Building Successful Working Relationships in CRE
Hannah Koole-Browne, associate director at CRE consultancy Incendium, discusses the growing importance of collaborative approaches in developing corporate real estate strategy.
One of the outcomes of the last 12 years is the sea-change we are seeing in the way corporates are approaching their real estate strategy. But something that has been really encouraging in the fall out is a new game-changing trend emerging where all the parties involved in the procurement process are now working more collaboratively than before, invested in each other’s success and creating win-win partnerships.
Collaboration, collaboration, collaboration
Businesses, families and communities have been stretched and tested beyond all reasonable levels of endurance, patience and uncertainty over the past twelve months. We have seen business priorities and targets shift like desert sands and have had to adapt in response. A case in point is the process of choosing strategic partners, and how to contract with them.
Why work in partnership? Simply put, we are better when we work together, with networks built upon foundations of trust. Collaboration is key and we are encouraged by a new game-changing trend which is emerging within facilities management and real estate services, where all parties involved in the procurement process are working more collaboratively than before, invested in each other’s success, and creating win-win partnerships.
OK – but how might that work?
We can see how this might play out as we consider how we might re-enter office life. The dynamics will have necessarily changed while so many of us have been working from home, so we want supportive partners who give careful thought to, for example, a return-to-office-plan, or how best to provide catering services to a workforce hugely reduced in size. We want to work collaboratively with partners who can work sensible and sensitively in our ‘new normal’.
Cue, Vested. Vested® is a methodology and business model which has championed true collaboration for over 10 years and continues to grow as recent events shift focus to greater collaboration. It is founded upon academic research, with many case studies of success, and has the aim to help companies achieve a win-win partnership. A brilliant example of this is the recent deal between bp and JLL, which shows it is possible to form a new partnership based upon transparency, flexibility and trust in a completely virtual, fast-paced and uncertain environment. Incendium Consulting was part of the advisory team for this innovative deal, alongside others. Through this collaboration, JLL will provide workplace and real estate solutions to support bp’s workplace transformation and net zero carbon ambitions.
Wendy Cuthbert (bp Global Head of Workplace Services) believes this new deal shows real intent from bp to transform its workplace, starting with a new way of contracting through Vested. She says, “We are excited to work in a new style of partnership to transform our workplaces globally. This partnership is underpinned by shared values and collaboration and stands us in good stead to achieve bp’s vision for our workplaces.”
Recognition of this changing trend was recently shown by IWFM, naming Sodexo and J&J as winners of its ‘Collaboration’ award for the success of their Vested partnership. This partnership shows how successful collaboration can result in substantial savings and cost certainty for a buyer, alongside the guarantee of a specific return for the supplier – a true win-win partnership.
Fostering the collaboration
It will come as no surprise that, when choosing a partner with whom to build a strategic partnership, a good fit in culture and values is key. In fact, shared values are a keystone on which all other elements of a partnership ought to hang. Whether it’s attitudes to sustainability and the environment, or how people are treated at work, alignment will make for far fewer sticky moments if core values are agreed. We’d venture that managing and supporting people within organisations is perhaps the most important of all these, and, as so many of us are missing face-to-face interactions, serendipitous encounters and ‘non-work’ conversations, we need to work harder to find opportune moments or excuses to catch up with colleagues and consultants. But, happily, the recent bp/JLL agreement shows this can be achieved virtually.
Who’s in charge?
The matter of who creates a collaborative agreement is also a key component to its success. Moreover, a ‘can-do’ mentality, and the necessary ‘buy-in’ to develop a different style of partnership, (and to transform) must come from the top of both organisations. A core team which not only develops, but also lives and breathes the terms of any operational agreement, is the next part of seeing a successful partnership through to fruition, and beyond. Continuity and understanding must be fostered through lead positions in, for example, operations, finance, procurement and technology working alongside supplier account leads, all of whom should be part of the core deal team. The ultimate aim is to create one joint team, operating so seamlessly that one might even forget who originally sat in which party.
Let’s be transparent
Finally, let’s talk transparency. Vested dictates that each party agrees a set of parameters, or ‘guardrails’ within which the core team will work to create their agreement, and, in doing so, lay all cards on the table. For business leaders used to holding back information in order to find themselves at the most privileged seat at the table, this might be an uneasy position in which to find themselves, but agreeing these ‘guardrails’ upfront is essential for setting the foundations for a relationship in which the parties feel invested in each other. Only then can each success be felt by either side.
Yes, this might feel unnatural, and it’s quite the departure from the traditional sense of ‘how to do a deal,’ but, once agreed, conversations can turn from how services should be performed, to how both parties can work together to create the best value. This will encourage a relationship to become a marriage on an equal footing, and less of a ‘parent/child’ dynamic.
Celebrating the wins – great and small
Needless to say, the commercial model should form a core aspect of any partnership, and a successful commercial model should incentivise your partner to be there for you through thick and thin, whether business is operating as normal, or during any inevitable changes brought about as a result of any ensuing transformation.
By taking a more collaborative approach to developing the commercial model, a successful deal should generate greater value, created by both parties working effectively together. Yes, there’s more at stake, but, the greater the value created, the more there is to share for both parties.
And not all principles in a partnership need to be strictly business, principles and ethos are, as we’ve mentioned before, crucial to success. When the guiding principles are put in place which form part of the collaboration agreement, these might (and rightly so) include integrity and loyalty. We are also hugely in support of the stipulation in the bp/JLL deal which included ‘celebration.’ This recognises the importance of celebrating, appreciating and acknowledging each partner’s work and achievements over the lifetime of the agreement, and fosters a stronger ‘team’ culture.
This shift from competition to community, focussing on collaboration with a true, well-chosen strategic partner, will help strengthen organisations as they go through both any self-imposed changes, as well as all manner of events outside their control.