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TRANSCRIPT
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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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
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Presentation Framework
Key Business Drivers
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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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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
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Presentation Framework
The Networked Enterprise
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• 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 Networked Enterprise
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GS II CoRE 2010THE RISE OF THE NVO
The Rise of the NVO
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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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Presentation Framework
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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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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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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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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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Work is Performed Everywhere (REALLY)
IMPLICATIONS FOR CRE
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The Workplace Strategist
BusinessProcess
Knowledge
Workplace NetworkDesign
Integrated Resources &Infrastructure
=Worker
Productivity
IMPLICATIONS FOR CRE
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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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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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Technology & the Web in Australia
• Workshop X:You ain’t seen nothing yet! Leveraging Technology & the Web
IMPLICATIONS FOR CRE
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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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The Evolution of Integration
IMPLICATIONS FOR CRE
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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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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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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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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
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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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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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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
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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
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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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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
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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