Tag Archives: CRE

Is your ‘benchmarking’ actually adding value? It should be by now!

Your current benchmarking….

If you are involved in corporate real estate (CRE) or facilities / workplace management, you are probably involved in benchmarking of space use and occupancy cost at the moment. Probably also environmental data, such as energy use and costs, and wider reporting on other sustainability measures. You may be using a specialist databank or benchmarking company. Or you may be working with other companies in an informal group.

We (at Occupiers Journal limited that is) have invested time in creating a discussion around this subject on Linkedin, called ‘OJ’ occupier benchmarking & data publishing. It is part of our ‘Open’ Group.

The discussion has taken off, with many of the leading benchmarking organisations (and key individual experts) now taking part. Roger de Boehmler, former Director-General of PISCES (now part of OSCRE, the International Open Standards Consortium for Real Estate, the only global e-commerce standards body for real estate) is now working with us as Project Director.

Therefore, as this discussion and ‘programme’ starts to take shape, I wanted to throw in some points to think about…

TIP#1 – What is a “benchmark”, and what is an “average”?

Many groups get this wrong! You may be working with one. Even specialist benchmarking providers misrepresent the difference between a “benchmark” and an average.

A “benchmark” should be exactly that – a mark on the ‘bench’ to show best practice, or best achievable. It should not be just the ‘mean’ or ‘median’ or some other average of a set of numbers. What does that tell you?? Do you aim to be ‘average’??

You should be getting told by your benchmarking provider, what their view is of ‘best practice’, and where you are against this measure. If they are also consultants (as many are) they will probably also be advising you on how to address any ‘gaps’ between where you are now and where you want to be.

TIP#2 – “What” is a start; “Why?” is more useful – quite often a question NOT asked!

Anyone can take a bunch of numbers, put them in a database, and tell you where your ‘numbers’ are against a wider group. Thats the “what”, and it doesn’t tell you much of value….

Your benchmarking group is not being useful unless it can explain “why” one company has achieved figures that appear to be better than the others.

Sadly, I have seen this situation NOT improve for almost two decades now! Why? Because every benchmarking group, or assignment, spends 90%+ of its time getting reasonable comparative data, and only whatever time is left (usually very little) on getting to the real kernel of ‘WHY?’ and ‘HOW?’…the real best practice questions that will help an organisation to actually improve.

One of the key reasons why we have started the ONE database programme. And the reason that we think it will get driven to a successful conclusion – where we can all get access to reasonably good quality data, and spend our time on analysis not on chasing data!

TIP#3 – Don’t accept the benchmarker’s phrase – “this could be because….”

That’s code for “we don’t know, but we guess that….”

Make them work harder to find the answers, not simple assumptions. Its all down to the ‘why’ and the ‘how’ questions above.

Some other serious points for you to challenge:

  1. The drivers of effectiveness (and even efficiency) for office facilities have changed….but many benchmarking groups have not kept pace. The key issue is that space is not used ‘9-5’, or by staff only, or on a ‘one person one desk’ ratio. To measure the effectiveness of office buildings today, we must take account of the Desk Share Ratio (DSR), where DSR= # of people using space / # of useable workspaces;
  2. The DSR measure necessitates understanding how many people use the space in each office, for how long, and how many useable workspaces are there, and how are they used. How does your benchmarking provider deal with this in their data analysis?
  3. We all know that it takes time, and ‘triangulation’ of several bits of data, to work out how many people actually use each building, how frequently, and for how long when they do use it (i.e., quick visit, in for a meeting, or ‘camp down’ for 10 hours?). Are you all doing this consistently?
  4. Many benchmarking groups use measures of “xyz per FTE”, to show “per capita” use of space and facilities. What is the FTE figure? Is it how many people are allocated to use the building (i.e., that is their base)? Or is it an assumption based on number of workstations? Or is it the actual average occupancy on a daily basis? This can vary by 100% or more! Here’s why: at a DSR of 1.2, you could have 6,000 people using 5,000 workstations, but the building average occupancy at say 60%, means 3,000 people use the space daily…6,000 people, 5,000 workstations, or 3,000 average users??
  5. “Cost per FTE” may be accurate in terms of the ‘numerator’ (cost), but can vary massively due to the ‘denominator’ (FTE), due to the later point.
  6. “Sq.m. per FTE” varies on the same basis….!
  7. “Sq.m. per Workstation? OK, as long as everyone is measuring space in the same way, that could be relatively accurate. But, is Sq.M per Workstation very relevant to a mobile workforce such as accountants and consultants? I’d rather have Auditors using comfortable productive space at 12 sq.m. per workstation, at a DSR of 2 or 3, than I would have then crammed into 9.5 sq.m. per workstation with no desk-sharing….size of workstation doesn’t matter, it’s what you do with it!
  8. “Cost per sq.m.” can be fairly accurate and comparable, if you work hard enough at it. But again, I would rather have a high “cost per sq.m.” office being operated over say 12 hours per day, with high levels of desk-sharing and high utilisation of meeting rooms and other spaces, than I would have a low cost building, occupied 9-5 on a DSR of <1, with poorly managed meeting and break-out spaces….

There’s more….we haven’t even got into “service levels versus cost” for each FM service line….! But that will do for now…

I hope this provides some useful material with which to challenge your 2012 benchmarking.

And suffice to say, if you want to do ‘proper’ benchmarking, and want to take these points and others into account, feel free to drop me a line at the email address below. Perhaps we should set up a special purpose company….”The Really Useful Benchmarking Company”, if Andrew Lloyd-Webber has no objections!

Contact me to talk about benchmarking anytime – it IS useful, if it is done properly: paul.carder@occupiersjournal.com

skype: paul.carder.uk

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‘OJ’ Careers & Jobs (#6 ; 13th April 2012)

Hi,

I hope you all had a great Easter weekend wherever you are/were in the world. I have given up trying to write this blog weekly, every Friday. But I hope you’ll accept “almost every Friday” as good enough. Unless of course someone out there wishes to sponsor the blog?? Then, of course, it will get done…. 🙂

Now two months in, we are well over 2,100 members on our Linkedin Group called “Careers & Jobs (Open) CRE & Facilities Management”. Adding around 100 people a week, after the initial fast start. The link is here: http://www.linkedin.com/groups?about=&gid=4269106 . You can read more on the first week’s blog: http://alturl.com/qmsso

Recruiters & Head-hunters

This group is independent, under the ‘OJ’ http://occupiersjournal.com. Do sign up on the website to receive our Newsletter and occasional papers. We hope that any and all recruitment and head-hunting firms will use the group, and post vacancies to the ‘Jobs’ section. Many of you have, so thankyou for that. Anyone is welcome, and feel free to ‘advertise’ yourselves on the “Discussions” section.

These people posted Jobs discussions this week (I will expand this list over the next few weeks, into a global list of recruiters, and save it on my shared ‘Box’ folder: https://www.box.net/shared/bxrprfdfr7 ). For now, here are this week’s new recruiters (new to us anyway) in the order in which they posted. The full list is at the END.

Coleen Cloherty, http://www.linkedin.com/pub/coleen-cloherty/1/89b/20 London , UK

Richard Whitfield, http://www.linkedin.com/in/richardwhitfieldinterserve , Warwickshire, UK

Elinore Minskey, http://www.linkedin.com/pub/elinore-minskey/4b/517/739 , Tennessee, USA

Alex Morris, http://www.linkedin.com/in/mralexmorris , Godalming, Surrey, UK

Michael Herman, http://www.linkedin.com/in/mikeherman123 , Washington DC, USA

Featured Recruiter this week

I have been adding a “top recruiter” in past weeks, on the basis of who posts the most jobs to the Linkedin group. But, as it keeps going to Rebecca Worley, and would AGAIN!, I have had to change tack….sorry Rebecca, but keep ‘em coming. Closely followed by Nikki Dallas of @TalentFM ; yes we’re all on Twitter these days, aren’t we?

Twitter is a great resource, especially if you are job hunting. Look up the links below on Linkedin, and most recruiters also have their twitter name on their profile. Even if you only follow them, and nobody else, you will at least stay ahead of the jobs available, and get the chance to get your CV in early!

This week I’ll give a special mention to Alex Morris, Global Sales Director at Berry Technical (UK), which now includes Cerebra. Alex founded Cerebra, which last year was merged into Berry Technical. He has been in recruitment in the Building Services/FM sector for many years, across Europe:

 Alex has been recruiting Senior level FM positions internationally for the last 16 years. Currently working for many blue chip companies globally. Experience in recruiting FM – Facility Director/ Board level positions

Top jobs this week (around the globe!)

If you go to the Linkedin group and click on Jobs you will see there are 33 jobs shared to the group, and 17 job discussions. There are more jobs if you click on Linkedin’s Jobs Home. But lets look at those on our ‘OJ’ group….

There are CRE & FM management roles posted in London, Prague, Brunei, Ohio (USA), Bangalore, Alabama (USA), Sao Paulo, California (USA), Cambridge (UK), Toronto….and more!

Unisys are looking for an APAC Director – Real Estate & Facilities in Sydney. I’d have to pick that as the top job this week! Living in Sydney, travelling across APAC, and working for a global information technology company.

Last week I said “hopefully we will go wider still in month 3…? India maybe….”, and of course we have. There is a Manager – Real Estate & Workplace required for vmware in Bangalore.

Johnson Controls are recruiting for many UK roles, but I noticed with interest their opportunity in Sao Paulo. As with India, covered last week, Latin America is seeing a growing need for CRE & FM management roles.

Top Discussions:

We had some interesting ‘Discussions’ (see the Discussions tab) over the last two weeks. I don’t have time to cover them all, but here is one: http://lnkd.in/PM9XPh; what I picked up here is that internal referrals are key! So get connected to people on Linkedin, and they may refer you to their HR department – remembering of course that many companies give staff a bonus for introductions, so don’t be shy! You may be doing each other a favour….

Working @

I have not had time to write another “Working@” this week, but will do as we had great feedback on the last one by Simon Beck, on “A Facilities Manager’s Life in Angola”: http://paulcarder.com/2012/03/09/a-facilities-managers-life-in-angola-southern-africa-by-simon-beck/ .

If you would like to write a similar article, for Working @ your company, drop me a line at the email below. Thanks.

That’s all folks for this week, but subscribe to this blog and receive the update every Friday….

Have a great weekend, and if you are job-hunting, good luck,

Paul Carder (paul.carder@occupiersjournal.com)

Twitter @occupiers and @paulcarder

RECRUITERS (alphabetically)

Simon Aspinall: http://www.linkedin.com/in/simonaspinallcatch22 , Leeds, UK

Melissa Baxter http://www.linkedin.com/pub/melissa-baxter/18/555/b64 London, UK

Meghan Blankenship http://www.linkedin.com/pub/meghan-blankenship/5/9a5/634 Austin, TX, USA

John Bruno: http://www.linkedin.com/pub/john-bruno/16/402/7a6 , LA, CA, United States

Douglas Carrick: http://www.linkedin.com/pub/douglas-carrick/41/886/630 , London, UK

Jo Caughey: http://www.linkedin.com/in/jcaughey , Birmingham, UK

Jaime Cheng: http://www.linkedin.com/pub/jaime-cheng/38/568/230 , Hong Kong

Nikki Dallas: http://www.linkedin.com/in/nikkidallas , London, UK

Bob DiSanto, Detroit, US

Kristin Erdmann: http://www.linkedin.com/in/kristinerdmann4hr , Minneapolis, USA

Brittany Finnell: http://www.linkedin.com/pub/brittany-finnell/8/602/643 , Dallas, TX, United States

Peter Forshaw, http://www.linkedin.com/in/peterforshaw , UK

Ben Gregg: http://www.linkedin.com/pub/ben-gregg-0415919590/6/782/a11 , Sydney, Australia

Simon Knowles: http://www.linkedin.com/pub/simon-knowles/1/bb6/a8 , Exeter, UK

John Kreis: http://www.linkedin.com/in/johnkreiss , Boston, MA, United States

Gareth Longley, http://www.linkedin.com/in/garethlongley , Manchester, UK

Natasha Luthra, http://www.linkedin.com/pub/natasha-luthra/35/67/a7b , Bengaluru, India

Chris Manning: http://www.linkedin.com/in/cjmanning , London, UK

Claire Marchant http://www.linkedin.com/in/clairemarchant Manchester, UK

Keely Marlin: http://www.linkedin.com/in/keelymarlin , Denver, CO, United States

Rick Morales http://www.linkedin.com/in/rickmoraleshrexpert New York, NY, USA

Merrick Morris http://www.linkedin.com/in/merrickmorris Norfolk, Virginia, USA

Cassie Rayner: http://www.linkedin.com/in/cassierayner , Leeds, UK

Raint Tang: http://www.linkedin.com/pub/rainy-tang/3b/280/12 , China

Rebecca Worley: http://www.linkedin.com/in/rebeccaworley , Co. Durham, UK

‘OJ’ Careers & Jobs (#5 ; 30th March 2012)

Hiya – its the end of Q1 already; where has the time gone, eh? I have given up trying to write this blog weekly every Friday. I hope you’ll accept “almost every Friday” as good enough. Unless of course someone out there wishes to sponsor the blog?? Then, of course, it will get done….

Now two months in, we are well over 2,000 members on our Linkedin Group called “Careers & Jobs (Open) CRE & Facilities Management”. The link is here: http://www.linkedin.com/groups?about=&gid=4269106 . You can read more on the first week’s blog: http://alturl.com/qmsso

Recruiters & Head-hunters

This group is independent, so we hoped that any and all recruitment and head-hunting firms would use the group, and post vacancies to the ‘Jobs’ section. Many of you have, so thankyou for that. Anyone is welcome, and feel free to ‘advertise’ yourselves on the “Discussions” section.

These people posted Jobs discussions this week (I will expand this list over the next few weeks, into a global list of recruiters, and save it on my shared ‘Box’ folder: https://www.box.net/shared/bxrprfdfr7 ). For now, here are this week’s new recruiters (new to us anyway) in the order in which they posted. The full list is at the END.

Gareth Longley, http://www.linkedin.com/in/garethlongley , Manchester, UK

Natasha Luthra, http://www.linkedin.com/pub/natasha-luthra/35/67/a7b , Bengaluru, India

Peter Forshaw, http://www.linkedin.com/in/peterforshaw , UK

Featured Recruiter this week

I have been adding a “top recruiter” in past weeks, on the basis of who posts the most jobs to the Linkedin group. But, as it keeps going to Rebecca Worley, and would AGAIN!, I have had to change tack….sorry Rebecca, but keep ’em coming.

This week I’ll give a special mention to Peter Forshaw , Managing Director of Maxwell Stephens (UK). Peter has been in recruitment in the FM sector for many years now, and is up to about 80 blogs now on his site. Some useful views on FM and recruitment issues.

Top jobs this week

Peter is recruiting for 3 Regional FM roles for CBRE: http://lnkd.in/rCrSHy .

I think this week I’ll pick on Interim roles, as Gareth Longley posted this: http://lnkd.in/Tk6TxX . I know of many people in my network (now well over 6,000 around the world) who have decided to focus on interim roles rather than look for their next salaried position. Gareth has experience in interim roles, so give him a call: 07961 591 406

There have been many others Jobs posted over the last few weeks, around the world. Hopefully we will go wider still in month 3…? India maybe….

India: a booming market….

I was doing some work this week with my friend Sanjay Parmar, a CRE consultant in the UK who has personal and professional knowledge of India. I realised that I had well over 100 end-user contacts in India, from New Delhi up in the north, to Mumbai & Pune on the west coast, down to the “tech” cities of Bangalore, Chennia and Mysore in south India. Watch this space, as we will be keeping our eyes and ears open for opportunities in this wonderful and rapidly growing region.

Top Discussions:

We had some interesting ‘Discussions’ (see the Discussions tab) over the last two weeks. I don’t have time to cover them all, but here is one from a friend of mine, John Garrett in Denver CO: http://lnkd.in/MKpk8J . As John says:

 Recognizing the current volatility within today’s job market, there are tremendous opportunities across multiple functions within CRE / Facilities Management. This article explores this subject and demonstrates that there is, in fact, significant growth potential within these growing markets

 

Working @

I would like to thank Manager’s Choice this week Simon Beck, for his careers article on “A Facilities Manager’s Life in Angola”http://paulcarder.com/2012/03/09/a-facilities-managers-life-in-angola-southern-africa-by-simon-beck/ .

Many of you clearly read the article, judging by the number of comments and emails received. It was an interesting case study in the variety of careers possible in our marketplace.

If you would like to write a similar article, for Working @ your company, drop me a line at the email below. Thanks.

That’s all folks for this week, but subscribe to this blog and receive the update every Friday….

Have a great weekend, and if you are job-hunting, good luck,

Paul Carder (paul.carder@occupiersjournal.com)

Twitter @occupiers and @paulcarder

RECRUITERS (alphabetically)

Simon Aspinall: http://www.linkedin.com/in/simonaspinallcatch22 , Leeds, UK

Melissa Baxter http://www.linkedin.com/pub/melissa-baxter/18/555/b64 London, UK

Meghan Blankenship http://www.linkedin.com/pub/meghan-blankenship/5/9a5/634 Austin, TX, USA

John Bruno: http://www.linkedin.com/pub/john-bruno/16/402/7a6 , LA, CA, United States

Douglas Carrick: http://www.linkedin.com/pub/douglas-carrick/41/886/630 , London, UK

Jo Caughey: http://www.linkedin.com/in/jcaughey , Birmingham, UK

Jaime Cheng: http://www.linkedin.com/pub/jaime-cheng/38/568/230 , Hong Kong

Nikki Dallas: http://www.linkedin.com/in/nikkidallas , London, UK

Bob DiSanto, Detroit, US

Kristin Erdmann: http://www.linkedin.com/in/kristinerdmann4hr , Minneapolis, USA

Brittany Finnell: http://www.linkedin.com/pub/brittany-finnell/8/602/643 , Dallas, TX, United States

Ben Gregg: http://www.linkedin.com/pub/ben-gregg-0415919590/6/782/a11 , Sydney, Australia

Simon Knowles: http://www.linkedin.com/pub/simon-knowles/1/bb6/a8 , Exeter, UK

John Kreis: http://www.linkedin.com/in/johnkreiss , Boston, MA, United States

Chris Manning: http://www.linkedin.com/in/cjmanning , London, UK

Claire Marchant http://www.linkedin.com/in/clairemarchant Manchester, UK

Keely Marlin: http://www.linkedin.com/in/keelymarlin , Denver, CO, United States

Rick Morales http://www.linkedin.com/in/rickmoraleshrexpert New York, NY, USA

Merrick Morris http://www.linkedin.com/in/merrickmorris Norfolk, Virginia, USA

Cassie Rayner: http://www.linkedin.com/in/cassierayner , Leeds, UK

Raint Tang: http://www.linkedin.com/pub/rainy-tang/3b/280/12 , China

Rebecca Worley: http://www.linkedin.com/in/rebeccaworley , Co. Durham, UK

‘OJ’ Careers & Jobs (#4 ; 2nd March 2012)

Just over a month (being a slightly short one!), we are tantalizingly close to 2,000 members on our new Linkedin Group (formed on 24th January) called “Careers & Jobs (Open) CRE & Facilities Management”. The link is here: http://www.linkedin.com/groups?about=&gid=4269106 . You can read more on the first week’s blog: http://alturl.com/qmsso

Recruiters & Head-hunters

This group is independent, so we hope that any and all recruitment and head-hunting firms will start to use the group, and post vacancies to the ‘Jobs’ section. They (and anyone else) are also welcome to advertise their services on the “Discussions” section.

These people posted Jobs discussions this week (I will expand this list over the next few weeks, into a global list of recruiters, and save it on my shared ‘Box’ folder: https://www.box.net/shared/bxrprfdfr7 ). For now, here are this week’s new recruiters (new to us anyway) in the order in which they posted. The full list is at the END.

Melissa Baxter http://www.linkedin.com/pub/melissa-baxter/18/555/b64 London, UK

Meghan Blankenship http://www.linkedin.com/pub/meghan-blankenship/5/9a5/634 Austin, TX, USA

Rick Morales http://www.linkedin.com/in/rickmoraleshrexpert New York, NY, USA

Merrick Morris http://www.linkedin.com/in/merrickmorris Norfolk, Virginia, USA

Claire Marchant http://www.linkedin.com/in/clairemarchant Manchester, UK

Top Recruiter this week

My “referee’s decision” is, as always, final :-)  This week it goes to Rebecca Worley, AGAIN!, mentioned above, who posted 7 job discussions this week..thanks again Rebecca! A Hat-trick….!

However, special mention must go to Nikki Dallas , owner of Talent FM (based in London, UK), as Nikki has also posted 5 roles in the last week and a bit.  As I have mentioned Maxwell Stephens over the last two blogs, this week I’ll quote Nikki’s website:

The Talent FM “Sourcing Stars” is a team of experienced consultants who really understand all aspects of the facilities management recruitment market.   We are totally committed to raising the standards of facilities management recruitment, both in the UK and internationally.  Our sector knowledge is unrivalled and we are passionate about making every stage of the recruitment process as easy as possible for our clients and candidates.  We have over 30 years recruitment experience between us and we love solving your staffing needs

Top jobs this week

I didn’t blog last week, as I left it too late on Friday! So this is ‘best of 2 weeks’ I guess. But, it is unanimous I’m afraid – the rest of you didnlt have a look in. Claire Marchant got straight in with her first post, for a property & facilities role in the Caribbean: http://lnkd.in/tmz42Y . So far, it has run to about 12 comments (if you discount mine!).

There have been many others Jobs posted over the last three weeks, from China, to several in Europe (Finland, Germany, UK, France) and the USA. Hopefully we will go wider still in month2…? Looking for our first job posting in Brazil…it is also a rapidly emerging market for real estate operations and FM roles.

Top Discussions:

We had some interesting ‘Discussions’ (see the Discussions tab) over the last two weeks. I don’t have time to cover them all, but here are a couple:

Maxwell Stephens have started a new Public Sector dedicated service: http://lnkd.in/mFZR2C

Nathalie Erwin has posted a few useful (I hope) links to interviews and resumes, etc.

Working @

I seem to have cracked the launch of a new series, called “Working @”….and so I very much thank Manager’s Choice this week; Marc Thompson for his careers article on “There no business, like snow business!”: http://lnkd.in/ptJ6wg . Marc describes his role as Facilities Director at the Telluride Ski Resort in Colorado. This time of the year especially, a busy job indeed, but so interesting again to see the breadth of FM roles out in the marketplace. Thanks Marc, great article.

If you would like to write a similar article, for Working @ your company, drop me a line at the email below. Thanks.

That’s all folks for this week, but subscribe to this blog and receive the update every Friday….

Have a great weekend, and if you are job-hunting, good luck,

Paul Carder (paul.carder@occupiersjournal.com)

Twitter @occupiers and @paulcarder

RECRUITERS (alphabetically)

Simon Aspinall: http://www.linkedin.com/in/simonaspinallcatch22 , Leeds, UK

John Bruno: http://www.linkedin.com/pub/john-bruno/16/402/7a6 , LA, CA, United States

Douglas Carrick: http://www.linkedin.com/pub/douglas-carrick/41/886/630 , London, UK

Jo Caughey: http://www.linkedin.com/in/jcaughey , Birmingham, UK

Jaime Cheng: http://www.linkedin.com/pub/jaime-cheng/38/568/230 , Hong Kong

Nikki Dallas: http://www.linkedin.com/in/nikkidallas , London, UK

Bob DiSanto, Detroit, US

Kristin Erdmann: http://www.linkedin.com/in/kristinerdmann4hr , Minneapolis, USA

Brittany Finnell: http://www.linkedin.com/pub/brittany-finnell/8/602/643 , Dallas, TX, United States

Ben Gregg: http://www.linkedin.com/pub/ben-gregg-0415919590/6/782/a11 , Sydney, Australia

Simon Knowles: http://www.linkedin.com/pub/simon-knowles/1/bb6/a8 , Exeter, UK

John Kreis: http://www.linkedin.com/in/johnkreiss , Boston, MA, United States

Chris Manning: http://www.linkedin.com/in/cjmanning , London, UK

Keely Marlin: http://www.linkedin.com/in/keelymarlin , Denver, CO, United States

Cassie Rayner: http://www.linkedin.com/in/cassierayner , Leeds, UK

Raint Tang: http://www.linkedin.com/pub/rainy-tang/3b/280/12 , China

Rebecca Worley: http://www.linkedin.com/in/rebeccaworley , Co. Durham, UK

Impacts of Lease Accounting changes on occupiers & CRE teams

Richard Drake, former Property Finance Director for Barclays,  discusses the likely impacts of Lease Accounting changes on occupiers and CRE teams.  He can be contacted via LinkedIn or direct: richdrake@yahoo.co.uk

Lease Accounting changes

Although the new Lease Accounting changes are taking a long time to develop, they are still coming and will affect anyone dealing with Corporate Real Estate (CRE).  This is a great opportunity for CRE teams to engage, proactively, with their businesses, to add value to business planning.

What are the main accounting impacts?

  • The value of leasehold commitments will go on Balance Sheet with a matching “right of use” asset.
  • It is likely that rental payments will be split between interest and capital repayments, resulting in an increased P&L cost at the beginning of leases.

What are the likely impacts for Corporate Real Estate?

  • Pressure from Finance and Treasury to reduce the length of leases
  • Freeholds become more attractive
  • Incentive to reduce cost of fit-outs to reduce depreciation over shorter leases
  • Real need to understand and document business occupation requirements

What are the timescales?

  • A revised Exposure Draft will be published in Q2 2012
  • A new Standard to be published late 2012/early 2013
  • To apply from 2015/6 but comparatives required from 2014

What do you need to do?

  • Make sure you know your real estate portfolio
  • Engage with your business, finance department and treasury
  • Watch out for the new Exposure Draft and respond to it (the IASB welcome comments)
  • Don’t panic!

Want to know more?

Drop Richard an email:  richdrake@yahoo.co.uk

Also:

The IASB have their own site for the Leasing Project: www.ifrs.org/Current+Projects/IASB+Projects/Leases/Leases.htm

Jones Lang LaSalle have produced a dedicated site that is also helpful: www.leaseaccountingchanges.com

Transactive memory – changing the way we recall information: good for CRE/FM outsourcing?

Sometimes I read an article and don’t get to the end (low boredom threshold…), and sometimes I have to read it again and think ‘wow, this is really news to me…’. This BBC News science article “Internet’s memory effects quantified in computer study” was one of those that got me thinking….I just had to ‘blog’ it.

If you want to read the full academic paper by Betsy Sparrow and colleagues at Columbia, its titled “Google Effects on Memory: Cognitive Consequences of Having Information at Our Fingertips“, or if you’re a bit lazier like me (!), watch the interview on YouTube.

So, interesting, but what has this to do with us? Quite a lot, it seems, as we are starting to change the way that we use our minds and recall information. We are using our minds a little like a computer with a ‘flash drive’ with plug in external memory. The BBC article states,

“Psychology experiments showed that people presented with difficult questions began to think of computers. When participants knew that facts would be available on a computer later, they had poor recall of answers but enhanced recall of WHERE they were stored.

The researchers say the internet acts as a “transactive memory” that we depend upon to remember for us. In the interview on YouTube, Betsy Sparrow explains that we have always used other people as part of this “transactive memory” – ie., you don’t need to ‘store’ all the answers, but have a network of people whom you know will have the answers – like ‘phone a friend on Who Wants to be a Millionaire. Or, more typically, in a workplace, our colleagues and network.

The BBC article continues:

“….the propensity of participants to remember the location of the information, rather than the information itself, is a sign that people are not becoming less able to remember things, but simply organising vast amounts of available information in a more accessible way”.

Dr Sparrow said:

“I don’t think Google is making us stupid – we’re just changing the way that we’re remembering things… If you can find stuff online even while you’re walking down the street these days, then the skill to have, the thing to remember, is where to go to find the information. It’s just like it would be with people – the skill to have is to remember who to go see about [particular topics].”

This makes me think of the corporate real estate or facilities management function, or clearly any corporate function that we may work within.

Organizational memory in CRE & FM

With the usual wikipedia health-warnings, it does contain some definition and links regarding organisational memory. In our organisations, collective memory exists in the organisation’s archives, filing systems, intranet etc…and in the heads of its employees (and I would say, its outsourced service providers).

But if people are becoming intelligent processors, rather than ‘storing’ much of the information they need to do their jobs, is this a change in the nature of work and the employee? And does this in fact make many technical and service delivery jobs potentially more transitory – anyone with the basic knowledge, using ‘transactive memory’, can perform many (most?) tasks?

In CRE & FM, what do we put online, available to the ‘transactive memory’?

Increasingly, in our market sector – management of real estate assets, facilities services and workplace design/change – we are putting more information into the ‘transactive memory’. No longer does the maintenance engineer need to know every building and every system in her portfolio – she has a handheld ‘widget’ that can recall all the asset data and history required to do the job. In fact, I have seen at first hand, such a knowledgeable person being replaced (via outsourcing) with a far more frequent turnover of technicians, reliant on their online/system-based asset schedules and task orders.

OK, thats easier – its technical. But how about the services that cannot be ‘recalled’ via computer-based systems?

When can’t we replace our internally-stored memory with ‘transactive’ memory? When is ‘looking it up’ just no good.

I don’t know the answer! I’m interested in your views on this.

Firstly, I would suggest that the in-house occupier, or ‘intelligent client’ needs to have in-built learned knowledge about the key individuals, departments and functions in the organisation. And a lot about the organisation’s culture and way of doing things. If you are sat in front of the Head of Operations for your company, there are only certain things that it would be acceptable to ‘look up’ from your transactive memory. Too much of this, and the Execs in your organisation would lose confidence in you.

There are certain instant, customer-focused jobs that rely on embedded knowledge also – not transactive memory. Like receptionists? They need to know faces, know what people do, who is important, who to call, etc. What about the Facilities Service Desk? Does it work as well for customers if the operators have little embedded knowledge of the organisation, its people, its buildings and systems? How much can they ‘look up’ on systems, and how much should they retain in their own memory? What about the ‘space planner/strategist’? Again, does this role need the in-built learned knowledge of the intelligent client as above? Probably. Does that mean the role should be in-house? Maybe….what do you think?

Structured, online, transactive corporate memory will be a BIG competitive advantage for outsourced service providers

Thats clear, is it not, from the discussion above? The more that an outsourced service provider can demonstrate that it has a well-structured ‘transactive memory’ to support all its staff on-site, the more the occupier (client) may be convinced that further services could be outsourced.

For example, staff turnover is a problem with FM companies. I spoke to a client recently who had experienced three Account managers inside 12 months – very disruptive, and bad for the outsourced provider’s reputation. But can this be fixed, or at least supplemented, with transactive memory?

How are companies investing in the systems they need to deliver this transactive memory? I would love to know.

regards, Paul Carder, Managing Director, Occupiers Journal Limited

paul.carder@occupiersjournal.com

http://www.linkedin.com/in/paulcarder

Twitter: @occupiers