I’ve been in the real estate industry for so long that I remember when leases had to be typed up on typewriters with carbon copies, and signed and delivered by hand. I’ve learned a good bit over the years working across many of the world’s major markets, and the myriad of challenges and opportunities that face our industry.
But I thought I’d let you in on a secret. The number one thing that corporates and real estate leaders need to be successful is to simply recognize and understand what race you’re in. If you show up with a horse, you might win a race against bicycles. But if you’re up against high performance race cars, you’re pretty much toast.
Applying the real estate lens
Let’s put this in the context of real estate. Many people I speak with are looking to us to help with cutting costs, increasing utilization of their current space, understanding how people use their space, and keeping up with never-ending expansion and contraction of different business units. We can help with all of these things. But if these outcomes aren’t aligned to something bigger and more strategic goals, actions can possibly hurt more than help.
Whether you realize it or not, the race you’re in is quite a competitive one. On the track your company is up against cutthroat competitors—hot, fast newcomers looking to disrupt your industry, and traditionalists desperate to do whatever it takes to win.
Just as how an F1 race car is built for performance, not just speed, your real estate portfolio needs to be similar. For instance, cost reduction in real estate keeps many seasoned real estate leaders up at night, but this is the price of entry today, or as the Americans would say, table stakes. But when the goal of cost reduction is pursued at all cost—where every possible cent has been squeezed from employee amenities, from the office location, from the vendors and support staff, from capital repairs—you are left with an office essentially no longer attracting the talent needed to compete. You’ve lost the race before the start, and have a long road ahead to become competitive again.
A couple of years ago, I was one race away from winning the championship in a classic race series. All I needed to do was finish the race in good standing, and the trophy and glory was mine. But I let myself get distracted, pushing myself too hard and going off course. Luckily, the only thing hurt was my pride. But that momentary distraction cost me the race. If only I had focused on the bigger goal of winning the championship, and ran a sensible, less aggressive race.
My advice is to take a step back; think about what race you are in. What are the conditions you’re operating in? What’s your business strategy (that is, the championship not just the next race)? What levers do you have to help the performance of your company, and win? How can you focus data, information and your performance metrics towards a single objective of the finish line?
Here are three things to consider:
Race strategy: What differentiates you from your competitors? How does this manifest itself in your real estate strategy?
Identify the finish line: Make sure it’s meaningful to both your CEO and shareholders. Quick litmus test: Would the results make the pages of your company’s annual shareholder or CSR report? Are they essential to decision-making in the C-suite?
A winning team: What has been successful in the past? Will it work for the future? Who needs to be part of the team? Can the team and those around us easily understand or articulate how we will win the race? Remember, it takes more than 400 people to get a front running F1 car across the line—it’s not just about the driver.
To help you in preparing for your corporate race, JLL recently released the Future of Work model. It is a methodology to think about your company’s long-term real estate strategy and address the massive industry disruptions happening literally everywhere.
Interested to find out more about Future of Work? Learn more about our outlook on the changing world of work here.