C-suite Demands More Productivity: How Will Corporate Real Estate Deliver?

corporate-real-estate-pressureSkyrocketing C-suite demands for productivity are creating a “pressure cooker” of expectations for corporate real estate (CRE) teams worldwide, reveals a new JLL global survey. Although the CRE function is rapidly maturing, its transformation from tactical manager to trusted advisor is far from complete.

JLL’s third biennial Global Corporate Real Estate Trends survey shows that CRE teams are now even more challenged to transform their roles from order takers to order makers. More than half of respondents to the survey report even greater C-suite expectations in nearly every category. A concerning 15% say that they are poorly equipped to meet the increased demands—a proportion that has doubled since 2013.

Tracking insights from 544 CRE executives in 36 countries, the 2015 survey details the C-suite’s growing recognition of CRE and the corresponding pressure on CRE teams.

“Demands on CRE teams are unrelenting. The C-suite simply will not accept ‘we’ve always done it this way’ for an answer any more and they shouldn’t,” said John Forrest, JLL CEO of Corporate Solutions, Americas. “C-suite executives are demanding office space that make employees more productive, and expect CRE executives to use sophisticated data and analytics to make their global facilities portfolios highly efficient. Many of these demands require CRE executives to speed up their pace of change, and get out of their comfort zones.”

Great Expectations
A central theme in JLL’s last Global Corporate Real Estate Trends survey in 2013 was the intense pressure on CRE teams to deliver against a broad range of tactical and strategic tasks. The percentage of those who say they are “well-equipped” has fallen from 28% to 17%. Lack of access to data and analytics was the top-rated constraint limiting further development of the CRE function.

Reducing costs is an underlying concern for CRE executives but the overarching demand of senior leadership concerns strategic engagement. Top C-suite demands include:

  • Share CRE decision-making with the business. C-suite leaders expect their CRE executives to enlist business leaders in making facilities decisions. Sixty-two percent of CRE executives report increasing C-suite demand to present scenarios and solutions to the business, and nearly 70% report increasing demand to challenge the business about its presumed space needs. Encouragingly, 43% of CRE teams have a formal business relationship management program in place for interacting with internal business leaders, while 29% engage with business stakeholders on a formal, but ad-hoc, basis.
  • Improve workplace and workforce productivity. CRE teams are at the forefront of creating a more positive experience and increased effectiveness in the workplace, and improving workplace productivity is the top productivity outcome expected from the CRE team. Sixty-two percent of CRE teams see increasing demand from leadership to enable more flexible working, and 59% see increasing demand to support cultural change.
  • Improve asset and business productivity. The C-suite expects improved productivity across the corporate real estate and facilities portfolio, a complex goal with many moving parts. Notably, 61% of CRE teams in 2015 report pressure to improve the productivity of the physical real estate assets, a significant increase over the 47% reporting this pressure in 2013. More than three in every five respondents report a growing appetite to drive greater flexibility through the real estate portfolio and provide larger volumes of on-demand space.

Forrest suggests five ways CRE teams can expedite transformation of the CRE function:

  1. Prioritize people and people skills within the CRE department;
  2. Create a strong data and analytics platform to bring data science to corporate real estate decisions;
  3. Define success and benchmark progress against peers;
  4. Address the broad sweep of activities that constitute ‘business as usual’ without undermining the evolution of the CRE to trusted advisers; and
  5. Leverage vendors and vested outsourcing for both tactical execution and strategic counsel.

“Corporate real estate teams must deliver with a more efficient and business-aligned approach that prioritizes data science, proactive leadership and predictive analytics,” said Forrest. “Without this shift, CRE teams will remain trapped in the past.”

To request a full copy of the survey report, visit www.jll.com/globalCREtrends. Social media users can also join the conversation about the future of corporate real estate on Twitter using #CRETrends.