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IAMC INSIDER
From Site Selection magazine, November 2016
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Some Thoughts on the Benefits of Agility

Russell Burton
Russell Burton
IAMC Chair

The Indianapolis Professional Forum was my 21st as a member and marks the start of my year as chair of IAMC’s board of directors. I look forward to serving you. 

The Forum, by the way, was up to the usual high IAMC standards. My thanks to the Indianapolis local organizing committee, sponsors, presenters and staff for their excellent work on this conference.

As incoming chair, I’ve been thinking about the IAMC organization. We’ve grown steadily in our 14 years of existence. We’ve launched new programs and expanded into Europe, Latin America and Asia. We’re on a financially sound footing. We’ve achieved an amazing level of success.

Even so, we’re not particularly agile. But we might conclude the same about many US and global companies, to a lesser or greater degree.

Why is agility touted as a key to long-term business success? First, the business and competitive environments change, and sometimes quickly. What served an organization well last year may be ineffective this year. For example, in the 1990s Eastman Kodak failed to make the crucial pivot from film to digital photography. They changed too slowly. They were not agile. On this point, recalling his days in the Texas oil industry, George W. Bush said, “You can’t do today’s job with yesterday’s methods and be in business tomorrow.”

Second, agility ensures the best use of resources. Few organizations have all the financial capital needed to do everything they’d like at the time of their choosing. Those that change too slowly may end up spending scarce cash doing pointless work. Peter Drucker famously noted, “There is nothing so useless as doing efficiently that which should not be done at all.” Another management expert makes the point this way: “Simplicity — the art of maximizing the amount of work not done — is essential.” Agile organizations are better able to focus on work that’s in their strategic interests and to avoid the other kind.

Spring 2017 Tampa Meeting

Third, agility enables an organization to focus on customer needs. Otherwise, the focus stays on what the customer needed six months, a year or more ago. I couldn’t say this better than Steve Denning in a recent Forbes article: “In agile [organizations], the role of the manager is to enable those doing the work to contribute their full talents and capabilities to generate value for customers and eliminate any impediments that may be getting in the way.”

At its October 8th board of directors meeting, IAMC took bold steps to become more agile. We went from 15 committees down to eight. These are organized into three intuitively tasked councils: Events & Programs, Membership and Operations.

This will be good for the members (our primary customers) in several ways. The new, compact organization will improve the flow of information to the board and enable it to act more quickly in the members’ behalf. In fact, responsiveness should improve at all levels. Further, expect better support by event and research programming for member recruitment and retention. 

I’m excited about the new structure, which will be communicated to you in detail in the coming weeks.

Russell Burton
IAMC Chair

Best Practices for M&A Execution and Integrating New Facility Portfolios Efficiently and Effectively

IAMC Active members take in the program.

This article is excerpted from a Mar. 13, 2016, IAMC New Orleans Professional Forum Health & Science Industry Group program. It was moderated by Gig Codiga, Associate Director, CRE, Genentech, Inc. Gordon Hurrell, Director, Real Estate & Facilities, Alexion Pharmaceuticals, was the presenter. Wilson Economic Development Council sponsored the session.

Overview

Mergers and acquisitions are increasingly common in the health and science industries, with implications for corporate real estate related to office and lab space. Corporate real estate (CRE) professionals should seize the opportunity to be proactive and help shape plans, and to consider exit plans.

Key Takeaways

Mergers and acquisitions present significant challenges for CRE.

In the pharmaceutical and life science industries, mergers and acquisitions are increasingly common as few new drugs are home grown by big pharma companies. Most new products are purchased from smaller biopharma companies or developed in collaboration with universities.

Common challenges associated with mergers and acquisitions include these:

  • Integrating a new culture. The situation is that a large pharma company acquires a smaller entrepreneurial company. The smaller company has been successful because of its entrepreneurial culture, yet shortly after the acquisition the larger company often attempts to impose its culture and policies.
  • Generating savings from labs. Often part of the rationale for a merger or acquisition is to produce cost savings by combining operations. Typically, the finance department has developed projections documenting expected savings. But the custom nature of labs often makes it harder to get savings than those who have done the financial projections realize.
  • Speed of execution. Often, making changes after a merger or acquisition takes longer than is expected. The CRE department can be a factor if workspaces are inflexible and difficult to change. If buildings and labs could be built more flexibly, execution of changes could be expedited.

Among best practices related to mergers and acquisitions are:

  • Be proactive. When a merger or acquisition is taking place, corporate real estate should not sit back and wait on directives from the business. CRE can drive plans instead of just responding to the plans of others.
  • Learn about business continuity plans. To learn about companies, ask about their business continuity plans. These show which assets are mission-critical and how a company has thought about dealing with possible disruptions. 
  • Have an exit plan. Having spent a decade working to close unused facilities, Hurrell advised that whenever a new site is opened or acquired, the owner should have an exit plan. If a facility is modular and flexible, it is easier to deal with the exit.

Large corporate campuses have pros and cons.

Some executives have a mindset of wanting to construct a large campus of 3 million sq. ft. (278,700 sq. m.) or even larger. Corporate campuses can have advantages of centralizing an organization’s talent, serving as a location that a company can occupy and grow on for years, and fostering a company’s culture and a sense of collaboration. However, the business strategy and technology might change, rendering a campus outdated or obsolete. Large campuses also can be inflexible, difficult to repurpose, and difficult to exit. 





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