When strategy changes, property needs to follow quickly

by Jonathan King, Director – Property Management
T: +44 (0)20 7544 2129 or E: jking@nbrealestate.co.uk 

Today nothing is predictable; everything changes. Market demand, staff motivation and availability, competitive activity, market expectation and financial management are all affected. Tough trading conditions provide a fitness test for companies. Some companies will fail the test and bite the dust, but survivors can thrive due to their improved market share and reduced competition. The stakes are high.

So what does this fitness test involve? Well for starters companies need to review the performance of their business. Sales, margin, return on capital employed, trends and cash position will all come under the spotlight. There will be some tough decisions about where to invest and where to divest. Making the right decisions for both the short and medium term will be crucial, as the objective is not just survival, but also preparation for the upturn. Successful companies will be those that demonstrate their ability to respond and to adapt to change. 

Adapting and responding requires teamwork across the organisation, and the one thing teamwork requires is direction – clear and practical. It sounds straightforward enough, until you recognise that the focus of the functional units, based around cost saving and operational effectiveness – is anything but responsive and adaptable.

Take a look at the property management team. What do they need to do to help the company respond and adapt to change? Understanding the overall business strategy is the first priority. Then an assessment of the current state would be a good starting point. Information such as the relationship between the business units and the underlying property infrastructure will be pivotal in a decision to divest a specific business unit. If the company decides to get out of a market, how much of the associated costs can be eliminated? How long will it take?

It is also important that property managers have a view of potential future initiatives. For example, it may make sense to hold on to some empty buildings to allow for future growth when the market returns. Sub-let space in your core buildings may force acquisition elsewhere at a later stage. As the business evolves and develops to meet challenges, the property team needs to be in a position to facilitate through informed and aligned support activities.

Testing times can be very revealing, and it can be stimulating to be part of the way forward. It’s a chance for property managers to demonstrate their true value to the business. The best way to act now is to be prepared. When strategy changes, property needs to follow quickly. Being ready with a complete set of the right data is the first step. NB can help you collate and organise your information in a meaningful way to help your business.

Call me, Jonathan King, Director – Property Management, on +44 (0) 20 7544 2129 or email me at jking@nbrealestate.co.uk. I look forward to hearing from you.