The Leader Magazine

MAR 2017

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Research questions and findings RQ #1: What are the strategic and leadership challenges that CRE leaders face? CREM as a strategic partner. Lack of input on the strategy process is often seen as preventing CRE leaders from optimizing CRE assets. A seminal study in the CREM world entitled Strategic Management of the Fifth Resource: Corporate Real Estate (Joroff et al., 1993), published by one of CoreNet's predecessor organizations, IDRC, found that CRE was generally not involved in strategic corporate decisions that affected CRE. To elevate the status of CRE as a strategic partner, Joroff, et al., envisioned a progression of CRE's role in the corporation from being an order-taking technical specialist, as it was perceived in the early 1990s, to being a strategic partner in shaping the strategy of the corporation. Of the CRE executives interviewed for this study, 64 percent support the finding that CRE has increasingly assumed a strategic role with the senior management of the corporation and its business units. This is evidenced by these executives reporting greater access to the C-Suite to provide input on strategic decisions. The executives also indicate that the C-Suite has a greater understanding of CRE's ability to affect corporate results. P6 captured this general theme very clearly by observing: "Senior leadership has a better understanding of the leverage and the impact that can come out of corporate real estate, which presents some challenges for corporate real estate. Because they understand it, I think their expectations have gone up of what the groups can really do." (P6, personal communication, April 28, 2016) CREM leadership. As noted above, the more strategic role that CRE is now playing does not come without a price. Greater expectations from the C-Suite bring higher visibility and demand greater skill for both CRE strategy and leadership. CRE executives need to be proactive and global, with excellent planning, influencing, and teamwork skills. CRE leaders need to have expertise in: establishing strategic direction, aligning people, motivating and inspiring, and producing change. Exercising these types of skills is the ticket to greater visibility and strategic importance. Continuing to expand and enhance these skills for the benefit of the corporation is the price of maintaining CREM's place at the table. RQ #2: What strategies and leadership practices do CRE lead- ers employ in responding to the challenges they face? CRE strategy. Given that strategy is always future-oriented (Andrews, 1971/1980; Chandler, 1962/1990; Quinn, 1995), strategy creation requires being proactive. In an internal service organization such as CRE, getting the client data to be proactive is often a struggle. The participants in this study identified proactivity with internal clients to define corporate facility needs as including everything from merely reaching out to find out how they are doing, to pushing actionable information to them, to not taking no for an answer when real estate decisions need to be made. The key point was that without proactivity on the part of CRE, success in CRE strategy is almost impossible. Ali, Adair, McGreal, and Webb (2008) point out that failure by CRE executives to be proactive in this fashion may be the reason that CRE is often perceived to be left out of the communication loop when strategy is discussed. Leadership skills and practices. Several of the CRE leaders interviewed mentioned both the need for, and the difficulty of, intentionally setting their own agendas aside in order to more fully understand their clients' needs. They further stated that without a full understanding of the partner's business needs it is almost impossible to arrive at an optimal solution. P2 described how the CRE leaders that are pushing the performance envelope to higher levels take time to understand their clients: "Even though it is hard, what I try and do is put myself in the posi- tion of that business unit leader or that project leader from the business. What are they getting hammered on? What's important to them? How can we make them look good?" (P2, personal communi- cation, March 31, 2016) The importance of interpersonal skills. In the highly collaborative world the CRE leaders described in their interviews, interpersonal skills are critical to building the shared understanding and trust that are required for large teams to function at a high level. Specifically, two executives framed interpersonal skills in the context of listening and interpreting (P7) and the critical nature of communicating clearly and often (P8). RQ #3: How do CRE leaders measure overall success of their strategies and leadership prac- tices? CRE success measurement. The data for this theme was very clear; according to 85 percent of survey participants, it is all about being on budget, making your numbers. Although the interview data aggregated a wide variety of metrics and goals – including expense budgets, capital budgets, project cost and schedule, process cycle times, customer satisfaction, and sustainability measurements – the vast majority of the respondents boiled it down to, in the words of P8, "You need to hit your budget or be damn close to it." Emotional intelligence and social construction. It is interesting to note that several of the participants' remarks carried a strong sense that hitting one's numbers or making one's budget was the minimum condition for success in terms of overall CRE MARCH 2017 55

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