The Leader - January/February 2009 - (Page 36)

W h irLp o o L ’ s L e e uT k e : sTaying ahead o F T he eC onoMi C CurV e The VaLue oF CoreneT gLobaL Lee Utke, MCR, has been a member of CoreNet Global since 1985, and recognizes the value of staying engaged with programs and other members. He currently serves on the global board of directors. “The education side of CoreNet Global is important,” he told LEADER magazine. He supports his CRE staff taking part in MCR classes and has brought Whirlpool people from outside of CRE into CoreNet Global programs. One of them is the head of monetization disposition who previously worked for a REIT, he related. “CoreNet gives them the CRE building blocks to understand the big picture,” Utke believes. “The ability to be a thought leader,” according to Utke, is the biggest part of the CoreNet Global value proposition to industry professionals. He’s even used CoreNet Global to align with his own CRE operation. “The Denver Global Summit jived with our sustainability planning at the time,” he recalled of the Summit’s theme, “Beyond Green Buildings.” coming from the investment side. Still, CRE’s ability to draw investors from pension and private equity funds – as well as other largely institutional channels – has a strong long-term track record within Whirlpool. It’s also a reflection of the business and portfolio models. Taken together, they help define Whirlpool’s proactive corporate culture. Clear Long-Term Value The internal value proposition comes back full circle to the company’s commitment to holding a carefully-planned, long-term view. Its result is that Whirlpool’s “view of the future enables early buy in from the investment and owner sides of the CRE industry.” Given the huge slowdown on the investment markets, Utke is still confident that “there are significant opportunities for similar models down the road.” He summarized it in another way: “The long-term value is with us as the tenant and them (investors) as owners.” The approach is applied strategically across 75 million sq. ft. (7 million sq. m.) of space covering 650 locations and a fairly complex mix of manufacturing, warehouse/distribution, technology and office properties housing 70,000 employees. Facilities are typically leased if they are non-core. Another key to success over time has been to “bundle activities to fund multiple (capital) projects,” Utke advised. The resulting economy of scale has a lasting effect, including in times of economic downturn. Utke’s team oversees all real estate transactions on both the acquisition and disposition sides of the ledger, regardless of size, plus all construction activity globally – a factor influencing healthier levels of portfolio consistency over time. The combined internal and outsourced JLL team is large enough to provide a local presence in each of the company’s four global regions. In fact, the overlap of Whirlpool’s and JLL’s regional structures is a leading reason why it’s been “a long-running partnership,” Utke pointed out. “It’s important that our service provider has a global platform,” he insisted. To that end, JLL continues to play a “strong advisory role” that helps make Whirlpool one of JLL’s largest accounts. To enhance the outsourced relationship, a lot of time is spent helping JLL understand Whirlpool, Utke added. It pays off when business unit and regional executives think that JLL people are part of the internal CRE team. Transparency is a positive outcome, Utke agreed. Rather than draw from multiple service providers, “a single management team focus is critical to the model,” for at least three reasons:  Internal size (lean internal support functions)  Consistency and standards  Driving performance across all regions As part of the mix, JLL also supports some of the metrics and KPI’s that are crucial to guiding performance. Like portfolio and capital procurement, a strong performance management component also provides CRE with its seat at the table. One key aspect is a “broad and encompassing” scorecard that’s reviewed three times annually and connected to Whirlpool’s business plan for CRE to deliver. Enterprise alignment is another feature, because the scorecard and other metrics help frame the company’s Executive Leadership Agenda that “cascades down” from the C-Suite and corporate treasurer to CRE “using the same key drivers,” according to Utke, who joined Whirlpool 17 years ago and has run CRE since mid-2006. CRE goals and objectives are then “layered” into the enterprise agenda, he mentioned. “Each year,” Utke said, “we need to identify where CRE competencies are injected” into the company strategy. Risk is further mitigated by what he termed a “stratified development process” addressing the leasing stream, investment-grade specifications and construction “below market cost with significant flexibility components.” Centralizing Facilities Management Utke spends most of his time with senior management, with the balance being spent largely working with internal teams and the regions. Like the corporate culture itself, there’s a forward-looking view of quality control. In CRE’s case, it comes through a program management perspective that’s divided into a CRM, or front-office function, and back-office support functions like resource allocation, documentation and metrics. This “inside-out” structure also encompasses strategic planning and is included in JLL’s scope of work. It represents another 2 0 0 9 Th e Le ade r 36 january / February

Table of Contents Feed for the Digital Edition of The Leader - January/February 2009

The Leader - January/February 2009 Contents Leadership Message from the CEO Real Estate in the News Mergers and Aquisitions Assessing Green Building Performance Measuring Space You Actually Use Global Trends in Sustainable Real Estate Whirlpool’s Lee Utke Northmarq’s Kevin Farrell Plastics: Hoping for Resiliency in Resins Regional Profile: Heartland Holding Strong Industry Profile: Ascendas Brings New Age Business Space to Asia-Pac Industry Tracker From the Applied Research Center Discovery Forum Findings Capital Corner Career Development Young Leader Economic Development in the News Learning Spotlight Connect With CoreNet Global Index of Advertisers A Look Ahead In our Next Issue Calendar of Seminars

The Leader - January/February 2009

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