One of the things I have seen over the course of my career is that standard real estate and facility management processes do not get taken into much consideration at the C-level. Real estate and facility managers often look for executive leadership to pay more attention to the raw data they present, however, that’s just not happening. Well, why not?
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I would say it is largely because the metrics, numbers, and analysis they prepare on their domains can be very insular and self-contained. It is rare that a real estate director will relate his or her reports to a corporate metric such as revenue, profit, or earnings. But that is exactly what will gain interest from the C-suite
What is the connection between the real estate and facility management data and key corporate metrics? What is the C-level impact of real estate costs and activities on those metrics? How can real estate numbers relate to the ones we hear about on Wall Street or in the stock market: the revenues, the profits, the earnings? Real estate and facility management teams need to take a more in-depth look at the relationship between real estate metrics and overall metrics to uniquely report this information to the C-suite.
Of course, this is easy to talk about but often difficult to execute. Real estate and facility managers aren’t accustomed to presenting in this context. Consequently, this could narrow the impact on the reports that are being produced.
Corporate metrics hold more attention due to a stronger connection with overall organizational goals
A good example that we have seen recently is all the attention given to the new lease accounting guidelines. These new guidelines require leases to be capitalized and reported in the organization’s files, resulting in an impact on the balance sheet as well as the P&L for the corporation. Suddenly a situation emerged where the real estate strategy had the potential to largely impact corporate finance, and what was the result? The C-suite was listening. Real estate departments want to be strategic players within the corporation, so it is their responsibility to act in a way that will successfully reinforce their position.
Evaluate your reporting for potential analytical improvements
To examine patterns and trends, there needs to be a shift towards the consistent cross-referencing of data between departments. Tools such as Planon’s new product, Planon Connect for Analytics, can assist with this process.
Rather than focusing on graphics or a presentation style, real estate and facility managers need to be focused on the powerful potential of linking their real estate data sets to other corporate data to discover patterns and correlations. It is always worth looking at these correlations to determine whether a closer relationship is present and can be leveraged.
Another issue that forces the C-level to pay attention is the difficulty seen during the job recruitment process within their organizations. Talent is becoming more challenging to find, hire and retain; and as a result, this process is costing an excessive amount of time and resources for companies. Prospective talent places an incredibly high importance on salaries and benefits; details that corporate C-level executives are much more in tune with than real estate professionals. A correlation that can be made evident through analytics is the relationship between workplace conditions and the ability to hire and retain talent. Of course, we talk about this in the abstract but with advanced analytical tools, it is possible for real estate and facility managers to present these correlations much more effectively.
I recently spoke to Erik Jaspers, Global Product Strategy Director at Planon who interviewed René Buck, CEO and Founder of BCI Global, for the Planon Podcast series "Real Estate experts share insight on how corporate real estate contributes to organizational strategy.” He mentioned that René also spoke about the crucial role geographical locations and building layouts play in finding talent and guaranteeing business continuity. Where is the office located? Is the location in a promising area for the right talent to come along? Also, what should be developed within the workplace environment to ensure talent retention, to captivate these individuals and motivate them to stay onboard? If you can connect real estate to this talent issue, a different perspective emerges that forces C-level executives to pay more attention to the real estate strategy.
This is where the power of analytics comes into play.