How did one man merge the 20m sq ft of property assets of Finnish and German telecoms giants?
According to widely held stereotypes, Finns are as likely to be found doing business in a sauna as they are in an office. Germans, on the other hand, would not appreciate doing deals in such an unorganised, not to mention hot and sweaty, environment.
Yet on 1 April last year, Finnish company Nokia and German firm Siemens launched a €15bn (£11.2bn) joint venture in the shape of telecoms infrastructure company Nokia Siemens Networks (NSN).
Peter Doran, head of global real estate for the new business, had the task of bringing together the different work cultures of its two parent companies and handling the 20m sq ft of property assets NSN inherited from them.
It is still early days, but his success guiding NSN’s real estate strategy through its first nine months has been recognised by his peers in the world of real estate occupiers.
He has been shortlisted in the Executive of the Year category at the prestigious CoreNet Global’s UK Corporate Real Estate Awards.
The winners will be announced in Property Week on 8 February.
Irene Masterton, deputy chair of the judging panel, sums up why Doran, who is based in NSN’s offices in Farnborough, Hampshire, was selected: ‘He has led his team to deliver aggressive savings in his global property portfolio, while managing the significant cultural differences brought about by the merger of Nokia and Siemens.’
Having worked for Nokia since 1998, most recently as regional head for Europe, the Middle East and Africa, Doran started planning the real estate strategy for NSN after the joint venture was announced in June 2006.
Nokia and Siemens formed NSN to have the size and scale to compete in the infrastructure and services business for the telecoms industry. This means that, while you can still use a Nokia handset, the infrastructure that connects your call is likely to be provided by NSN.
This month the company bought British telecoms firm Apertio for £104m and won the contract to provide India’s Bharti Airtel’s network technology for the next three years.
‘The challenge was to take on more than 900 sites in 120 countries overnight on 1 April and keep all the lights on, all the doors working, all the cafeterias operating, while at the same time building relationships with our hundreds of landlords, getting to know the leases, paying the rents and establishing a three-year strategic plan for the portfolio,’ he recalls.
To hit the ground running, Doran, who describes himself as ‘a businessman specialising in the property arena’, outsourced senior roles on his board to Cushman & Wakefield, Mace, Property & Change Solutions and Cortex International.
He set his team tough monthly targets that are measured against a baseline formed from the real estate data provided by the parent companies. Measures of its performance relate to the consolidation of former Nokia and Siemens employees; cutting out duplicated space, which is ‘part and parcel of any joint venture’; and installing Doran’s ‘modern office’ concept.
Explaining how the real estate team’s success is quantified, Doran says: ‘We take into account all staff and their working practices in offices and use net internal area minus special space, such as labs,’ says Doran. ‘Our objective is to have an industry-leading space efficiency per person in our operating mode, post-2008.
‘We have driven down average occupation density considerably per person across the board and are making good progress to meet our objectives.’
This is where the modern office programme comes into play. Its details were circulated around NSN in a booklet, which was also posted on the company’s intranet. It has already been rolled out in around 20 office locations and there are plans for a further roll-out in 20 more this year to ‘optimise space while enabling effective work’, says Doran.
‘Our goal is to provide space that supports individual choice and to pick the place that best supports individual and team needs,’ he adds.
‘Working in a high-tech sector, our success depends on creating ideas and products more quickly than our competitors.
‘To achieve this we organise our operations into projects that constantly change with the dynamic requirements of the business. We need workplaces that support rapid changes in headcount and make project work easier.’
Another benefit of the modern office concept is that it accounts for cultural differences across office locations because it is designed after weeks of monitoring how staff in each office work for example, how many hours they spend at their desks and how long they spend in group meetings. ‘There isn’t a one-size-fits-all solution,’ explains Doran.
He adds that, although the ‘two parents [Nokia and Siemens] had considerably different approaches to managing property’, optimising the inherited property portfolios did not involve struggling to fit these approaches to the workplace together. ‘We are a global organisation, so working cultures are much more diverse than that,’ he explains.
One of the most significant differences between the two companies ‘was the global nature of thinking and decision-making in Nokia real estate, compared with the more country-focused style of Siemens’, according to Doran. ‘In Siemens most of the world was “inside” or “outside” Germany,’ he says.
‘In Nokia it wasn’t untypical for your line manager to be based in another country.’
The aim now is to create a new identity for NSN. The structure of its real estate division reflects this. Seven of the 12-strong management team are based in NSN’s seven global regions. They are the local experts in their particular markets.
There are also four functional leads:
property and workplace solutions; workplace management and environment; integrated systems; and finance and control.
To start with, at least, many of these senior positions were taken by individuals on secondment from property firms, such as Cushman & Wakefield.
‘When we first started along this road we hadn’t got a full view of everyone who was coming in to the organisation,’ recalls Doran.
‘When you’ve got 60,000 people coming together, you don’t know who they are or what they do. We had to discover that along the way and get to know a new mode of operation.
‘There was an urgency about what we had to do. We could not wait and did not want to wait to find out who was coming, so we took the decision very early to bring in secondees, putting them into senior positions within my own management team, to basically get us up and running. They are not necessarily in the same positions today, but they are still with us.’
Doran believes this approach is one of the key reasons why he has been shortlisted for the CoreNet award, along with the likes of Chris Kane of the BBC.
‘I was able to pull together a highly functioning team quickly, both internally and externally, so that the results were almost immediate,’ he says.
Doran believes the ‘real estate leadership is a component in the engine of change’ within such a newly formed company.
‘When you can see the tangible contribution that real estate can make to the corporation's bottom line, it makes it all worthwhile.’
for production and warehousing (21%).