M.W. KELLOGG COMPANY- CASE STUDY
For most companies, the thought of relocating their world headquarters and moving 3,000 employees is intimidating at best.  Such a move would be a challenge for the most experienced facilities managers and relocation consultants.

Now, imagine relocating your headquarters building, all 37 floors, and moving nearly 3,000 employees in 15 months.

That was the challenge undertaken in 1990 by the M.W. Kellogg Company, one of the world’s largest engineering and construction firms. Kellogg, which serves energy-related industries, was rapidly outgrowing its space in Houston’s Greenway Plaza development. After evaluating numerous options. Kellogg and its parent company, Dresser Industries Inc., agreed to swap leases, with Kellogg relocating to Dresser (now Kellogg Tower) Tower in the Cullen Center development in downtown Houston. Kellogg also leased additional space in an adjoining building in the complex.

The decision to move was announced to employees in early March 1990. The moves of 450 employees had to be made by July 1, when the first of Kellogg’s Greenway Plaza leases expired.

Immediately, Kellogg placed one of its senior executives, Richard Arnott, in charge of the move.
Arnott, in turn, formed an internal move team and hired Lesley & Associates, a Houston-based relocation management firm, to provide its expertise. Committees were then formed to address specific relocation issues such as space allocation, data center relocation, and employee communications.
The first task was to create a budget and establish space-planning criteria. After defining the basic parameters of the move, Kellogg and Lesley & Associates, along with the architectural firm of Hoover & Furr, solicited bids from primary vendors in order to develop a draft budget. Downtime also was estimated; this was a key issue for Kellogg, since the move had to be completed without interrupting project schedules.

Simultaneously, the architectural committee—composed of internal facilities planners and architectural consultants—began developing space guidelines for cubicles, offices, conference rooms and other facilities. To determine space allocation, the committee analyzed the number of employees, their seniority and job function and total available space. Kellogg also was committed to integrating into its overall space plans a model floor plan for task forces that was developed by an employee committee. The plan was developed for Greenway Plaza space, but with a few modifications it was configured to the Cullen Center buildings. By standardizing the layout of task force floors, Kellogg drastically reduced the time and money spent on architectural and build-out costs for those floors.

Based on the architectural committee’s analysis, Kellogg adopted standard office sizes. Conference rooms were limited to four percent of total net usable space.

The timesavings provided by standardized floor plans would allow Kellogg to meet its schedule.

With a budget and space plan in hand, build out of the task force floors began on April 2. Crews had two –and-a-half months to finish 11 floors with 205,738 square feet. Part of the build out included features to provide a first-class working environment and reduce the cost of future moves. Because many Kellogg employees work on task forces, they move frequently when one project ends and another begins. Kellogg was spending hundreds of thousands of dollars annually for rewiring and other expenses associated with these moves.

A team from Kellogg’s information systems department developed an innovative solution. All task force floors were wired with a raceway system. That included central communications rooms on each floor and outlets around the perimeter capable of handling all types of voice and data hardware. In the future, when a Kellogg employee moves his or her phone and computer equipment, they are simply unplugged, moved and plugged in with no rewiring. Kellogg estimates the raceway system will save about $800,000 a year in wiring costs.

With space guidelines in hand, the next step was to develop a stacking plan. Because of Kellogg’s commitment to the total quality management process, the company had extensive information on the flow of work. Using this information the architectural committee developed a preliminary stacking plan.

Shortly after the move began, Kellogg’s business started expanding. Before the year was over, Kellogg would hire 800 new employees, adding a whole new dimension to the move. Besides the gross increase in employees, the increase in business meant new task forces would be formed, raising the number of temporary moves that would take place. Kellogg moved an average of 300 task force employees each month in the midst of the overall relocation.

In addition, because the move involved a swap of space between Kellogg and Dresser, a few departments had to be moved into temporary quarters, so their floors would be cleared and built out to allow the swap to start.

When the stacking plan was finally completed, plans had to be drawn for the floors housing the headquarters departments. Each department was given the same amount of space it occupied in Greenway Plaza, plus space for any special new facilities approved by senior management.

These facilities included several computer demonstration rooms where Kellogg employees could demonstrate to clients the company’s extensive computer-aided design capabilities.

Initial floor plans were then drawn up and distributed to departmental move coordinators, who discussed them with employees. Every employee had the opportunity to review the space plan for his or her area before the floor plans were approved, to make suggestions or point out anything that might have been overlooked by the architectural committee. After all employees had reviewed the plans, the build out began.

Build out of the department floors took 11 months and was completed in July of 1991, about 15 months after the move was announced.

Despite its size and complexity, the relocation of Kellogg’s world headquarters was a tremendous success.The move was completed without any negative impact on project schedules; in fact, not one client complained about the relocation.

There were several reasons for the success of the relocation: Kellogg’s extensive project management experience, the strong teamwork exhibited by everyone involved in the move and the commitment of top management. Underlying all of this was an intensive and extensive communications program. Kellogg believed from the beginning that good communications was an essential element in the relocation plan.

Employees were kept informed throughout the process and had several vehicles they could use to get questions answered and discuss concerns.

Communications activity started before the decision to move was made. While executives were involved in final deliberations, Kellogg’s public relations staff was busy preparing internal and external announcements, as well as ongoing communications programs.When the final decision to move was made, the company was ready to communicate the decision and its implications to employees, clients, the community and the industry.

After the decision was made, written notices appeared on bulletin boards throughout Kellogg’s Greenway Plaza buildings.Employees were briefed concerning the move and were invited to attend meetings with Don Vaughn.

Vaughn met with groups of employees to tell them why the company was moving, how the move would have an impact on them, their and—perhaps most important—how Kellogg and its employees would benefit from the move.A detailed newsletter was distributed to employees to answer many of the most common questions.The newsletter also let employees know that Kellogg was committed to keeping them informed throughout the move, ready to address their concerns and resolve individual needs as quickly as possible.

Because of Kellogg’s commitment to the total quality management process, empowerment is an important part of the company’s management style.When issues need to be addressed, Kellogg frequently forms an employee team to discuss the situation and develop a solution.Shortly after the move was announced, Kellogg management directed the formation of an employee team to serve as the primary link between management and employees for move-related issues.The QMove Team was born.

QMove included a cross-section of Kellogg employees. The team met weekly (more often if necessary) to discuss the status of the move, respond to employee questions and offer suggestions.QMove was assigned its own electronic mail box on Kellogg’s computer network and the move became a separate category in Kellogg’s on-line suggestion system called PEST (Problem Elimination and Suggestion Team).To supplement the online capabilities, QMove published a weekly newsletter that provided the latest information on the move and answers to the most frequently asked questions.

Kellogg also went to great lengths to help employees adjust to their new surroundings.Many long-time employees had never worked anywhere but Greenway Plaza, so the move would require a big psychological adjustment.Anticipating this, Vaughn arranged for an open house to be held at Cullen Center before any employees moved, so they could familiarize themselves with their new building and the downtown environment.

Less than two months after the move was announced, some 5,000 Kellogg employees, spouses, children and friends jammed the public floors of Kellogg Tower for the open house.They were greeted by robots, clowns and booths representing dozens of downtown businesses that rolled out the red carpet to welcome them.Stacking and floor plans were displayed, so everyone could find their new areas and a model shoed how the public areas and lawn would look after building renovations were completed.

The response to the open house confirmed Kellogg’s communications strategy.Employees’ feelings about the move, which initially were negative, began to short after the open house.Positive feedback from the initial moves shifted more attitudes and the trend continued as Kellogg dedicated its new building in September.By the time the move was completed, employees’ attitudes had been completely reversed. Initially, many employees wanted to stay at Greenway; now, the vast majority prefer downtown.

Throughout the relocation, Kellogg conducted many activities in ways that would further boost employee morale.Kellogg decided to do the same, but project schedules dictated that the event be on a weekend.Working with Lesley & Associates and a local recycling contractor, Kellogg planned and executed a tremendously successful recycling program.

The first challenge was to get employees to come in on a Saturday.To do this, Kellogg provided breakfast and lunch and numerous prizes.A contest was held and employees who found the oldest and most unusual items received $50 gift certificates.Everyone who participated in the Saturday effort was eligible for door prizes including free airplane tickets to New Orleans and a computer.

The recycling program continued for a week, for those employees who could not come in on the weekend and who were not on project task forces.When it was over, Kellogg had purged 39 tons of paper, recycling more than 28 tons.This effort reduced the amount of paper file space needed in the new facility providing a significant savings.The money raised by recycling was donated to Clean Houston, a non-profit group that worked with Kellogg to plan the recycling effort.It generated goodwill in the community for Kellogg and its employees.

The Kellogg relocation demonstrates the tremendous return a company can realize by involving employees in a move, communicating with them throughout the process and taking the time to understand and respond to their concerns.Despite the complexity and constantly changing parameters of the project, everyone involved in the Kellogg move worked together to the end to achieve impressive results.