What Are the “Great Traits” of a Corporate Real Estate Organization? 11 Key Qualities That Define Greatness

Best in Class or Best of Breed? Everybody wants to know who’s the best and how they compare to the best. This is not just about having the right programs but about creating the most value. It’s critical to keep in mind that every organization creates and destroys value in three areas — the triple-bottom-line of financial, social and environmental impact. Your organization’s prioritization of those three factors determines how you will execute against the Great Traits of a corporate real estate organization.

In other words, it’s not just about adopting the features of greatness, it’s also about the results you want to achieve, because, deliberately or by default, you are always making choices about these three areas of value creation. If you’re in a phase where your organization is primarily focused on costs, for example, you will execute against the Traits differently than if you have costs under control and are in an industry fighting for talent, where you might focus on other drivers and look at strategic planning differently.

Whether your ambition is to achieve Best-in-Class or Best-of-Breed greatness, you need to understand what constitutes all of the best practices for a CRE organization, evaluate where you are, target the most important areas for improvement in relation to the results you want to achieve, then work to achieve top performance in those areas.

To begin with, you need a framework to measure yourself against. The 11 Great Traits of a commercial real estate organization provide that framework.

How great do you want to be as a corporate real estate organization? Before you answer, consider the difference between being simply Best in Class versus Best of Breed.

When you buy groceries, for example, you might go to a certain market because it offers a pretty good selection across the board. Even though it doesn’t stock the very best of each item, it’s best in its class – plenty good enough for your day-to-day needs. But say you’re hosting a party and you want to serve dishes made with only the finest individual ingredients. You might go to one market for fish, another for meat, another for vegetables, and so on, before integrating the components into a single great meal. That’s Best of Breed.

The Great TraitsJLL first published thought leadership around the qualities of a high-performance CRE function 10 years ago. Since then, the role of corporate real estate departments has evolved, demanding the abil-ity to anticipate and identify new sources of enterprise value before they become common knowledge—or surface as pressing needs.

We have continued to evolve the framework accordingly, based on our industry experience and research, the input of the JLL Client Advisory Board, and, most recently, by polling a distinguished group of clients. We looked at the strengths and weaknesses of each or-ganization’s platform as well as how the role of corporate real estate is changing and where opportunities exist to adapt and improve. We have studied and implemented best practices in each of these areas.

On the 10th anniversary of our initial thought leadership on this topic, we offer the following framework of Great Traits that a corporate real es-tate team must possess to serve as a strategic partner to the business.

In an example of putting the framework into practice, the JLL Client Advisory Board recently chose three of these traits — Internal Relationship Management, Strategic Planning, and the importance of being a Change Agent — as ones to explore more deeply in terms of their own best practices, demonstrating the power of the framework as a lens for focus and improvement. Which traits would you choose? JLL has a comprehensive evaluation tool (see end of article) that can help you target the traits most important for your own journey to greatness.

A great CRE function — one that truly serves and can positively impact the enterprise — uses the following core competencies in whatever combinations are appropriate to the organization’s finan-cial, social, and environmental goals. In other words, the traits on their own aren’t the final goal. The traits create value in the context of the triple-bottom-line that your organization is pursuing.

1. Centralized, Empowered and Process-Oriented The CRE function “owns” the portfolio and takes overall responsibility for its strategy, administration, financials and operations.

2. Data Analytics/Business Intelligence Analytics are used to drive better decisions and im-proved performance.

3. Service Delivery Excellence The CRE organization is strong across all major deliv-ery areas, and has a culture of soliciting feedback and using it to improve performance.

4. Internal Relationship Management A formal Client Relationship Management (CRM) function exists with the internal business units, developing a deep, strategic understanding of the business through ongoing dialogue at multiple levels, so that business issues can be anticipated and translated into real estate solutions.

5. Strategic Planning CRE has a robust strategic planning function that is integrated with the enterprise.

6. Talent Management The right people are in the right roles; there’s a strong relationship with HR and an environment of learning, problem solving and diversity of thought.

7. Infrastructure Management Workplace, location and portfolio strategies are built in close coordination with other shared service functions (such as IT, HR, Sourcing, Finance), and common assumptions and budgets are shared to create and drive cross-functional processes.

8. Innovation The culture supports a systemic approach to gathering and advancing ideas that contribute to the day-to-day delivery and strategic direction of the CRE department.

9. Partner Management/Leverage There is an appropriate mix of internal and external resources to meet the fixed and variable needs of the business and retain best-in-class tools, processes and technology.

10. Change Agents The CRE organization has the credibility to drive change and creates change by proactively identifying opportuni-ties to align the portfolio to the business mission, needs and outcomes.

11. Risk Management There is an active, formal structure to anticipate and diffuse safety, financial, environmental, regulatory, and other operating risks or issues that may compromise the business.

What emerges from these 11 traits are some common fundamentals that a great corporate real estate depart-ment adheres to:

• Prioritize from the top • Measure success• Follow a rigorous process• Hold the right people accountable • Promote partnerships• Establish and maintain credibility, position,

professionalism and trust

What’s the Global Consensus?JLL’s newly released 2015 Global CRE Trends survey of more than 500 CRE executives, drawn from over 350 corporations and 36 countries, supports the need to reach clarity around specific areas for performance improvement encapsulated by the Great Traits.

The report found that more than 50% of respondents note increas-ing demand from the C-suite to deliver against specific strategic or tactical CRE activities, and yet interaction between corporate real estate and the wider business units remains largely ineffective, despite the growing number of formal relationship management programs being adopted. While such programs are in place for 43% of our respondents, they are not creating a level of engagement that enables progressive CRE strategies or even a raised profile for the CRE team itself: just 9% of respondents rate their formal relationship management function with internal business units as “very strong.”

In terms of talent management, only 48% of respondents rate their ability to put the right people in the right roles as “strong” or “very strong.” More acutely, 14% believe that they are actually ill equipped to meet the increased demands being placed upon them. Significant-ly, these figures have doubled since 2013.

A central conclusion of the report is the need for CRE teams to develop more robust interaction and integration with other business functions and stakeholders — prioritizing people and inter-personal relationships, while adopting a more proactive, data and analytically based style.

Find Out if You’re Firing on All CylindersIf you’re inspired to ask, “How great are we?,” contact Michael Jordan to access JLL’s evaluation and determine how your organization currently measures up.

And remember, in addition to assessing your traits, it’s important to evaluate your results against your goals for financial performance, employee engagement and environmental sustainability.

Talk to us to learn more or to access JLL’s Great Traits assessment.

ContactMichael JordanManaging Director, Consulting+1 503 662 2684michael.jordan@am.jll.com

About the AuthorMichael Jordan is a Managing Director at JLL and leads the consulting practice in Organization Design, Process Improvement & Change Management, which includes helping organizations with strategic planning, operational excellence, and environmental sustainability. He is a six sigma master black belt and a co-author of Six Sigma for Sustainability. His clients have included Key Bank, Cisco, The Coca-Cola Company, Apple and Pfizer.

The People & Process team at JLL is dedicated to helping corporate real estate organizations enhance their effectiveness and better align real estate strategy with the business. We can help you analyze your organizational strategies and performance challenges to develop and implement tailored improvement initiatives; advise you on bench-marks and best practices for achieving your goals; evaluate and improve your cost, risk and employee retention profile, and more.

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