Breaking down outmoded boundaries: It’s a key element in the ongoing revolution in corporate real estate service delivery. And boundary-breaking is precisely what’s driving the creative alliance between Cleveland-based KeyCorp (www.key.com) and service providers Johnson Controls (www.johnsoncontrols.com) and Trammell Crow Corporate Services (www.trammellcrow.com).
Formed in September of 1997, the KeyCorp Real Estate Enterprise (KREE) is so creative, in fact, it’s won a prestigious Best Practice Service Delivery Award from the International Development Research Council (IDRC), the world’s preeminent association of corporate real estate executives.
IDRC and KREE make for a harmonious convergence.
Long-time boundary-breaker IDRC has become the industry thought leader through its Corporate Real Estate 2000tm (CRE 2000) research and its championing of Corporate Infrastructure Resourcesm (CIR) management, the integration of real estate with other key support functions like information technology and human resources.
KREE mirrors those IDRC innovations. “KREE has been developed after IDRC’s CRE 2000 model,” says Snow Mitchell, Johnson Controls’ director of client services. And Trammell Crow Corporate Services CEO Bill Concannon says, “Infrastructure management is the fastest-growing division of Trammell Crow’s core services.”
No Boundaries, Many Challenges
Using those imaginative principles, KREE has extended the “boundary-less” notion of GE’s Jack Welch across three independent organizations.
KREE slaughtered one sacred cow with Johnson Controls and Trammell Crow Corporate Services’ combined efforts, a partnering that embraces the idea that collaboration and teamwork, not competition and turf-protection, are the stuff of late-20th-century competitiveness.
Further boundary-breaking came in KeyCorp’s move of 100 of its employees onto the two alliance partners’ payrolls. (In fact, shortly before Site Selection went to press, John Helling, former KeyCorp corporate real estate head, joined Johnson Controls as vice president/general manager for Northeast operations.)
Such inter-organizational transparency has yielded impressive results. But it wasn’t easy, given the varied challenges in KeyCorp’s real estate portfolio, with 1,300 locations in 32 states.
“The portfolio encompassed high-rise Class A office buildings, 1,000 branch banking operations, in-store investment and banking service operations, ATMs, and other office and administrative facilities, with several mission-critical facilities: a Toledo (Ohio) check processing center; an Atlanta call center; and telecommunication/network-linking operations and data centers in Buffalo and Albany, N.Y., Cleveland, Salt Lake City and Portland and Tacoma, Ore.,” Snow says.
Then things got more complicated. In midstream, two major KeyCorp acquisitions had to be incorporated into KREE’s real estate integration.
A Matrixed Meeting of the Minds
Nonetheless, KREE has provided seamless, nationwide management of properties, transactions, construction and projects through a coordination that transcends traditional turf concerns.
For example, KREE successfully implemented a matrix stretching across all three companies — and across corporate work space. “A good symbol of our working together is the three partners’ office space use, sharing the same regional locations with no differentiation between organizations,” Snow says.
KREE also cemented its vital relationships with KeyCorp’s business units by assigning “relationship managers” to translate each unit’s goals and objectives into real estate terms. Mutually agreed upon service response standards further solidified internal relationships. For example, for “emergency work orders,” KREE’s metric for customer contact is 20 minutes.
Much like IDRC’s cross-functional CIR emphasis, KREE bolstered responsiveness through information technology. It established a 24-hour call center, which was soon handling 6,000 service calls a month. The KREE team also created an interconnected information system that shares information across service lines at all levels. Arming in-the-field employees with pagers, cell phones and PCs added more responsive muscle.
That thoroughness has substantially boosted customer satisfaction. For example, after KREE’s first six months, 36 percent of customers said KREE’s construction services “met all expectations,” while 46 percent said those services “exceeded expectations.”
Those accomplishments are even more impressive given the stringent cost reduction and property disposition requirements that KREE met. In its first year, it reduced real estate expenses by some US$28 million and disposed of 113 properties.
All told, as Snow puts it, “KREE serves as a model within the three individual organizations for successfully reorganizing corporate real estate infrastructure.”
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