Many in senior management have failed to be convinced that CRE has more value to add than managing real estate transactions and providing associated facility services. It is seldom recognised that well structured real estate strategies can provide strategic advantage. But why are CRE professionals struggling to build this credibility internally? CRE is not a well-defined discipline, having evolved from many disciplines: janitorial and soft services; engineering and building services; real estate transactions; workspace management and churn; complex financial and cash-flow analyses; and many others.
CRE managers come from various backgrounds with different skill levels across the required CRE disciplines. Also, CRE reporting lines vary dramatically, reporting through to a range of different operational and support functions. The lack of credibility is compounded by a lack of a body of knowledge that links and identifies CRE initiatives to improvements in organisational outcomes. As a result, the CRE brand within organisations and in the industry is weak, confused and misunderstood. And without a clear brand, strong relationship models are difficult to build.
What is the CRE brand?
Branding is far more than a name and a logo. Learning from the marketing gurus, it is evident that branding is all about how customers think and feel about services or products. Brands are made in the minds of customers and define relationships with products or service providers. Brands are composites of all past experiences, encounters and perceptions. While products and services do stuff, brands satisfy needs. It is evident that branding of the CRE functions has been neglected. And with the trend towards the integration of facility management and CRE functions within organisations – which makes compelling sense and is difficult to argue against – the branding challenge is even greater. Do not expect positive responses to strategic CRE initiatives if the executive toilets are continually dirty and lacking service.
The everyday mundane service level expectations of the internal customers will impact the CRE brand at the strategic level. So what is the CRE brand within your organisation? Is it based on the poorly performing air-conditioning? Or on slow response to fix a flickering light? Or the office relocation when everyone lost their offices for open plan and got nothing in return? Or, is it based on the clever workplace strategy that resulted in greater productivity, individual work-style choice and significant bottom- line savings?
CRE mandates and models
Many different CRE relationship models currently exist. They are highly dependent on the mandate of CRE within an organisation. Is the mandate a support function that has to ‘earn its stripes’? Or is CRE mandated at the CEO level to achieve specific strategic initiatives? Current market trends are confusing. At global levels there appears to be a ‘coming of age’ of the CRE function with a strategic mandate having been earned.
At the local level CRE functions continue to be commoditised, with reporting linked to lower levels in the business hierarchy. The most frequent current trend is the procurement function – real estate is a commodity to be procured at the lowest cost level. It is not difficult to see why this situation has occurred. Few in management seem to understand that savings in real estate costs are not the main CRE game. Many don’t seem to understand that gains in productivity and cost savings in the rest of the organisation through innovative portfolio strategies can be significant. The commoditisation of real estate has come about through divergent service delivery, poor branding and lack of evidence to show that real estate can make a difference.
The ideal CRE relationship model should be focused on the establishment of a structured, meaningful and collaborative approach to the alignment of business and real estate strategies. This is pivotal in guiding CRE operatives into broader awareness and better understanding of the business language and parameters. To be effective, CRE relationships need to be both formal and informal, linking into all levels across the business units. The relationship should not be based on either an ‘order taker’ or ‘order giver’ mentality. The CRE department should not be perceived as policing the use of the company’s asset base, nor should the department be seen to be passive players waiting for real estate requisitions. Mutual trust is the foundation stone. Awareness that real estate is different underpins the need for CRE skills. The challenge then is how to manage these internal relationships to be able to continue to deliver CRE services at the right time and the right place.
Customer relationship management
CRM models are in mainstream use in most industries. In their broadest sense, they are all about managing interactions and business dealings with customers – be they external or internal. The focus is to improve customer service and meet their needs. The typical architecture of CRM is based on three components:
- Operational – automating basic customer facing business processes
- Analytical – used to analyse customer behaviour
- Collaborative – facilitating interactions with customers through all channels.
This latter component is the most appropriate in managing CRE services delivered to internal customers. A structured ‘partnership’ relationship model would have some key characteristics. Excellent people chemistry at the starting point will ensure a good fit between all contributing parties. Clarity of purpose and expectation management, with explicit goals and benefits, will result in each party having the same understanding of the expected outcomes. In a ‘win-win’ relationship it is expected that strategic synergies will be achieved with all business units together achieving benefits fairly. This may be reducing risk levels, productivity gains and/ or cost savings. Once established and operating successfully, the relationship model can explore growth opportunities to see how the benefits to the organisation can be expanded. CRE service performance measures need to shift away from measuring inputs to measuring meaningful outputs. This will lead to substantiation of broader business gains generated from portfolio and workplace initiatives. In this ever-changing business world, the job is never done. The CRE functions should continually be adapted to contribute to improved organisational performance. But the CRE brand must retain its integrity. But can CRE as a discipline in business become synonymous with strategic valueadd opportunities and awareness? This will need consistency of delivery across the CRE service spectrum, CRE branding and sustained relationship models supported by a ‘best practice’ body of knowledge, over many years.
