We are mistaking accounting visibility for strategic clarity.
When I was at Deloitte Consulting, I spent just over two years as a direct report to Janet Foutty after she was appointed CEO.
I sat in rooms with senior leaders, major clients, and junior teams. Sometimes I was presenting. Sometimes I was just watching. Either way, I was paying attention to the same thing: how you move a room when the message is hard, the stakes are real, and the old way of talking about the issue is no longer helping.
There was one facilitation frame I saw Janet use again and again.
"We need to stop talking about this. And start talking about that."
What made it effective was not the elegance of the line. It was the discipline behind it. She was not trying to win the old argument. She was changing the frame so the room could finally deal with the real problem.
I have used that frame ever since. And every time I walk into a board-level real estate conversation, I find myself waiting for the moment when someone is finally willing to use it — because the conversation we are having is almost never the conversation we need to be having.
Not long ago I was in a portfolio review with a CFO and her real estate leadership team.
They had built a careful, thorough presentation. Liability figures. Cost per seat. Utilization rates. Consolidation scenarios. Every number was accurate. Every metric was defensible. The room was well-prepared and moving efficiently through the material.
And they were about to recommend a ten-year extension on three floors the company was already struggling to fill — because the lease economics made sense, the timing was favorable, and the alternative was uncertainty.
Nobody in the room had asked what the organization was going to look like in two years. Nobody had asked whether the workforce model that filled those floors was still the one the business was building toward. Nobody had asked whether the flexibility they were trading away was worth more than the rate they were locking in.
The CHRO was not in the room.
That detail is not incidental. It is the whole problem.
Since ASC 842 put operating leases on the balance sheet, companies have gained precise visibility into their real estate liabilities. Finance teams can see the numbers clearly. Boards can interrogate the exposure. Audit committees have a line item where there used to be a footnote.
That matters. But in the process, something quietly went wrong.
We mistook accounting visibility for strategic clarity.
We started over-managing the metrics that are easiest to defend — liability figures, occupancy costs, density ratios — and under-managing the risks that actually determine whether a portfolio serves the business it is supposed to support.
A ten-year lease tied to a business model, an organizational structure, or a workforce plan that may look materially different in eighteen months is not just a real estate commitment. It is a bet on the accuracy of leadership's own certainty. And in most organizations I work with, that certainty is considerably more fragile than the lease term implies.
The biggest real estate risk on your balance sheet is not vacancy. It is the planning horizon mismatch — the gap between how long you are locking in a cost structure and how far out you can actually see.
I used to open major transformation engagements with a version of the same line: You have to make big changes to see big changes.
What I did not always finish saying — and should have — is the part that matters more.
People have to be able to see themselves inside the change.
Not in the strategy deck. Not in the all-hands presentation. In the actual day-to-day. What am I being asked to do here? How does work happen in this place? What does this environment tell me about what the organization actually values?
Employees are asking those questions every time they walk through the door, whether leadership acknowledges it or not. The physical environment is answering them whether leadership designed it to or not. The organizations getting this right are not necessarily the ones with the most sophisticated design language or the most impressive address. They are the ones where the space gives an honest answer.
A portfolio that was built for a version of the company that no longer exists is not just a financial liability. It is a daily signal to the people inside it that leadership is still planning for a future that already changed.
This is the financial face of what I have been calling the Commitment Gap — the distance between what a company signs and what it actually knows about itself. I wrote about it first from the workforce side: the CFO and the CHRO describing two different companies, with the Head of Real Estate caught between commitments that were made for an organization that is already becoming something else.
Here it shows up on the balance sheet.
The lease term and the planning horizon are not in the same conversation. In most organizations I walk into, they are not even in the same room. The CFO owns the liability. The CHRO owns the workforce strategy. The Head of Real Estate is executing against assumptions that neither of them has recently tested together.
That is the conversation we need to change.
Until we do, we are just optimizing the cost of the furniture while the operating model burns.
Matthew Bennett Alderman is the Founder and Managing Principal of Alderman Bennett. He spent 16 years at Deloitte, including just over two years leading strategy and transformation within the Office of the CEO during Janet Foutty's tenure — work that included directing Deloitte's own operating model redesign. He later served as Senior Managing Director and West Coast Occupier Leader at CBRE before founding Alderman Bennett. [email protected]
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