New horizons for a real estate industry

Posted by Peter Cochrane on September 18, 2002

CoreNet Global Conference - 18th September 2002 in Lille, France

Corporate real estate executives were given an insight into the social, political and technological trends that will affect their clients, their markets and their jobs. Geraldine Bear reports from CoreNet's Global Summit held in Lille last month.

It was inevitable that the programme at the recent CoreNet Global Summit would be about probing the future and what it might bring for the Corporate Real Estate profession. This was the first European Summit following the merger of NACORE and IDRA and a forward-looking conference agenda was the natural and positive proposition.

The conference was structured around three keynotes speeches from heavyweight international speakers, none of whom were property professionals

Dr Patrick Dixon describes himself as a Futurologist and works from the premise that 'tomorrow is yesterday'. Dr Albert Bressand, who heads up globally renowned think-tank Promethee, offered an 'Economic Weather Report' that was a compelling eye-opener to all Anglophiles - and there were plenty of us. Peter Cochrane, founder of ConceptLabs, raced through future directions in technology. All were absorbing and consummate performers with strong messages to impart and despite coming from different directions there was overlap and convergence between all talks.

Understanding the future 
Looking across all the speakers you can group the majority of their messages under about six headings, however it is worth noting Dr Patrick Dixon's mnemonic for eyeballing the future. Think FUTURE in terms of Fast, Urban, Tribal, Universal, Radical and Ethical and then imagine each theme sits on the face of a cube; you can only focus on one face at any given point in time but any theme could be redefining your business and your life. The future is fast and unpredictable.

Dealing with pace and change 
All three speakers were emphatic that success depends on anticipation. Dixon said: "Don't design solutions for yesterday." Merely keeping up with the market is death. You've got to imagine what your clients will need and design in anticipation. Dixon described how five years ago American Airlines started to deliver power to their airline seats because that is what they imagined (rightly) their clients would need. Poor old BA asked their customers what they wanted and designed solutions for today's (ie yesterday's) problems. Five years down the line BA is thinking about retrofitting, but technology has moved on. Tomorrow's solutions will be wireless.

Dr Peter DixonLuck helps - Cochrane noted that the text messaging features of mobile telephony were tagged on as an afterthought extra. Today text messaging is used more than voice.

Product life cycles are shorter and getting a product or service to market before the customer / consumer knows he wants it is the only recipe for success.

What does this mean for the property professional? More of what we've been talking about for the last couple of years; flexibility, short-term leases and the ability to move fast to support a business that is performing at breakneck speed. It also means that anything in the pipeline is probably already obsolete. More importantly it is being able to anticipate what a business might need and being ready to deliver before that need has been articulated.

Understanding how we will work 
"Work is an activity, not a place. I go to work to be interrupted," stated Cochrane. Concentrative work will take place anywhere but in the office. The office is where we go to bond, exchange knowledge and know how and affirm what it means to be part of the organisation we belong to.

Technology will continue to shape our working day with parasitic networks taking us to the next level of wireless working. Wherever we are our mobile devices will scan to piggyback into a device that will forward data device by device to your connection. Unfortunately you really will be able to work whilst you tramp the Fells.

Bressand argues that creative relationship management will enable successful business. This is not the ability to deal with the face-to-face relationship (although even today some executives spend six weeks a year at 35,000 ft just to foster relationships of trust (and more about trust later). For Bressand relationship management tools will enable companies to manage every possible internal and external relationship as part of an 'industrial process'.

All speakers touched on the role of video conferencing. Despite its clunky reputation this has got to be the way of the future. Open plan offices, according to Dixon, do not support successful video conferencing and the current levels of bandwidth continue to create a stilted, unnatural event that most people find unsatisfactory.

Peter Cochrane ran a fascinating clip that showed a BT Research Laboratory development; a room set up with half a meeting table butted against a wall video screen that mirrored the real 'half meeting room'. As the video meeting progressed remote people 'walked' into/onto the screen and joined the meeting table. It seemed a convincing 'in the round' meeting with participants apparently moving throughout a virtual meeting space. The ability to conference from the desktop and in a successful meeting environment will arrive and offices today will need to adapt.

Technology will continue to make us 'even more skilful amateurs' - during the last decade we have become successful typists (death of the secretary), desk top publishers (death of the in-house design team), document producers (death of the reprographics and print department). Do not expect this to change. Any non-core expertise than can be transferred to the mainstream workforce by increased application of technology will continue.

Another way to flourish, according to Dixon, is to have global reach but be able to act within the local context. Technology allows you to tap into global audiences but responding to local culture is key to success. Organisational structures will continue loosening to embrace all forms of business partnership with organisations reshaping themselves constantly. The ability to deliver a global but flexible property solution will be a growing imperative. Dixon believes that there will still be ownership - for flagship buildings - but there will be embarrassing and expensive mistakes. The real answer, however, lies in a business being able to offer a creative combination of place and technology to work.

A note about the conference itself 
The Summit was a revelation for someone more used to visiting facilities management events.

The real conference business was about professional networking and the sponsorship that the real estate profession can attract allows this to be a convivial and enlightening activity. Every breakfast, lunch and evening meal was sponsored generously.

We enjoyed New York style brunch courtesy of The State of New York, an elegant dinner sponsored by Chambre de Commerce et D'Industrie De Lille Métropole, Lille Métropole Cummunauté Urbaine and so on.

APIM Mille Métropole funded a tour for all conference delegates around the key Lille developments including phase 2 of a major business centre and a bio-health business park sited alongside one of the largest hospital sites in Europe.

The ability of this professional group to attract this level of sponsorship support highlights the power that the CRE professional has compared to his facilities management colleague. These are people who are perceived to have the influence to participate in the deals that commit organisations to global property moves. Whilst there were, as always, more suppliers than end users delegates, the end user community was well represented at a senior level. facilities managers were absent and facilities management was rarely mentioned. There is still a major gulf to bridge between these two professional groups.

In addition to the keynote speeches, there was the familiar education programme with all events structured around a panel of experts each offering a ten-minute view to support or oppose a theme followed by open discussion. There was something of the Curate's Egg about them; they were good in parts.

Culture and beliefs 
In this fast and fragmenting world knowing where and how you belong will be important to sanity. Dixon predicts the rise of 'Tribalism'. At its best tribalism is a positive force that creates coherent groups that share values, trust one another and work together for a common good. In the corporate world the successful merger is dependent on two or more tribes being able to come together. On the world stage, and at its worst, tribalism manifests itself as international terrorism. For Dixon tribalism is becoming the most powerful influence throughout the globe and it will colour every level of corporate life. On the one hand nurturing a healthy tribal identity will support the corporate agenda, on the other corporate survival could be threatened by the violent behaviour of a tribal group. The property professional needs to be able to respond to both possibilities.

New economic orders 
Corenet is a global network and the conference attendee profile by and large reflected this. That said the UK contingent probably dominated to the tune of 40%. This created an interesting response to Bressand's presentation about the EU. Bressand's overview of the state of the EU and how it was developing was described by one Anglophile as "the most interesting and compelling explanation of the EU", at the same time "you knew you were part of the club but you didn't really feel like you belonged yet." Attendees from mainland Europe just said "that's Europe."

Dr Albert BressandBressand reminded us that the EU continues to expand; by 2005 the EU will be a union of some 20 odd countries. It's a community based on the unique concept of 'mutual recognition', a belief that if it is good enough for one member it is probably good enough for another. It is a principle based not on an economic viewpoint but the belief that one society can respect the institutions and practices of another. This has meant that it is a remarkably open system with fewer trade barriers and an appetite for modernisation. It also allows the EU to adopt a step-by-step approach to the future. There isn't a grand vision, a place where we need to get to, this is a journey that we take step by step. It still isn't clear whether it will be the 'United States of Europe' or a large European market. However, Bressand says, do not under estimate the transformations that happen along the way.

The launch of the euro created a single money market overnight. A Europe-wide bond market integrated within months. Consolidation of the equity markets is underway. The impact on property finance and investment is and will be considerable. The impact on the City of London has yet to unfold but one must question whether London can maintain its position as a key global finance centre.

Politics 
Dixon argues that in the western world political conviction is dead. Political decisions live or die by the opinion poll. Politics will be dominated by the single issue, it can bubble up overnight with little warning, it can threaten business survival and its resolution is often decided by emotion. The proposal to sink Brent Spar and the resulting campaign to stop it damaged Shell's corporate reputation overnight, yet several years on all parties - including the environmental lobby - agree that sinking would be the best solution, yet no one is prepared to make that decision and the platform continues to rust in-situ.

The property professional has to be prepared for anything and everything. Some situations will hit you with no warning and little justice. Some businesses and some individuals will fail unfairly; a case of wrong place at the wrong time.

Trust and transparency 
Bressand and Dixon both reminded us not to underestimate the impact of corporate debacles such as Enron. In the future an 'interpretation' of the truth will not be acceptable; Bressand noted that on one level perhaps Enron's figures were a 'technically acceptable' explanation within existing guidelines, but in no way were they an honest, truthful or defensible explanation. Every corporate decision, explanation and transaction must be transparent. "Values and ethics will make or break your business," according to Dixon. There is no room for misinformation and maintaining the trust of clients, customers, suppliers and every other internal and external audience will be required survival behaviour.

Dixon was the speaker to specifically urge the audience to 'build a better world' but underlying all three presentations was the belief that success will accrue to those organisations that espouse strong values, believe in honest transaction and are willing to make a positive contribution to the wider world.

Conclusions for the future? 
Dixon would say: "Keep turning the cube." As you throw your future dice one face turns to enlighten you, but who knows what is happening on the other five faces. If you don't keep turning the dice something will hit you unexpectedly and perhaps with deadly force.

Cochrane would offer a more Darwinian view: "The survivors will not be the strongest or the most intelligent. The survivors will be those who are most responsive to change."

Bressand would say: "Be aware and understand the storm clouds but look for the silver linings because they are out there."

If you are interested in delving more into the viewpoints of the speakers you can visit their respective websites. Cochrane and Dixon welcome you to download both the CoreNet presentation and anything else that takes your fancy.