Re-Engineering Real Estate

If "total quality management" was the rage among companies during the '80s, its '90s-style offspring appears to be "reengineering."

During the past academic year, Harvard Real Estate (HRE), like numerous companies, decided to reengineer its business. So it went to work interviewing numerous employees and experts, trying to decide how to make operations as basic as purchasing more efficient.

"We're taking a hard look at some of our core work processes to see if we could do business better, faster and cheaper for our customers and ourselves," says HRE president Kristin S. Demong.

But it is the timing of the HRE program, not the process, that makes it unique.

Most American businesses began re-engineering in order to restore profit margins that sagged in the recession.

But re-engineering, termed a "service improvement project" by the real estate company, is the goal at HRE even though business is booming. Sources there estimate that between 1993 and 1995, the company will deliver a 40 percent increase in return to the University.

Keeping Up the Pace

HRE officials say they are re-evaluating now in order to maintain their record of profits.

"The challenge is to do more work with the same amount of people," Demong says. "We figured we need to do business in a different way so as to maintain our pace."

A source at HRE says the re-engineering process has made some middle level officials nervous about their job security. But Demong and others say they have no plans to cut workers and are hoping a more efficient company will lead to new business, new tasks and eventually more jobs.

Demong says re-engineering, which will examine areas such as leasing and procurement of services, has already resulted in minor changes.

For example, she says that purchasing orders were going through too many hands before they actually were filled. Demong wants to reduce the number of people who see such an order to just two.

"We've found we made everything too complicated," Demong says.

And HRE will now allow new tenants to pick up their keys and sign their leases at their buildings, instead of only at the company's main office, says Susan K. Keller, assistant vice president of residential housing.

Re-engineering will also help HRE by educating middle managers and making all employees more aware of efficiency issues, officials say.

"The issue of re-engineering is to make sure the people in place have the skills to manage that budget well without 55 steps in the process," Demong says. "And they should be held accountable for the quality of their work."

Demong says HRE is following the lead of the University-wide administrative data task force, which is reviewing purchasing and human resources within Harvard.

"We really have been tracking what they've been doing," Demong says

Strategic Planning

The re-engineering process at HRE has coincided with the onset of a strategic planning effort by its top management.

HRE officials are billing their planning as analogous to the academic planning process completed by President Neil L. Rudenstine and the various graduate school deans last year.

"This is a microcosm of the academic planning process," says David A. Zewinski, senior vice president for property operations and construction.

The early stages of the strategic planning process have consisted largely of interviews with HRE staff, customers and University officials.

Top executives of the real estate firm met late last month to begin reviewing the results of the interviews.

Zewinski says the first meeting "didn't have broad, conclusive results." But he says the ultimate process will.

"I would like to plan to develop areas in which we are strong, and move away from areas where we are weaker," Zewinski says.

He also says he wants the company to make better use of new computer technology, including the high speed data network Harvard has set up.

"There are major breakthroughs in the way things get done and business processes work," Zewinski says.