Colliers International Case Study Case 51

1
Colliers International Case Study Case 5-1

• Group 4
• July 30, 2002
• MBUS 626
• Information Systems Theory and Practice

2
Introduction of Group 4

• Angela Daniel
• Gina Bowman
• Lin Ye
• Wen-Chi Chao
• Kip Gering

3
Overview

• Colliers International Background
• Industry Information
• Three fundamental problems to address
• Alternative Solutions
• Recommendations
• Colliers International Today

4
History of Colliers International

• Early 1970s 2 real estate firms in Melbourne and
  Adelaide, Australia merged
• International growth came through development of
  a federation of firms under a single partnership

5
Rules of the Game

• Firms become members of Colliers by paying annual
  dues that support worldwide corporate
  headquarters
• Headquarter support services
• Marketing and Communications
• Research and Development
• Information Management
• IGC International Governing Committee

6
Colliers International - 1996

• 4,400 employees
• 34 countries
• Networking established through regionalization

7
Colliers Organizational Structure
International Governing Committee
Support Services (Boston)
Americas
Europe
Asia-Pacific
8
Real Estate Industry - 1995

• Clients wanted more than a one time real estate
  transaction
• Clients demanded advisory services on a broader
  scale across borders
• Colliers Responded
• Established Corporate Service Group
• Provided knowledge on real estate conditions in
  markets around the world

9
Colliers Goal

• Become the leading global provider of
  professional real estate services
• Double their annual world wide revenue to 850M.

10
What problems did you observe?
11
Barriers to Implementing Strategy

• Expansion of Core Competency
• Corporate Culture
• Business Process and Networking
• Organizational Structure

12
Corporate CultureProblems

• How to keep the entrepreneurial spirit alive?
• No one knows what Colliers is
• Regional characteristics
• Cultural diversity and different attitude
• Culture influences the way of practicing business

13
Network and Process Problems

• Fee structure does not support referrals
• Poaching within territories
• Lack of HQ involvement
• Inadequate Corporate Advisory services
• Lack technology in general

14
Colliers Organizational Structure
International Governing Committee John
McLernon Colliers Macaulay Nicolls Chairman Stew
ard Forbes Colliers international President Robe
rt McCuaig Colliers Jardine, Sydney Secretary Ro
ger Cook Colliers Jardine, Hong Kong Jordan
Lee Colliers Kuala Lumpur, Malaysia Charles
Lee Colliers Erdman Lewis, London Jean-Michel
Andrieu Colliers Auguste Thouard, Paris Wally
Pinkard Colliers Pinkard, Baltimore, USA
15
Services of Colliers International HQs Boston
Office
16
Organizational Problems

• Lack of clarification and details on Colliers
  structure being delegated to business units
• Conflict between centralized control and
  decentralized autonomy
• Boston office muddles the issue of control
• Disunity between the US and the other two regions

17
Alternative Solutions

• Bureaucratic Hierarchy
• Benefits
• Organization context for large firms
• Drives Standardization
• Centralized performance/decisions controlled at
  the top
• Detriments
• Colliers was built on entrepreneurial theme
• Spirit must be protected
• Decisions at the top could adversely affect a
  region
• Must account for global diversity

18
Alternative Solutions

• Entrepreneurial
• Benefits
• McLernon would continue to be the glue that holds
  it all together. Ruling from the top
• Entrepreneurial spirit alive among offices
• Detriment
• Does not protect the collective whole Colliers
  strategy
• No standardization
• Corporate control would not improve

19
Group 4 recommended solution

• Create a hybrid matrix organization
• New organizational structure will address
  organizational problems
• Networking/Process and Corporate Culture barriers
  will be addressed through implementation of the
  organizational change

20
Colliers New Organization
21
Roles of new organization

• International Governing Committee
• Led by Chairman John McLernon
• Ultimate Corporate responsibility
• Focus on business units
• President Steward Forbes
• Focus is on the product and services groups
• Membership is expanded to include product and
  services group executives

22
International Governing Committee

• Maintains Corporate Strategy
• Approves Business Unit strategies and goals
• Colliers as a whole is top priority
• Approves Group strategies and goals
• Business Units become the customer for the Groups
• Empowers executives to meet goals
• Business Units revenue
• Groups service to the business units (value
  creation) and operational cost benefits

23
Business Units

• Based on current regions
• Europe
• Maintain current structure
• Remove Boston office duplication
• Americas
• Create 2 Major divisions
• North America
• Latin/South America (emerging markets)
• Asia Pacific
• Maintain current structure

24
Business Unit Benefits

• Maintain a level of autonomy/entrepreneurial
  spirit
• Empowering executives to meet corporate goals

25
Group Implementation

• Boston office is dissolved
• Three new groups
• Marketing and Communications Group
• Information and HR Management Group
• Corporate Advisory Services

26
Marketing and Communication Group

• Branding of Colliers
• Success stories
• Maintaining Market information
• Marketing liaisons will be located at BUs
• International Office Market Report
• Industry Marketing/Manage publications
• Research and Program Development today

27
Information and HR Management Group

• Responsible for IT outsourcing and coordinating
  BPR around IS improvements corporate wide
• Assume responsibility for information management
  to support business units
• HR for salaried professionals
• Corporate Training

28
Corporate Advisory Services

• Provide service expertise to the business units
• Helps standardize service quality
• Ensure Colliers can be seamless across the
  borders with respect to service
• Mission is to help grow Colliers Advisory Service
  expertise

29
Are we addressing known problems?

• Corporate Culture
• Process and Networking
• Organizational

30
Corporate Culture
Problems
Solutions

• Establish the mission statement for the corporate
  strategy and each business unit
• Business units remain regional keep
  entrepreneurial spirit alive
• Redefine job descriptions and responsibilities
• Develop boundaries for each organization and
  business unit
• Marketing Group responsible for consistent
  message
• Exchange programs for key positions to foster
  trust among the new departments
• Training on culture, business practices and
  customs

• How to keep the entrepreneurial spirit alive
• No one knows what Colliers is
• Regional characteristics
• Cultural diversity and different attitude
• Culture influences the way of practicing business

31
Network and Process
Solutions
Problems

• Establish fee for overhead to support Groups
• Transactional fee adjusted
• Change referral process to foster more teamwork.
• Provide incentive for this referral
• Measures in place to monitor transactions outside
  of region
• IGC driving business units and groups
• Corporate Advisory Group formally established
• Responsibility to expand services core competency
• Information/HR Management Group
• IT Advisory Board with corporate representation

• Fee structure does not support referrals
• Poaching within territories
• Lack of HQ involvement
• Inadequate Corporate Advisory services
• Lack technology in general

32
Organizational Structure
Problems
Solutions

• Lack of clarification and details on Colliers
  structure being delegated to business units
• Conflict between centralized control and
  decentralized autonomy
• Boston office muddles the issue of control
• Disunity between the US and the other two regions

• Each business unit will have a liaison office
  supported by the Group offices
• Hybrid Matrix supports centralized direction
  (IGC) while allowing business units to operate
  within certain autonomous boundaries
• Boston office dissolved IGC has representation
  from Group executives.
• IGC will enforce standards set by Groups and IGC
  themselves

33
Colliers International Today

• 6,600 employees located in 234 offices in 51
  countries on 6 continents
• 1994 4,400 employees located in 234 offices in
  51 countries on 6 continents
• 800M in revenue in 2001
• 1994 - 485M
• 442M square feet under management
• 1994 300M
• International Governing Committee which meets
  twice yearly to decide the worldwide strategic
  goals and plans of Colliers International

34
Colliers Growth

• 1995 added offices in South America and Africa
• 1997 expands to the Middle East
• 1998 American office merges to offer better
  service
• 1999 Corporate Services Initiative gets underway

35
Colliers International Today

• Brokerage
• Corporate Services
• Construction Consulting
• Investment Sales
• Real Estate Management Services
• Development

36
Colliers International Today
Corporate Services
Real Estate Services

• Strategic Planning
• Portfolio Administration
• Project Management
• Acquisition
• Disposition
• Site Selection
• Transaction Management
• Facilities Management
• Build-to-suit Development
• Construction Management
• Move Management

• Multi-discipline expertise in office, industrial,
  retail and multi-family property management
• Regional, national and global client
  relationships
• Team approach to executing ownership, and
  investment strategies

37
Questions