Six Sigma for Corporate Real Estate

Sometimes the obvious answer is not so obvious....

On Tuesday of this week, I hosted a discussion forum of Corporate Real Estate Executives from around the midwest...six prominent corporations, five of them solid six sigma practioneers. The purpose of the forum was to share learning related to common issues that these real estate executives share. While Six Sigma was not a specific topic, Six Sigma projects came up often as we discussed approaches to solving some common critical problems. Project areas included; energy management initiatives, elevator reliability, the move, add, change process, Major capital planning, work order management and improving transaction quality....an impressive range of fairly complex analysis and well thought out solutions.

That’s why I was surprised when the discussion turned to cost reduction initiative and there was no mention of using a six sigma approach to achieving cost reduction targets. My experience has taught me that a six sigma cost reduction campaign is the most effective means of achieving serious cost reduction targets. Establish baseline costs by categories, set reduction goals (big y’s), break those goals into subcategories (sub y’s) and then deploy cross functional project teams to determine the most effective process for achieving the goals within each sub category (vital x) project team. Implement a rigorous toll gate review process and a dashboard that track actual spend vs planned reduction and you have a full fledge six sigma campaign.

My point is that this group thought about six sigma methods when they had complex problems to solve but I also find the methodology to be effective when I want a focused effort, driven through cross functional teams, supported by rigorous review.

Benchmarking Burning Man

A key part of six sigma process improvement is using benchmarking to determine performance targets.  The important concept here is to use benchmarking of performance against measurable requirements.  For example, in designing or improving a corporate real estate recycling program, the inevitable question is "What should be our recycling goal?"  Benchmarking to set the target does not have to be limited to comparisons of other CRE programs.

Take Burning Man, for example.  The organizers of this living-art-theme-camp-in-the-desert project have a "leave no trace" policy and extra supplies such as wood are donated to Habitat for Humanity, among other nonprofits. 

If a corporate organization adopted "leave no trace" that would be a high bar indeed.

Missed Opportunity: ING's New Office

ING is moving from their office in an Aetna building to Windsor.  As you can see in the photo, it looks like the cubes will be relatively nice.  Other decisions?  Put the IT department on the first floor instead of in the basement, put the cafeteria "in prime space", co-locate an executive near the customer-focused call center.

I was a little disappointed that an article about a large corporate move (over 2000 people) didn't mention any virtual space -- unassigned cubes for employees that come and go in the office.  Sounds like hard wall offices will be assigned based on seniority (even though the more senior you are, the more you are typically travelling...are you telling me there were no opportunities to share space?) 

I also would expect to see a large move like this as an opportunity to revisit the company's co-location practices.  Do all these corporate functions need to be in the same building?  Couldn't they distribute their footprint in order to keep their portfolio more flexible and to build a foundation for a more "network approach" to worksites with commute flexibility for workers?

Maybe next time.