Can the CRE team ruffle feathers and manage change?

As their murderous group name suggests, they are the death omen for the status quo. The CRE team is adaptable to change, just as the crow is capable of changing its food sources as its environment becomes urbanised. But exactly how do crows manage the changes they observe as only one bird group out of the many?

The exaltation of larks, more commonly known as the HR department, is happy to progress discussions internally. The larks will sing a pretty ditty of change and its many benefits. They will socialise the reasons for change, a slow song that takes time to build to a crescendo. Each company will require a slightly different tune because no single change will ever be the same.

But this assumes the crows and the larks recognise the cross-over in their roles. Can a lark and a crow sing together?

The crow turns to the IT department, the starlings of the bird world. The IT teams are capable of mesmerising murmurations no other bird has seen before. They change with the movement of the wind, and leave all other birds stunned at the progress occurring in their industry. The creation of the next big murmuration is the starlings’ life. But has the starling spoken to the crow on what is required to make progress?

It is time to get senior buy-in on these changes. The crows consult the parliament of owls, those that can be the predator for the crow. These are the wise C-suite that work tirelessly, long into the evening, for the success of their company. Like all parliaments, facts, figures and, often, a lot of emotion is used to come to their conclusion. The owls will question whether there is a need for change. What is best for my building of rooks? Are there benefits to my bottom-line costs?

To describe CRE teams as a murder of status-quo crows may be a little extreme but is not an uncommon perception within organisations. Their roles are expanding to the co-ordination and management of various internal and external teams to implement change. Historically, in-house CRE teams would be concerned with the day-to-day running of their portfolio of real estate, including ensuring the payment of invoices, facility management and dealing with never-ending complaints about air conditioning.

Maintaining these normal occupations has been perceived as ‘doing a good job’. But in reality there has always been more to it than that. They are at the forefront of initiatives such as restructuring or flexible working, so they are well-placed to implement change.

But while they can be effective managers of change, they are not the leaders of change. Hence the bird analogy. A vision of the future must be developed from a variety of parts in a business - and the real estate strategy must be capable of aligning with these plans.

This requires forward planning, and due to leases typically being long-term, the plan needs to be far-reaching. CRE teams are faced with the prospect of a shortage in supply in London, requiring longer lead times for lease execution of up to two years. Add the lease term of 10 years and a company is making decisions for a 12-year period.

Business planning

Many firms struggle with five-year business planning. So the nature of leasing challenges CRE teams in how they implement and manage change over the term of a lease. This can be overcome with flexibility in lease terms and a tenant’s fit-out.

Both may require an up-front capital investment or a price for flexibility but the long-term benefits will be apparent. For example, a tenant may agree to a higher penalty fee to have more frequent break rights. Or a landlord may provide contraction rights in return for a slightly higher rent. Perhaps a tenant can afford a higher initial fit-out cost that is capable of adapting to shifts in work practices over time.

The magic number that has started to be commonly referred to in real estate is 20%; 20% reduction in density, in bottom-line costs, in carbon footprint and so on. For those in legacy leases, it is a challenge for the CRE team to uncover innovative ways of creating this 20% figure. Often a CRE team may be entrenched in the ongoing management of the existing and the future is a ‘bigger picture’ undertaking. External advice may assist in overcoming these challenges. Communicating with other CRE teams in understanding how they have managed change could be of benefit.

One possibility is that the CRE teams engage with their landlords to consider alternative solutions to the ‘standard industry practice’ to achieve the 20% target. If an idea to change or upgrade has been identified and the barrier is an inability to implement the opportunity due to legacy leases are the barrier, for instance, landlords should accept their share of the responsibility. They should agree to co-fund upgrades to reduce energy consumption and costs.

The real challenges to the CRE team in managing change are:

• Gaining meaningful and relevant buy-in from various internal and external teams;
• Ensuring senior stakeholders are engaged and support the idea;
• Difficulty in planning for unknowns in the long term; and
• Legacy leases that create inability to adopt new initiatives.

Flexibility, communication, innovation and clearly-defined planning may be the keys to preventing future ‘murders’ in the real estate industry.

CRE teams are not always effective managers for change, but this is not to say they cannot be. It is the responsibility of the organisation, particularly its leaders, to empower these groups to seek property solutions for the benefit of the company.

Embrace the murder of crows, a bit of status-quo killing is a minor offence in the court of the birds.

Libby Humphreys is the winner of the CoreNet Young Person’s Essay Award, run in association with Property Week