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CORPORATE SOLUTIONS

AT
JONES LANG LASALLE (2001)

Case Study
Presented by
Group 5
Nitin Tiwary, Roll No. 22
Vaishali Ganesh Roll, No. 23
Billy Sam Varghese, Roll No. 24

COMPANY PROFILE
Jones Lang LaSalle Incorporated or JLL is an Investment management & professional
services company specializing in real estate, headquartered inChicago, Illinois.

Jones Lang Wootton(British) & LaSalle Partners,(American) Company formed Jones Lang
LaSalle in 1999, which was the largest international merger in the real estate industry at
the time.

They are worlds leading commercial real estate management company and the second
largest real estate investment management firm.

This case describesabout the Strategic and Organizational challengesthat Jones Lang
LaSalle (JLL) faced at the turn of the millennium.

INDUSTRY BACKGROUND
In Mid-1990s real estate sector had undergone a significant transformation due to Rise in
competition, forcing service providers to compete increasingly on price.
The industry growth in 2001 was 12.5% of total U.S GDP (JLL one of the largest player)
Globalization Trends in Commercial Real Estate

A need to integrated global service providers arise due to global expansion of any
companies
Thus they began to outsource their entire real estate departments to 3 rd party providers so
that to :
Ensure consistent service
Decrease internal management costs and inefficiencies
Leverage the expertise of professional real estate service firms

THE PROBLEM FACED BY JLL

Until 2001, JLL sold real estate services to its corporate clients, who maintained
relationships with a variety of vendors

In 2000,their clientsstarted globalizing their activitiesandseeking to outsource their


real estate needs. They were looking for integrated solutions delivered through a single
point of contact.

They were cutting their providers to a few strategic vendors.

JLL had not kept pace with the rapidly changing marketplace, a fact reflected in its
recent lacklustre financials.

JLL'sorganizational structure, operated as autonomous service lines, and were not


well suited to supporting the development of integrated services.

THE PROBLEM FACED BY JLL


IMMEDIATE SITUATION: BANK OF AMERICA

JLL largest account BofA (Bank of America(BofA), like other MNCs was seeking to
outsource its internal real estate management functions and ready to pay for the
convenience of an integrated service provider who would oversee all its real estate
needs.

BoFA had announced plans to consolidate its business with the two or three vendors who
would be willing to "partner with it to provide forward-looking, integrated services.

JLL was trying to respond; providing integrated services to BofA would allow the firm to
test a new model of customer-focused operations.

If JLL is successful with the BofA account, it would be well positioned to take
advantage of the emerging market.

OTSD ISSUES IN THE CASE


Change

JLL needed to change to deal with competition and global trends especially to be able
to offer more client-focused services like integrated global services due to rapidly
changing marketplace.

Strategy: Positioning JLL for the Global Marketplace

The strategic merger failed to reverse the firm struggling financials

JLL needed to become more than a seller of services to its global clients--it needed to
become its clients partner and advocate

JLL needed to provide not only diagnose and selling, but also offer solutions to their
Clients real estate needs--Give Win-Win solutions, Save clients money and Increase its
own profitability.

OTSD ISSUES IN THE CASE

Organisational Structure

The case examines the many tradeoffs JLL must make to balance the benefits of the former
organization with the new structure to achieve the firm's strategic goal of becoming more customer
focused.

JLL'sorganizational structure needed to restructured to support the development of integrated


services which presently configured largely autonomous service lines.

The communication within JLLs business units was poor, the service offerings just remained as a
concept

Culture

JLL needed to change culture of the Business Units of independence and autonomy to a culture of
Collaboration across the units.

Competition for large accounts, rather than teamwork, drove productivity resulted in the
development of managers with high degrees of expertise but also resulted in a culture of "protection
of turf."

The Hierarchy among the business units, created a culture of separation rather than collaboration,
only added to the complexity of the current undertaking

JLLS HANDLING THE PROBLEM


CORPORATE SOLUTIONS GROUP
Peter Barge was put in charge of a new team, called Corporate Solutions, whosemission was to
draw connections between the service lines in order to foster integration.These are tasks
before him:

How should he structure Corporate Solutions to make sure it succeeds in its mission?
How should he ties the group's to the service lines to ensure their collaboration?
The retention of JLL's most profitable clients like BoFA was at stake. How to retain them?

His Challenges

Would the matrix structure work?

How should decision-making authority be shared?

What compensation structure would best motivate the AM & business unit managers to work
collaboratively?

How would the new function affect career trajectories of promising managers at the firm?

How would the changes affect company morale?

JLLS HANDLING OF THE PROBLEM


RE ORGANIZING AROUND THE CUSTOMER
Restructuring to stimulate
collaboration among the business
units
Getting the three business units to
work together as a single group.

Differentiate by the service,


solution and service

To reaffirm their client focus and


solution orientation.

JLLS HANDLING THE PROBLEM


STRUCTURE AFTER RESTRUCTURING

JLL
Americas

Hotels

Global
Consulting
Service

Support
HR
Marketing
Global Client Services

Corporate
Solutions Group
Peter Barge

Account
Management

Tenant
Rep Group

Project Dev.
Management
Services

A matrix structure in
which the product-specific
business
units
would
continue
to
operate
independently while the
corporate
account
managers would operate
across the various units as
dictated by client needs.

Investor
Services Group

Corporate
Property
Services

Land

Retail

Leasing &
management

Capital
Markets

JLLS HANDLING OF THE PROBLEM


CORPORATE ACCOUNT MANAGEMENT FUNCTION

Creating Corporate Account Manager


To Work as coordinator of the business units activities
To act as advisors, assist with long-term planning and be focused on
achieving clients objectives and providing strategic insight in
addition to fulfilling transaction
To create teams composed of members of multiple business units to
work on offerings for particular accounts
Structuring the Account Management Function
Account manager able to prioritized the trade-offs, including
promoting services less profitable to one business unit in the name of
increasing highly profitable services of other units

JLLS HANDLING OF THE PROBLEM


Looking to the Future

Account Manager formalized, must train down into the organization so the lower-level managers
could cross-train in each of the business units

Building working knowledge across business units


Review each units product offerings
Presented case studies to improve understanding of the units work
Highlighted statistical details to aid the other units in understanding of the fundamental drivers
of that unit & Make standard service & price for all region

Raise the awareness of each groups diverse product and service offerings, business units more
comfortable cross-selling the service to other units

Building a Culture of Collaboration.

Convinced the business units to actually collaborate with one another.

The integration of all of the IT systems of the 3 organizations to create a unified communication
and information platform.

Convincing management to change the "old way of doing business" to become customer-centric
would be a hard sell.

EPILOGUE OF JLL

JLL manage to retain the account of BofA

In 2007 the company again integrated their IT system to align it to their businesses.

Presently Peter Barge is not only heading the American offices of JLL but is now the
global Chairperson of the JLL group.

Their strongest strategy for expansion has been M&A and as on now they have a
successful M&A with more than 35 companies.

In June 2007 JLL has merged with Trammell Crow Meghraj (TCM) group in India and
claims 35% market share in India.

DESIRED SITUATION HANDLING


Organizational effectiveness approach a mix of competitive Organizational
excellence & Versatile Organizational excellence approach
Porters model of strategy focus , cost & differentiations.
Structure flexibility identifying the structure Flat or tall as per business need.
i.e. Horizontal & vertical movement of employees.
Better Collaboration of structures and units and have various cross function units.
Efficient methods for Flows of information with regards to products and service
offerings.
Aware of the changing marketing scenario .Better market research - Proactive
Better adaptable culture
Better Customer focus -Delight the customer -Upper hand with regards to
competitors & pricing

SWOT ANALYSIS BASED ON STRATEGY &


ENVIRONMENT

STRENGTH(Build)

Opportunities(Exploit)

-Brand positioning

- New distribution channels

-Strong Management Team

Technology advances

Strategy growth plan

Strong backlog & Order growth

-Transparency in trade

Diversification

Integrated Businesses

Global expansion

Adequate knowledge of the law of the land

acquisitions

WEAKNESSES(Resolve)

- Effective communications

- Leadership issues

-System integration & interoperability


challenges

- Linking the overall businesses

Coping up with market research database

THREATS(Avoid)

- New competitors

-Increasing competition in price

- Changing Political & environment factors

-Changing market scenario

Downturn in economy

Legal issues

SWOT ANALYSIS BASED ON STRUCTURE & CULTURE

STRENGTH(Build)

-Strong infrastructure

- Due to globalization, opportunity to adapt


the best culture.

Automation of different businesses together


in terms of technology.

-Employee Loyalty
-Transparency in businesses at every level

OPPORTUNITIES(Exploit)

- Integrated Businesses
-Adaptable culture

WEAKNESSES(Resolve)

- Levels of Hierarchy

- Culture not in align to the business

THREATS(Avoid)

- Unable to adapt to the changing market

Integration with existing systems

Division of roles and power

hank you !