We’re halfway through National Preparedness Month, but we’re going all the way to ensure we’re ready for that black swan event. What I’m talking about does not involve Nathalie Portman, and it’s not a subject your company should dance around. Preparation for an unpredictable event calls for more tabletop exercises than barre exercises.

Now is the perfect time for commercial real estate owners to assess their respective levels of readiness. Did you go “halfway” on your emergency pre-plans? Have you forwarded all the necessary information to first responders in advance of an emergency? Do you practice regular tabletop exercises? In sum, are you prepared for when the “what if” scenario becomes “what now?”

Ready or not, here comes the Building Engines Emergency Preparedness Kit to help you assess and raise your level of readiness. Here’s a glance at what’s inside:

Checklist: Implementing a Successful Emergency Response Plan

Case Study: Cook County Chicago Fire

Webinar: Emergency Preparedness- Managing risk and the changing role of the property manager

And More!

Download the Kit here!

Why Risk Management Needs to be at the Top of your To-Do List

There is an unavoidable situation for commercial real estate owners and property management firms. The simple world of ensuring day to day operation in properties is gone forever. Companies need to look long and hard at the emerging arena of risk management. Otherwise, their ass(et) can be in serious jeopardy.

We recently interviewed commercial real estate risk management experts Joe Donovan, SVP of Beacon Capital Partners, and Kathleen M. Nickerson, SVP of Robert M. Curry and Associates for best practices in emergency preparedness and reducing your building or portfolio’s exposure to risk and loss.  The conclusion: property owners and managers must move beyond daily operations to proactive, long-term risk management.

This article looks into the current state of risk management and the key questions associated with it:

Why risk management?

How do we get started in risk management?

How has the role of the property manager changed?

What are best practices in risk management?

How can technology assist in risk management?

How can we know it’s working?

Read the Article Now!

This September marks the eigth annual National Preparedness Month- a perfect time for commercial real estate owners to assess their respective levels of readiness.

While it may seem difficult to plan for every unexpected event that can occur in your building, there are simple, cost effective steps you can take to minimize your exposure. Just five minutes can help you prepare for years to come!

Watch a short video from our emergency preparedness experts:

Emergency Preparedness “Best Practices”

The only good Earthquake is the brownie kind served at Dairy Queen. The only preparation it takes to handle one of those is a spoon and an appetite. Real earthquakes, however, like the 5.8 magnitude one that shook Virginia on Tuesday, require advance planning.

Every property owner and manager should identify potential hazards ahead of time and ensure that there’s an emergency preparedness plan in place. In accordance with Local Law 26, building teams are required to prepare Emergency Action Plans (EAPs) detailing procedures for staff and tenants in various emergency situations.

Before you get rattled, you need to know your building’s potential points of risk, what to provide emergency responders in advance, and how to communicate with tenants. Here is a checklist of general items to include in your emergency pre-plan:

Does the plan consider all natural or man-made disasters that could disrupt your workplace? Does it consider internal sources?

Does the plan consider the impact of these external and internal emergencies on the workplace’s operations and is the response tailored to the workplace?

Does the plan contain a list of key personnel, as well as contact information for local emergency responders, agencies, and contractors?

Does the plan contain a list of names, titles, departments, and telephone numbers for individuals to contact or an explanation of duties and responsibilities under the plan?

Does the plan address how rescue operations will be performed?

Does the plan address how medical assistance will be provided?

Does the plan identify how and where personal information on employees can be obtained in an emergency?

For better or worse, you cannot control the seismic activity of earth’s crust. But you can control how prepared your team is to deal with it and the level of its impact on your operations. In any emergency, preparation and communication are key. During Tuesday’s earthquake, Building Engines clients were using our system to file incident reports, sort through COIs, and notify tenants through BEI.

View this one-minute video on how Building Engines customers rely on Building Engines to manage tenant communications while on the go.

Watch Now!

Date: Thursday, June 9^th at 12:00pm EST

Presenter: Kathleen M. Nickerson, SVP of Robert M. Currey & Associates

Prepared Buildings

Reducing Your Exposure to Risk & Loss

What is your organization’s exposure to risk and loss?  How prepared is your building or property team for an unplanned event, accident, or liability incident?

• Simple ways to decrease your exposure to loss & risk
• Tips for managing Certificates of Insurance and Contracts more effectively
• Key best practices for managing risk
• How to decipher what’s working and what’s not before an event occurs!

Register Now!

Risk is defined as the probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through pre-mediated action.  In short, bad things can happen due to the decisions that you make or don’t make.

We all deal with risk in our daily lives as well as the consequences of our actions in response to those perceived risks.  Managing the decisions we make with respect to risk is a tricky thing to do and takes years or practice to perfect – and in many cases, it cannot be perfected – but with patience and thoughtful decision making using the best information available, it can be minimized.

Aside from waiting for “life’s lessons” to come your way, is there any way to practice?  Is there any way to learn those lessons in a consequence free environment so that when the real deal comes your way you are prepared?  I say yes – the answer is an appropriately named board game – RISK.

Risk is a strategic board game in which players attempt to capture territories from other players by rolling dice.  The game is won when one player has managed to occupy ever territory on the board with his or her armies.  While this may seem like a game of chance (because it involves rolling dice), it most certainly is not.  Yes, a battle or two may be lost by chance, but the winner will almost certainly always be the player that has played with the best strategy – calculating the risks associated with attacking or fortifying their stronghold – and then proceeding accordingly.  The game requires long term strategy, vision, planning, and calculated execution.  These are the key components to reducing risk and achieving success in life and business.

So, before you rush out and make hasty decisions, please, think about the risks involved, strategize and execute accordingly.  And if you don’t believe me, take a look at what might happen:

http://www.google.com/url?url=http://www.youtube.com/watch%3Fv%3DfzLtF_PxbYw&rct=j&sa=X&ei=3xORTKf9L8H98AbLpt3mAw&ved=0CBMQuAIwAA&q=Kramer+Risk&usg=AFQjCNEzmJAu_iOPPfQNU33XS6j7u6kpjA&cad=rja

As National Preparedness month continues across the country, property owners and managers follow guidance and suggested best practices delivered thru top 10 lists from partners like Building Engines (10 Best Practice Points for Property Team Preparedness) or BOMA (Preparedness Top Ten List for National Preparedness Month.) The question is, who is preparing adequately for the Black Swan Event?

In his 2009 book, The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb, the author makes the case that business owners and risk managers place too much weight on the odds that past events will repeat.  Instead, the really important events are rare and unpredictable. He calls them Black Swans, which is a reference to a 17th century philosophical thought experiment. Nassim argues that most of the really big events in our world are rare and unpredictable, and therefore, trying to extract generalized stories to explain them may be emotionally satisfying, but it’s practically useless.

In an October 2009 Harvard Business Review article entitled The Six Mistakes Executives Make in Risk Management,  Nassim and his co-authors summarize the primary points of his book and their research in the following manner-

Six critical mistakes that many executives and risk management professionals make in risk management:

1.       We think we can manage risk by predicting extreme events

2.       We are convinced that studying the past will help us manage risk

3.       We don’t listen to advice about what we shouldn’t do

4.       We assume that risk can be measured by standard deviation

5.       We don’t appreciate that what is mathematically equivalent isn’t psychologically so

6.       We are taught that efficiency and maximizing shareholder value don’t tolerate redundancy

They continue by presenting 6 answers or solutions to those mistakes:

1.       Instead of calculating the odds of whether things will happen, rather think about what you will do if they do happen (This is your response planning!). People who can handle one type of crisis, always have the potential to handle many types of crises.

2.       Hindsight can never be converted into foresight. Lessons should be learned from the past, yes, but the past should not be used to predict the future.

3.       A dollar not lost is a dollar earned, and preventing losses is perhaps a better strategy than gaining profits, and risk management activities are in fact profit-generating activities. There is no separation.

4.       Statistics is a complicated science and the often cited standard deviation is not average variation, but the square root of average squared variations. Although in a perfect world of randomness, most events fall within the -1 and +1 standard deviation, in real life (“Black Swan”), movements can easily exceed 10, 20 or 30 standard deviations. (…This is what your real exposure can be.)

5.       In absolute quantified numbers, two events may be equal, but subjectively, in a group of people, the same event may have very different value to each of them and may be understood entirely differently.  After all, number are just numbers, feelings, values, and risk acceptance are not so uniform. (…This is the real risk to your business.)

6.       Optimization of processes makes them vulnerable to changes, but robust processes can survive change.

There are no shortage of Black Swan events we can point from the past decade that have impacted the real estate ownership and management community.  Make sure that you give some thought to how you can apply some of these principles to your risk management plan during National Preparedness month.

What embodies risk within your real estate portfolio?  Is it the damage that could be caused by water, mold, wind, rain, or aging?   Is it a slip, a trip, or a fall?   Is it a prolonged elevator entrapment; a disgruntled tenant employee who acts out; a media blitz on your building, or a public demonstration?  Is it the failure to have valid insurance protection in place through your tenants and vendors?   Risk transforms to damage and costly repairs or claims.  Litigation is costly, both from an insurance and time perspective.

Do not wait to react.  Be proactive and follow these ten simple best practice points for risk reduction and preparedness.

1.      Assemble a Response Team:  Make sure that you have ownership and management representation on that team.  It should include some risk and liability expertise and remember to think outside of the building – e.g. the Government is a critical part of your team, as are fire, police and the local Department of Health.

2.      Outline Key Risks in Advance:   Remember that threat levels are unique to each building.  Think through what might happen to your building before it happens.  Get experts involved to help you see what you cannot.  Look at historic data to help your recognize likely events and insure your greatest areas of risk.

3.      Create A Response Plan: Write it down and publish it to those that should know. Match your risk to your response team.  Train backup employees to perform emergency tasks.  Create a business continuity plan – Make sure you tenants have a continuity plan.  Determine offsite crisis meeting places.  Test your plan to reveal and accommodate changes

4.      Run simulations:  Make sure that all employees-as well as executives-are involved in the exercises.   Practice crisis communication (employees, customers and the outside world).  Invest in an alternate means of communication.  Form partnerships with local emergency response groups.  Evaluate your performance – Continuity exercises should reveal weaknesses.

5.      Focus on Responsiveness:  Most claims result from failed responsiveness.  Put the right assets in place so that you can respond quickly.   Redundancy is key to reliability and response.  Immediate response enables real time advice, real time reaction and injury or damage mitigation.

6.      Capture all Relevant Data:  Data and information is your best defense.  Only with data can you make informed decisions.  Train you teams to identify incidents and record them.  Keep Data up-to-date and available.  Make it accessible from anywhere so that you can retrieve it quickly when needed.

7.      Leverage Technology:  Responsiveness relies on information and speed.   Redundant systems prevent data gathering and communications failure.  Establish preset response protocols for every situation.  Build your Response Team and your Response Plan into the technology.  Keep contact information up to date.  Go mobile while leveraging multiple communications points.

8.      Train Your Team and Analyze Your Response: Three rules of Team Preparedness = Practice, Practice, Practice.  Do a post mortem analysis of every incident.  Look for trends and opportunities.  Adjust your Response Team and Plan to fit the building risk profile.

9.      Involve Local Teams and Authorities: Police, Fire, DHS and DHLS are key partners in any response.  Relationships are critical to responsiveness.  Imagine calling your local Fire Department and the Chief knows who you are. Know your neighbors so that they know you.  Have regular meetings with Response Teams in adjacent buildings.

10.  Keep it current: Take your partners, colleagues and neighbors to lunch once a year. Review your plan annually. Practice regularly.  Never stop testing or improving your plans, practices and procedures and the technologies that support them.

There is a scene in the movie Field of Dreams when the voice that originally convinces Ray Kinsella (Kevin Costner) to turn his cornfield into a baseball field now instructs him to “Go the Distance.”   Ray was feeling somewhat pleased with himself at this point in the movie having built the field and locating Terrance Mann (James Earl Jones,) but there was still work to be done in order to realize the ultimate vision, and he needed just a little more prodding to get there.

I thought that this was the same situation as I read through both the BOMA 360 certification program life safety components and the recommendations in the National Preparedness Month notice on how property professionals can maximize preparedness.

Both the programs and recommendations are excellent and go a long way toward helping guide property professionals with regard to what they need to have in place in terms of emergency and risk management guidelines, processes, manuals, training, etc. But, owners and manager need to understand that creating and documenting alone does not mean the objectives of risk management and preparedness have been fully met.

In order to “Go the Distance,” professional owners and managers must also:

• Effectively share and make the information available throughout their organization-  This means that it cannot exist in manuals on someone’s shelf, or in documents sitting buried on a network drive

• Make the information actionable

• Educate people (employees, tenants, vendors/service providers) on how to implement and ultimately execute on all of the procedures they have put into place.  You don’t want to be practicing this stuff during an actual event or emergency

This is extensive process that requires commitment, and often a partner, to help guide you and support your teams.  There is little question that effective and well thought-out risk management and preparedness plans are essential components of today’s property management reality, just make sure you Go the Distance so that your efforts deliver the Field of Dreams you’re hoping for.

Related resources you might be interested in:

On-Demand Webinar- Managing Risk & Life Safety With Effective Pre-Plans

I do not mean winning a new customer, which is normally the primary focus of my job.   I’m referring to a recent project where we helped an existing client improve building security and a tenant service related issue, and solidified (secured) our relationship with that client in the process.   This is equally important to the health of any business…keep the clients you have happy.

The brief background on this project involves a client of ours in New York  (a very large, prestigious property) who uses the majority of our operations and maintenance platform, but was not using our visitor manager module.  They weren’t using it because they had previously installed a very expensive custom integration years before we got there that allowed their tenants to pre-authorize a visitor to the building as well as deactivate visitor passes, enroll new employees for access card activation and deactivate terminated employee’s access cards from the building’s security system. While the process worked, it required multiple applications for both tenants and building staff to use.

Additionally, the integrated configuration they had in place required the visitor system provider to make programming adjustments every time their security system provider made a change or upgrade to their system. This proved to be expensive, unmanageable and resulted in multiple system failures. – With a pending new required security system server upgrade coming, building management knew they needed to make a change and asked Building Engines to help.  Thanks to our terrific engineering resources here and a great partnership effort (which I’ll get into) we delivered a solution to the client that eliminated the need for co-managed upgrades and provided their tenants with a single application to use and a far better user experience.

…We also saved the client a significant amount of money over time by eliminating the annual cost associated with the other application.

The security system provider at this property is Lenel, a UTC Company and provider of the technology-leading “OnGuard” system. Pulling it altogether at the property was Henry Brothers, New York’s leading systems integrator.  In addition to being a complex project, what was interesting about this effort is that it required detailed cooperation from these two service providers.   Lenel & Henry Brothers bent over backwards to help us and the client achieve their objective.  The effort went so well that we joined Lenel’s partner program and they recently participated in our Webinar program and delivered an outstanding presentation free of charge to our audience entitled “Integrated Solutions for Enhancing Building Security.”  We find this kind of cooperation to be rare, particularly when the other service providers are larger and the effort doesn’t necessarily represent immediate revenue for them.  We look forward to the opportunity to work with both of them again.

While it’s great to win new business and that emphasis won’t change, helping existing clients and solidifying those relationships with this kind of effort is every bit as important to our long term health.  It’s also rewarding to work with partners who share the same values and commitment to customer care, service and quality work that you do.