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IAMC INSIDER
From Site Selection magazine, November 2012
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The Journey That Lies Ahead

George Manos
George Manos
IAMC Chair
Following Mert Livingstone as chair of IAMC’s board of directors, I feel humbled to inherit his unprecedented list of accomplishments and challenged to measure up to the example he set. I promise to you my full commitment to continue along the IAMC 2020 Strategic Plan expansion path, nurturing what’s been put in place, implementing what’s next in the queue, and sponsoring new planning to keep IAMC fresh and relevant. To Mert, I say, “thank you” for your dedication and hard work on behalf of this organization and job well done.

The recently concluded 2012 Fall Forum in Omaha was every bit the success we planned it to be. The City of Omaha and State of Nebraska were wonderful hosts. The education programs were up to their usual high standards. And the events planned by the 10th Anniversary Task Force to celebrate a decade’s worth of accomplishments and progress lifted Forum networking to a new level.

Now, we look forward to the Spring 2013 Professional Forum in Charleston, S.C., scheduled for March 16-20, 2013. The theme is “Ship-to-Shore, Door-to-Door: Our Evolving Global Supply Chain and Its Impact on Industrial Assets.” Charleston is a historic and beautiful coastal city with many great restaurants and local attractions. The region is also known for its warm hospitality. This could be IAMC’s best-attended Professional Forum yet. Register today, if you can.

The Omaha Forum delivered the high-quality professional networking that is an IAMC hallmark — it’s at the core of our brand. And IAMC 2020 proposes to extend this networking to the time between Professional Forums. The Strategic Plan will do this through close-to-the-members meetings called IAMC Local, Webinars and CRE content teleconferences called Flash Calls. And the same benefits are being delivered in the Europe and Asia regions through the IAMC International meetings.

IAMC Local started to deliver programs in 2011 thanks to the initiative of Mike Wolff. In 2012, events in Chicago and Philadelphia really proved the concept that members will support half-day, high-quality programs in their communities that they can drive to. IAMC Local meetings are in the early planning stages for Toronto, Ont., Canada, and Ontario, Calif. If you’d like to host one in your community, notify Tracey Hyatt Bosman of Biggins Lacy Shapiro & Co. or Joel Parker of IAMC staff.

IAMC 2020 calls for the adoption of educational Webinars in 2012-13, and the Benchmarking Project will be conducting one on December 5, 2012. Active members are already using data from the current benchmarking survey in discussions with other company managers, not to mention for internal CRE department planning. The December 5 Webinar will explain to the Actives what data is asked for in the survey, how to log on to fill it in, how to access the immediately available results, and how to begin using the results to assess and improve current CRE operations. The Sustainability Council is also planning a Webinar for the first half of 2013.

Flash Calls are the other program type we’ll use to connect members between Forums. If the term conjures images similar to “flash mob,” you need to read further (I promise there is no dancing involved). A Flash Call is a teleconference requested by an Active member to assist with a CRE work issue they’re facing. Any Active member may request one; just contact Joel Parker. They can be staged on short notice, with two to five days of lead time, and are completely confidential in nature. Past calls have dealt with such topics as surplus property disposition, CRE director job description and how to develop a corporate headquarters campus. I have personally requested a flash call and found it to be extremely useful. I would encourage all Actives to take advantage of this program and the resources it can provide.

IAMC International is an IAMC 2020 program whose goal is to establish IAMC communities in Europe and Asia and to serve them much as we do now for U.S.-based professionals. We’ve conducted exploratory meetings in Singapore (November 16, 2011), London (September 17, 2012) and Brussels (September 20, 2012). We know we’ll have to accommodate different social customs, business cultures and laws. But we’ve learned that we have little competition if our programs and services focus on end-users in manufacturing and industrial environments. Few of these regionally based professionals will be able to attend a U.S. Forum, so we’ll have to serve them where they are.

Thanks to Mert’s leadership, a strong board of directors, committee chairs with deep roots in the membership, and a dedicated and versatile staff, IAMC has tremendous momentum propelling it into the future. We are moving forward, as we must. But to maintain the progress, I need your input. If you have a question about IAMC’s strategic direction or an idea to make it better, please email me. I promise to respond and to get the idea into play, if appropriate. If your question or idea is about IAMC operations, please email it to our brand new Executive Director, Aubrey Glazman.

I’m grateful for the opportunity to serve you as IAMC Chair this year, and I look forward to continued success for IAMC.

George Manos
IAMC Chair

Omaha Professional Forum Highlights

“Adversity is not the enemy; it’s the path.”

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The stars seemed to align as IAMC celebrated its 10th anniversary Oct. 13-17 at the Fall 2012 Professional Forum in Omaha, Nebraska. The enthusiasm of the attendees, quality of the speakers, insights heard in the workshops and fellowship shared at the networking events came together as a fitting culmination of the organization's first decade of service to its members.

Here are highlights from a few of the Forum's strong roster of programs.

"The Adversity Advantage: Turning Everyday Struggles into Greatness" by Erik Weihenmayer

The conference's first presenter was arguably its best. Erik Weihenmayer is immensely inspiring! He's blind but has climbed Mt. Everest, summited the highest peak on each of the seven continents, scaled El Capitan and many others. Weihenmayer said, "Greatness and adversity go hand in hand. There's no way to separate them. Adversity is not the enemy; it's the path." Referring to his mountain climbing background, he pointed out, "I love summits because I love goals. But visions are more important than goals because they bind goals together."

"Supply Chain Visions for Industrial Asset Managers — 10 Ways to Create Competitive Advantage" by Dr. Kate Vitasek

Noting that she'd been preceded as speaker by a futurist (Dr. James Canton), Kate Vitasek opened her address by saying, "Here are 10 principles you can use right now." Her broadest scope recommendation was to "radically focus on the big things, and the little things will take care of themselves." A principle she calls MoneyBall is to let data inform decisions whenever that's possible. She observed that supply chain business relationships depend on trust; and that the stronger the trust the more effective this business relationship.

"How Does the C-Suite View Corporate Real Estate?" by Dr. Marvin Sadovsky, Kevin Dollhopf and William Jenkins

Corporate real estate departments and their managers are either strategic resources central to their companies' mission and ability to deliver shareholder value — or they're not. Dr. Marvin Sadovsky, principal of Leadership Strategy LLC, defined the two prisms through which most C-suite executives view their managers of corporate real estate. "Some view the corporate real estate function as a tolerated expense," he related. Others view the corporate real estate executive as the go-to individual in the organization, noted Sadovsky. Kevin Dollhopf, vice president of worldwide real estate at Hanesbrands, made the case that the role of the corporate real estate manager is diminishing. At the other end of the spectrum is William Jenkins' experience at Thermo Fisher Scientific Inc., where he serves as vice president, real estate, Americas. Service providers have a role at many companies, but Jenkins suggests keeping that role tactical, and leaving the strategic contribution to the corporate real estate manager.

"Our Incredibly Shrinking Planet" by Todd Buchholz

Former Bush Administration Economist Todd Buchholz opened by saying that the old template for the world economy, one of growth, expansion, decline and recovery, doesn't seem to apply any longer. He attributed the change to the rapid pace of global communications and the highly integrated world economy. He predicted that "China will not take over the world" because it has unnatural population demographics, i.e., too few young women and too many aged citizens.

Mark Arend, editor in chief of Site Selection Magazine, contributed the summary of the workshop entitled "How Does the C-Suite View Corporate Real Estate?"



Outsourcing in the CRE Function in 2012

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s the decade opened in 2001, managers in charge of most corporate functions, including real estate (CRE), were wondering how many years remained until their department's work was fully outsourced. For most, as cost pressures rose more work was given to service providers, but few corporate functions have experienced 100 percent outsourcing. And many companies, to the contrary, learned that employees will take better care of their interests than outside vendors. A few companies have reduced the level of outsourcing in some departments.

Today, CRE managers are still concerned about additional outsourcing. But the sense across industries and companies is that the process has reached relative stability.

IAMC's Benchmarking Project provides some very current 2012 information on the status of CRE benchmarking. This represents data from over 40 IAMC manufacturing companies. We have the 2004 IAMC report "Outsourcing in the Corporate Real Estate Function — A Manufacturing Perspective" for comparison.

What kinds of companies were sampled for each survey? The 2012 benchmarking survey is dominated by Fortune-listed manufacturing companies. The 2004 report compiles data from 61 manufacturing companies based in the U.S. and Europe.

In 2012, the most extensively outsourced CRE activity is transactions management with 41 percent of respondents reporting that their departments outsource over 60 percent of this work. Still, 15 percent indicated their departments outsourced none at all. Eight years ago in 2004, transactions work was also the most outsourced CRE function according to the IAMC report.

Tenant fit-out and support is the second most outsourced activity in 2012 with 37 percent of respondents saying they contract out over 60 percent of the work. On the other hand, 15 percent reported no outsourcing of this.

The 2004 report also placed tenant fit-out in second place on the list of most outsourced CRE work.

Space planning ranks third on the 2012 list. Thirty-eight percent of those responding said over 60 percent of this work is outsourced, while 21 percent reported that it was done 100 percent in-house. Space planning also placed third on the 2004 list of most outsourced CRE activities.

Which CRE activities tend to be done primarily in-house? At the head of this list in 2012 is sustainability management, which was mostly a public relations issue at many companies until recently. But that's no longer true. Among IAMC companies, 80 percent of respondents reported that 80 percent of this work is conducted internally (only 20 percent is outsourced). No data is available from the 2004 IAMC report.

CRE strategy development too is mostly an in-house activity with 76 percent of those responding saying 80 percent of this work is done by employees. None of the respondents said more than 60 percent of the work is outsourced. In 2004, strategic planning was the least outsourced CRE activity.

What can we conclude?First, the ranking of CRE activities by extent of outsourcing is virtually unchanged from 2004 to 2012. This is evidence that outsourcing in the corporate real estate function is mature and stable. Companies are making small adjustments, but by and large the same pattern is being maintained. Second, there's no evidence of major advancements in the extent of outsourcing for any CRE work function.

For the most extensively outsourced CRE work, transactions management, only 22 percent of respondents said 80-100 percent of the work is outsourced. And for types of work relatively new to CRE's bailiwick, such as sustainability management, the vast majority of the work tends to be managed internally.

— Joel Parker

Survey Results Chart



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