Do or Do Not, There is no Try
These immortal words from Yoda in the Empire Strikes Back may be the catchphrase for corporate real estate in 2006. This applies to both the client and the service provider side of the business. For clients, there is growing pressure to create value and lead change neither of which can be done effectively from a reactive posture. Moreover, CRE is evolving from a single touchpoint business to an integrated model where various corporate functions (HR, IT, operations, etc.), management and service providers/vendors must be harnessed and enabled. I believe we will see this evolution accelerate in 2006.

For service providers, the pressure is on in 2006 to be more consultative in the approach to outsourced delivery of corporate real estate services. More and more clients are looking to their service providers to do more than just transactions. They are looking to service providers to bring organizational redesign strategies, benchmarking, financial consulting (SOX compliance, alternative financing structures), and functional, proven technology tools for portfolio management. In all of this, the facilities, transaction and even lease administration roles are becoming commoditized. The emphasis is on driving strategy through leadership--not necessarily execution--because quality of execution is becoming increasingly hard to differentiate. For many service providers, 2006 may be a watershed year.

If Yoda isn't your idea of a business leader, then our recently departed friend Peter Drucker had it right when he said management is doing things right; leadership is doing the right things. The year 2006 will be about leadership.

Stick Around, It'll Change
It's been said about the weather, your company's management and the direction the corporate real estate industry is heading. I've had my nose in John Kotter's book, "The Heart of Change" for the better part of this year along with Jim Collins' treatise "Good to Great." Both writers spend pages talking about perseverance. Kotter says don't let up and Collins says to never lose faith. The secret for staying ahead of change and the profile of those who will be successful is the same: the winners will anticipate and understand what is happening before it happens. In recent presentations, I've used the analogy of standing on the deck of a boat and looking ahead to the destination while staying on course through the roughest of waters.

The unfortunate side of change is when leadership fails to anticipate the changes or picks the wrong course of action. Because the role of change agent sometimes requires betting the company, many would-be change agents may find themselves job searching in 2006. It takes a specific skill set to be a change agent and, frankly, this has nothing to do with the individual's internal desire or ambition for change. It has more to do with a skill set that overcomes external resistance factors, establishes buy-in, stays current with mega-trends, understands the power of individuals, and cultivates the image of corporate real estate as a business unit partner. This is extreme makeover for the corporate real estate department: the change from a tactical doer to a customer relationship manager. Some won't make it.

Breathe, You'll Need the Endurance
Finally, if there's one thing I still need to work on in 2006, it's taking the time to re-charge. This year saw my travel increase from less than 10% to a fairly constant 40% toward the end of the year. Sure, I may be known as an adrenaline junkie, but even this pace was hard to keep up. I have a friend in San Francisco who is a real estate broker as well as a runner. On a good day, with the wind at my back and down one of San Francisco's steep hills, I might be able to whip him in a 100-yard dash but he could probably lap me twice in a 5K. I think 2006 is going to be more than a 100-yard dash or even a 5K for the typical CRE professional or service provider. The question is who is going to lap you? If you're a CRE, it might be that service provider. If you're a service provider, it might be your competition.

Vik Bangia ([email protected]) is a managing director in CB Richard Ellis' global corporate services organization. Views expressed here are the author's solely.