Why do I want to cut costs in Corporate Real Estate?

Cutting costs isn't an attractive way to improve quality. Eliminating staff and using lower quality inputs (think crummy buildings and single ply toilet paper) only reduces customer satisfaction. Who wants that for Corporate Real Estate? Most managers want better facilities and a higher level of service, not less. CRE managers are constantly looking for a way to make users (managers, departments and all employees) happier. CRE is usually less sensitive to cost than processes where an external customer pays money. Those processes are, understandably, designed to make money. It is easy to see the profit margin and the need to improve where there is a paying customer. CRE is often viewed as overhead, serving everyone in the organization, with fewer objective metrics of efficiency. Efficacy, is another matter. CRE managers are often given the mandate to provide a comfortable work environment and to do what it takes (within reason) to make users happy. A tool such as Six Sigma, billed as a cost cutting program does not command a warm reception.

Six Sigma isn't about cutting costs. Six Sigma is about reducing defects and variability. It does this by focusing on the customer. The cost cutting misconception is perpetuated when Six Sigma is sold to business managers as a way to cut expenses. In Six Sigma, the needs of the customer are systematically identified and quantified. They are then delivered with as few defects, as consistently as is economically feasible. The result is a better product with better service. Avoiding rework, unnecessary steps in the process and constantly having to deal with special situations is what saves money.

It is only when CRE managers understand that Six Sigma efforts result in improved service at a lower cost that a meaningful conversation can take place..