How many facilities management and corporate real estate editorials and articles have been written over the past five years championing the cause that facilities management and corporate real estate need seats in the C-suite Club? Many, but probably about the same number written in any five-year period since the 1970s, when facilities management and corporate real estate began to emerge as unique business functions. It’s an old lament.
By “C-suite” I draw on the current Wikipedia definition meaning the most important and influential group of individuals at a company or institution who are vested with responsibility for high-stakes, strategic, enterprise decision-making and management, and whose job titles often start with the word “Chief.” C-suite “Chiefs” tend also to make a lot of money.
Check out the makeup of C-suites, and you will find represented there the executives shepherding enterprise interests and commitments involving customers, product, labor, productivity, money, and institutional compliance with the laws that regulate their respective industries. For academic and healthcare institutions, the words used for these enterprise elements may be somewhat different—students, faculty, programs, lives covered, doctors, services—but the basic nature of the elements is the same.
So, why no square feet in the C-suite? “Square feet” is simply not in the lexicon of C-suite language. The language of the C-suite concerns long-range strategic enterprise missions. Square feet are non-core and expendable. (Unless, of course, we are talking about a real estate firm or a location-defined retail company, which for this opinion piece, I am omitting.)
Case in point is the U.S. pharmaceutical industry, which in the past 10 years has shed, and in many cases simply walked away from, millions of square feet of space. Yet it continues to press forward successfully with its corporate mission of products for human health. The outsourcing of manufacturing to contract production firms, with the corresponding shedding of factory space, also gives testimony to the non-core nature of square feet to corporate missions, as does the increasing number of person-hours spent by workers (and students) doing their work (or learning) via tele-links from places other than dedicated office spaces (or classrooms).
So, as long as the criteria for success of the facilities management and corporate real estate functions are measured in terms of square feet (cost per square foot, people per square foot, investment per square foot), those functions will not be found represented in the C-suite of strategic thinkers, planners, and doers.
To be C-suite relevant, the facilities metrics for success need to be something else. “Facility cost” is certainly a relevant numerator, but the relevant denominator is not square feet. Rather, it needs to be an enterprise mission value, such as widgets produced, revenue, students, or patients.
A clear example is that of U.S. auto manufacturers, who started some years back looking at facilities and real estate in terms of facility costs per automobile produced. Nothing about square feet, but rather a strategic assessment of facilities (and facilities options) relative to the mission of making marketable cars and trucks.
The language of C-suites is about enterprise elements involving customers, product, labor, productivity, money, and institutional compliance. It does not include “square feet.”
By Steve Westfall, founder and CEO of Tradeline, Inc.
