e enjte mars 10, 2005

The CRO??

I don't know if the top corporate real estate executive of any company has taken on the title of "CRO" -- Chief Real Estate Officer -- but I wouldn't be surprised if this job title isn't eventually adopted by many. An article in the February 24th issue of the Economist entitled “A Rise in the C-level” talks about the trend towards establishing new C-level positions in corporations. It used to be that corporations had only CEO's and CFO's and the occasional COO. Now there are posts for all manner of CXO's: Chief Information Officers, Chief Technology Officers, Chief Talent Officers, Chief Purchasing Officers, Chief Privacy Officers, Chief Growth Officers. Why not CRO?

According to the Economist, “the rising number of C-level appointments indicates a significant change in corporate structure” reflecting the fact that “heads of specialist functional 'silos' (finance, human resources, IT, etc) are becoming more and more involved in talking corporate strategy with the chief executive and the board”.

This certainly rings true to me, particularly for the tech world. In a fast-changing world where product lines often do not last more than a few years, the functions that define the corporation's character – its culture, organization, business practices, geography, and financial structure -- seem to me to be the ones that are really strategic. Products will come and go, becoming almost tactical responses to how best to use the corporation's resources at any particular time; the corporate character is what endures and determines long-term success.

No function defines a corporation's character more than corporate real estate. Over the last decade, real estate groups in many companies have come to be respected strategic functions. I would like to think the Workplace Resources function at Sun is one of these. We've been involved in many strategic issues that go far beyond our traditional “facilities management” role. We've played active, sometimes lead, roles in addressing issues such as the company's geographic configuration, recruitment and retention of employees, and cost structure.

Probably no CEO has gone so far to think that long-term strategy isn't about products – my admittedly unconventional assertion, above – but many, if not most, now realize that the functions are no longer just services for the business units; they now play important strategic roles. The rise of the CXO's evidences this. I'll be watching to see if anyone is annointed "CRO".

If you are a subscriber to the Economist, you can check out “A Rise in the C-level” at www.economist.com. Search "C-level" in the February 24th issue.

e hënë mars 07, 2005

New Corporate Real Estate Blog

I'm starting a dialogue about financial issues in corporate real estate (CRE) and invite all interested parties to join in.

The dialogue I envision will be about difficult issues CRE execs confront as they make risk/return decisions for their companies – decisions like whether to lease long or lease short, whether to lease at all or own, whether to plan around market cycles or ignore them.

It'll also be about issues CRE execs face as they attempt to reconcile the divergent goals of, on one hand, the corporations which they serve and, on the other hand, the real estate industry within whose world they must operate. I hope the dialogue will allow three groups – CRE execs, corporate finance execs, and real estate investors – develop a better understanding of each others' worlds so they can better team to create value-creating CRE solutions for their mutual betterment.

Many of my postings will be prompted by news items that relate – many times not so obviously -- to corporate real estate. As such, I hope the ensuing discourse will be provocative and have a certain immediacy.

I also plan to post about issues that I confront in my role as Head of Financial Strategy in Sun's Workplace Resources group. Since this dialogue will be available to those both inside and outside of Sun, I will have to be careful to not divulge any proprietary information. Even with this restriction, though, I believe I'll be able to post articles with enough substance to provoke comment.

Which brings us to the issue of "comments"...

A dialogue requires more than one voice. I am hoping readers will comment on my postings and on each others' comments and that the blog takes on a life of its own. I'll be the steward, but I don't want to be the only one heard. The greater the participation, the more we'll learn from each other.

So I'm hoping to hear from readers, and now would not be too soon. Seriously. A good way to comment now would be to give me suggestions for topics I should address. I'd really like to hear your ideas. Please let me know by commenting on this posting.

I look forward to hearing from you