Six Sigma for Corporate Real Estate

The Role of Bank Branches

I thought this posting was an interesting discussion of the role of bank branches and whether NetBank failed because it was only online.

Is Bottoms Up Goaling a Good Idea?

Now that it's coming to the end of the calendar year, we're working with clients who are setting their goals for next year (although, strange enough in some cases, financial targets are set already).

As a Six Sigma practitioner, I have an appreciation for a good transfer function*.  As such I get anxious when goals are set from too far down in the bottom of the organization.  If management is using facts and data for decision-making, and if they understand the critical few drivers of their own success, then setting annual goals should feel more like a tops down exercise.

The broad brush comes from senior management and the lower-down departments are required to show how they contribute to the primary goals.  The exercise is to solve for the higher level objectives, not just to make a list of all they things we think we want to do next year.

*A "transfer function" is a reference to algebraic logic, e.g., strong CRE performance "is a function of" effective space acquisition, cost management, sustainable business practices, etc.

The Hidden Facilities Factory

At the risk of making a blanket statement that tempts my colleagues to find an exception, I'll go ahead and say that every large manufacturing company we work with is working to optimize real estate and facilities management functions across plant and non-plant lines. 

The basic idea is that there is an unnecessary division of staff reporting between workers and issues of a plant and those of the larger enterprise and that greater productivity would be unlocked if this division were eliminated.

(I doubt that this is an issue only for manufacturing companies, but will postulate that it's the union and non-union model that puts it into sharp relief, as well as the "supremacy" of plant management.)

Six Sigma can help assess whethere there truly is a productivity leakage.  The first step is to assume a process mentality -- what are the (verb-noun) workflows that produce the results we're looking for?  Maintain mechanical systems?  Optimize the real estate portfolio?  These processes are independent of the asset and worker type and, once measured, allow for comparisons of effectiveness and efficiency.

Let's start with that:  Process approach using common metrics to look for opportunities for improvement.

How Big is Wal*Mart?

Pop quiz -- how many square feet of space does Wal*Mart's facilities department manage?

1. 35 million
2. 250 million
3. 490 million
4. 750 million

Go to Buildings Magazine 2007 buildings census for the answer.

First Time Squash

I know this doesn't have anything to do with Six Sigma or Corporate Real Estate but...I played squash for the first time today.  Background:  I recently facilitated a strategic planning session for the US Squash Association and of course it came out that I don't play the game.  Long story short, I tried it today and really enjoyed it.

I suppose I could try to create a business metaphor here and describe the need for strategy, speed, agility, going for the ball, etc.  But I think I'll just admit that I'm going to post a bit more "color" on my blog to see if I can shake things up a bit.

Defects Killed the Ducks

When I lead workshops with clients about designing measurement systems for their business, one of the insights that is usually an "ah ha" moment for business leadership is a discussion about how to measure defects.  Measuring what goes wrong and then reducing frequency or impact of those problems is often an easier metric than throughput. 

This is especially true in an industry like corporate real estate, where we are often noticed only when there are problems -- too hot, too cold, too messy, too crowded, too empty, et cetera.  And it was certainly true for my Oregon Ducks on Saturday during their game against Cal.  It was the defects that did them in -- Dixon's interception, a kick-return collision, a fumble in the end zone.  Throughput was looking ok -- they managed to keep the score up until these late-game defects.

But in the end, frequency and impact of mistakes was what cost the game.