WORKPLACE NOW E-ZINE

Top predictions for 2013

As 2012 comes to a close, WorkPlace Now asked industry thought leaders to predict the key trends that will influence the corporate real estate (CRE) industry in 2013, which looks set to be a year of change. 

 

Subject matter experts and past WorkPlace Now contributors, Richard Jolly, Angela Cain, Rakesh Kishan, and Steve Tighe, shared their perspectives.

 

Richard Jolly

Professor Richard Jolly, London School of Business

Macro level trends from 2012 will continue. The ‘new normal’ of living with volatility, uncertainty, complexity and ambiguity will feel more permanent. Ongoing trends will accelerate, such as reregulation, the continued shift of economic power to the East and financial uncertainty.

 

At the psychological level, we will continue to struggle with the loss of stability, both in relation to sustainable economic growth and the impact on our careers, finances and career planning. Our world is getting more stressful, brought about by this instability combined with high demands and a feeling of a lack of control. Additionally, creating the time to think is becoming more challenging in our “always-on” lives.

 

The business world is getting increasingly asymmetrical – average organizations and managers are going to find life increasingly challenging, but the resilient ones will increasingly thrive. Great organizations will manage the balance between over-confidence (hubris, arrogance and complacency) and under-confidence (victim mentality, bystander effect and passivity) by staying open to challenge and feedback. Less successful organizations know what they should be doing – they just aren’t doing it.

 

Angela Cain

Angela Cain, CEO CoreNet Global

CoreNet Global foresees a watershed opportunity for the CRE industry to change this coming year.

 

In 2013, we have the ability to transform key practices and the resulting measurements that have tended to shape the perception of CRE as a cost-center or cost-cutting mechanism. This revolves around the growing number of companies that are adopting ‘people-centric’ approaches driven by employee engagement, workplace wellbeing and employee wellness.

We can evolve away from simplistic metrics like cost-per-square-foot or revenue-per-person, to more meaningful metrics like value-created-per-square-foot, or even-quality-of-life-per-square-foot.

 

A major step in that direction happened in 2012 with the finding that work-life balance is no longer just a CRE strategy, but rather a business model.

 

In 2012, we also realized, through our Corporate Real Estate 2020 research findings, that work is viewed as a social experience and is not simply about bricks and mortar. Part of our 2020 focus revealed the formation of the “Super Nucleus” inside forward-facing companies that have integrated CRE with HR, IT and other key support functions at a strategic level.

 

The metrics to track our performance need to become less anecdotal and more evidence-based, so that internal partnerships with areas like HR and IT, along with academia, help inform the new business model, and to ultimately manage to the quality of work environments and work experiences, while addressing people, technology and place.

 

Rakesh Kishan

Rakesh Kishan, Managing Director, UMS Advisory

In 2013, the business environment will continue to be uncertain in many countries with significant political, security and economic risks. Companies will use outsourcing as a key management strategy for navigating these risks through more flexible and scalable operating models.

 

CRE/ facilities management (FM) organizations will continue their transformation towards centralized operating models. These organizations, while centralized, will customize their services to the specific needs of each region. While location-free workplaces will become far more commonplace in the Western world, similar workplace environments will be tempered by the lack of infrastructure in many emerging countries. Centralized organizations will drive greater standardization and process excellence without loss of customer experience and business alignment. Center of excellence models will continue to flourish within both suppliers and corporate clients, and in 2013, we will begin to see the perfection of these models.

 

Client-supplier relationships, under substantial cost pressure over the past few years, will begin to pivot towards seeking greater innovation and added value from suppliers. These innovation-driven relationships will require new governance configurations and will emerge in second- and third-generation relationships, as corporations transcend scope, price, and cultural acceptance.

 

Emerging markets will offer significant optimism and growth. Clients will look to suppliers that can span the highly varied landscape of Asia. As new markets open to competition we will see additional investment. The concentration of CRE/FM demand in a few major regional hubs will spawn the need for additional hubs in lower cost countries. CRE/FM models, tested successfully in the West, will extend their reach into emerging markets. The growing middle class and workforce in Asia will continue to drive the need for value-added CRE/FM products and services, and companies will place a premium on talent in emerging markets.

 

We expect 2013 to be a year of “out with the old and in with the new” as legacy operating models will be replaced by new, more flexible and streamlined approaches.

 

Steve Tighe

Steve Tighe, Strategic Planner and Futurist

While traditional bricks and mortar stores feel under siege from a consumer shift to shopping online, a far more important trend is the decline of material want. This decline should not be mistaken for a short-term fall in consumer confidence. It’s not about interest rates, or the capacity to purchase, but rather a fundamental decline in the value that people place on purchasing and owning material possessions. This shifting paradigm presents a great challenge to Western economies and the existing strategic models of many organizations going forward.

 

Due to the decline of want, traditional retail outlets will find themselves competing for a declining consumer base, forcing many to close, as the industry contracts significantly. As a result, expect a significant amount of CRE to be converted to alternative uses in 2013 and beyond – e.g. housing, parklands, community libraries, etc.

 

Perhaps the greatest unmet need in many developed countries today is the need for more personal time. In essence, millions of people spend too much time at work, and too much time getting to work. If this unresolved tension persists, then it is plausible that major cities will begin to decline in population as technology enables remote working and better lifestyle choices.

 

Instead, cities need to reinvent themselves. In 2013 and beyond we are likely to see the growth of dispersed business districts, as local governments place an emphasis on increasing self-contained employment within their regions (the proportion of locals who work locally) and the community benefits that spring from this.

 

As a result, we will begin to see the emergence of suburban villages, as cities reinvent themselves and transfer from tarmac and concrete jungles to villages where people spend more time in their community and less time commuting to and from it.

 

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