© 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
© 2012. CoreNet Global. All rights reserved. MCR Enterprise Alignment Page 3
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
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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
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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.
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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
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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!
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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.
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EA Test 1: What Is This?
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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
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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
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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
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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
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Changing Business Environment
Solutions Delivery…..Technology…..Enterprise Leadership
The CRE Value
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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.
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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."
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© 2007. CoreNet Global. All rights reserved.
Drivers of Change
Long-Term
Cyclical Economic
Shocks
Time
And Where does CRE fall among these 3 Types?
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A Possible Timeline to Recovery
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+PLUS+
$500
Gift Card
UNDER CONSTRUCTION – INVENTORY MUST GO
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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+
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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
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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
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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
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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
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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
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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.”
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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”
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KNOWING WHAT IS IMPORTANT
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KNOW YOUR STRENGTHS & WEAKNESSES
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IDENTIFYING TOP CRE STAFF PRIORITIES
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INDENTIFYING TOP INTERNAL CUSTOMER PRIORTIES
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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
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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
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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