As P&G’s real estate services provider since 2003, JLL has been privileged to experience this powerful approach first-hand. Here is how it works:
- Rule 1: Focus on outcomes, not transactions. Our compensation is linked to our success in achieving specific outcomes established in collaboration with P&G – not on property commissions. This structure ensures that both parties share a vested interest in bringing new ideas to the work and for achieving our shared goals.
- Rule 2: Focus on the what, not the how. Rather than defining service minutia in the contract, P&G delegated these details to us. For example, at the outset, approximately 550 P&G employees were transferred to our company. Most had never worked for any company other than P&G, but we were trusted to affect the change in mindset and motivate the new employees.
- Rule 3: Establish clear and measurable desired outcomes. We worked with P&G to define big-picture metrics rather than measuring the program against individual task performance. For example, in 2005 we focused on the successful integration of P&G’s Gillette and Wella acquisitions. An annual review and yearly goal-setting keeps our program aligned with business strategy.
- Rule 4: Create a pricing model with incentives. Multi-tiered incentives align P&G and service provider goals. The contract features cost pass-throughs in which P&G retains responsibility for bills; a management fee-at-risk structure in which a portion of our fees are withheld until results are achieved; pre-structured compensation for above-scope work; and shared savings incentives.
- Rule 5: Provide insight balanced with oversight. We incorporated a proactive governance structure into our contract to ensure an ongoing “win-win” relationship, establishing both companies as co-owners of the corporate real estate function, with shared goals and aligned processes.
Most critically, P&G expected us to take charge of its facilities, not just take care of them, to achieve cost efficiency while exceeding customer satisfaction targets. It’s a profound difference in mindset that continues to inspire our work.
_______________________________________________________________________________Joe Stolarski, International Director at Jones Lang LaSalle