The Leader Magazine

SEP 2016

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SEPTEMBER 2016 37 process was extensive and disciplined to ensure all opportunities were considered and exhausted. The process itself creates the greatest leverage and competition in negotiations, so we gained buy-in from all parties – even those originally wanting to stay. Protecting the deal terms and holding the line was our next biggest challenge. The temptation, like in all major leasing deals, to "claw back" the terms and flexibility was a daily challenge. This required a sound legal team with solid property skills and daily attendance at legal meetings to keep up the momentum. Ultimately, some 10- to 15-hour marathon legal lock-up meetings were required to draw it to a close and freeze the moving parts. The transaction was, no doubt, the toughest and most complex lease agreement I have ever dealt with in 20 years, increasingly so as we needed to develop a master lease housing all the "special terms" and then 15 affiliate leases for the key entities, ensuring that they all spoke to each other without ambiguity. Then, we repeated the process to produce a Chinese version. Finally, execution on a tight timeline was challenging for all. The resounding note from the CEO in January 2015, when terms were first com- mercially agreed to, was "Good – now you have to deliver!" It was 20 floors, 45,000 square meters (485,000 sq. ft.), and we had to document a lease that took until June to complete. Design worked in tandem, and the building works were not expected to complete until July, meaning we had August to November to build, approve clearances and commence the staged move. The timeline was crazy. The upside was that decisions were made fast – there was little procrastination. t he leader : What are some of the biggest learnings from this project? Woodburn: Time is a real enemy. This project was the stand-out option. Failing that, renewal was Plan B. We had the emergency option to extend our key leases by 1, 2 or 3 months with a relatively modest rental premium of 50 percent per month. This was outstanding flexibility for which I thank my predecessors, for their forethought in capturing in the earlier renewal. However, our businesses are fiscally, incredibly responsible, and by the July cut-off date they each elected to keep the focus on delivery within the initial timeline and waive the extension rights – meaning zero tolerance to unfore- seen issues. And, believe me; we faced those hurdles every single week. We battled "flooding" issues as plumbing worked against us on multiple occasions, yet I was assured that water was a sign of good luck. And, we saw plenty of that! Authority inspections were terminated amidst the floods, products were delayed in shipping, and plans changed at the eleventh hour. But we met the deadlines. t he leader : s trategically, what decisions were the light bulb moments in the project? Woodburn: The game-changer decisions for this were twofold: 1) appointing two design firms and creating a competitive spirit between the two, and 2) appointing a single project management firm to ensure that across-the- campus management was fully coordinated and to avoid the "he said/she said" finger-pointing. Any different team structure would have completely failed us. t he leader : How would you say members of the staff felt in the lead-up to the move? Woodburn: Change brings uncertainty and with that comes concerns. It is fair to say some were less than excited, coming from some very trendy and centrally located properties. But we reminded all that it is our vibrancy and diversity that brings life to precincts we occupy, and that we would repeat the same outcome in this new project. Our commitment to properties in Asia has regularly made the areas famous and popular. t he leader : What initiatives were employed to manage the change process? Woodburn: Steering committee town halls identified early on that com- munications would be critical. As that is our core business, we expected it to be well executed. We assembled an across-the-group Communications committee and looked to do something unique. We developed a digital application (app) with partners specific to the campus. It provided a platform for life after the move, with way-finding map links to send clients, a visual profile of all campus tenants, a gallery to share images and welcome videos, and a map with nearby food & beverage and services highlighted. Our communications included a program of creating 100 mostly tongue- in-cheek reasons to move, which were blasted to all staff in the months preceding the move. Multiple welcome messages were developed by respective CEOs and triggered using iBeacon technology so that messages were "pinged" to staff when they came in range of the receptions. Sir Martin (Sorrell, CEO) also contributed, delivering a personalised welcome mes- sage to all staff as they arrived in the building lobby. Importantly, we did not share everything; we kept images to a minimum to ensure an element of surprise. Separately, I kept CEOs apprised of progress with regular pictorial updates of progress, usually peppered with humour to defray the stress. t he leader : s omething this big must have delivered some firsts. t ell us about them. Woodburn: We invested in our first whole-campus air filtration system to deliver high-quality, clean air to all staff, which is a topic of huge focus in Shanghai. We have also organised a host of shared facilities, the fun elements being a "playground" terrace area served by our private on-site "The transaction was, no doubt, the toughest and most complex lease agreement I have ever dealt with in 20 years." Terrace space, complete with colourful sheep, encourages creativity and collaboration.

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