"The Washington Post" has details today of how the Bush Administration has created a parallel shadow government operating from two underground locations, with 75 officials working in shifts to make sure the government keeps functioning in case a catastrophe in Washington. Corporate America is also re-examining the wisdom of keeping too many key people at one place at one time. Marketplace's Bob Moon reports.
Moon: "Location, location, location has always been critical to the business world. Now a big part of deciding where to be is enterprise risk management. Read that: redundancy."
Dennis Donovan : "Enterprise risk management is now near the top of the food chain in terms of a driver of location strategy. It is assuming equal position with labor, real estate, market orientation, access -- those kinds of issues."
Moon: "Dennis Donovan heads a global corporate location consultancy in Morristown, New Jersey. He says these days companies have to decide whether it makes sense to concentrate their senior executives, managers and employees in high-rise central-city skyscrapers, or disperse them to multiple locations. Morgan Stanley was the largest tenant at the World Trade Center, and in the aftermath of the attack, it was so worried about having its primary and secondary sales and trading facilities within a block of one another in midtown Manhattan that it sold a just-completed building it was about to move into, and bought a slightly smaller one in the suburbs 27 miles to the north.
Donovan says the motivation behind this kind of spreading out is clear."
Donovan: "You're not going to have all executives at one time on a single executive floor. You know, they'll be dispersed, or they can be rotated, as well -- which is not bad for the executives to better understand a business…get to know the people."
Moon: "But Stan Ross, chairman of the board of the University of Southern California's Lusk Center for Real Estate, says dispersed executives also have to ask if the security strategy makes good business sense."
Ross: "They're separated from other executives, from other divisions, who have common problems which, when you're in the hallway or you're having coffee or you're in a bathroom, you're sharing some of these issues. You kind of miss that."
Moon: "Those kinds of concerns might explain a survey of corporate real-estate planners taken just after the 9/11 attacks. Asked if companies planned to 'increase the decentralization of mission-critical facilities,' two-thirds said: 'No.'
At City University of New York Queens College, professor Josh Freeman has been watching, with interest, what this means to lower Manhattan."
Freeman: "There was a great deal of talk after 9/11 about the need to have duplicate facilities, dispersed facilities, but more recently, we've seen a few companies decide the other way. Most recently, American Express has decided to reunite its entire New York-area work force back in the World Financial Center, right near ground zero, and abandon a plan to have some of their people stay in New Jersey."
Moon: "In that case, money apparently spoke louder than the idea of decentralization. American Express executives told city officials here this week that, after making a round of layoffs late last year, they realized they had enough space and could save more money by consolidating operations back in Manhattan.
In New York, I'm Bob Moon."