Tuesday, 19 September 2006
Education Programme 9
Aligning Property Information to Business at the BBC
 The BBC's alignment of workplace with the business was the central focus of panel including the Andy Thornton of BBC Workplace and moderator Roy Cloudsdale of Johnson Controls Inc. Also serving on the panel was Andrew Waller of Remit Consulting. |
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Moderator:
Roy Cloudsdale, VP Corporate Clients, Johnson Controls
Speakers:
Andrew Thornton, Head of Portfolio Direction, BBC Property
Andrew Waller, Partner, Remit Consulting
KPI's Support BBC's Transformation
to On-Demand Information Model
Shift Places Workplace in a Leadership Role
Info Platform Informs Senior Management and the Board
Alignment is the Holy Grail of corporate real estate (CRE) for what asset manager doesn't aspire to calibrate workplace with the total business plan of the enterprise?
Public sector entities even see things in this manner. Witness the U.S. General Services Adminstration.
The British Broadcast Corporation is also tax-funded, and like the GSA, takes a keen interest in aligning its real estate and workplace operations with senior management's oversight of its extensive operations.
As seen in a growing number of corporations, key performance indicators (KPI's) are forming the heart and soul of the BBC's management of a new business model. The broadcast agency-cum-internet media giant is well into a transformation to being an on-demand provider of news and other content. It's a steep change from its traditional roots of simply providing pre-scheduled live and taped programming reflecting technological and demographics shifts linking to the iPod generation.
Tracking the progress of that transformation is central to the success of the new BBC model, almost as much as property is integral to its execution.
"Metrics that matter," is how program moderator Roy Cloudsdale termed the focus undertaken by BBC's property team. The methodology of those metrics was the central focus of the CoreNet Global European Summit panel on "Aligning Real Estate Information to Business at the BBC," and KPI's took center stage.
"The BBC has reinvented its business over the last five years," explained Cloudsdale, VP of Corporate Clients at Johnson Controls Inc. "Innovation supports the business."
The innovation comes largely in the form of superb data management and its application to the business plan, resulting in decreases in cycle time, enhanced real estate portfolio decision making, streamlining and improved analysis, according to Cloudsdale.
Andy Thornton, Head of Portfolio Direction for BBC Workplace (the real estate and property arm of the agency) said that the $8.5-billion organization is run a lot like a corporate enterprise, starting with the breadth of 60-million viewers and listeners in the U.K. and extending to the enormity of a global audience totaling 250-million.
"Creative, digital, simple and open" are the characteristics that the BBC is remodeling by, Thornton offered. Within that mix, "property is an enabler of change."
Creating new ways of working are central to the shift, he added. For example, the BBC is beginning to tear down traditionally closed and assigned office space in favor open team space environments and flexible work environments. At the same time, it's downsizing its studios and editing suites largely in response to digital technology replacing former broadcast formats like tape.
"It's more than property," Thornton emphasized, citing the change of the real estate department's name from BBC Property to BBC Workplace. "It's people and place." As a result, change management is also part of the mix in what Thornton called "change reassurance" in the form of proactive communication and involvement by BBC staff in the new business and work models before they are actually implemented.
Working under the head of Workplace, Chris Kane, Thornton has helped oversee the addition of more than 20 new properties since 2004, along with the redesign or disposition of many more. For example, several new studios have opened in former warehouses in Wales. He describes the transition as an "internal culture change with outward physical changes."
One of BBC's alliance partners is Remit Consulting. The firm has guided the development of what amounts to a mutli-layered metrics-based knowledge-sharing platform. It serves as the key tool for senior management to communicate performance metrics to the BBC board, and for both leadership teams to either stay the course or adjust plan according to the data.
Remit partner Andrew Waller agreed that the platform makes for an effective decision support tool that is also the BBC balanced scorecard.
With Kane and the rest of the Workplace team, Thornton and Waller oversee the regular feeding of a wide range of data into a tiered system. The base or foundation of that hierarchy is service provider data. On top of it reside management reports. Above that are the management performance indicators. The top of the pyramid features the KPI's.
KPI's are derived from the three layers of information below them. The latter are considered "irrelevant to the board," Thornton confided. Only KPI's are shared with the board to avoid information overload and to keep the board focused on governance and strategy.
"Identify stuff that makes a difference," Waller advised in terms of what the board views. "Save management time in doing so." Along with that view, he counseled not to use "other people's" KPI's mainly to avoid information overload and the potential for apples-to-oranges comparisons. "Don't bite off too much information," he cautioned.
The scorecard that accompanies and reflects the data platform is comprised of five components also tracked by the board: Finance, Internal, External, People and Innovation. In typical scorecard fashion the color codes of green, amber and red are used to signify "on or ahead of plan," "caution flag," and "off budget or off plan."
There are five top-level measures informing the top-line KPI's: cost; quality; efficiency; predictability and compliance. Data maps "headline" bad news and find root causes, providing the framework for improvements.
The system is SAP-based in large part, but also has some legacy and Excel elements that feed it, according to Waller. Document management and contracts are held outside the system for confidentiality and for proprietary reasons. Other than the last two areas mentioned, "outside contractors look after all the data," Waller summarized as one of his key points harkening to the axiom of outsourcing for the 'business of the business' to stick to its core competencies.
It's all distilled in the so-called BBC "Rag Report," a composite high-level view of the performance of all key pieces of the organization's operations, margins and performance vs. plan. One of the KPI's currently integrated into the Rag Report is vacant space in the BBC portfolio, Thornton related. But he and Waller stressed that KPI's need to change sometimes. "Don't use the same metrics over and over. It's good for benchmarking but it's not good for (the future direction of) the business," Waller intoned. "Identify further metrics for better control."
The data system is of course integrated and acts like a piece of software that a virtual learning community might use. One of its features is that it automatically emails providers of new data to update their metrics so that the new information can be calibrated into the metrics tables and filtered upwardly to re-inform the KPI's.
With its growing understanding of KPI's, the BBC is really beginning to take the idea of efficiency to the level of effectiveness. A recent study reported by Corporate Real Estate Leader magazine's Industry Tracker (Align by Design) strongly advocates the use of KPI's to align real estate with the business plan. In part through its alliance with Remit, the BBC is on that track.
"Defining KPI's really equates to clarity on strategic objectives," concluded Thornton without realizing perhaps he's about to find the Grail.
Richard Kadzis
Reach Richard Kadzis at
industrytracker@corenetglobal.org. Kadzis is Senior Contributing Editor for Corporate Real Estate Leader Magazine, CoreNet Global's official publication.
Education Programme 10
The Rebirth of Birmingham
 Birmingham's case for urban revitalization was presented by 'Locate in Birmingham' City Council member Michael Loftus (left), pictured with panel moderator Mark Tamburro of Nokia. |
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Moderator:
Mark Tamburro, VP Workplace Resources, Nokia
Speakers:
Michael Loftus, Manager, Locate in Birmingham, Birmingham City Council
Reshaping a Concrete World
Birmingham's Transformation
Pays Off for UK Community
"The city of a thousand trades," Birmingham was once the manufacturing leader in the United Kingdom. Michael Loftus, Manager, Locate in Birmingham, Birmingham City Council, opened his presentation with dramatic photos of pre-1980's maps of the city.. Spaghetti highways, massive shopping malls and anonymous and slightly foreboding underground walkways. The maps of this era favored the car over the pedestrian so much so that it was even modeled after Los Angeles. A dramatic concrete jungle had formed.
The 1980's, Loftus continued, saw a deep recession for Birmingham. The challenge in the 1990's was to draw a new map, a new vision, for the rebirth of Birmingham.
The theory was to favor the pedestrian over the car resulting in an expansive increase in retail. In fact, once the center of manufacturing, Birmingham has now become the second highest retail market in the United Kingdom. The presentation dramatically showed how the new maps drawn for the city have brought city dwellers and visitors alike up and out of the claustrophobic tunnels and into green parks and pedestrian walkways.
A process was undertaken to identify and reconnect key areas of the city center. Pedestrian walkways were established, including a pedestrian bridge, replacing the underground passages. Canals were brought back to life and parks were created. Cultural centers such as the Symphony Hall were established and Suffrages created a unique and compelling architectural statement to replace the concrete blocks of the previous shopping malls.
The results were clear, and the transformation impressive. Most interestingly, however, was during the question and answer period of today's presentation. Loftus was asked what he felt could have been done better during the process. His answer was communication to make the citizens the ambassadors for the city. The necessity of rapid change, given the dire economic circumstances, meant that decisions were made and often not communicated to the public as effectively. In retrospect, he offered, a communications approach might have been taken to truly make the citizens into ambassadors. Today, many have become evangelists for the new city, yet during the process of transformation he felt that the best public relations for the city would come from the direct engagement with the populace: an interesting note for those undertaking such a process in their own city.
Rowland Hobbs
General Session III
Around the World in 80 Ways
Miles Hilton Barber
Adventurer
 In Jules Verne-like fashion, sight-challenged adventurer Miles Hilton Barber related the story of his extreme odysseys during the Closing Luncheon General Session. The author of "Around the World in 80 Ways" is pictured with programme moderator Rick Bertasi of JCI EMEA (right), an Iron Man tri-athlete whom Barber described as a bit of an adventurer himself. |
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Overcoming Preconceptions and Obstacles
Dream Big, Plan and Persevere
And you thought your day in the office was an adventure!
Miles Hilton Barber went blind when he was 21. Since then he has circumnavigated the globe, walked across the Sahara and Qatar deserts, hauled a sledge across Antarctica, and set the Malaysian Grand Prix record for a blind driver - to name just a few of his extraordinary achievements. Miles' sense of humour, however, is probably his best trait; recalling each of his adventures with a vivid and self-deprecating style that had the audience laughing and spontaneously applauding.
Miles opened with the observation that there are indeed limits that we place upon ourselves. These limits become imaginary circles that surround us. A map of our world we slowly accept. For him, stepping outside that circle and looking at what might be possible became the ultimate in his own personal quest.
Miles' brother, who also went blind at a young age, decided he would sail a boat from South Africa to England. It opened Miles' mind to the possible. This is what he called the "dangerous dreams" ones that frighten. He gave the example of a fellow adventurer who faced his fear of heights by repelling off of a mountain. At the top, this man was wracked with fear to the extent of becoming physically ill. Yet, he managed to get himself down the mountain, and even went back for a second time. In effect, he had put his fear in perspective, given it a new vantage point which rendered it less powerful, less significant.
It goes beyond the dream, he dramatically demonstrated, to make a decision. A decision to step outside of the circle in which you live and face your fears. It's the second step here in redrawing a map. First, dream dangerously. Second, decide to expand your worldview.
However, more lies ahead to truly achieve a new map. Dreaming and decisions do not get you there. Planning is the next step in this journey. Miles and his best friend painstakingly detailed their trip across Antarctica. We watched video of their preparations: every item of crucial importance.
No plan, however, is foolproof. Miles was struck with severe frostbite on his adventure, and had to return. Amazingly, however, his best friend continued on to place the Royal Institute For Blindness flag at the Antarctic: a statement to the importance of loyalty and friendship.
It is for this reason-not that we cannot plan for all contingencies-that Miles brings us to his fourth pillar in drawing a new map: perseverance. Truly stepping outside our circle requires this ongoing vigilance in pursuit of our dreams.
Dreaming big, making a decision to pursue that dream, planning and perseverance. I might add to that humour. Miles noted at the beginning that he was but "one beggar telling another beggar where to find a square meal".
Rowland Hobbs
Education Programme 13
Workplace Strategies in Dubai and the Middle East
Moderator:
Richard Watton, SVP Corporate Real Estate EMEA, JP Morgan
Speakers:
Jon Steiner, Executive Director, CitySpace
Cathy Beasley, Marketing Communications Manager, CitySpace
Clodagh Burke, Morgan Stanley
Alberto Bounous, Morgan Stanley
Dubai's Total Market Absorption
Makes Expanded Occupancy Challenging
New Development Lags Strong Demand
 John Steiner of CitySpace demonstrated how the outer areas surrounding Dubai pose more of an occupancy challenge than the central city, which currently has an unprecedented vacancy rate of -1%, according to Steiner's colleague Cathy Beasley. |
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In the rich mix of emerging markets, Dubai is a 'ME' in EMEA.
Among the many fast-growth regions of the Middle East, Dubai is among the best known, a kind of Shanghai of the Arab world with its glistening new skyline rising from a less stately landscape.
Dubai's diversification from its oil-based economy is producing growth hotter than the desert sand. So hot, in fact, that the commercial real estate vacancy rate is -1%, possibly making this UAE state the world's only property market with full absorption.
Industry executives gathered here for CoreNet Global European Summit heard in a 19 September panel discussion that Dubai's economy has reached critical mass. Property demand outweighs supply, so that multinational corporations are having to look beyond the totally occupied inventory of the city proper to outlying areas as they wait for new development to create more space.
According to Cathy Beasley of CitySpace, a Dubai occupancy specialty firm, there's been an unheard of $45-billion infusion of capital into the area in recent months.
 Dubai panelists were (from left) Cathy Beasley of CitySpace, Morgan Stanley's Alberto Bounous, panel moderator Richard Watton of JP Morgan, CitySpace's John Steiner, and Clodagh Burke of Morgan Stanley. |
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But the heavy investment stream belies the tenant market, at least for the time being. Whereas in the 1980's companies often had to work out of converted apartments and non-dedicated office space in the central city, that situation is frequently the case in today's 'suburbs,' Beasley outlined, referring to the current trend as "regressive."
"Dubai needs more office space right now," she said. "It's an enormous jigsaw puzzle with many gaps and many players."
Both Beasley and her CitySpace colleague John Steiner has lived in Dubai for 15 years, so they know the market's nature and evolution from a first-hand view. Steiner observed that one of the long-running challenges to development still remains access to information from owners and landlords, despite the fact that Dubai's Emir, Sheik Mohammed, recently opened local property ownership to outsiders.
"There's a lack of transparency," Steiner related. "There's no need for planning consent, and it's not uncommon that zoning can change overnight. But market opportunities prevail over challenges. Steiner confided that CitySpace and its corporate clients "learn to live with it." As highlighted in the conference's Emerging Markets panel held 18 September, they've also come to expect the unexpected.
Projects underway will presumably relieve the pressure of the backlog on space demand. One of them is Gale Village, a broad mix of 40 towers with office, retail, hotel and residential. The 45-hectare site, however, won't be ready until 2010.
Until more office stock comes on line, occupiers without space in new buildings will have to continue living with challenges like unusual floor plates. "They're the norm, not the exception," Steiner added.
Aside from the zero-plus vacancy rate, other challenges remain. Workspace ratios are among them. Steiner repeatedly referred to low-density, converted work environments forced to high density despite their limits.
He also listed security, the sourcing of goods and utilities as ongoing problems for many occupiers seeking new space. VOIP is even banned in the city's outlying areas, though it's available in its Free Zones.
Mainly for cultural reasons, it takes time to clear hurdles to occupancy. "It's almost like a diplomatic solution," Steiner remarked.
Morgan Stanley executives also took part in the panel. Clodagh Burke and Alberto Bounos related that Dubai was their firm's first foray into the Middle East. The company has since expanded into Qatar and Istanbul.
Both consider the key challenges in Dubai to be a "broad range of requirements (for leasing), flexibility and future proofing." That's why pre-lease preparation and patience are advisable, Steiner concluded.
Richard Kadzis