However, as a result of our pre-proposal site visits, it was apparent to us that there were other, even broader business issues that should be incorporated into the study. To the credit of CE management, they approved a broadening of the scope to include recruiting and retention considerations, investigating the feasibility of a public private partnership to revitalize downtown Jackson, material distribution issues and evaluation of accounting practices for facilities.

Securing the Assignment
The Landauer Associates team that I headed from Chicago and Dallas was selected over a long list of competitors, including the Big Five CPA firms, because our proposal showed insights that “put us head and shoulders above the competition and demonstrated an uncanny insight into Consumers Energy.” We accomplished that competitive distinction by presuming, not asking, to visit CE sites in Michigan and interview local executives before responding to their RFP.

Initial Findings
In December 1998, my team delivered the initial findings to a dozen senior CE executives, including the two COO’s of the Gas and Electric divisions. The key recommendations of that report were:

1. It was advisable for CE to initiate a dialog with the local government entities to explore the possibilities of forming a partnership to help downtown Jackson revitalize itself around the 900 administrative and executive jobs that CE could bring. CE was considering moving out 600 jobs that were already based in inefficient buildings in downtown Jackson. Incumbent in this initiative was the study team’s expectation that significant government incentives could be supplied to CE to offset the higher costs of developing downtown for these 1,500 employees.

2. Develop a new corporate headquarters in a downtown setting, with architecture and space planning/design that announced CE was a “today” company, so that they could attract and retain the best and the brightest recruits. CE’s average employee was in their early 50’s.

3. Consolidate field operations to a more efficient configuration based on drive time analysis to their customers. The study teams financial model for this topic showed the potential for over $10 million in potential savings on an adjusted current annual expenditure of $41.6 million occupancy cost.

4. Discontinue pouring capital monies into functionally obsolete facilities.

5. Revamping of accounting practices to incorporate more appropriate cost items.

Phase II
The executives decided in January 1999 to move forward to test the practicality of our recommendations. In Phase II, we were again engaged as advisors to CE on structuring an Implementation Plan. That scope included having my new employer, CarrAmerica Realty Corporation; conduct detailed building engineering studies in March and April. That engineering analysis confirmed that the old buildings downtown could not be feasibly updated. We also had leadership roles at various CE employee meetings intended to marshal employee support for the expected changes. This component was dubbed by CE, “Resource Alignment in a Competitive Environment.”

Successful Outcomes
By late 1999 and early 2000, the City of Jackson, Jackson County and 29 local townships finally rallied to this once in a lifetime opportunity to revitalize a fundamentally dead downtown. The government team was named “The Jackson 21,” and in March of 2000 they delivered a $11.9mm incentive package. Included in the package was the elegant former Post Office. It is an architecturally distinctive limestone structure in the heart of downtown that was built in 1933.

After CE engaged their design/build team in 2000, a beautiful new $78mm 13 story building was delivered in July 2003.

Assignment Conducted
1998 - 2000

Closing Comments
One of the CE Group Presidents, after listening to our arguments during the delivery of the original study findings said that our work demonstrated one of the finest presentations, in both form and substance, that he had ever seen. The head CE’s large internal Real Estate and Facilities Department said that our work pushed their thinking well outside their previous box about how real estate decisions should be made.

My team did the asset study we were engaged to do, but our biggest contribution was to help them see how real estate is a marvelous lever to accomplish a variety of broad corporate objectives.

Return to Case Studies





Print Friendly Email This Page