The world of commerce is becoming more complex every day. Strategic decisions about the location of offices, factories and distribution centers can no longer be made in isolation from other key organizational functions like human resource management and information technology. This new reality means that corporations must become much more agile; that is, they must develop the capability to change and change faster than their competition. And it implies that deciding where to do business will also require more agility. These locational decisions should be made within the context of Collaborative Strategic Management (CSM), a revolutionary new business approach that links HR, IT, and facilities together to generate unprecedented levels of corporate agility and productivity.

But first of all, what are the forces that are driving the need for integrated, collaborative decision making?

1)                  reducing fixed operational costs in order to remain competitive in the global marketplace

2)                  institutionalizing the processes of innovation in order to react more quickly, and more efficiently, to the endless twists and turns of the marketplace; and

3)                  confronting the coming talent gap for creative or knowledge-based workers, and adapting both human resource management and workplace design strategies accordingly

Given these needs, what is CSM, and how will it affect executives concerned with the real estate function? People, place and technology are what come together to define the workplace, and it is there that businesses thrive or fail. Yet despite that simple, unassailable truth, in most businesses operating today the management of HR, CRE and IT is disconnected, and therefore, highly dysfunctional.

At first glance, given their dissimilarities, this situation is not surprising. Just think about it for a moment — are there any two professional areas more dissimilar than IT and HR? IT is all about reliably delivering data on demand, and at the lowest possible cost. IT is about machines, software codes and electricity. It is about being 100 percent correct all the time, since one little bug, or virus, can cripple a multimillion-dollar enterprise.

HR, in contrast, is about understanding and motivating human beings — i.e., highly unpredictable, emotional creatures, who are often wrong.

And the corporate real estate profession? Real estate professionals are charged with providing safe, productive, low-cost workplaces in strategically desirable locations. And they must provide that space at just the right time, anticipating the company's needs so that the space is available just before its needed, and yet can be disposed of just as soon as it isn't, and at minimal cost to the company in either situation.

Thus, each of these three functional areas has its own disciplines, its own values, and its own challenges. Yet no business can operate effectively unless HR, CRE and IT are in sync, aligned both with one another and with the organization's broader strategic goals. For all these reasons, businesses today need a clearly defined methodology that allows them to align their HR, IT and CRE strategies, and thus achieve corporate agility. Imagine for a moment that this happens to you (this example is from an actual real-life situation): 

 You are responsible for real estate management in a large multinational firm. Business has been off for several quarters, and everyone is struggling. The CEO makes it public knowledge that the future of the company depends on keeping key talent from going to the competition. While you're still digesting this information, you are directed by the CFO to cut costs by closing 50 percent of your field operations offices, a move that will displace hundreds of employees. You fear that taking away these employees' offices will result in tremendous dissatisfaction, and therefore adversely affect morale in the sales force. What do you do?

In this scenario, the CFO's order that 50 percent of the field offices be closed is a precursor, presumably, to serious morale problems within the displaced sales force (and this after the CEO has warned that the key to the company's future lies in protecting its human resources). A corporate executive who practices CSM might try the following:

·                    Immediately assemble a task force of his or her peers in sales operations and human resources. Invite the CIO to send a representative to consult with the team on technical issues.

·                    Design a public relations campaign aimed at the soon-to-be-displaced workers, focusing on the implementation of a distributed work program, which will offer those in the field greater freedom and flexibility.

·                    Stress management's commitment to providing whatever technology and training is needed.

·                    Organize and conduct face-to-face focus groups with all affected employees in order to identify their needs, desires and constraints.

·                    Ask senior executives to explain the necessity for this change in operations and have them stress the importance of the affected employees to the future of the business.

·                    Conduct an analysis of all locations subject to closure to determine which ones can be most expeditiously jettisoned (given lease requirements and local market conditions).

·                    Perform a geographic cluster analysis of the residences of all affected employees and use this data to select the centralized, regional locations that will remain open.

·                    Immediately begin redesigning the remaining locations to improve their “touch down” and “hotel” functions.

·                    Design and institute a distributed work-training program, and appoint a project manager to monitor the progress of the transition, giving him or her the authority to solve any problems associated with the transition.

Post Mortem

What happened here? In this example the real estate executive took charge and demonstrated leadership by approaching the problem from a collaborative, strategic perspective. In essence he developed a strategy of place that went far beyond the traditional boundaries of simple location. It became a process of learning how to manage a network of places instead of seeing each location as an unconnected node. This example illustrates some key principles of the emerging workplace.

1.      Work will be accomplished in a wide range of locations, and on the go.

2.      Work will be spread throughout the day and week (24x7); no more 8 a.m. to 5 p.m. schedules.

3.      Work will take place in shorter chunks, down from months to weeks.

The implications are, again, that the utility of real estate will be substantially impacted by technology and the changing role of the knowledge worker. The work environment is about connectivity — a network of places, both virtual and physical. And people need to be somewhere. Locational strategy today — and, indeed, workforce strategy as well —  has to be about identifying the people you want and knowing where they are so you can connect them to your business. A new set of skills will be required to manage a network of places. An effective approach is to develop and implement a CSM methodology as a critical first step.

A Quick Look Around the Corner

In this instance, what should you be looking for in the future? What questions should you be asking yourself, and your peers? There are two major themes that people involved in making locational decisions must pay attention to:

1.                  Demographic Dynamics. What are the multi-generational dynamics of demography, especially in under-developed countries? What factors influence generational cultures and values? What are the long-term trends in educational funding, in the United States and elsewhere? How do these trends vary across different geographic regions?

2.                  Geography of talent pools. Close on the heels of the demographic questions, where will the most desirable talent be living in five, 10, 20, and maybe even 50 years? Why? What is the psychology that underlies mobility?

Focus on these two sets of questions and you will not be blindsided by the dynamics of the future of work.

This article was prepared as an excerpt from the forthcoming book Corporate Agility: A Revolutionary New Model for Competing in a Flat World, by Charles Grantham, James Ware and Cory Williamson. The book will be published by AMACOM Books in spring 2007. For more details visit the Future of Work Web site at www.thefutureofwork.net.