VideoWilliam Kelly, chief financial officer of Boston Partners Asset Management LP, may not have a background in climate control, data transfer, information technology, or crisis management, but recently he received a crash course in each when he oversaw the redesign of the investment firm's new office space.
Kelly's Boston-based company was bursting at the seams early last year, having grown from zero dollars under management and 30 employees in April 1995 to $16 billion and 90 employees three years later. To accommodate that growth, Boston Partners needed to remodel and fully equip two trading rooms, a telephony room, and a computer room, in addition to building new office space. And the whole project--35,000 square feet of new space--had to adhere to a tight six-month time frame.
"We didn't have time to have meetings, then have more meetings to update me. I needed to be at the table," says Kelly, who worked closely on the $1.7 million project with architects, engineers, climate-control specialists, and an outside facilities consultant, as well as the heads of his firm's information technology and administration departments. And to keep the project, which ran from March until September 1998, on track, Kelly faced a multitude of decisions, from the mundane--what color carpet to order--to the critical--what type of computer-cooling system to install--without the luxury of time for analysis. "I had to make decisions on a daily basis, any one of which could have added time or cost to the project," says Kelly, who had participated in two earlier redesign efforts. "It was a humbling experience," with lots of potential for catastrophe along the way.
Because Boston Partners is an investment firm, Kelly had to guard against any downtime in information technology. There were also several potential crises to avert, including a snapped sprinkler head that caused water damage right before the project's completion, and a strike by telephone vendors. "We had to leave our old space, but the phones in the new space weren't working," he recalls. The phones did come on line at the last minute, but the near-disaster gave Kelly a fresh perspective on facilities operations. "Let's just say I have a new appreciation for what these projects entail," he declares.
That appreciation is shared by a growing number of finance executives, who are getting their hands dirty in office redesign. Part of the reason for their increased participation is the sheer pervasiveness of corporate expansion programs. Thanks to the booming economy, such efforts have increased significantly over the past three years, says Kristin Hill, a principal with Natick, Massachusetts-based Design Management Corp., a facilities- planning and architectural firm. Hill estimates that "50 to 75 percent of all companies" are either moving, expanding, or renovating their current space.
And with real estate and construction prices skyrocketing, companies are using the finance department as a safeguard on expansion projects. "It only makes sense to have financial controls on these types of projects," says Hill. Having the CFO involved, says Charles Lee, CFO of the Council for Advancement and Support of Education (CASE), "provides the justification and rationale for every expense, and ensures that every decision is rooted in [increased] productivity."
A Different Perspective
Traditionally, corporate redesign and expansion have been the domain of real estate or facilities departments. In the past five years, however, the involvement of finance executives has increased about 25 percent, estimates Hill, who adds that their involvement brings a new perspective to office architecture.
Aside from securing the necessary financing, she says, CFOs ask such questions as: Will building walls build productivity? Will opening space open communications and boost profitability? What colors and style will help attract and retain employees? Does it makes more sense to lease new furniture than to buy it? Should the company sublet extra space? "No one thinks of these things except the CFO," says Kathy Guilfoyle, CFO of Citizens Bank of Massachusetts, a $6 billion bank that recently moved into a new, three-floor location in downtown Boston.
While the breakneck pace of redesign projects makes some finance executives uncomfortable, Lewis Goetz, CEO of the Washington, D.C., firm Greenwell Goetz Architects, believes that they are well suited to the task. CFOs have a unique understanding of how a workplace should mirror what the CEO wants and what employees and clients need, he says. In addition, says Robert Sherwood, managing director of the design firm Pace Corporate Services/CRESA, in St. Louis, "While they tend to be left-brained people, [finance executives] recognize that aesthetics do tie into financial performance."
At Loomis, Sayles & Co. LP, a Boston-based investment firm with about $71 billion in assets under management, for example, chief operating officer and former-CFO Mark Holland says that aesthetics played a major role in the design of all 12 of his company's offices. "We go for high-end everything. Class A office space, high-end furniture. As people tour our offices and trading rooms, we want the high-quality equipment and furniture to represent our company. It's important to our image."
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