Remaking Corporate Real Estate and Facility Management

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ORIGINALLY PUBLISHED BY CORENET GLOBAL THE LEADER

Remaking Corporate Real Estate and Facility Management

Embracing a Technology Revolution

BY RAKESH KISHAN, MANAGING PRINCIPAL AND STUART LANGDON, MANAGING DIRECTOR | JUNE 2021

Politicians and pundits continue their relentless call for us to get “back to work” after a year in isolation and the upending of countless lives around the world. Among the most widespread effects caused by the pandemic has been the fundamental shift of an entire global workforce, transitioning (virtually overnight) from traditional office settings to makeshift home offices. Few have given serious thought to the real-life dilemmas left behind by COVID and the life-altering changes for COVID-19 survivors. With few exceptions, analysts believe it to be nothing more than folly to expect workers to simply pick up where they left off and resume their (once-upon-a-time) normal routines. This complex set of circumstances provides a clarion call for real estate leaders to find new workplace solutions and services for the post-pandemic world.

This article will highlight the ways in which corporate real estate (CRE) leaders can develop a sustainable strategy for success, requiring fundamental rethinking of five key workplace elements: people safety, people productivity, portfolio flexibility, technology-driven workplaces, and stewardship of sustainability. Real estate leaders will have to work with peers across IT, HR, and procurement finance, and with C-Suite/division heads, to reinvent the workplace in a post-pandemic world. Nevertheless, in constructing new workplace norms and protocols, not only does real estate have a seat at the table, real estate figures prominently at its head.

Currently, there is a stark realization that today’s workplace model, despite its familiarity and long-held recognition as the quintessential workplace paradigm, is no longer suitable to meet stakeholder and corporate needs. Workplaces have long outgrown the top-down model with coveted corner offices and the associated maze of cubicles. Leading companies across disparate industries have accelerated removal of legacy models that primarily assigned dedicated office spaces to individual employees for the length of their employment with a given company. As we begin to enter a post-pandemic world, buildings are opening slowly, in predetermined phases, with many employees still electing to work from home. As a result, the old “brick-and-mortar” office environment needs shrinking and a more consolidating footprint. A more flexible environment that can accommodate remote, in-office, and hybrid scenarios is the imperative right now, as is the need to maintain OSHA compliance. While a fundamental goal of the future work environment will inevitably maximize safety requirements, it will also require significant accommodations for productivity and collaboration.

Particular attention must be given to emerging markets where paradigms that are adopted in the developed world might not be congruent with the workplace realities of other cultures. Specifically, regarding sanitization, testing, safety partitions, and re-imagining layouts, real estate leaders will need to play a pivotal role in ensuring the safety and well-being of associates as they gradually return to the office.

Real estate leaders will also be relied upon to drive entire portfolio strategies given the new remote-in-office-hybrid work options. This is a chance to make strategic portfolio choices that “right-size” shifting portfolios across divisions and leverage collaborative working possibilities. In addition to portfolio optimization, key supplier relationships will have to be redesigned to be more flexible and scalable. Fragmented contracts will need consolidation for greater safety standards and efficiency, as well.

Technology to Lead New Disruptions

The pandemic has also turned a harsh spotlight on real estate’s technology stack and data readiness in addressing both pandemic concerns as well as achieving greater building efficiency. We are now witnessing resolute efforts by CRE leaders to analyze information that can drive strategic workplace decisions. This focus has highlighted an urgent need for improved data flow closely tied to work-flow and standardized processes for workplace services.

Now is the time for CRE leaders to pursue clear technology strategies with the potential to create disruptive leaps in value. Technology is key to creating value-added workplace services while engaging with and enhancing the overall employee experience. Today, millennials understand that strength comes in numbers and they know how to wield that power with rapier precision (the recent manipulation of GameStop stock by a cohort of millennial online investors left little room for doubt as to their technological prowess and their business savvy).

Another key area that will receive added scrutiny in the new post-COVID world order will be the supplier partnerships that corporations rely upon to deliver services. These relationships will have to be redefined through shareholder-value-centric approaches to sourcing and governance.

Finally, the issue of sustainability has been at the center of corporate discourse for some time as the effects on our planet from excessive human consumption have been increasingly spotlighted. Practices that increase carbon emissions, accelerate deforestation, and unleash environmental pollutants must be relegated to the past. The need to protect our planet for future generations is a collective responsibility shared, in equal measure, by the corporate world. Real estate is well positioned to provide corporate stewardship around sustainability to enable corporations to achieve their carbon-neutrality goals and even reverse much of the damage that has already been done. Large corporations can be expected to lead the way on issues of sustainability by cleaning up our oceans, championing anti-global warming initiatives, and helping to protect rainforests and other natural resources.

Little Time Left to Adjust

The global response to the pandemic that forced people to adjust to a new normal also afforded them unexpected freedoms in the form of greater autonomy and the benefits of streamlining their lives, balancing multiple tasks more efficiently and effectively on their own terms – especially for millennials who are recent entrants to the workforce.

Today’s millennial generation was raised on a diet rich in technology and possess an almost intuitive insight into its potential to remake the world. Studies show that a whopping 90 percent of millennials access at least one social network daily. Other independent sources support that same trend, with YouTube reaching 77 percent of all millennials regularly and mobile devices belonging to millennials being unlocked an average of 63 times per day.

For CRE stakeholders and facilities managers alike, the rise of this powerful new force will be the final catalyst that forever banishes the traditional employee/employer dynamic and, in doing so, creates a seismic shift in the role and physical design of the future workplace. Corporations that have thus far resisted the adoption of new technologies to help transform their workspace into more appealing versions of themselves will be at severe risk of alienating an entire generation.

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