One of the most prevailing discussion in 2014 about Corporate Real Estate Management (CREM) was around adding value.

How does CREM add value to the overall business result?
Many CRE manager has asked hemself/herself this question and probably has been able to give some common sense and/or pragmatic solutions.
However, these may not have been as structured and as complete as one might have wanted. And that is what is needed to really open-up the discussion with the executive management team and be able to discuss the impact of housing on a par with them.
There has been (academic) research by several very knowledgeable experts in this specific field. I have used research that in my view had the most complete set of areas where CREM can add value (*). Originally this research shows 9 values and I have (based on my own experience) added a tenth value: Implement Corporate Social Responsibility.

Below I have depicted the 10 Value Drivers for CREM 
Underneath the picture are sliders for each of these 10 value drivers where you can learn more about my view on how this driver can add value to your organization's CRE department and what other functions CREM needs to team with. Having this on-top-of-mind is crucial to enable a meaningful collaboration between CRE and the company management and between CREM and their peers in the organization. All geared towards valuing CRE as an integral part of the organization's business that contributes actively, measurably and meaningfully to the business result.

{slider Improve Finance Position}

Improvement of possibilities to get real estate financed by external parties, e.g. by regarding real estate as an asset to improve the overall finance position of the organization or an assessment of the (future) marketability of the building.  Sub-leasing space or renting-out meeting rooms in a multi-tenant building are examples. But of course sale & lease-back also can be a strong driver.

For this Value driver CRE works closely with Finance and Procurement.

{slider Improve Productivity}

Improvement of (labour) productivity, e.g. by supporting logistics of primary processes and short proximity between related functions (example: sales near to marketing). Productivity is typically measured through output.  Of course the IT infrastructure (like Wifi) and using mobile devices, easy acces to resources, less bureaucracy and card access systems are supporting the succes of this driver too.

For this Value driver CRE works closely with the Lines of Business, HR, IT, Finance and Procurement.

{slider Increase User Satisfaction}

Improvement of user satisfaction by steering on a functional, comfortable and pleasant working environment, taking into account user needs and preferences, a safe environment, an appealing workarea, added services (like e.g. dry-cleaning) (*) This driver influences both the internal (employees) and the external customer (visitors, partners, contractors). Happyer employees are more productive employees.

For this Value driver CRE works closely with the Lines of Business, HR and Procurement.

{slider Increase Innovation}

Stimulation of innovations in order to improve business processes, e.g. by creating formal and informal meeting space to exchange ideas. This added value needs a similar real estate policy. Innovation requires individual creativity and team creativity. Creative thinking can be facilitated by opportunities to relax and to concentrate and places that support exchange of knowledge and stimulate new ideas.

For this Value driver CRE works closely with the Lines of Business, Marketing and Business Development.

{slider Reduce Costs}

Reduction of real estate costs during the life cycle (investment costs, operational costs) by steering on efficient space use and smart design. In this regard it has become common practice that a real estate decision is backed-up by a solid business case. Costs can be reduced through e.g. new ways of contracting such as DBFMO (Design-Build-Finance-Maintain-Operate), strict space budgeting, space reduction by shared workplaces (New ways of working), extension of opening hours and sustainability measures in order to reduce energy consumption.

For this Value driver CRE works closely with the Lines of Business, HR, IT, Finance and Procurement.

{slider Control Risks}

Controlling the risks within CRE with regards to time (opening hours), costs, health and safety and coping with a changing context, e.g. technically by application of strict safety standards or juridical by short term rent contracts. Mainly managed by real estate choices improving flexibility and marketability, a well elaborated business case, outsourcing of maintenance for a long period.

For this Value driver CRE works closely with Finance, Legal and Procurement.

 

{slider Support the Corporate Image}

Support of a positive corporate image, e.g. by a nice overall building appearance and an appropriate building lay-out. Apply principles from imagineering to show corporate values throughout the building. Having a visible concept and consistens corporate branding increases the feeling of belonging and reinforces with all staff, visitors and passers-by what the organization is all about.

For this Value driver CRE works closely with Marketing and Procurement.

{slider Implement Corporate Social Responsibility}

Implement Corporate Social Responsibility within Real Estate by 'translating' the corporate CSR policy to the CRE function. With regards to sustainability, the circular society, caring for the society we live and work in, giving back to the society, showing that the organization is not just about making profit but has a feel for it’s ecosystem like customers, partners, suppliers, employees.  Topics for the CRE managers to address that spring to mind are: Recycling of waste, water (grey water), paper and so on Use green electricity (generated from water, wind, bio-fuel or solar sources) Give excess materials to charity or local volunteer organization Use inventory and/or fit-out components that have been made out of recycled materials Occupy sustainable buildings; energy efficient/energy neutral/CO2 neutral and built with materials and techniques that are environmentally friendly Instead of buying/leasing buildings that were developed new, switch to sustainable re-developed existing property Buy/lease offices that are close to public transport to reduce emission from (commuter) cars Consider buying/renting offices in areas with nearby shops and services in support of the New Way of Working: the employees can easily combine work/private (e.g. during the lunch break walk over to the supermarket or a dry-cleaner) Perform local society chores with the RE/FM team Promote that people have socially meaningful roles next to work, community services When hiring new staff consider hiring disabled or challenged people Give back to good causes (either in money, goods or time)

For this Value driver CRE works closely with the CEO, Legal and Marketing.

{slider Improve Flexibility}

Improvement of flexibility to enable future spatial, technical, organizational or juridical adaptability, e.g. by standardization, simple opportunities to extend the building or easy adaptability to other functions.  Think of things like not using fixed seperation walls but instead work more with flexible walls and/or screens or even open-space. When fitting-out a space do that with flexibility in mind thus preventing extensive costs for any small change in the lay-out.

For this Value driver CRE works closely with the Lines of Business, Legal and Procurement.

{slider Improve Corporate Culture}

Supporting (change of) corporate culture, e.g. by sharing work spaces to support social interaction. Real Estate managers try to do so by creating more openness and informal meeting facilities, facility sharing and hot desking, in order to stimulate communication and to make different ways of behaviour or different attitudes a subject of open discussion. Another option is to create a front office (=customer facing area) -back office with a different atmosphere.

For this Value driver CRE works closely with HR and Marketing.

{/sliders}

(*) Source: Van der Voordt, D.J.M., Van der Zwart, J. (2011), Value-Based design and management of Hospital Buildings. Conference paper MISBE, Management and Innovation for a Sustainable Built Environment, Amsterdam, 20-23 June 2011

 

One of the most prevailing discussion in 2014 about Corporate Real Estate Management (CREM) was around adding value. How does CREM add value to the overall business result? Many CRE manager has asked hemself/herself this question and probably has been able to give some common sense and/or pragmatic solutions.However, these may not have been as structured and as complete as one might have wanted. And that is what is needed to really open-up the discussion with the executive management team and be able to discuss the impact of housing on a par with them.There has been (academic) research by several very knowledgeable experts in this specific field. I have used research that in my view had the most complete set of areas where CREM can add value (*). Originally this research shows 9 values and I have (based on my own experience) added a tenth value: Implement Corporate Social Responsibility. Below I have depicted the 10 Value Drivers for CREM  Underneath the picture are sliders for each of these 10 value drivers where you can learn more about my view on how this driver can add value to your organization's CRE department and what other functions CREM needs to team with. Having this on-top-of-mind is crucial to enable a meaningful collaboration between CRE and the company management and between CREM and their peers in the organization. All geared towards valuing CRE as an integral part of the organization's business that contributes actively, measurably and meaningfully to the business result. 1 - Improve Finance Position   Improvement of possibilities to get real estate financed by external parties, e.g. by regarding real estate as an asset to improve the overall finance position of the organization or an assessment of the (future) marketability of the building. Sub-leasing space or renting-out meeting rooms in a multi-tenant building are examples. But of course sale & lease-back also can be a strong driver. For this Value driver CRE works closely with Finance and Procurement. 2- Improve Productivity Improvement of (labour) productivity, e.g. by supporting logistics of primary processes and short proximity between related functions (example: sales near to marketing). Productivity is typically measured through output. Of course the IT infrastructure (like Wifi) and using mobile devices, easy acces to resources, less bureaucracy and card access systems are supporting the succes of this driver too. For this Value driver CRE works closely with the Lines of Business, HR, IT, Finance and Procurement. 3 - Increase User Satisfaction Improvement of user satisfaction by steering on a functional, comfortable and pleasant working environment, taking into account user needs and preferences, a safe environment, an appealing workarea, added services (like e.g. dry-cleaning) (*) This driver influences both the internal (employees) and the external customer (visitors, partners, contractors). Happyer employees are more productive employees. For this Value driver CRE works closely with the Lines of Business, HR and Procurement. 4 - Increase Innovation Stimulation of innovations in order to improve business processes, e.g. by creating formal and informal meeting space to exchange ideas. This added value needs a similar real estate policy. Innovation requires individual creativity and team creativity. Creative thinking can be facilitated by opportunities to relax and to concentrate and places that support exchange of knowledge and stimulate new ideas. For this Value driver CRE works closely with the Lines of Business, Marketing and Business Development. 5 - Reduce Costs Reduction of real estate costs during the life cycle (investment costs, operational costs) by steering on efficient space use and smart design. In this regard it has become common practice that a real estate decision is backed-up by a solid business case.Costs can be reduced through e.g. new ways of contracting such as DBFMO (Design-Build-Finance-Maintain-Operate), strict space budgeting, space reduction by shared workplaces (New ways of working), extension of opening hours and sustainability measures in order to reduce energy consumption.  For this Value driver CRE works closely with the Lines of Business, HR, IT, Finance and Procurement. 6 - Control Risks Controlling the risks within CRE with regards to time (opening hours), costs, health and safety and coping with a changing context, e.g. technically by application of strict safety standards or juridical by short term rent contracts. Mainly managed by real estate choices improving flexibility and marketability, a well elaborated business case, outsourcing of maintenance for a long period. For this Value driver CRE works closely with Finance, Legal and Procurement. 7 - Support the Corporate Image Support of a positive corporate image, e.g. by a nice overall building appearance and an appropriate building lay-out.Apply principles from imagineering to show corporate values throughout the building. Having a visible concept and consistens corporate branding increases the feeling of belonging and reinforces with all staff, visitors and passers-by what the organization is all about. For this Value driver CRE works closely with Marketing and Procurement. 8 - Implement Corporate Social Responsibility Implement Corporate Social Responsibility within Real Estate by 'translating' the corporate CSR policy to the CRE function. With regards to sustainability, the circular society, caring for the society we live and work in, giving back to the society, showing that the organization is not just about making profit but has a feel for it’s ecosystem like customers, partners, suppliers, employees.  Topics for the CRE managers to address that spring to mind are: Recycling of waste, water (grey water), paper and so on Use green electricity (generated from water, wind, bio-fuel or solar sources) Give excess materials to charity or local volunteer organization Use inventory and/or fit-out components that have been made out of recycled materials Occupy sustainable buildings; energy efficient/energy neutral/CO2 neutral and built with materials and techniques that are environmentally friendly Instead of buying/leasing buildings that were developed new, switch to sustainable re-developed existing property Buy/lease offices that are close to public transport to reduce emission from (commuter) cars Consider buying/renting offices in areas with nearby shops and services in support of the New Way of Working: the employees can easily combine work/private (e.g. during the lunch break walk over to the supermarket or a dry-cleaner) Perform local society chores with the RE/FM team Promote that people have socially meaningful roles next to work, community services When hiring new staff consider hiring disabled or challenged people Give back to good causes (either in money, goods or time) For this Value driver CRE works closely with the CEO, Legal and Marketing. 9 - Improve Flexibility Improvement of flexibility to enable future spatial, technical, organizational or juridical adaptability, e.g. by standardization, simple opportunities to extend the building or easy adaptability to other functions. Think of things like not using fixed seperation walls but instead work more with flexible walls and/or screens or even open-space. When fitting-out a space do that with flexibility in mind thus preventing extensive costs for any small change in the lay-out. For this Value driver CRE works closely with the Lines of Business, Legal and Procurement. 10 - Improve Corporate Culture Supporting (change of) corporate culture, e.g. by sharing work spaces to support social interaction. Real Estate managers try to do so by creating more openness and informal meeting facilities, facility sharing and hot desking, in order to stimulate communication and to make different ways of behaviour or different attitudes a subject of open discussion. Another option is to create a front office (=customer facing area) -back office with a different atmosphere. For this Value driver CRE works closely with HR and Marketing. (*) Source: Van der Voordt, D.J.M., Van der Zwart, J. (2011), Value-Based design and management of Hospital Buildings. Conference paper MISBE, Management and Innovation for a Sustainable Built Environment, Amsterdam, 20-23 June 2011