Daily Reports Direct from the CoreNet Global San Antonio Summit Monday, November 8 8:30 am – 10:00 am Opening General Session After the Bubble Bursts: Futurist Shares Perspectives on How to Prosper in the Coming Downturn The U.S. economy will see yet another bubble in the next few years, predicted business futurist Harry S. Dent, speaker at Monday's opening session of the Fall 2004 CoreNet Global Summit. "The technology revolution is not over," he said. "In the next six to eight years we will see the industry leaders established who will lead for decades to come." Dent believes the economy is instead in a so-called bubble boom. New technologies drive these bubble cycles, he said, adding that the last great bubble boom occurred in the early 1920s to the 1930s, when the majority of American households began to own an automobile and electric appliances. He predicts a boom toward the end of this decade, followed by a 10- to 14-year downturn. New technologies, however, "will have a very strong second wind," he said, and the companies that see the downturn coming and plan for it will prosper. His advice for success in such an economy is to run the organization from the bottom up rather than from the top down. "Companies must be able to make decisions from the front lines and make real-time, accountable, creative decisions to deliver high-quality customized products," he said. Additional recommendations: Focus on the core business -- outsource functions that the company does not do well; Organize around your customers and the front lines; Make every individual or team a real business, and Link everyone in real-time systems. 2004 Sustainable Design Awards The Sustainable Design Awards recognize leaders who have make long-standing commitments to sustainability and corporate social responsibility goals. CoreNet Global board member Simon O'Reilly shared Monday's General Session stage with Mary Bartlett of AIA, IIDA president John Lijewski, and IIDA CEO Cheryl Durst as the 2004 award winners were announced. The winners of the 2004 Sustainable Design Awards are: Hugh L. Carey Battery Park City Authority; BNIN Architects; Environmental Home Center Seattle; and ABN-AMRO. Underwriting partners for the award are Haworth, Tandus, Unicco, and Johnson Controls. Ta-DA! Toronto Summit Keynoter Announced Former New York City mayor Rudolph Giuliani will be the keynote speaker for 2005 CoreNet Global Toronto Summit in April. Rudy Giuliani's appearance will be sponsored by the strategic alliance of Trammell Crow Company and Toronto-based jjBarnicke. Congratulations! At the first-ever joint hospitality event – "Taste of ..." – Donna Murray of the Delaware Economic Development Office was the winner of a 42-inch plasma television and home theater system. The event was sponsored by Atlantic Canada; Team Florida; PECO Energy, an Exelon company; the State of Mississippi; and the Tennessee Economic Partnership. 10:30 am – Noon Educational Breakout Session CoRE 2010 – Integrated Resource and Infrastructure Solutions (IRIS): Innovation at the Intersections: IRIS Strategies for Unlocking the Next Level of Value "Innovation at the Intersections" is a key concept that evolved as the IRIS research track of CoRE 2010 progressed. Karen Ellzey with Trammell Crow Company and Steve Valenziano with Jones Lang LaSalle presented this concept in a context that set the stage for Sprint's case study, presented by Dan Boutross. Bottom line: corporate real estate (CRE) must go beyond simply working with HR and IT to create infrastructure efficiencies, taking the lead if possible in promoting meaningful integration of these and other infrastructure functions with regard to: 1. A common vision and customer orientation (internal and external) 2. Common business processes 3. Integrated data, systems, and tools 4. Common models for measurement Sprint has established a Transformation Office staffed by 250 employees with the goal of facilitating such integration, moving from a product-centric mindset toward being more customer-centric and process-focused in its business planning, portfolio and project planning, project delivery, and site operations. Boutross observed, "It doesn't seem like we're talking about real estate anymore, but rather integration with the business, and that's exactly where we want to go." The resulting innovations at the intersections have doubled output and reduced cycle-time surrounding Sprint's retail PCS stores. When asked who should lead such integration, he responded, "Whoever understands the [enterprise's] strategy roadmap." Len Pilon of Herman Miller cited experience with CRE, HR, and IT reporting to the chief administrative officer "not by design, but by default." Tom Kurtz of Booz Allen Hamilton, also on the session panel, emphasized the IRIS approach as being demand-intensive, with benefits evident in stronger communications and cross-functional accountability. 10:30 am – Noon Educational Breakout Session CoRE 2010 – Technology and the Web: A Process-Centric Approach Using Technology to Integrate Real Estate Activities Speakers from USAA and Computerized Facility Integration presented on CoRE 2010 Technology and the Web research. The session began by introducing the research findings, which addressed specific integration issues facing corporate real estate. The increasing focus on the global nature of customer satisfaction, vendor partnering and mergers push corporations toward effectively integrating data, processes and services. Sam Lampe, Director of Corporate Real Estate eSolutions for USAA, presented a case study on how the organization has applied technological solutions to create more effective business operations. The goal is to deliver world-class workspaces that allow employees to serve their customers better. The company's "best of breed strategy" emphasizes four phases: individual application, data aggregation, receiving the right information at the time of decision, and preferred management or operationalized information. To fully utilize this strategy, Lampe said, the company believes in "pushing the capabilities of the system, which pushes the cost down." 10:30 am – Noon Educational Breakout Session Place: Financial Incentives for Site Selections Financial incentives continue to be an important - and sometimes controversial - part of the site selection landscape. That was one of the main takeaways from Monday morning's breakout session on incentives. The session featured three corporate case studies, each with its own spin on the incentives game. Leading off and telling the story of how incentives helped bring an $800 million, 2,000-employee Toyota plant to San Antonio were Aaron Seaman, Assistant Manager for External Affairs, Toyota Motor Manufacturing Texas, Inc.; and Mario Hernandez, President of the San Antonio Economic Development Foundation. Though the announced direct incentives package weighed in at a hefty $133 million ("we put in everything but the kitchen sink," Hernandez joked) the total value, including various related payments that didn't go directly to Toyota, is closer to $400 million. "This is by far the biggest incentives package Texas has ever put together," Hernandez said. "Nothing else even comes close." Still, as Seaman pointed out, San Antonio's incentives tender was not the biggest among the several suitors pursuing the new factory. The teamwork of the community actually played a bigger role in the final decision, he said. Next, Gary Cook, Director of Real Estate for TriZetto Group, and James (Jim) Renzas, President and CEO of incentives specialist Location Management Services, LLC, teamed up to describe the role of incentives in two recent TriZetto location projects. "Local knowledge is the key to success in incentives," Cook observed. "And compliance management is critical. As much as 50 percent of all negotiated incentives aren't taken advantage of." Renzas pointed out that understanding how communities perceive new investments could be key in triggering the flow of incentives dollars. He described a case in which a community offered no incentives at all for a proposed 900-employee customer service center that would pay an average of $35,000 per job. But when a small Internet sales operation was added to the mix - boosting employment totals by just 60 - the community changed its tune. An incentives package worth millions was offered to TriZetto due to the impact of the sales operation on local sales tax collections. In the third case study, Anthony Savarese, Managing Director of Corporate Services, The Depository Trust & Clearing Corp., joined with John C. (Jay) Biggins, Executive Managing Director of incentives specialist Stadtmauer Bailkin Biggins, LLC, to describe the role incentives played in DTCC's selection of Tampa, Fla., for a $25 million facility that will create hundreds of high-paying jobs. DTCC, the world's largest provider of post-trade technology infrastructure for U.S. and global capital markets, needed to expand beyond Lower Manhattan for business continuity reasons. Fully 98 percent of the company workforce was at a single location: Wall Street. After narrowing hundreds of potential locations to 15 communities, then four, Tampa was chosen. Incentives were not the driving factor, Biggins said. But once the location search is down to two or three suitable communities, he continued, "incentives can differentiate one location from another in a decisive way. And it did in this case." Afternoon EXPO Two Governors Visit the San Antonio Summit Two state governors visited the CoreNet Global San Antonio Summit Monday afternoon. In the left photo, Louisiana Governor Kathleen Blanco (right) visits one of many EXPO exhibits. Texas Governor Rick Perry (right photo) speaks to EXPO attendees. 2:30 pm – 4:00 pm Educational Breakout Session CoRE 2010 Nature of Work and the Workplace: Measuring Business Benefits of High-Performance Workplaces Andrew Laing and Peter Andrew from DEGW co-presented two cases, along with their clients from GlaxoSmithKline and ANZ Bank. Peter McMahon, now retired from ANZ Bank, embarked several years ago on a study with DEGW to challenge the paradigms of both the geography of work and territoriality of space. The study was a carefully documented analysis which begun with a pilot during which workers were forced to work in different environments to test various effects on teaming, employee satisfaction, and productivity - all the while being mindful of the security issues critical to a bank. The results of continued (still to this day), measured study of these issued have proven beneficial in financial terms as well as indirect terms such as human capital. Further, ANZ has, subsequent to the initial pilot analysis, integrated other infrastructure functions including HR into such ongoing study. GlaxoSmithKline's Space Program was presented by Christian Bigsby, stressing performance framework metrics. While space-use profiles for this organization are similar to that of a bank, each case validated the other's objective measures of space vacancy and utilization. GSK introduced an integrated scorecard comparing factors such as cost, business processes, customer stakeholders, and human capital against efficiency, effectiveness, and expression. Measures for, and analyses of, difficult-to-quantify factors of needs vs. wants, employee satisfaction, and productivity were obtained using combinations of actual observed data, employee perception data, and interactive workshop methods to extract information. Such metrics are very difficult to nail down and be broadly applicable across industries and types of work; but all three organizations involved in this program clearly demonstrated that meaningful information on real estate and workplace performance, relative to the nature of the work to be performed, can be obtained through such diligent partnerships of careful study. 2:30 pm – 4:00 pm Educational Breakout Session CoRE 2010 Asset Management & Portfolio Optimization: Nokia Case Study A cell phone rings in the midst of the session, and Bob Canavan - a workplace executive for Nokia Americas and program presenter - says, "That's not a Nokia. Bad. Very bad. Will the Motorola user please stand up?" The laughter subsides, but Canavan's point is well-taken. Nokia uses its technology to not only link its increasingly dispersed global workforce but to showcase it to its internal customers: employees who are empowered to work in teams regardless of location and function. It's all part of a comprehensive workplace and portfolio optimization scheme offering one of the best examples of how leading multinational companies are adopting the principles and practices outlined in Corporate Real Estate 2010, CoreNet Global's industry-leading research initiative on managing the globally networked digital enterprise. The 100-plus-year-old company has morphed with incredible velocity from a diversified manufacturing focus to advanced mobile and wireless technologies. Through a far-flung network of plants, R&D centers, field offices and home offices, more than half of its employees report to bosses on a virtual basis. "Mobility brings value in many ways to customers, employees and the company," Canavan observes. "It's a conceptual shift. You work whenever, wherever you need to; providing mobile work solutions and increasing productivity." The size and scale of Nokia's 700 locations in 55 countries have one key element built in to achieve the ultimate goal of raising productivity: flexibility. The company entered a partnership with space-on-demand provider Regus to provide a key resource to attain a noteworthy level of flexibility, as well as to attain the almost unattainable goal of realizing a truly fluid portfolio. Regus succeeded in reaching this seldomly-seen value point with its client by narrowing down hundreds of price points for leases to an amazing total of 10. At the same time, Regus developed a globally standardized one-page license agreement that replaces traditional, complex lease documents, according to Bob Gaudreau of Regus. That innovation, combined with the fixed pricing structure, has saved Nokia millions of dollars and has optimized the company's real estate portfolio in ways many other companies can only imagine. It's also the main reason Nokia has adopted the term "workplace resources" in place of real estate to position its management of this critical corporate asset and competitive advantage. "It's not about the real estate, it's what's happening inside the real estate that matters," adds program moderator and CoRE 2010 author and team leader Candace Fitzpatrick of CRESA Partners. CoRE 2010 VP of Knowledge Development Barbara Hampton also took part in the leading-edge panel. A former head of real estate for a large telecom, Hampton focused on the importance of performance management in measuring workplace impact, stressing the relation of workplace metrics to other strategic support areas like IT and HR, as well as the direct linkage of the metrics to the strategic business plan of the enterprise. Key metrics include employee learning and innovation, operating efficiencies and internal processes, internal and external customer satisfaction, sustainability and triple bottom line accounting, and knowing the break-even cost of supporting the business of the business. While 2010 is still a few years off, there are a growing number of companies and organizations already adopting the best practices surrounding the research initiative that include Capital One, GSA, Pacificare FHP and Whirlpool. "Optimizing the entire portfolio requires a broader skill set from the corporate real estate executive," she concludes.