REV: JULY 1, 2010
Corporate Solutions at Jones Lang LaSalle (2001)
On a snowy, January morning in 2001, Peter Barge, the CEO of the recently formed Corporate Solutions Group (CSG) at Jones Lang LaSalle (JLL) Americas, was preparing for an upcoming meeting with Bank of America (BofA). Barge was cognizant of the meeting’s importance—BofA was one of JLL’s largest accounts and represented an ongoing growth opportunity for the real estate firm – that is, unless JLL lost the account. BofA, like many other multinational firms, was seeking to outsource its internal real estate management functions and pay for the convenience of an integrated service provider who would oversee all its real estate needs. Unfortunately, while JLL had always prided itself on being client-focused, it had not kept pace with the rapidly changing marketplace, a fact reflected in its recent lackluster financials. JLL was trying to respond; providing integrated services to BofA would allow the firm to test a new model of customer-focused operations. If the firm was successful with the BofA account, it would be well positioned to take advantage of the emerging market.
But for any of this to happen, Barge needed to convince BofA that JLL was serious about providing integrated account management services. The bank was growing increasingly frustrated with the lack of coordination among its different real estate providers and had announced plans to consolidate its business with the two or three who would be willing to “partner with it to provide forward-looking, integrated services. ”Barge wanted JLL to be one of those partners and felt that JLL’s recent restructuring efforts—the company was placing its three independent, product-based business units under a single organizational entity (CSG)—would be an attribute in this endeavor. As part of this plan the three units would remain autonomous, but would report to a single person, Barge. At the same time, dedicated account managers would be assigned to large clients and would work on their behalf across JLL’s various product and service units to provide them with an integrated offering. Still, the restructuring was a work-in-progress, and Barge knew that in order to win the account, he would have to reassure the bank that JLL would be able to pull off this integration effort. Barge was confident that the account management solution -- offering a single, senior point of contact to BofA who would first help the bank define its real estate goals and priorities and would then work internally to accomplish those objectives – was a winning formula. Barge’s plan to win the ongoing BofA business would depend on his attracting a strong candidate for new account management position, and this posed several challenges. For one, Barge would have to determine the ideal structure (e.g. revenue allocation, reporting relationships, compensation plan, etc.) for the new function. Specifically, should it be set up as a profit or cost center? In a company where bonuses were a huge part of compensation, this was a key concern. The chosen structure had ________________________________________________________________________________________________________________ Professor Ranjay Gulati prepared the original version of this case, “Corporate Solutions at Jones Lang LaSalle,” HBS No. 409-045, which is being replaced by this version prepared by Professor Ranjay Gulati and Research Associate Lucia Marshall. The original cases were written and researched by Professor Ranjay Gulati, with assistance from Research Fellows James Oldroyd, Thomas Knapp, Stephanie Pfeffer, and Sarah Huffman. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2009, 2010 President and Fellows of Harvard College. To order copies or request permission to reproduce...