Quality in Real Estate is not one of those topics that is discussed regularly. It’s a very tough proposition to define because real estate can be a very strange function. You have a fixed asset that you don’t own that supports every business function in the business. Changing the asset is extremely capital intensive and offers difficult to quantify savings – but large amounts of business disruption and operational headaches. Additionally few business managers have “real estate expertise.”
So with all that said, it’s easily understandable why most companies think very little about the way the setup and manage their real estate. Instead relegating it to a department that remains separate from the business and not providing it with the resources that it needs to really get ahead and put in place the systems and processes required to really do things right.
So with all that said, what are the aspects of the Quality Real Estate department?
- Intimately integrated into the business planning process.
- Reports through the Operations function instead of Finance.
- Given an IT and improvement budget commensurate with its spend.
- Allowed to proactively bring improvement opportunities to business units with the plan openly considered.
- Incorporates cross-functional business operational metrics reporting (revenue per SF, customer satisfaction per SF, etc.).
Essentially, a quality RE department is one that is not treated as a cost center, but it treated the same way that a high value function such as inventory management, transportation or sales and marketing would be. Real estate, more than almost any other traditional “cost center” function, has immediate and direct impact on business performance. A non-best in class HR or accounting function is an inconvenience and hindrance but rarely will impact top line business performance.
Is your real estate department best-in-class quality?