Lorraine Teel, President and
CEO
|
From Our President
2006 was a great growth year for us and our clients. We spent
the last few months helping our Commercial Real Estate clients understand how many people they needed, which roles
were the most effective and how to motivate their team. We also helped our clients enhance existing technology and select and
implement new technology to run their businesses better. Some needed new processes that cut their cycle times by 30%, some corporate real
estate users needed help communicating their real estate facilities strategy to their board in order to get their future space needs addressed. All
in all, the focus was on growth while carefully positioning the lowest-cost options in place to maintain quality.
As our clients have grown,
so have we. In 2002, Teel Enterprises, Inc. perceived a need in the industry for a more consultative approach so we began to focus on strategic
consulting and advisory services. Teel StratVisor Group, L.P. was formed in 2006 as an independent entity to better deliver those
services. In conjunction with that change, we launched our new name and logo in February 2006, and are pleased to announce the launch of our
new Web site, http://www.stratvisor.com/
We hope you enjoy our newsletter and some
of our ideas that have helped our clients grow this year. In upcoming issues we'll share other solutions, such as helping a
Tenant-in-Common (TIC) company transform its investor reporting and leapfrog the competition, and showing a full-service real estate company the
bottom-line payoff for creating operational excellence. Meantime, check out the link to our on-line diagnostic surveys that can help you
prioritize a list of ways to reduce costs and improve operational performance. We are offering these surveys free to non-clients
until June 1 so act quickly!
The StratVisor Disposition Model
(SDM)
There are numerous initiatives a company can use to enhance its real estate and real estate
operations. A strategic plan that helps a company prioritize these real estate initiatives with an overall business focus is the first place to
start.
Teel StratVisor Group has developed the StratVisor Disposition Model, which provides a strategic solution to analyzing and funding a business entity's strategy and disposition of commercial real estate and
realizing recurring benefits.
In her article, entitled "Improve Your 'Disposition' - Transforming Your Real Estate" (May 2006 issue of
Corporate Real Estate Leader), Lorraine Teel outlines some of the challenges facing companies in managing their real estate portfolios, and
shows how adopting a new business model can re-align portfolios and reduce costs.
To read it now, visit our Web site: www.stratvisor.com/insights.
Communicating with Top Management and the Board of Directors: Do You Speak Their
Language?
Have you recognized areas in your company’s real
estate assets that need improvement, but you find it hard to effectively convince senior management of the right solution?
Frustrating, isn’t it?
Recently, we helped the
facilities managers for our client, a private, not-for-profit health insurance company, get approval for a new building to meet their future
occupancy needs. Getting the green light for a $100M development project after being turned down numerous times by the board over
a two-year period was a major milestone to those managers! During those two years, the facilities managers had to lease remote
space to meet the company’s growing needs. Having some company operations housed off-site impacted both productivity and
morale. Plus, it cost the company more money in the long run than had they approved the expansion project and developed when the project was first
initiated by the real estate group.
Why was getting the development
trigger pulled so difficult? Well, typical of many companies, Real Estate as a “profit center” was not on the radar
screen for the company’s leaders or Board. Most executives are quite surprised to learn that, whether your business is a
manufacturer, a telecommunications company, a health care provider, a retailer, a government or other non-profit entity, the second highest expense
after payroll is typically Real Estate. Most companies miss seeing the impact of their Real Estate on the bottom line because
Real Estate costs are not typically captured or maintained in standard financial reporting.
Even though Real Estate is often not
viewed as a core business line, it is critical to the business’ success, as it houses employees, equipment and supplies, products, and
sometimes outside contractors. Despite Real Estate’s big bottom-line impact, in many companies the responsibility for its oversight is
delegated to whoever agrees to take it on: the CFO, the COO, even Human Resources or Legal.
Real Estate often is not acknowledged
in the executive suite as a differentiator to the corporate culture, to the supply or demand for goods, to the impact on customers and employees, or
to the profitability of the company…but it has significant impact in all of these areas. So how does the facility manager
or the commercial real estate director gain a voice with management and move important initiatives forward within the corporate culture?
Answer: You have to speak their language.
The typical communication model looks
something like this: |
Communication
between Real Estate Manager and Senior Management: It Often Misses the Mark
|
Real estate folks speak
the language of occupancy costs, lease terms, property tax reductions, load factors…while senior management speaks the language of return on
investment, strategic plans, quarterly financials and the like. If you want to change this dynamic, you need to change your
communications. Effective communicating, tied to performance, can be the key to elevating Real Estate on the corporate agenda and
gaining that project approval.
It is important for
real estate managers to understand what the top three to five decision drivers are for the company as a whole. Is senior
management most focused on growth, profitability, to be the best in their market or to be the most cost-effective provider of their goods or
services? What is the timeline for achievement? What “metrics” or performance measurements
do company leaders rely on most heavily to track their progress toward achieving the company’s strategic goals? |
