Critical Issues: CB Richard Ellis

Dec. 29, 2004
At Issue:› Sarbanes-Oxley Act of 2002› Implementing Organization-Wide Standards› Serving the Customer While Controlling “Scope Creep”It isn’t lonely at the top after all – at least not for CB Richard Ellis (CBRE). With a workforce of 14,000 professionals and revenues in excess of $1.7 billion, this outsource provider has found a sure-fire, bona fide way to achieve success: hire some of the best people in the industry, who make putting the client first a priority. There is no doubt that this strategy has mass appeal.That’s not to say that success has come easy or is without some challenges. When Eric Conrad, managing director, facilities, CBRE, Seattle, was asked which critical issues affected his job of overseeing 3,000 banking facilities, his immediate response was the Sarbanes-Oxley Act of 2002. This public company accounting reform and investor protection act ensures that company CEOs report the value of their real estate assets for compliance – assets that must be maintained in order to continue to hold their assessed value. As Conrad points out, poorly maintained facilities “can reduce the assessed value of a property anywhere from 5 to 20 percent of the potential value.” Upholding its reputation and the expectations of its client-owners, CBRE strives for complete customer satisfaction by implementing standards across the organization. Nearly 5 years ago, the company began developing its Quality Management System (QMS) program specifically for integrated services accounts. The QMS program organizes facility management functions into modules (such as change control management and preventive maintenance) and documents each of them in a standard training manual. “It’s our reference – a set of guidelines that says [to clients], ‘Here’s how we run a top-notch, world-class organization,’ ” explains Conrad.The QMS program not only communicates to customers the depth and breadth of CBRE’s knowledge, it streamlines operations tremendously. Because of these organization-wide standards, individuals that work on any integrated account can speak the same language, reference the same processes, and work together to further the company’s mission of standardization and improvement. “That’s one of our short-term goals next year – to really figure out what needs to be in that library of standards next,” adds C. Mark Howe, national manager, critical environments, CB Richard Ellis, Seattle.Expansion of the company’s standards is ongoing. “When you’re talking about changing environments or technologies, the point is to try and continue to move forward in the right direction,” explains Howe. “Certainly, the client that we work for, as well as the core business at large, is moving forward together – not necessarily on the cutting-edge or bleeding-edge – but certainly on the adaptation and process improvement scale.”Processes are not the only area where consistency has been a priority. Project management teams use formal design procedures that, while they differ from one type of account to the next, are standardized according to the type of facility. And the suppliers of some of the equipment and products with significant first costs and the greatest impact on maintenance, repair, and operation (MRO) budgets are being standardized as well. “We’ve standardized on a lot of the larger equipment and systems. When it gets down to which egress signs and door hardware we use, we haven’t done that yet; but we do have recommendations such as using LED egress signs only, etc.,” says Conrad.While rigorously working to bring more value to each account, the company’s professionals must carefully balance delivering impressionable service while preventing requests from a client-owner from ballooning beyond the bounds of the contractual agreement. “Scope creep,” as Conrad and Howe call it, must be handled delicately. While the requested services may only take a few hours each week to fulfill, they can add up over time. “These can be countered with a tight scope and making sure you amend your contract, but the fact remains [that] we are a service company/industry and we do whatever it takes to make our client-owners happy,” Conrad says.To try and assert some control over the inevitable wave of requests, Project Input Forms were created. These track the additional projects and can be shared with client-owners anytime throughout the contract term, and especially at the close of the contract term to demonstrate the level of service provided by CBRE throughout the contract. “When it comes time to renegotiate a contract, you can say, ‘By the way, here [are] all the things that we’ve done outside the scope of services that we haven’t billed you for, but did as a value-add,’ ” explains Conrad.By vigilantly pursuing compliance with government regulations, implementing standardization across the organization, and responding to requests from client-owners with smart business practices, CBRE turns challenges into opportunities. It’s no wonder that the organization has grown to be the largest full-service real estate company of its kind; the company has visionary leaders at every level who wouldn’t have it any other way.Jana J. Madsen, Managing Editor ([email protected])

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