Change Is Constant and Change Is Good

Samantha Turner
IAMC Chair

My first Professional Forum was in September 2009 in Minneapolis. I remember it well. Rick Little, my manager at the time, was chair of the board of directors. He asked me to attend and see if I’d like to get involved in this organization called IAMC, of which he was a major fan and cheerleader.

As I walked into my first Early Arrivals Reception, I recall being a bit nervous, not knowing what to expect. But I quickly took to the size of the event, the venue and the number of people — as the Forum progressed, around 300 people in total were in attendance. Everyone I met was very friendly and welcoming — several I call good friends today. Many of the programs involved small-group discussions, and the opportunity to exchange ideas was refreshing. I remember thinking as I was flying back home to my corner of the country, “This is the organization for me.”

Now, here I am in January of 2016 as chair of the board (I’m proud to say IAMC’s second from Weyerhaeuser Company). For me personally and professionally, that’s a big change from 2009, and IAMC has changed a lot too. But even so, the really valuable and important brand elements that initially attracted me to IAMC then are still here today — industrial, balance and relationships.

Let’s look at some of the changes since I joined IAMC:

The Health & Science and Manufacturing Industry Groups existed then, but since, we’ve added Distribution and Food Processing.
IAMC, in cooperation with SIOR, has published two whitepapers on industrial manufacturing.
IAMC Local held 12 meetings in 2015, and has become a successful platform between Forums (a re-format of its predecessor Regions Program).
IAMC International will host its first Forum in London in June 2016; we held six International meetings in 2015.
The College of Fellows Master Class had its first course in Cleveland, and will provide continuing leadership training to Fellows.
The Professional Forum Monday morning Fun Runs started in Philadelphia in fall 2011. I haven’t missed one since its inception. (Where is everyone at 6:30 in the morning??!!) And I hope to be part of the Philly Fun Run group again when the Forum returns there in fall 2018.
Likewise, the Forum Book Club meetings began a couple years ago. Who’s reading the book for the New Orleans Forum? (More than one reviewer has said that “The Son,” by Philipp Meyer, can take its place among the Great American Novels.)
My personal favorite is the Volunteer Service Projects. Service is good for all of us, not to mention the local communities IAMC gets to visit. Let’s see how many folks we can get to turn out in New Orleans.

Wow, that’s a lot!

As all organizations must, IAMC is continually re-creating itself; all from input and commitment from our members. All of the above programs started as a small idea or discussion amongst members, and developed through the hard work and dedication of the committees, staff and board. As you can see, IAMC thrives on change, which some would call renewal.

While we welcome change to meet the needs of and serve our members as well as the changing landscape of corporate real estate, we’ve stubbornly held on to what’s important — what many of us call non-negotiable: our core values.

We’re about corporate real estate in manufacturing and industrial environments.
Overt selling is a no-no. We build and establish personal relationships.
We engineer a balance of Actives and Associates in our membership and at our events.
IAMC is relatively small. Today, we’re only 30 percent bigger than in 2009.

I’m proud to introduce new members to the organization, always with the hope that they get out of it as much as I have. As we enter 2016, refreshed and renewed, I wistfully look at 2009 and the past seven years with the belief that, with our strong culture, leadership and staff, IAMC will be just as good, dare I say better, for many years to come.

Best regards,

Samantha Turner
IAMC Chair

Designing CRE Metrics that Work

Editor’s Note: This article is taken from the IAMC Cleveland Professional Forum Research Roundtable program. Presenters were Mike Ohata, Partner at KPMG LLP and Richard Whobrey, VP of Enterprise Asset Strategies, Newmark Grubb Knight Frank.

Session sponsors:

Indiana Economic Development Corp. and North Dakota Department of Commerce

Overview

Time and effort spent gathering data may be wasted if the key performance indicators (KPIs) of each department, including corporate real estate (CRE), don’t align with corporate strategies. When metrics are aligned, organizations make better decisions.

At each level of an organization, the metrics and KPIs should roll up to support the corporate strategy. Everything you do, even in real estate, should be tied to adding value.

If the company leadership hasn’t effectively defined the role of the real estate function, it is up to the CRE team to work across departments to articulate how it is supporting the corporate strategy.

Enterprise Metrics: Streamline reporting for efficiency and focus.

When metrics are tailored to each level of the organization — while also being aligned with the corporate strategy — leaders can focus on what is important to the types of decisions they must make. Consider these three tiers:

Executive management should use scorecards, dashboards, and concise reports to focus on topics such as growth, customers and products.
Senior management responsible for specific parts of the business can rely on dashboards, standard reports and statistical analysis to focus on topics such as revenue-by-customer, brand penetration and churn or retention.
Operational management needs more detailed metrics to handle daily operations. All the operational measures should roll up to the senior level.

“The right KPIs can drive directly to shareholder value.”

— Richard Whobrey

Corporate Real Estate Metrics: Relate operations to high-level strategies.

When the organization’s strategies are broken into specific objectives and measures, it is easier to define the role that CRE can play in reaching those strategies. When breaking down total CRE and facilities spending into cost-to-own, cost-to-operate, and cost-of-occupancy, CRE leaders can begin to develop KPIs, such as energy cost savings per square foot.

To create a balanced scorecard of KPIs for the executive level, CRE needs to go beyond operational measures. Four areas to look at, and the key question for each, are:

Financial: How do we look to shareholders?
External focus: How do customers see us?
Internal focus: What must we excel at?
Growth/Innovation: How can we continue to improve and create value?

Based on the enterprise strategy, several new measures could be valuable.

Research Roundtable participants discussed the types of KPIs they would like to develop and show their executive boards, or which they would like their bonuses based on. Their ideas included:

Revenue per square foot, broken down by business unit.
Real estate total cost of ownership (TCO) as a percentage of revenue for each business group.
Revenue per cubic foot, which is especially relevant in distribution or the manufacturing of large products, such as aircraft.
Mergers and acquisition savings compared to estimate.
Operating cash flow impact.