One of the late 20th century?s most significant business
trends, infrastructure integration is an idea whose time has come — and with it, a
new role for real estate.
Case in point: CIGNA corporate real estate?s (CRE) innovative Vision 3
Initiative, which merited a prestigious Best Practices Award from the International
Development Research Council (IDRC), the world?s preeminent
corporate real estate association, which has adopted Corporate Infrastructure
ResourceSM Management (CIR) as part of its mission.
CIR?s promise has reached fruition at Philadelphia-based CIGNA
(www.cigna.com), with real estate moving from the traditional concept
of being a component in business to being an organizing principle of
the business, says Robert Hamilton, CIGNA CRE vice president.
CRE embarked on the evolutionary Vision 3 program in 1997, extending the
success of the Integrated Workplace Strategies (IWS) strategic entity it created in
1995.
Coming in on Little Cat?s Feet
It was an unabashedly ambitious plan: a cross-functional
realignment to shift the organizational style from project- to process-
driven. Wisely, those big ideas tiptoed in on little cat?s feet.
Anticipating inevitable cultural lag and knowing that some would see CIR as
an alarming, revolutionary step, CRE took an informal, grassroots approach. It
incorporated CIR into regular customer communications and began with
manageable, measurable changes to sustain momentum.
But first CRE aligned itself with CIR, creating a concrete
organizational model. It bulked up training and career and leadership
development, and formed partnerships with the finance arms in information
technology (IT) human resources (HR) and business finance. CRE finance client
managers were assigned to each business unit, a major step toward integrating
real estate financials into broader strategy.
Cognizant of measurement?s critical role, CRE developed benchmark
databases to track cultural change. One includes factors like work and time
utilization patterns, knowledge transfer, process mapping, and productivity
enhancers and blocks. Related databases track productivity, worker output, and
process-improvement and real estate costs.
Those databases yielded a critical benefit: point-of-work costing, identifying
where work does, and should, occur to support long-term business goals
and quantifying each point?s real estate and HR costs for each individual.
Pilot programs, implemented with CRE alliances with IT and HR, were part of
the phase-in. One early pilot yielded solid traditional real estate results, cutting
total space 16 percent and per-workstation costs 38 percent. But that pilot,
Hamilton says, produced something broader and more substantive: a closer
alignment between business goals and work patterns.
A Chorus of Customer Praise
Moving slowly and successfully, CRE?s well-thought-out plan
steadily strengthened its perception as a valued strategic partner, eliciting a
chorus of praise.
Kevin Barth, CIGNA Group Insurance vice president, credits “a highly
responsive work environment
“achieving and maintaining high customer satisfaction and retaining the skill set
critical to our continued success.”
Byron Oliver, Retirement and Investment services president, credits CRE?s
design of the retirement unit?s new headquarters for “faster decision-making and
implementation.”
With CIR, CRE?s role now has an anticipatory proactive aspect going well
beyond site selections and lease renewal notifications. With its HR and IT
partners, CRE offers business units complete economic analyses of how their
location decisions fit the bigger business picture. Those analyses include how
current work patterns align with future business goals, HR?s current and
projected labor appraisals and IT?s evaluations of buildings? technological
capabilities. Analyses may even recommend a different market location
as a better strategic fit.
Vision 1 is now “standard” for all projects, and many other projects are at the
Vision 2 stage, says Hamilton. “We intend to claim Vision 3 by 2000.”
Vision 3 has substantially reduced real estate costs, which can save millions,
with every saved dollar directly boosting profit. But there?s much more at stake.
“Vision 3?s urgency escalates when you combine real estate savings with
savings that can be realized through improved IT management, the soft costs
related to enhanced HR management and the realignment of IT, HR and CRE
roles,” says IWS Director Lynne Kelley-Lewicki. “In fact, it soon becomes clear
that the Vision 3 Initiative has the ability to enable the entire CIGNA organization
to become a measurably more productive and profitable operation.”
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