Performance measurement in corporate real estate

Abstract

Purpose Most performance measurement systems and scorecards fall short of communicating strategic value because they do not relate the metrics of real estate to the larger objectives of an organization. This paper aims to show that choosing the right business metrics and monitoring them through effective scorecards identifies and amplifies the competitive value that corporate real estate (CRE) creates for its host company. Design/methodology/approach This paper identifies the common failures in performance measurement systems and presents a six‐step process for effective scorecarding that is formulated solely on strategic business objectives. Findings The paper finds that good performance measurement systems create a direct line of sight between CRE goals and stakeholder interests founded on open, strategic dialogue; refinement to a narrow set of metrics; and commitment to consistent process governance. Practical implications The business transparency of a well‐designed performance measurement system helps to prioritize work and clarifies investment and disinvestment decisions. Originality/value Leading businesses are increasingly refining the quality of their analytics as the source of competitive advantage. CRE executives who adopt the perspective and process described in this paper can elevate real estate as an integral part of the vision and success of their organizations.