Guiding the Reach of a Giant

Siemens has its hands in a little bit of everything. The German-based electronics and electronic-engineering conglomerate’s 60,000 employees in the United States and its 750 subsidiaries and partners around the world work together to manufacture automation equipment, power-generation equipment, imaging systems, and much more for clients in the industrial, energy, health-care, and transportation sectors. Basically, anyone who leaves home in the morning (and maybe even those who don’t—Siemens makes domestic appliances, too) is likely to feel the company’s impact, either overtly or incidentally.

Over the past five years, Siemens has seen significant North American growth; two years ago, in response to this growth, it launched a reorganization of its corporate real estate division, replacing fully centralized operations in Munich with four regional headquarters around the world. The company knew that leadership in each new location would prove critical to the project’s success, so it turned to a proven manager, Michael Kruklinski, to oversee Siemens Real Estate (SRE) in the Americas.

“Michael brings a unique strategic viewpoint to the operational business of real estate,” Siemens Corporation president and CEO Eric Spiegel says. “His leadership will help strengthen our offerings and services in this market.”

The new role as head of the Americas region represented a chance for Kruklinski to refocus the organization. “It was kind of like a start-up,” he says. “We had to analyze all the data, and [we] found the best way to promote regional entrepreneurship, collaboration, and proximity to our customers.” And, now that the restructuring is complete, Kruklinski and SRE are simply adhering to and executing on Siemens’s overall plan, which is to concentrate on client needs.

Kruklinski brings to his position deep experience in global finance and an intimate knowledge of Siemens’s various divisions. He has held several jobs with the company, including, most recently, chief strategy officer in the United States, and before that, the German native worked as a senior principal at AT Kearney. In his current role, he oversees more than 34 million square feet of real estate spread across more than 600 total office and industrial locations, which together generate around $100 million per year.

“It is a great opportunity to be working with such a diverse group of professionals across the Americas,” Kruklinski says. “The 22 countries composing the Americas region are highly dynamic, with different markets where SRE can support Siemens’s business in leveraging opportunity for growth and consolidating its market presence.”

SRE manages the full life cycle of properties in the Siemens real estate portfolio, including strategic location conceptualization, new construction, purchasing and selling, and the management of operations. The subsidiary ensures that the use of resources at each location is optimized and sustainable in terms of cost, transparency, and efficiency. “By managing Siemens’s real estate portfolio, SRE takes the burden of real estate management off of the Siemens business segments, allowing them to be more profitable and competitive and to focus on their core business,” Kruklinski says.

SRE does a lot of work to be a trusted partner for customers. “We can do so much more than just lease space and turn the lights on,” Kruklinski says. His division works with clients to develop growth strategies and show how real estate choices can help drive their business forward. By consulting on location strategies, for example, SRE can help customers build near the right universities or the right talent pools that match their business visions. “We’ve developed some location strategies for customers to really open their eyes on specific cities and show them how increasing or consolidating space can help,” Kruklinski says. “We’re bringing people together while showing them new opportunities and savings.”

Discussing all issues prior to a deal is important. Is the customer’s business increasing production or ramping it down? What is the average commute time for employees? Knowing these details helps SRE properly structure purchases, leases, and sales to further maximize potential and operate proactively. In doing so, the subsidiary adds value to Siemens by changing the way both its divisions and outside companies think about corporate real estate.

In July 2013, for example, the company opened a major project—an industry-leading wind-service training center in Orlando, Florida. The $7 million structure will train Siemens Energy’s wind-service employees to be the best in the industry, and it is itself sustainable. The 40,000-square-foot building meets LEED Gold standards and includes two wind-turbine generators, three climbing towers, a service crane, and other training and safety stations.

The need for the facility arose when Siemens Energy outgrew its first wind-service training center in Houston and demand for skilled workers became greater than ever. (Siemens has installed 3,000 turbines in the Americas and almost 7,000 worldwide.) Kruklinski and his team worked with the energy division to select an indoor space in a convenient location close to Siemens Energy’s headquarters, also in Orlando. The new site can be easily accessed by international customers, and it will host at least 2,400 trainees per year.

The project illustrates how SRE works closely with its customers. Kruklinski and his team have now settled into their new roles, and they’ll continue to ensure that Siemens’s properties in the Americas, across all divisions, get the proper attention they need. As the company continues to grow and spread over the continent, SRE’s task will be more important than ever.