Location! Location! Location!

It was not hard to find the spanking new offices of Triple D Adjusters Ltd. They occupied the main floor of a new low-rise office building close to one of the city’s main expressway exits. My insurance company used Triple D frequently and my boss, downtown branch manager Fred Wilson, had asked me to attend the official opening of their new premises, along with other people from our head-office staff. I was greeted at the front door by their managing director. “Thanks for coming, Dave. And welcome to our new digs. A little nicer than the old place, don’t you think?”

I had to agree with him. The firm’s previous offices had been on the second floor of a century-old building in the city’s downtown east end, an area that had gone slowly downhill over the years. “This is

definitely an improvement,” I said with a smile. “Bright, modern, and easy to get to – just off the expressway.”

The managing director nodded. “Our people really like it. Our office staff don’t have to fight their way into the city every morning and out again at night. Our staff adjusters can get on their way to calls quickly. We’re a lot closer to the airport too, Dave. With so many of our assignments out of town and out of province, that was a consideration in picking this location.”

At the far end of the firm’s new offices an informal reception area and cocktail bar had been set up. Tables were set out with platters of finger food and a number of invited guests were standing together chatting. I quickly saw a couple of familiar faces: Bob Davies, the co-owner of a successful midtown brokerage which had a large portfolio of business with our company, and Al, a fiftyish broker with a highly successful business in a town of 75,000 two hours’ drive from the city. As our company’s senior marketing representative I knew them both very well. As I joined them, they seemed to be engaged in deep debate. “Hey, you two,” I said, “are you discussing the state of your balance-sheets or the sad result of that hockey game last night?”

Bob Davies smiled at me. “Nothing as crucial as these two topics, Dave. Actually we were discussing the pros and cons of moving offices.” Al put his hand on my shoulders and grinned. “I was telling Bob the only move he should make is out of the big city: get away from all those hard-driving brokers who’re rushing around trying to buy each other, or juicy pieces of property.”

I looked at him and raised my eyebrows. “Well, consolidation is a fact of life these days, Al. But on the other question you raise: doesn’t every business at some stage have to consider whether they’re going to rent or buy office space?”

“True enough,” he replied. “It’s that old fixed versus variable cost factor. Buy a piece of property and you know precisely what your annual occupancy costs are going to be. When you rent, you’re at the mercy of a landlord.” Beside me, Bob Davies grunted his agreement. “Don’t forget another point. As a renter, you should check your lease agreement carefully. Some agreements incorporate clauses that allow your landlord to increase the rental costs to reflect increases which affect him – like higher heating or lighting costs, or a rise in the rate of inflation. All perfectly legal, but it can add to your cost of doing business.”

A tray of hors d’ouevres arrived and we helped ourselves. Al spoke up again, “here’s one fact you have to bear in mind: if you buy a property, you’re immediately involved in another business, investing in the real estate market. If you can manage to buy during a period of low prices, you might make a decent profit on your property. And, of course, if you don’t need all the space in the building you buy, you can become a landlord yourself and rent out space.”

From my visits to his town, I knew the answer to my next question, but I asked it anyway to keep the topic going. “Al, you own your own building, don’t you?” He nodded, and smiled in my direction. “Dave, I’ve only moved my office once, 15 years ago, and it was so I could buy a very nice piece of property on our main street. It was a financial stretch at the time, but I saw it as a long-term investment that would be part of my retirement plan down the road. Fortunately it didn’t matter to my staff that the new office was two blocks from my old place – you can get anywhere in our town in five or ten minutes. The new place gave me great visibility and my customers can drop in when they’re shopping.”

I nodded. “The joys of small town life, eh, Al? But it’s a little different in the big city, eh, Bob?” My broker friend nodded his head. “No doubt about that, Dave. For one thing, you have to put up with big city real estate prices.” He smiled. “I thought about buying our office building some years back, but neither my accountant nor my lawyer liked the deal. And incidentally…” Bob looked over his glasses at us both, “their advice is usually more sensible than your over-optimistic exuberance. It’s very easy to get carried away with the possibilities in owning property. It’s always a good idea to get objective opinions from people whose judgment you trust.” He sighed. “Anyway, soon after that we ran into another soft market, when commissions were slashed back and our profit line dipped pretty sharply. That ended any thoughts I had of buying.”

A group of business friends stopped by to say hello at that moment, and after they left I asked Bob another question. “When you merged with your partner some years ago, I guess you both had to face the question of one combined business but two offices?” He nodded. “Oh yes, but that question was resolved pretty early on in our discussions, Dave. When my partner and I decided to join forces, he was located right downtown and I was midtown. But my building was a bit more modern, the rent was a little cheaper, and I had some parking on-site, so it was really a no-brainer in deciding to join forces at my place.”

At that moment a booming laugh erupted at my right elbow and I turned to see the cheerful face of Joanne, co-partner in a successful

all-woman brokerage in the city’s suburbs. “Geez, did I hear someone here say ‘no-brainer’?” she said,

giving me a playful dig in the ribs. “I guess you must be talking about some dumb company guy, eh?”

“Now don’t you start on the downtrodden masses,” I said, shaking my head. “We have enough problems these days. Actually, the subject under discussion is moving offices: why you should do it, when to do it, and how to do it.” Al interrupted, “and also, how not to do it, because even smart people screw the concept up sometimes.”

Beside me, Bob Davies held up one hand. “True enough. I know of one fellow – I won’t mention his name – who announced a move to new offices without ever sharing this important news with his staff until a month before the big event. All hell broke loose. Although it was a nice location, there was very limited parking at the new place, it wasn’t near transportation or shopping, and the only restaurant was a very pricey place a block away. On top of that,” he shook his head slowly, “he’d mapped out where everyone was going to sit, who was going to have a corner office, who would get the window space, and so on – without giving his staff any chance to provide their input.”

Joanne snorted. “That’s not only insensitive, it’s dumb! He’s either got a major ego problem or he just does not care about his staff.” I nodded. “Surely, if you’ve done a good job, you should have smart people working for you. So why not get their ideas for the new office layout, where the filing cabinets and the mailing machine and the photocopiers go, so you get a good work flow.”

“Exactly, Dave.” It was Bob Davies speaking. “Take office location for starters in a city environment. The majority of staff in a brokerage are CSRs and they’re often secondary wage earners who put a real value on lengthy or expansive journeys to get to work. You can’t ignore these people; they’re the backbone of your business and you forget that fact at your peril.”

“Absolutely!” Joanne said forcefully. “Before Shirley and I moved to our new combined office, we had meetings w ith everyone on both our staffs. We asked each one of them to list the things they liked

most about the old office, and why. And we asked everyone to list what they liked least about it.

We collected all the sheets and went through them carefully. It was amazing how closely the lists matched. Their likes and dislikes were very consistent. For my money, this sort of exercise is not just good public relations, it’s empowerment for your people and in my experience, they take it very seriously.”

There was a second or two of silence, then Al spoke up. “Apart from staff, isn’t location for our offices, or for company offices, sort of irrelevant these days? I remember, back in the 1980s, when companies started to change their billing practices and customers had to pay direct to company billing centers hundreds of miles away. I worried about that when it first began to happen, but people quickly got used to it. Isn’t it the same with our offices. So long as the service and the price are right, personal lines’ customers aren’t usually too concerned over where you happen to be located.”

There was a hearty chuckle from Bob Davies. “Let me tell you something else,” he said. “That business rule also goes for major commercial clients. Give them fair prices and consistent, professional service and they don’t really care where you operate from. My single largest account, a metal-forming manufacturer, has been with me for over 16 years and nobody from that firm has ever visited our office – or has ever suggested that they might ever want to.” I noticed Joanne and Al nodding their heads. “Same here!” they said together. I grinned at the group. “Probably just as well too. I’ve seen all your offices on a bad day and they’re not exactly a joy to behold.”

Joanne put down her glass and her face turned serious. “Since we’re talking about office moves, let me tell you what happened to us before Shirley and I moved to our new building. We looked very hard at all our hard copy paper files because we

really wanted to dump as much unnecessary stuff as possible. Since we’ve been fully computerized for a long time, I was keen to heave the lot out.” She grimaced and shook her head. “Fortunately, Shirley was a whole lot smarter than me. She absolutely insisted that we keep our paper files and all the written documentation attached to them. And it was just as well, because we ran into a major claim problem that involved our lead insurer. Thank goodness those handwritten notes and transcripts of conversations from several years ago were still sitting there in our old files.” She gave a throaty laugh. “They literally saved my ass!”

Bob Davies looped one arm over her shoulder. “And a very nice one it is, if I may say so,” he said with a chuckle. “And on that happy note,” I said, “I think we’ve done another office opening. We should be on the move ourselves.”