Archive for May, 2010
|Integrated Services: It’s Not Your Parents’ Pitch Meeting
Wednesday, May 26th, 2010
By Vik Bangia
Ah yes, the integrated services opportunity. Otherwise known as that great big gap where excellence in point solutions meets a potential customer with multiple needs. In the real estate services industry, the zeal to close the deal is often what kills the larger opportunity. These days, the structure and format of the integrated services pitch meeting has changed dramatically from similar meetings 10 or 20 years ago. However, if the integrated services sales approach is handled appropriately, the results can be outstanding.
First, it’s important to understand the goal, and the best way to understand the goal is by understanding what it is not. It’s not transactions, it’s not revenue, and it’s not even expertise. Rather it is relationship, trust, and safety.
Relationship
The prospect wants to know and needs to be shown that the service provider intends to be in the relationship for the long haul. That’s difficult to do when the service provider is looking only at short-term or near-term portfolio opportunities, but there are a number of tools and techniques that can help.
One such relationship building tool is called the discovery. The discovery is a method for arriving at a common understanding of the prospect’s problem and situation. In order for the service provider to present an integrated solution that makes sense to the prospect and gets their buy-in, there must be a mutual agreement as to the defined need. Otherwise, the service provider is left guessing, and the prospect is left wanting. When the service provider offers to perform an in-depth discovery, they are showing the prospect that they will gain a deep understanding of the prospect’s business goals, challenges, and constraints before they propose a solution.
The goal of a discovery is not to arrive at a solution, but rather a scope of work whose solution will allow each integrated service proposed to provide a direct benefit. It is undesirable to separate the prospect from the sales process, and the discovery process fully engages the prospect in developing their vision for an ideal solution. Throughout the process, the service provider must express candor, humility, concern—and even regret—for the historical failure of the real estate industry to truly understand its clients’ needs.
Remember, with integrated services sales, the sale is not made as a snapshot in time. Service providers need to know that things change, needs change, and the prospect’s business will change and, as a result, must promise to treat the relationship as an unfolding story.
Trust
As service providers, we must learn not to allow the stages of the decision process to be rushed. What was once called a “baby close”, is now positioned as an “offer to reconvene” well after the prospect has said everything they want to say. Why? Because after an integrated services meeting, there’s an awful lot to digest for the prospect, and there is an overwhelming need to achieve clarity, which requires time. By putting themselves in the prospect’s shoes, and by offering the needed time to make a decision, the service provider shows empathy and sets itself apart as confident and trusting in the prospect’s discernment. Competence is not in doing the work, it is in handling the crises. That’s what the prospect needs to believe about the service provider – that they will be there when it counts.
Safety
What constitutes a safe choice? Size? Financial Stability? Reputation? I would argue safety is fluid and relative considering that Enron Corporation was once considered a safe stock investment. Instead, look at safety as one of the core fundamentals of ethics, integrity, and business philosophy. When these characteristics are embodied by people across the firm and lived out explicitly, then and only then can a prospect define the safe choice in a real estate service provider.
In an integrated services opportunity, the prospect’s objectives can seem incompatible, and service providers usually mishandle the opportunity by either narrowly focusing on one area of expertise or overwhelming the prospect with more than they need. However, the discovery process is one tool of many that, when used appropriately, can make all the difference.
What do you value in an integrated service provider?
Tags: integrated services, prospect, sales pitch
Posted in National Accounts | Comments Off
Workforce in Tier II and Tier III Cities
Wednesday, May 19th, 2010
By Tim Myllykangas and Mitch Jacoby
Many companies are rethinking site selection strategy, a trend that impacts cities and businesses globally. Companies are looking at rebalancing, consolidating, or reducing headcount for a growing list of job titles in larger Tier I cities. They are shifting their focus towards smaller cities such as Detroit, Nashville, and even Dubuque, IA, where IBM announced last year they will relocate and consolidate over 1,400 people.
Companies have historically established locations in large cities to increase brand recognition and gain access to abundant labor. Once-preferred Tier I cities are no longer viewed as the only ones worth considering, even for jobs requiring 4-year degrees and industry experience. Why?
By growing in smaller Tier II and Tier III locations, companies can lower operating costs and improve labor quality. Some small community characteristics are:
-Lower sector saturation
-Stronger recruitment
-Reduced turnover
-Decreased labor costs
-Lower business operating costs
Sound too good to be true? Lower labor costs coupled with higher quality is a reality in small communities. Given the growing list of diverse project types (i.e. headquarters, tech support, R&D, IT, customer support, manufacturing, distribution) in smaller cities, companies are frequently amazed at the improved workforce performance and operational savings, as well as impressive economic incentive packages that are available in Tier II and Tier III cities.
In the past, herd mentality drove site selection. The thought was, if the competition and more than 1 million people are already there, then the workforce must be ample, good quality, and priced at market. This is not the case across all job titles and functions. Businesses should identify ways to improve productivity and lower operating costs while maintaining some presence in larger metros, but not all job functions must remain there. Pigeonholed for only low-end or “back-office” functions, small cities are now able to fill those needs, providing equally talented and loyal workforces for higher-level jobs.
How can one argue with large city success? For years, companies grew in existing locations. The problem is that they haven’t measured performance, i.e. wage, recruitment, turnover, and saturation. Consequently, few realize that they’ve run out of cost-effective labor. For example, cities like Phoenix or Orlando, once thought ideal for customer support, are no longer optimal since competitors entered the market, expanded, and pushed sector saturation levels upward. If companies were keeping an eye on these saturation levels, they would be looking for new, less saturated areas which could save from 20%-30% on current labor and operating costs.
Other reasons companies cite for relocating certain jobs to smaller communities include:
-Tele-commuting
-High-speed internet availability
-Business continuity
-Disaster recovery
-Time zone coverage
-Expanded business hours
-Commute time
-Footprint optimization
There also exists a significant difference in the mindset of small city employees versus large city counterparts. A higher percentage of small city workers value jobs more than their Tier I peers since fewer employment alternatives exist. Small city workers choose to stay for the “quality of life,” and commute times can be 50% shorter than in large cities. These workers value stability and longer-term employment, thereby reducing turnover by 20-50% in many cases.
To be competitive, companies must look more objectively at their workforce options and consider a small city business strategy. New jobs are more meaningful to small cities. They are far more motivated to compete for all job types and do whatever is necessary to win new jobs. They typically provide more, larger incentives than large cities. Moreover, Tier II and Tier III cities often have more available cost-effective real estate.
Ultimately, not every project works in smaller cities, but those that do benefit from improved workforce quality, reduced operating cost and added benefits like cheaper real estate and higher incentives. To reduce costs and improve profitability, companies must consider:
1. Bottom line relocation impact?
2. Job functions for possible relocation/consolidation?
3. Potential labor cost savings?
4. What are competitors doing to improve labor costs and profitability?
5. How are we measuring performance in our location selection process?
6. What incentives are we leaving on the table?
Where are you or your clients looking to expand or relocate?
Tags: sector saturation, Site Selection, tier II cities, tier III cities
Posted in Workforce & Location Planning | Comments Off
Can Real Estate Practices Prevent Oil Spills?
Wednesday, May 12th, 2010
By Mike Tobin
Continuing on the thread of transparency in the real estate market from the last posting, the waters of sustainability can be rather murky…literally in the case of the oil spill in the Gulf of Mexico where we face one of the worst environmental disasters since the Exxon Valdez. It is amazing how within a short period of time (i.e. since the last blog posting), we are forcefully reminded of how perilous the line between our industrial economy and our natural ecology is.
This disaster will inevitably bring forth the heated debate about the risk/reward balance with off-shore drilling. Then, the debate will most likely grow to encompass the risks and rewards of oil drilling in general (we’ll be inundated with “Drill, Baby, Drill!” references again and again). Next, it will expand into a debate about the need for energy independence and renewable energy sources. Finally, it will come full circle to how we need safe/effective/controlled/regulated oil drilling as part of the process to achieve energy independence. Ahh…the same circular arguments we have every few years that are initiated by a disaster of such proportion as to WAKE US UP and get us to start thinking quickly…but acting slowly.
Perhaps, the April 20, 2010 oil spill disaster will be THE tipping point we will look back upon in the future as the time when we started to act quickly to change our current mode of operation. Or maybe not. Regardless, it will definitely be a date and a disaster that will not be forgotten soon and will force us to react.
Now, how does this event relate to transparency in the real estate market and sustainable real estate practices?
The simple fact is that real estate has a major impact on our energy policy and our environment. The United States Green Building Council tracks some handy statistics you can use when connecting the dots:
In the United States alone, buildings account for:
• 72% of electricity consumption,
• 39% of energy use,
• 38% of all carbon dioxide (CO2) emissions,
• 40% of raw materials use,
• 30% of waste output (136 million tons annually), and
• 14% of potable water consumption.
At the very least, this disaster provides a common reference point for corporate America to discuss sustainability. What can be done to prevent such a disaster from happening again? Is there anything we can do to help? What will the future bring?
This is a time when we should take full advantage of our resources to engage corporate real estate managers in discussing these questions and to educate them on the impact real estate has on the global environment. We should be excited about the opportunity to introduce them to sustainable real estate practices.
As real estate advisors, we can and should do our part to help clean the waters and bring sustainable real estate practices into every business. By engaging and educating, we can help people and corporations to see through the murkiness and to act in a positive and sustainable manner to help ensure a disaster like this will not happen again.
Do you think that real estate impacts energy policy and energy independence?
Tags: energy policy, environment, gulf of mexico, oil spill, sustainable, sustainable real estate practices, usgbc
Posted in Sustainability | Comments Off
Draft Choices
Wednesday, May 5th, 2010
By Phillip Infelise
Back again, are you? Good to have you.
Last month we profiled the New Day Project Manager. A very eclectic mix of skills don’t you think? To act as a high performance Project Manager (PM), you need a very high performance project team. I thought it would be good to show you how we go about picking our first round draft choices in concert with our client’s internal team. As you might imagine, our PMs are inundated with vendors/providers of all varieties wanting to carve out an “inside track” to some of our clients and their projects. If we announce a major new project, we become every vendor’s new best friends. We get constant offers of “referral payments” from vendors of all types. In our industry, it is the hidden referral fees that we worry about. We need to be constantly vigilant to protect our objectivity, reputation, and integrity by keeping our vendor relationships totally transparent.
Our rigorous Vendor Protocol outlines a “Do the Right Thing” approach to vendor relationships that sets out strict controls on the way we select our project teams. One violation is grounds for termination—that’s how seriously we take it since everyone is looking over our shoulder, as they should be! The basic components of that protocol and our approach to making the right draft choices and creating the perfect high performance project team include:
-Client First. The client’s procurement policies or desires control how we move forward.
-Respect. For any existing client relationships; but be willing to point out the not all past relationships will be perfectly appropriate to this specific project scope.
-Leverage. Our experience on similar projects to suggest a recommendation list of the best qualified providers.
-Process. Follow a step-by-step process throughout the RFP, short-list, interview, and selection phases that allow each vendor to put their best foot forward.
-Value over Price. Constantly remind the team members that we honor value over bottom line price every time. Unless the client says otherwise, of course.
-Give Back. For their efforts, we owe the team members a thorough debrief, win or lose, so that they can improve their game for the next time.
-Special Circumstances. Such as timing or budget constraints may dictate—on the rarest occasions—the need for the PM to bring forward an integrated project team of their own choosing to suggest to the client in order to be successful.
-Proof. If we have successfully executed a project team selection, the proof will be in the results. Does the winner want to work with us again on the next project and, equally important to us, do the vendors that lost want to participate in our next RFP process.
The right team ensures success and makes the high performance Project Manager look like a genius.
Next time, I will try to be provocative in pointing our biggest challenges as Project Managers.
What topics would you like to see covered relating to Project Management?
Tags: project manager, project team
Posted in Project Management | Comments Off
