SAN JOSE, CA—As corporate America deals with changing dynamics in the economy and at the workplace, many challenges exist, including site selection, lease negotiation, space planning, and construction. But today’s greatest underlying challenge may be the need for the workplace to promote the recruitment of top talent in an increasingly competitive market.

The financial implications of the above are clear, and an age-old truism still applies:  Following human resources, real estate represents a company’s largest investment.  Looking at ways to cut costs, companies often turn to real estate service providers to help them negotiate favorable lease terms.  But beyond rent considerations, companies often overlook the fact that they can realize even more significant savings—sometimes more than $1 million—if they think strategically and adopt a “project-centric” rather than a “transaction-centric” approach.

If you’re a corporate executive in charge of facility management, chances are you’re looking to maximize the use of your office, warehouse, or R&D space.  Perhaps you want to reduce your footprint, anticipating more virtual workers and more desk-sharing, which will significantly lower your occupancy costs.  Perhaps you want to relocate to more creative space that promotes your brand and provides highly sought-after amenities such as a café, a variety of work setting within the office, an executive briefing center, and even a fitness center.  Perhaps you want to reconfigure your existing space to include more open areas that promote collaboration and may improve morale and production.

Tied to the above considerations, you will likely want to address how best to accommodate the rising number of Gen Z and Millennial employees while being sensitive to Baby Boomers.  And you will certainly want to identify customized, cost-effective solutions, recognizing that one size doesn’t fit all.

In planning a move or a design/build project, a typical question is:  Should I hire a project manager (PM)?  Often the initial response is, “Not sure I need to spend the money.” But with so much at stake—including opportunities to save considerably—this is worth another look.  In fact, if you want the project to be delivered efficiently, on time, on budget, with minimal risk and maximum value, your final decision will likely be “yes.”

Charting Your Direction

Let’s assume that your company needs help with one or more of the following:  strategic planning, budget/schedule development, building evaluation, benchmarking studies, programming/growth forecasts, space planning, construction implementation, move-in coordination, overall project supervision, and quality control.  How can you ensure that you select the right project manager?

First, consider your broad options.  Should you keep the task in-house or outsource?  If choosing the latter route, should you go with an architectural or construction firm, a full-service real estate firm, or an independent project management firm?

Here are some thoughts to guide you:  

In-house project management.  This scenario may be worth exploring if you have a professional on staff who has the requisite expertise as well as the time to dedicate to this huge undertaking.  Unless the scope of your project is small, this most likely isn’t the case.  Typically, for more substantial projects, it is more efficient to outsource the work to a more experienced specialist, allowing in-house managers to focus on their core competencies and work with their advisors.

Architects and construction managers.  Architects and construction managers are vital to workplace solutions; however, even the most successful firms of this kind generally don’t possess the business acumen, strategic know-how, and experience to manage the entire project.  For this reason, to ensure the proper expertise and financial oversight, they often partner with PM firms, some of whom have their own architects and construction managers. In this model, they are subsets of the PM firm and can still work their magic under the direction of the principal project manager, who is best suited to avoid conflicts and cost overruns.

Commercial real estate firms.  Some of the larger commercial real estate firms have a project management arm, but PM is likely not their primary focus.  Further, since these PM’s are first accountable to the brokers, they may lack a third-party perspective, and their objectivity may be compromised.  Still, an integrated approach like this might make sense if the real estate firm partners with an independent PM firm that has the required experience and depth.

Independent project management firms.  As workplace solutions become more demanding and complicated, more companies are adopting this approach as the most efficient and cost-effective way to go.  Many PM firms may specialize in this discipline, but make sure they have the expertise and experience required for the job.  Overall, a good project manager will set the tone from the onset.  This includes mapping out the project’s objectives and the expectations of all players involved.  A good project manager will inspire confidence and make everyone’s job a little easier, while giving team members the space to excel in their roles.

In selecting a PM who promises to be the right fit, be sure to check with references and determine if the firm’s bandwidth includes a far-reaching network that allows them to assist with projects beyond the local area.

A New Breed—the Contemporary Project Manager

Over the last 10 years, we have witnessed a dramatic transformation in work and the workplace.  As this transformation continues, cubes with high walls and private offices with minimal glass are often being replaced with an open environment and a variety of work settings that support collaboration. Thanks to the untethering of the desktop, workers can more easily move around the office and effectively do their jobs.

This shift has caused project managers, facility managers, brokers, and architects to think differently about their roles.

For many years, project managers have directed vendors and integrated services with commercial real estate brokers.  They have served as mechanics, responsible for staffing, budgeting, scheduling, and implementation, including IT, AV, security, furniture, and relocation management. While these are mission-critical activities, PMs seldom were involved in big picture thinking. Today, the PM needs to think like a CFO, brand/marketing manager, workplace strategist, architect, facilities manager, risk manager, HR recruiter,   operations manager, and workplace visionary. In this context, alignment of the workplace with the corporate vision and strategic goals, while meeting the task needs of each department, become more important than ever!

Accordingly, we need to view the role of the PM through a wider lens.  Enter the Contemporary Project Manager (CPM), who ideally has the following attributes:

  • The expertise of a mechanic but also the broader skills of a strategic thinker.
  • A client partner and advocate, providing non-biased counsel from start to finish.
  • An experienced professional who brings business acumen and understands lessons of sociology and psychology and is sensitive to employee demographics.
  • A good listener and communicator.
  • One who combines strategic planning and tactical know-how.
  • One who understands the design and construction process, infrastructure systems, operational programs and jurisdictional requirements.
  • One who can align real estate plans with corporate objectives.
  • One who is part architect, part space planner, part interior designer, furniture dealer and part visionary.
  • One who understands the businesses that comprise a project team and has the background and experience to negotiate the best deal for the client.
  • A coach/facilitator who collaborates with staff and vendors but is also nimble enough to overcome barriers and strong enough to push for solutions that meet the client’s best interests.

As part of today’s holistic approach to project management, CPMs should be involved from the start in tenant improvement discussions, lease negotiations, and work letters, through occupancy.

In the final analysis, the right project manager can mitigate risks, reduce your time involvement, and improve your ROI.

So consider a start-to-finish approach to your real estate needs, beginning with site selection and continuing with lease negotiation (including an appropriate tenant improvement allowance), and project/process management that will optimize recruitment and retention.  The right project managers will navigate around the thousands of potential pitfalls, deliver an appropriate/effective workplace, and squeeze savings every step of the way.  Today, getting the workplace right isn’t just a priority; it is a necessity.

Robin Weckesser is the president and founder of a3 Workplace Strategies. The views expressed here are the author’s own and not that of ALM Real Estate Media Group.