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IAMC INSIDER
From Site Selection magazine, July 2015
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IAMC Rocks! - WE will be the disruptors.

Kevin Dollhopf
Kevin Dollhopf
IAMC Chair

The numbers are in, and IAMC leadership applauds the organization for achieving another milestone — Palm Desert was the first Forum to receive a 9/10 overall rating from the attendees. Combined with more than 100 active members for the first time, we truly can say that IAMC rocks. The next time we gather will be in Cleveland, the city that rocks!

Disruptive Innovation, the theme in Palm Desert, is a hot phrase in the business world. But what is it? Quite simply, it means staying relevant to your customer as the world economy and population undergo a significant paradigm shift due to changes in technology, communication, demographics and big data analytics. Mass customization, a new oxymoron, is the wave of the future.

IAMC leadership cannot become complacent — we must work harder. During our July strategy meetings we will ask ourselves, “Will IAMC be the disruptor or the disrupted?” The message this year has been consistent — we must challenge ourselves while remaining true to our core principles.

TeamCalifornia Host Committee Sponsor and Riverside County 4th District Supervisor John Benoit presents IAMC Chair Kevin Dollhopf with a brand new Fender guitar at the closing session of the Palm Desert Professional Forum.

Here are some of the key learnings from the fantastic programming at Palm Desert and how we must apply them to IAMC:

• Beware the undertow of the status quo.

While we fight to protect the past we must focus on the future. IAMC has a strong culture of tradition, but there is resistance to change — similar to many organizations. This is the most significant hurdle for IAMC to overcome in order to be a disruptor.

• Geography matters. (I love this one because I am a geographer.)

Locations, national or global, have distinct geographic and economic competitive strengths. Businesses recognize this and compete in a global economy. IAMC has a value proposition that resonates with industrial real estate executives around the world. We must provide the membership and connections that allow members to succeed in this environment.

• We need both Dreamers and Doers to succeed.

A hallmark of the IAMC culture is the significant engagement of its members. The new College of Fellows Leadership Council is forming to address the most important topic to IAMC — identifying and developing the leaders to drive the success of IAMC. We must find the balance of people that think and people that do to create and achieve our goals.

• We must keep plussing our show.

If you don’t engage your audience and provide new stimulus you will lose them. Once lost, it takes years to get them back. IAMC is creating new ways to connect and learn, but let’s explore shaking it up. What ideas do you have?

• Keep trying and learning — even monkeys fall from trees.

Our forthcoming education strategic plan will provide the foundation upon which IAMC can launch new ideas to help membership develop and enhance skills, both professionally and personally. Let’s push the edge, try new things and keep learning. It will make us better.

Please help us disrupt! We learned in Palm Desert that culture is what our members do every day without being told. The unique culture of IAMC, built on connections, will allow us to create experiences that continue to differentiate and separate the organization from the increasing field of professional organizations. IAMC will continue to rock and disrupt with the great leaders we have.

Rock on!

Kevin Dollhopf, IAMC Chair

Kevin Dollhopf
IAMC Chair

The Capital Delivery Process:
How Do You Do It Where You Are?

Health & Science Industry Group discussion at the Québec City Professional Forum

Editor’s Note: This article is taken from the Health & Science Industry Group meeting held Sept. 14, 2014, in conjunction with IAMC’s Québec City Professional Forum. The session was sponsored by the Wilson Economic Development Council.

Overview

In large global companies, capital projects often take longer to complete than planned, and contracting (bid through fully executed contract) can take three months or longer.

Key Takeaways

In many organizations, a multi-phase capital project approval process is a C-suite requirement.

Different organizations require varying degrees of review and approval. But multi-stage processes with several approvals are common.

• In Company 1, the capital project phases include define, develop, execute and close out.

• Company 2 uses a similar process. When corporate real estate (CRE) moved under procurement, the company revised the CRE department’s approval process so that every contract would go through a review and signature process.

• Company 3 has taken proactive steps to dramatically streamline its capital project process. Now, projects are reviewed and approved just once, and a report-in process is used for the remainder of the project lifecycle.

Detailed capital project processes can reduce risk, but they may translate into longer project timelines.

At Company 2, fully completing a project typically requires between 19 and 30 months, with a target of 16 to 22 months. The capital process has six phases: pre-design (including project definition), capital approval (done in parallel with pre-design), contracting, design, construction and close-out.

Project inception to contract bid execution usually takes between 11 and 18 weeks, with a target of 12 weeks.

Company 2’s capital delivery process has the following characteristics:

The capital project process flow is very detailed. The Real Estate Group uses a five-page capital process flow that outlines the steps required from project inception to capital budget approval.

Asking for seed money up front saves time. Seed money is requested to begin planning. That saves about six months.

Accurate project scope information is essential to efficient contracting. During the pre-design phase, an iterative process is used to solidify the user requirements. Internal staff define the requirements and outside design firms complete them. Design-build firms help to confirm the budget numbers.

Various factors can prolong project delivery. Scope redefinition throughout a project inevitably results in delays. Other things that slow projects include hesitation to approve the project, proposals that exceed the project budget and vendors that take exception to agreements late in the process.

A consistent project team is recommended. Adding new project team members during the process can lead to reinventing the wheel. This is especially true on the procurement side.

Some organizations find it difficult to link facilities planning with production equipment purchases.

Often, long-lead-time items like production equipment are overlooked during the capital project approval process. It is not unusual for CRE teams to work overtime to shorten the facility completion schedule, only to find that the production equipment will arrive six months later.

Company 3 addresses this issue by putting real estate and production equipment purchasing for R&D under one capital planning function. The CFO and real estate person for R&D must co-approve all projects, whether they are for equipment or facilities. These leaders also co-present the overall R&D capital plan to the R&D leadership team.

A capital delivery process that consistently delivers the product within expectations requires a well-vetted process, experienced inside managers and good communications among the customer department, CRE department and the outside vendors and service providers.


Disaster and Recovery Planning for Manufacturing Operations

Raymond Ocasio of Gulfstream moderated the Manufacturing Industry Group meeting at the Québec City Professional Forum.

Overview

For manufacturers, particularly of expensive capital equipment, a business continuity plan is a must. It is the result of intensive brainstorming and consensus forging among senior leaders.

Key Takeaways

Business continuity planning helps organizations recover faster from disasters.

Business continuity plans help companies restore mission-critical functions after disasters that make normal business impossible. Some of the key objectives of business continuity planning include:

• Safeguarding human life.

• Minimizing confusion during an emergency (e.g., over who is responsible for doing what).

• Prioritizing facilities, functions, and processes; determining what resources each would need to return to normal operations.

• Minimizing the loss of vital data and records.

The process involves senior leaders forging consensus on what is most critical to the business.

Business continuity plans start with clear understanding of what is most critical to the business, i.e. which functions, facilities, and resources most need to be safeguarded and which processes need to be restored first. These decisions must be made by senior leaders; the heads of each functional area need to take the time, often involving laborious work, to forge consensus on these tough but critical decisions.

After the prioritizing is done comes brainstorming about different kinds of disasters, their possible effects on operations, and the actions to take under those hypothetical scenarios. From those discussions, a plan is gradually built and continually revisited and refined.

Other best practices include figuring out what procedures to implement under disaster scenarios.

• Make sure decisions are data-based. Getting the right information to make the critical prioritization decisions is hugely important.

• Figure out what new processes, procedures, and policies you may need under various disaster scenarios. For example, how would you safely shut down the systems of a building you had to evacuate? How long would you pay employees who were unable to return to work? How about if you couldn’t reach them physically via roads?

• Set up an emergency command center. Or establish several, powered by generators and outfitted with comprehensive IT systems.

Suggested Action: Set up emergency command centers.

• Have one point person in charge of execution of the business continuity plan.

• Create “disaster packs” for key personnel. Senior leaders and those responsible for executing business recovery plans should have stored for them “disaster packs” of emergency provisions including satellite phones (in case conventional telecommunications systems are down): one pack at their homes, one at each of the firm’s command centers, and one at a hotel.

• Build redundancies into manufacturing processes and supply chains. In the event that some of your usual facilities or suppliers are rendered inoperative, you want to have ways to resume operations without these particular resources.

Suggested Action: Build redundancies into manufacturing processes and supply chains.

• Create plans for all locations company-wide. Tailor business continuity plans to the most likely disasters for locations, considering geopolitical risks, climate, the potential for social unrest, etc.

• Involve vendors and suppliers in business continuity planning. Make them aware of how your plan may affect them, and learn what they would do to meet the demands of your business in the event of a disaster.

• Maintain good partnerships with local electric power, transportation, police, and civic authorities. Involve them in your business contingency planning.

Suggested Action: Test business continuity plans via disaster scenario simulations.

• Use drills to train employees on what to do and expect under emergency conditions. Incorporate learnings from these exercises into plan improvements.

• Continually develop and improve plans. There are so many potential disasters that could affect operations in various ways that no business continuity plan is ever complete. Keep working to flesh it out further to address more scenarios and become even more prepared.



Crossing the Digital Divide

“We need to talk to people in the company who care about speed-to-market for new products and explain that a key aspect of speed-to-market is project delivery.”
— Session participant
By Sharon Miller Trackman, Director of Marketing, The Americas, Qube Global Software; and Ken Hagaman, Director Real Estate, Anixter Inc.

The corporate real estate (CRE) discipline was initially slow to adopt powerful software solutions, perhaps because real estate is to a large extent a people-to-people business. But with growing pressure to cut budgets and streamline headcounts, CRE departments were compelled to adopt new communications and real estate portfolio management technologies.

There is, however, a downside to technology overload. Managers must take care that new software, apps and electronic devices solve more problems than they create, and they must preserve the vital role of human conversation in the work process.

Back to the Future: Can We TALK?

Ineffective use of technology can affect social behavior, perhaps even reshape personalities. For example, a virtual lifestyle can cause impatience, impulsiveness and forgetfulness. Sometimes called digital distraction, this can diminish empathy by limiting how we engage with people, affecting connectivity, social ties and business results.

The world has seen incredible enthusiasm for the cell phone. A United Nations report says, “Of the world’s 7 billion people, 6 billion have mobile phones.”

When your phone almost never leaves your hand, you may suffer from digital device separation anxiety. To that end, we should be careful of always viewing the world through such a restricted lens. Instead, have more face-to-face conversations and living in the moment, which will both support development and maintenance of personal relationships.

Turn Off Technology and Tune Into Reality

The term digital dementia was coined by top German neuroscientist Manfred Spitzer in 2012. He describes how overuse of digital technology can result in the breakdown of cognitive abilities, much in a way commonly recognized in those who have suffered a head injury or psychiatric illness.

Excessive digital connecting deprives the brain of downtime. The Internet encourages rapid, distracted samplings of small bits of information from numerous sources. If our screen lives become more compelling than our real lives, we merely retain bits of random information with no common element, thus becoming disconnected participants in threads of virtual discussions.

Further along the lines of digital dementia, information acquired while partially distracted is often quickly forgotten, making learning shallow. Alternatively, try retrieving information organically. Reading a good, old-fashioned book with pages you turn has been shown to improve memory retention.

Single-Tasking Saves Time In the Long Run

The idea that humans can multi-task is a misnomer. When bouncing from distraction to distraction, we are actually switching tasks rather than accomplishing multiple tasks simultaneously. Although the ability to juggle tasks is a great strength, digital devices may not always improve our ability to multi-task.

Digital distraction contributes to our hectic lifestyle, preventing concentration and information retention. How can we capture the attention of increasingly fragmented and inattentive audiences? According to a November 2013 blog post on the Alzheimer’s website, a study in Seoul, Korea, stated more people are connected to digital devices there (over 67 percent) than anywhere else in the world. The study also found young people raised in this highly digital environment showed early signs of short-term memory dysfunction.

“Of the world’s 7 billion people, 6 billion have mobile phones.”
— United Nations report

Is there a simple remedy for controlling digital distraction? Research has shown taking on one task at a time in priority order is the most effective way to work.

The pace of technology advancements has exceeded our expectations; digital experiences overwhelm the senses. But real-time person-to-person interaction requires a longer attention span during discussions. Have we crossed the digital divide to a place where we prefer using electronic communication tools at the expense of furthering important relationships?

Don’t be guilty of communicating without connecting. Spend less time in technology, and more time in conversation. Great conversations trump technology every time.


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