sigma you can find. There’s a dandy one called What is Six Sigma that clocks in at five ounces and about 85 pages and tells you everything you need to know if you r a newbie.
• Go to websites. There’s a great one at www.isixsigma.com which lets you read articles, surf around to find answers to questions and provides some free off-the-shelf tools and templates.
• Ask someone who knows. There are lots of smart, passionate people out there who are dedicated to using these tools to make people’s lives easier.
Some of the best six sigma tools are qualitative in nature so don’t be intimidated by the numbers or jargon. Just dive in and have fun!
 

Some of the Most Fascinating People on Earth

If you haven’t been to the TED Talks site and spent some time surfing around it, you owe it to yourself to stop reading this article, click on the link below and GO!

TED, an acronym for Technology, Entertainment and Design, bills itself modestly and simply as “a non-profit devoted to ideas worth spreading.” It’s really like the most fascinating cocktail party in the world, with thought leaders in different disciplines sharing their findings, works in progress and ideas about where things are heading. TED Talks are short videos and the site functions as a sort of YouTube for thinking people.

You can find the famous and the brilliant at that site, but also obscure people who have knockout creative ideas. Let your imagination and your own interests direct you to the speakers you’ll like best.

Since this is a site about workplace ideas I will direct you first to David Kelly, the founder of IDEO and leader of Stanford’s d-school. His firm designed the first mouse, the TREO and the Leap chair. In short, his ideas have helped shape the way we work today. Take a look at the video and listen to his ideas about “human-centered design” which factors behavior and personality into the product.

http://www.ted.com/talks/david_kelley_on_human_centered_design.html

Real Estate Innovation is Not an Oxymoron

This year’s CoreNet Global Innovator’s Award winners prove again that the most important things in life are simple, but not easy. The Mindshift Consortium has proven that basic steps like creating a trusting team, collaborating early and well, and creating client centered incentives can transform the way our industry does business. My favorite example: They built Signature Center, a LEED Platinum building in Golden, Colorado, for $3 less per SF than conventional buildings. Take THAT, folks who believe LEED automatically costs more!

Mindshift is a consortium comprised of premier industry players: Gensler, Turner, Haworth, AIA and GSA among others. Their Thought Leader (that’s his job title!) is Rex Miller and he captured the consortium’s nine basis operating principles in the book, The Commercial Real Estate Revolution, and demonstrated its success in using them to drive some amazing reductions in cost, waste and schedule.
Part of their breakthrough thinking comes in looking at the total life cycle of a project, not just the up front costs. That “total life cycle” view is a theme we’ll return to again and again at Workplace Ideas.
Congratulations to the folks at Mindshift! Here’s a link to their book on Amazon. Check it out:
http://www.amazon.com/Commercial-Real-Estate-Revolution-Transforming/dp/0470457465/ref=sr_1_1?ie=UTF8&s=books&qid=1263769635&sr=8-1