http://www.regus.com/?utm_campaign=slideshare Given at the CoreNet Global Summit in Chicago, May 1-3, 2011 by: Moderator: Dr Barry Varcoe, Zurich Financial Services Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics Speakers: Michael Leone, Regus; Tanya Penny, Verizon

1. #12: The Relevance of Corporate Real Estate to
Enterprise Success
Moderator: Dr Barry Varcoe, Zurich Financial Services
Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics
Speakers: Michael Leone, Regus
Tanya Penny, Verizon

2. Running Order
• Session Introduction
• The Research
• CRE Practice Findings
• Key Findings:
 Panel & Audience discussion
• Conclusions

3. The Research
Is there a relationship between the capability of
CRE and Enterprise economic performance?
CRE Practices Enterprise Economic
Maturity Performance
Correlation
Tests
Identified
Relationships

4. The Sample
• Fortune 500 focus
• On-line survey live during October 2010
• 40 valid data sets on perceived CRE performance:
 3.6 m people supported
 221 m (gross) m2
 US$72.6bn budget

5. 20 CRE Practices
Tactical
• Supplier management
• Operational and management
information
• Space and interior standards
• Governance and compliance
• Customer satisfaction
measurement
• Performance measurement
• Budget management
• Extent of outsourcing
• Telework policy

6. 20 CRE Practices
Strategic
• BU relationship management
• Sustainability
• Portfolio strategy planning
• CRE team diversity
• CRE/HR/IT collaboration
• Use of serviced offices
• Effective staff development
• Continuous improvement and
innovation
• Business strategy collaboration
• Capital release strategies
• Alternative workplace strategies

7. The Sample
5 Economic performance measures
• Revenue growth (last 3 years)
• Net sales per employee
• Return on Assets (RoA)
• Return on Equity (RoE)
• Tobins Q

8. Industry Sectors
Market Sectors

9. Sample Variance Tests
• Portfolio size
• CRE team size
• CRE&FM operating budget size
• Professional membership
• CRE organization structure
• Industry sector
• Enterprise size (annual revenue)
• Enterprise size (No. of employees)
= No significant differences

10. Organization Structure
CRE Organization Structure

11. Budgets
Budgetary Control / Recharging

12. Reporting Line
CRE Reporting Line

13. Suppliers
Use of Suppliers

14. Telework
Telework / Telecommunications
Applicability

15. AWS1
Alternative Workspace Strategies (Current)

16. AWS2
Alternative Workspace Strategies (Future)

17. Sustainability
Sustainability Practice (Future)

18. Self View of Executive Opinion
CRE View of Executive Opinion

19. Key Findings… Maturity and Correlations
CRE Practice Maturity

20. Industry Maturity
Comparative Industry Maturity

21. Key Findings
6 CRE Practices correlated to
Enterprise Success Measures
• Correlation vs Causality
CRE Practices
? Enterprise
Economic
Maturity
Performance

22. Discussion Topic 1
Supplier Management…
Correlates positively to both RoA and RoE
Discussion points:
• What do you think the key
aspects of good supplier
management are?
• Is it the CRE’s or Suppliers
that are making a difference
(note: the extent of
outsourcing did not show a
correlation)?
• Only ¼ of respondents have
international/integrated
solution supplier relationships
– does this mean there is a lot
more potential to add value?

23. Discussion Topic 2
Operational and Management Information…
Correlates positively to both RoA and RoE
Discussion points:
• What is it about the MI that
makes the difference?
• What are the key challenges
in getting good MI?

24. Discussion Topic 3
Close CRE/HR/IT Relationship…
Correlates positively to both RoA and RoE
Discussion points:
• As an industry we have been
talking about this for quite a
long time, but have we really
done much?
• Who can take the credit for
this – CRE, HR or IT?
• What are the main
relationship areas that are
key?
• What are the big potential
gains in the future by doing
more of this?

25. Discussion Topic 4
Use of Serviced Offices…
Correlates positively to both 3 year growth,
RoA and Tobins Q
Discussion points:
• Use of serviced offices was
the least ‘mature’ CRE
practice…
• Why would this correlate? Is it
more a case that growing
enterprises are more likely to
use Serviced Offices?
• Do Serviced Offices offer
potential value in situations
other than growth strategies?

26. Discussion Topic 5
Continuous Improvement & Innovation…
Correlates positively to RoA
Discussion points:
• Which direction is the
‘causality’ likely to be?
• What continuous
improvement practices are
really effective?
• What are the main sources of
innovation?
• Do we invest enough as an
industry in research and
innovation?

27. Discussion Topic 6
Use of Capital Release Strategies…
Correlates negatively to both 3 year growth
and Tobins Q
Discussion points:
• What are the likely causes
of this?
• Is this likely to be a passing
phenomena of recessionary
times or more sustained?
• Should we stop this sort of
activity until we better
understand what it is really
doing?

28. Correlations vs Maturity
CRE Correlation Practices vs Maturity

29. Discussion Topic 7
Tactical Strategic
• Space and interior standards • BU relationship management
• Governance and compliance • Sustainability
• Customer satisfaction • Portfolio strategy planning
measurement • CRE team diversity
• Performance measurement • Effective staff development
• Budget management • Business strategy collaboration
• Extent of outsourcing • Alternative workplace strategies
• Telework policy
Discussion points:
• Any surprises amongst those that did not show any relationship?
• Which practices may make a difference as they advance further?

30. Correlations
Correlation Summary
3 Year Net Sales /
CRE Practice RoA RoE Tobins Q
Growth Employee
Supplier Management
Management Information
CRE/HR/IT/Collaboration
Serviced Offices
Continuous Improvement
& Innovation
Capital release strategy

31. Conclusions…
Is there a relationship between the capability of CRE
and Enterprise economic performance?
Yes… in parts!
Does CRE make a difference?
Probably
What are the consequences?
Good; Bad; Good

32. #12: The Relevance of Corporate Real Estate to
Enterprise Success
Moderator: Dr Barry Varcoe, Zurich Financial Services
Facilitator: Dr Martha O’ Mara, Corp. Portfolio Analytics
Speakers: Michael Leone, Regus
Tanya Penny, Verizon