Is the Corporate Real Estate function beginning to move from the domain of the Chief Financial Officer to the Chief Executive Officer? If it is, why is it?
Marissa Mayer’s remarkable move reasserting the power of the workplace has received global attention. In some of the more positive speculation (Mayer herself has not given us any comment on the move or explained her reasoning beyond the leaked memo we received) are those who reason that, since Google is in her genes, her policy could not have been shaped without data informing the move. With all of us now waiting anxiously for the implications of the move on the company’s performance, her policy could be greatly influential.
Over the past decade or more, developments in technology enabled us to connect effortlessly, find information in the cloud, and work from 1st, 2nd and 3rd places, and more. This potential was captured by a CRE function operating out of the CFO’s office, and was used to justify a massive reduction in the amount of real estate necessary to perform the company’s (any company’s) work. HR and IT departments got the message and packaged technologies and formulated policies to allow work from home, and anywhere else.
Much of this, when voluntarily selected, was absolutely great. Finally, we began to see the workplace not as a single place, “the office,” but as a portfolio of places and spaces we could freely choose from to best suit the work we were doing at any time and allowing us to work with the people and teams we chose for the purpose of our objectives and performance.
Most of this, however, was driven by a different metric of “performance.” Performance became a measure not of individual and organizational innovation and accomplishment but of the balance sheet. Progressively reducing the “burden” of real estate by employing “mobility” and “work@home” programs reduced asset and lease costs and made CRE and the CFO look like heroes.
In the meantime, however, the office became increasingly irrelevant. Not an attractive place to begin with, it became less so with fewer people jammed into less space using workstation products not really suitable to the diversity of work they were doing.
So, with people in the office and either unmotivated or having to jump the hurdles of inappropriate design, or “connected” at home but unconnected to purpose and meaningful interaction, many organizations began to lag or fail.
CRE and the CFO had found ways of improving the balance sheet as we entered the Great Recession, but the CEO began to look for the resources she needed to make her way back into leadership as the economy reshaped itself. Marissa Mayer, the most visible of the CEO’s making this move, took the reins of CRE and HR practices and policies and reasserted the power of place to generate innovative ideas and drive industry leadership and performance.
However, if the workplace is not designed for performance, the policy will fail. We’ve commented before about the power of design to bring people together who otherwise have reason to work in other places. Yahoo, and any others who might generate policies justified by the Mayer Move, must provide a place designed to enable people to connect with purpose, find meaning, ignite passion, support teams, nurture creativity, engage flow, and otherwise activate, augment and amplify the vision of the CEO and the promise he/she makes to customers.
The future of CRE may be in the office of the CEO.