Environmentally friendly. Green. Sustainable. These concepts have become ingrained in our everyday vocabulary. Recognizing the impact we have on our environment is easy, now we must all do our part to sustain a better world. Whether you are an individual or a corporation, we all can make a difference.

By measuring the amount of carbon dioxide and greenhouse gases we produce in our everyday activities, we are able to calculate our own carbon footprint. There are many ways in which we can decrease our footprint on the environment, such as utilizing renewable energy sources in place of fossil fuels, taking advantage of public transportation or carpooling, being knowledgeable about the products we are buying or purchasing carbon credits to offset the footprints we have already made.

For corporations, considering carbon neutrality is becoming increasingly important and popular. Many companies are reducing their footprint by understanding the value of their waste, utilizing alternative energy sources, selecting green energy providers or purchasing credits for emissions that cannot be eliminated. What are we doing? Kahn has taken on the challenge of Architecture2030 for a carbon neutral footprint by the year 2030. With a goal to achieve a dramatic reduction in the greenhouse gas emissions causing global warming, we are changing the way we plan, design and construct projects. What does that mean for you? We are passionate about producing healthful, productive and efficient environments for you in which to live, work and play.

Any Facility Manager will tell you that power for their building is very important, and that the quality of that power is critical in many of their buildings. In fact, concern for clean reliable power is at the forefront of worry for FMs.

In late October, President Barack Obama announced the release of $3.4 billion in grants under the American Reinvestment and Recovery Act to spur the growth of the smart grid. The grants, which are matched by another $4.6 billion in private investment, will be enough to fund the deployment of 18 million smart meters, among other projects. That's 10 percent of all the meters in the country. With those meters, the nation will come one step closer to transforming its electricity grid into a smart grid.

The term "smart grid" is a simple phrase used to describe a complex idea. The easiest way for facility executives to think of Smart Grid is to consider it as an upgrade to the nation's electric generation and distribution infrastructure that sends power and data on the grid in two directions instead of just one.

The goal is to improve the metering and control of the power flow.

Smart Grid has several goals, among them better security, better support for renewable energy, and of course, real time communication. One goal that can help facility executives understand Smart Grid is the push to improve the efficiency of the nation's power grid.

As many facility executives know, the electrical grid is actually becoming less reliable even as demands for clean, reliable power increase. Digital equipment is significantly more sensitive to voltage disruptions than the equipment used in commercial and industrial facilities 30 years ago. Reliability problems crop up not only in the form of interruptions but also as poor power quality. Presently, the existing grid is 99.97 percent reliable but interruptions cost the economy $150 billion annually, according to a 2008 estimate from the Galvin Electricity Initiative.

The Northeast blackout of 2003 illustrated just how costly the current approach to power delivery can be. The four-day blackout in August affected more than 50 million people in the Eastern United States and Canada, according to the North American Electric Reliability Corporation, causing $4.5 billion in economic losses.

On a business level, Galvin estimated in 2008 that one hour of downtime can cost a cellular communications company $41,000. A brokerage operation stands to lose $6.5 million per hour.

While facility executives often have backup systems in place in mission critical systems, such systems aren't always failsafe either. As the 2003 blackout illustrated, not all facilities are designed to operate for days off the grid during a severe outage.

Reposted from Chairman’s message, Kahn Update newsletter, Issue 3 2009. To see the complete issue, click here.

This is my final message as the leader of this wonderful organization. It’s been an honor to be associated with this great firm founded by Albert Kahn. The firm’s legacy and more importantly, its people, are what set this special place apart from all others.

Unfortunately, it is the nature of our business to be seriously impacted by business cycles. Like many others, Kahn faces huge challenges in the upcoming year, but at the same time, is poised to capitalize on huge opportunities too.

When I joined Kahn a little over 30 years ago, the firm was coming back from a very serious period. While there have been several strong and weak periods since, the current recession is posing a major test of all design firms’ stamina and resourcefulness. However, I have every confidence that Kahn will emerge from these difficult times even stronger.

Under Chuck Robinson’s leadership, the new executive team is ready to hit the ground running on January 1, 2010. For that very important reason, I have accelerated my timeframe for stepping down. While I will be retiring from the firm’s leadership at the end of 2009, I anticipate working with the firm in a continuing client support capacity.

This is the right decision and move for me, my family, but more importantly for Kahn. However, I am leaving with no regrets, as it’s been a good ride and the firm has been good to me. Plus, this is not goodbye, but rather we’ll see each other soon. Best wishes to each of you this holiday season and beyond. May 2010 be everything that we all hope and need it to be!

A few weeks ago I was asked by someone what it meant when those of us in the facility strategy and planning field state that we align facility assets with business strategy. My answer quickly turned into a question: How do people in the real estate and facility industry perceive this statement? Those of us in the industry throw the term around in articles, blogs and presentations sometimes without providing a clear understanding of what it means. On that thought, the following three points are my views on what it means to align facility assets with business strategy:

1.   Alignment with the Strategic Plan – Understanding and facilitating discussions with corporate level executives on the company’s strategic plan is important in understanding the key strategic issues impacting facilities. Issues such as globalization, growth and consolidation and business models are all strategic issues that have facility impacts. For example, if acquisitions are key to a company’s growth strategy, then understanding the acquisition target profile can shed light on potential headcount and operational impacts on facilities.

2.   Alignment with Financial Strategies & Goals – Since real estate is a significant asset and cost to a company, assets need to be managed to reflect the strategies and goals set by the CFO. Value, cost, ownership and utilization are all important metrics in managing facility assets. For example, if a CFO wants to mitigate the impact of FASB 13 on the company’s balance sheet and income statement, facilities can align with this objective by consolidating and selling facilities that have low utilization.

3.   Alignment with Business Plan – Assessment of the business plan is typically where facility assets are in direct support with the functional needs of a business unit or department. Issues ranging from headcount forecasting to selecting regional locations are examples of how facilities can align with business goals. For example, if a business unit’s plan calls for the co-location of offices in key growth markets with minimal risk to the company, a strategy could plan the facility for an appropriate level of resources under a short term lease with the potential to expand the facility and negotiate longer lease or purchase as market conditions strengthen.

The above points show that facility and business alignment can be rather complex and requires a comprehensive approach. We are interested in your thoughts and approaches to business and facility alignment.

Have you ever read Seth Godin’s book The Dip? As described by Seth, it’s “a little book that teaches you when to quit (and when to stick).” Not long ago we had our Principals and key business development force read this as part of a series of corporate enrichment meetings. At the time it certainly generated a good deal of dialogue – discussions ranging from the tenacity and drive that it takes to remain successful in a fast-paced changing world to “what do you mean ‘quit’?!”

The premise of the book is pretty straightforward. Quit the wrong stuff. Stick with the right stuff. Have the guts to do one or the other. Of course there’s a bit more to it than that, but these are the fundamentals. And according to Godin, the superstars in the world – people, companies, you name it – have learned how to escape dead ends quickly while staying focused and motivated when it really counts.

With the never ending economic doom and gloom of late monopolizing news reports and blog discussions I’d say now’s a time when focus and motivation are essential. Those of us in leadership positions are certainly being challenged these days to make calculated and strategic decisions that will allow us to appropriately steer the direction of our companies. Panic (another topic covered in the book) is not an option.

So while unsettling times still lie ahead, sound planning and wise use of resources can help to smooth the road. And as we embark on setting business strategies for 2010, knowing when to call an end to damaging or unproductive efforts doesn’t hurt either.

Recently I read an MIT Sloan study on sustainability and came across this quote representing a more cynical view on corporate sustainability: “My only objective is [a high] return on equity, and I hope that the CEOs who manage the companies in which I invest my savings reason just as I do.” Though extreme, those of us in the business community know that there is some inherent truth in this statement. I do believe that many companies have embraced the awareness of sustainability, but feel that the awareness has not manifested itself to a comprehensive tangible plan of attack. It’s easily understood why; in this economic environment it’s hard to sell to the CFOs who are looking at the business case when it comes to return on investment. Many companies expect that sustainability endeavor will add to their costs, deliver no immediate financial benefits, and quite possibly erode their competitiveness.

When it comes to sustainable investments in new or existing facilities, the main issue that executives face is the ability to tie the value of these policies and investments back to real financial impacts. It’s been my experience that leadership feels that the effects of such programs are either too indirect to value or too embedded in the business to even value at a macro financial level. With that being said, I pose the question: Does it all stop there? Do we only invest in the initiatives that provide us a quick and best return? What do our facilities say about our strategic value and commitment to the environment? The premise that I place out there is: Have companies missed the greater strategic value created by sustainable facility investments by allowing “return on investment” to be the driving criteria for facility investment?

Companies that are creating real values through increased revenue, decreased cost and reduced risks are adopting strategic frameworks that looks at a comprehensive set of values generated through sustainable investments. The key is to understand how each of these investments is impacting the strategic values of the organization. By understanding this relationship, organizations can identify and develop metrics for measuring the performance of the investment. Not sure if you’re evaluating the value of your sustainability investments in a comprehensive way? How do your responses to the following resonate?

• How are you evaluating the value that is derived from customer awareness?
• Beside the standard return on investment, what financial metrics do you have in place that comprehend a larger impact to the financial picture?
• Bottom line values can be derived from internal sustainable process improvements, but what value do you plan on capturing from the greater supply chain?
• How do your employees values sustainability and how is that value being measured throughout the organization?

Is a greater value being missed? We are interested in your thoughts and approaches to sustainability strategy, initiatives and investments.

In these days of economic uncertainty, declining revenues, and aging facilities it becomes ever more difficult to adequately plan for future operations. Typically, buildings are viewed as assets but can quickly become liabilities if not properly cared for. Capital improvements and maintenance for a building’s infrastructure are necessary to keep a building and a business functioning. Allocation of limited revenue is a difficult, yet necessary, task that is subject to thorough review by the stakeholders of a business or governmental entity. To help accomplish this juggling act, many chose to have facility condition assessments performed for their facilities.

The facility condition assessment process is utilized to assess the major systems of a facility and determine which of those systems are in good or satisfactory condition or those that are in need of repair or replacement. The assessment is in-depth enough to allow for the development of corrective action recommendations and costing, listed in the order of what should be done immediately and what should be contemplated within the next 3-5 years.

The facility condition assessment report is used for capital improvement planning, support of capital improvement budget requests; providing justification for maintenance and repair/replacement fund allocation, and for determining the most beneficial method of achieving energy conservation or LEED-EB certification. A facility condition assessment report is a key element in assisting an appraisal firm in developing an accurate estimate of value for a facility for the owner for tax purposes, or when selling or buying a facility. The report is a “living document” which can be easily added to, subtracted from, or simply updated on a yearly basis or at the very least, every three years.

Having an up-to-date facility condition assessment will aid building owners or operators (in both the private and government markets) in keeping their buildings in the asset column and not in the liability column.