Challenges and opportunities in aligning real estate and the workplace with business strategy: A survey of leading CEOs

Abstract

The following paper contains the results of a global benchmark survey conducted among more than 200 CEOs from some of the world’s ‘Most Admired’: leading Fortune 500 and Global 500 companies. The survey was designed to identify, from the perspective of the CEO, practices that are essential for effective execution of corporate strategy. In all, 34 practices were studied to determine which are most important to strategy execution. Relocation of a corporate headquarters, or other major facility, and redesign of the workplace were two of the practices considered in the research. By including relocation and redesign within the larger context of strategy execution ‐ one that considers a broad spectrum of operational, market and organisational dynamics ‐ the relationships between real estate, workplace and other essential practices could be uncovered. The results show that real estate and workplace design do synchronise with, and contribute to, the success of changes required in other areas that are critical to execution, making it important for companies to examine closely the impact of real estate and the workplace on company strategy. The results also confirm CEO awareness of the strategic value of real estate and workplace design, since all who reported relocating or redesigning the workplace did so in order to execute strategy. More significantly, however, the findings reveal that a high percentage of CEOs who reported carrying out a move or a redesign did not perceive that these changes effectively contributed to strategy execution. While the explanation for this finding is beyond the scope of this study, it does suggest one of two things: either real estate and workplace professionals need to master a better understanding of how to align real estate strategy with business strategy in order to add value; or they need to be able to measure better the value and communicate it to the CEO.