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CoreNet Global Sydney 2006
Summit full education program
General Session 1
Global, Regional, and Local Business Outlook
Saul Eslake, Chief Economist for ANZ Bank (one of the largest
banking institutions in Australia and New Zealand) opened the
Summit with a summary of the current macro economic conditions both
globally and in Australia.
His observations began with a discussion of the impact of the rise
in oil prices on the global economy, which has to date been less of
a factor than one would anticipate. He stated that we are
currently in the third “oil shock” in modern times, but that oil
prices are still comparatively lower than during the second oil
shock of the early 1970’s. In addition, the global economy is
still experiencing growth, which is counter to the response to the
first two oil shocks. Mr. Eslake’s explanation is that
this phenomenon is due in major part to the fact that the
majority of the current global economic growth is being driven by
developing economies (China, India, Eastern Europe), which had not
been the case during the first two oil shocks. He also said that by
the end of 2006, for the first time in history, developing
economies will have a greater share of the world gross domestic
product (GDP) than the mature economies of the U.S. and western
Europe.
Another reason for this phenomenon is that this particular oil
shock is different from the first two shocks, in that this shock is
a result of demand outstripping supply, whilst the first two shocks
happened as a result of political upheaval in the oil-producing
regions of the Middle East. The current increase in demand is
being primarily driven by China. China accounts for 8% of the
world’s consumption of oil (as compared to the U.S.’s consumption
of 25%), but whilst the U.S.’s demand for oil has remained
relatively steady, China accounts for 35% of the increase in world
demand for oil. Another mitigating factor accounting for the
minimal impact of rising oil prices on world GDP is that in the
main, these increases are not being fully passed on to
consumers. Consumer and business confidence remains high, and
consequently, higher oil prices are not (thus far) leading to
higher inflation.
Mr. Eslake went on to share some of his projections for the
economic outlook in various parts of the world. He believes
that the U.S. economy is near its peak, and should start to decline
over the next 18 months. Japan’s economic recovery is gaining
traction, with more companies hiring and paying higher wages which
will lead to increased consumer spending. China’s economy is
growing too rapidly in Mr. Eslake’s opinion, and he sees that there
is the possibility of a “bubble” in the economy brought on by
excessive corporate and consumer spending. In general, he
sees other Asian economies achieving reasonably steady growth
through 2007.
In Australia, Mr. Eslake points out that trade with China has
produced an increase in the costs of goods exported to China,
whilst there is a reduction in price of goods imported from
China. The rise in export prices are directly related to
China’s consumption of Australian commodities, particularly in the
mining sector. These price increases are driving Australia’s
economic growth for the time being. He counsels, however,
that the Australian economy’s near full employment of labor and
capital is putting upward pressure on certain market sectors
(including housing and office supply), and underlying inflation is
rising. He also notes that the resources boom is benefiting
Western Australia, Queensland and the Northern Territories more
than other States. The Australian economy currently ranks
8th in the world in terms of GDP.
Workshop I
Occupant-Centred Workplace Design
Case Study 1 – Westpac Place
Due to the inefficiency of space in the existing eleven properties
in Sydney CBD, Lyn Lennard, GM of Westpac decided to consolidate
the properties and create a new great place to work. She would like
to change the concept of corporate real estate from a business
expense to a tool for enhancing business profitability. They held
visioning workshops with senior leaders to find out what that space
should look and feel like. They identified their stakeholders to be
the employees, shareholders, customers and community. The
aspiration was to be creative and the new space should express
identity (who we are), agility (functional and flexible), ingenuity
(to be inspire by the place), linkages (work as one Westpac team)
and purpose. Employees spent a day with the designers to determine
their needs and express their opinions. The final concept is an
open plan and have only six enclosed offices. They used technology
to enhance productivity.
Peter McCamley, Managing Director of Geyer, used the concept of a
city to design the new building. The result is a multi-tenant
building with personality. Education of the employees is important
to ensure they understand the concept and how to use the new space
to enhance their work. The slogan is My Space @ Our
Place.
Case Study 2 – SAP, Shanghai
Jeremiah Lee, Ideation Manager of Haworth explained how they design
the SAP new office in Shanghai to accommodate the rapid growth of
the company. SAP started off with only 30 employees in Shanghai and
quickly grew to 400 people in 3 years. 95% of the employees are
local Chinese talents. They expect to grow to 1500 people in
2009.
SAP believes that the most valuable asset of a software company is
their motivated employee and that creativity and innovation are
crucial for the constant improvement of business software. Open
management style and a feedback culture are important to
them.
With this in mind Ideation team used several survey techniques and
workplace analytical tools to establish the work environment of the
new SAP building . They engaged the employees in the process to a
point that the employees actually are engaged to evaluate and vote
on the workstation design configurations. The result is a more
collaborative and open concept. The building is very open with lots
of windows. There are lots of open spaces to encourage
collaboration. Pre and post-occupancy surveys indicated the final
product shows marked improvement in areas such as personal control,
workplace affordances, privacy and ambient environment. They
achieved zero turn-over in moving from the city to this new
suburban high-tech park.
General Session III
Beyond CoRE 2010: Emerging Workplace Strategies around the
World
A highly successful first day ended with a keynote presentation
from Linda DeMars, Vice President Programme Development entitled
Beyond CoRE 2010: Emerging Workplace Strategies around the
World. Before sharing new innovations and insights from the
Beyond CoRE 2010 report, for the benefit of attendees of the Summit
who had not been present at the Melbourne 2005 Summit, Linda
provided the background on the original CoRE 2010: Enabling Work in
the Networked World. Launched in 2003, the 2010 research project
engaged more than 200 multi national corporations predominantly in
North America and Europe who studied 8 inter dependant topics. Each
topic with its own research team made up of MNC members, later
participated in a consolidation and integration exercise. The
principle findings of the report were:
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Key business drivers is enabling new business models
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Most dominant is the networked enterprise
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Networked enterprises demand integrated infrastructure
solutions
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Networked enterprises connect people to the enterprise through
technology
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Integrates disparate organizations to work as one
entity
DeMars quoted United Groups recent acquisition of Equis as an
example.
Other 2010 principle findings showed that CRE adds value to the
networked enterprise in two important ways: workplace strategy and
resource optimization, and how CRE leaders will require a different
skill set: visionary, strategic and collaborative; and general
managers who will need to act as advisors to the
business.
Focusing on workplace strategy, and reminding delegates of Len
Pillon from Herman Miller’s presentation at the Melbourne Summit in
2005 “Employee Experience”, where they successfully transformed
existing workplaces with the integration of HR, CRE and IT, Linda
shared their winning formula – Business Process Knowledge +
Workplace Network Design + Integrated Resources and Infrastructure
= Worker productivity.
DeMars then moved on to the benefits of resource optimization and
then focused on the other findings of the initial report and the
requirements for CRE executives to have a new skill set.
Structuring it into three tiers: skills for credibility (CRE
skills), skills for management (business skills) and at the top,
skills for strategy (enterprise skills).
The presentation also addressed the critical success factors for
the networked world – Knowledge, flexibility, transparency, focus,
design and risk.
The second part of Linda’s discussion looked at Workplace Strategy
Innovation and listed several examples that have validated the
findings. The first case study presented was HP – Catching
up with Mobility. DeMars shared the fact that most people in
organizations are surprised by the high level of mobility they are
creating. Where is everyone? The conclusion is that mobility
strategies are following the traditional s curve and it is less
about RE objectives and more about retaining the right talent. HP
looked at how do you communicate and coordinate? and uncovered two
strong needs 1) maximize face to face time and use this time
productively and 2) transform community spaces (which are
fairly unused) to functional group workspace promoting better
collaboration. HP has acknowledged that they are catching up with
mobility and are rethinking what it takes to provide a successful
work environment.
HP was followed by an Intel case study positioned with a quotation
from Robert Noyce, Co-founder, Intel “Do not be encumbered
by history. Go off and do something wonderful”. Intel’s initiative
eSP – enterprise Strategic Planning had four major elements: CRE
Strategy plan; enterprise face plan; enterprise growth model;
infrastructure response plans. An Intel employee will claim that
the new strategies has changed CRE from supporting to leading the
business and has reduced the portfolio by 89 sites in 3 years with
a resultant growth in business of 18%.
The third case study featured was RBS – Royal Bank of
Scotland, the fifth largest bank in the world. Barry Varcoe,
the original presenter of the case study positioned the initiative
with the statement “Innovation is our currency”. He claimed to use
language that the business would understand and whilst starting out
with simple workplace innovations, the real breakthroughs had been
found in other places.
The session concluded with a look at the new research directions.
ARC – the Applied Research Centre which released its first
reports a few months back: Valuing Flexibility in Leasing and
Decision support for CRM in CRE and another current project in
progress on the rising cost of energy consumption in buildings. ARC
will also be shortly engaging chapter leaders globally to enroll
subject matter experts for the survey center. All current research
directions can be viewed at the Knowledge Center on line at
www.corenetglobal.org
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the Reports from Tuesday 1 August | 