The Advisor's Dilemma
Often, the quality of a company's real estate planning is limited more by internal dynamics than external market factors. Corporations are, after all, a collection of people, each with their own interpretations and behaviors. Soon after its first communication, a leader's vision risks getting lost in translation. And not all leaders have a clear vision to begin with. They got where they are by trusting their own instincts, by believing their ideas are better. This can make them less open to being challenged, breathing life into bad ideas.
Real estate planning can feel like a less dramatic version of the movie Speed, in which Keanu Reeves and Sandra Bullock create and execute real-time strategy amid the chaos of keeping a bus above 50 MPH to avoid a bomb that will kill everyone aboard. No one's likely to die from a bad office. But your company might.
As an advisor, I sometimes see flaws in the mission itself, usually the result of leadership failing to consider all factors before setting objectives. For example: leadership wants a near-term sale of the company, valued as a multiple of EBITDA, then executes a lease that hurts EBITDA.
More common than a flawed mission is a lack of capability to execute it, which usually shows up in a very human way. The team tasked with the project is inexperienced and insecure. With the right advisor, inexperience isn't a problem, it's an opportunity. A good advisor-client partnership builds internal teams. Insecurity is the real killer. An insecure team hides its lack of knowledge out of fear of losing its job. That breaks the communication between advisor and client, and the outcome suffers.
The advisor's dilemma is how to address this. Advisors rarely have access to the top, where the flawed mission began, and even less often the credibility to question it there. At the execution level, the dilemma looks different: whether to flag internal team dynamics that threaten the outcome, and if so, to whom.
The advisor's own incentives complicate things further. Paid on completed transactions, it's easy to look the other way. Take the order, do the deal. Yes, the plan is flawed, but you're not paid to fight that fight, you're paid to transact. The strong advisor finds a way anyway: making sure leadership has considered every alternative, helping bridge gaps in capability, and putting the right solution ahead of just getting deals done.