By Tim Springer and Steve Lockwood
Published in the June 2004 issue of Today’s Facility Manager
One thing is clear about the facility management profession—the future is not guaranteed. Practitioners will need to develop new skills and expertise to support changes in how they think, how they plan and develop workplaces, and how and what they measure as indicators of success.
Clearly, all aspects of organizations will continue to be challenged. In order to succeed, they will need to adapt in order to accommodate an increase in the pace and magnitude of this change.
Unfortunately, flexibility of this kind promises to pose a problem for FM—one that will require a fundamental shift in the profession’s paradigm. The traditional approach to FM was built on a slower pace with longer life cycles for facilities. It was founded on the notion that managing space and costs were the key indicators of success. Consequently, real estate, whether owned or leased, was viewed as a long-term (15 to 50 year) cost of business.
Similarly, furnishings were considered as durable goods with life cycles from seven to 20 years or more. These items were not seen as tools that could support flexibility or adapt to change. Therefore, the old FM mindset emphasized minimizing the effort involved in managing space and reducing the costs associated with facilities.
Cost control and reduction remain a constant; however, the new model of business has dual goals—streamline the organization and operational side while growing the revenue and profit side. Clearly, the old FM philosophy does not adequately address these goals.
The new FM paradigm must shed the perception of facilities and workplaces as fixed costs. FM must find a way to demonstrate its ability to deliver value, improve performance by delivering improved return on effort, maximize return on investment, and anticipate (rather than react to) change.
This is a tall order, but it is one that is imperative to the survival of the profession. The future will no longer build on an expectation of constant change, but it will require those who survive and thrive to change or die.
Facility professionals cannot focus simply on low cost or increased value. Instead, they must look for ways to deliver added value with lowered cost. Impossible? No, just difficult. To accomplish this feat will require a new approach to thinking about facilities, planning workplaces, and measuring success.
For example, if a business unit is moving toward processes that involve rapid and frequent reconfiguration to accommodate changes in group membership (e.g., product development, where requisite skills are tapped at different stages during the cycle), there are several options one might explore:
- Minimize effort and cost by providing a “universal footprint” solution for facilities—the traditional approach;
- Increase flexibility by providing freestanding, mobile, adjustable furniture and furnishings—a more avant garde option;
- Lease space with furnishings provided; or
- Support the core group and provide remote access through technology tools.
Which of these options would best meet the needs of the business unit while delivering both low cost and added value? Therein lies the present and future challenge for FM—evidence based practice. It is imperative that FM professionals commit themselves to asking the appropriate questions and putting in place the tools with which to demonstrate the value of their decisions. Why? Because in the future, those who don’t add value won’t matter; and those who don’t matter won’t survive.
How do facility professionals shift from cost focus to cost and value focus? First, do not wimp or wilt when it comes to taking time and expending resources to prove the worth of facilities. An effective, if counterintuitive strategy is to develop an on-going process of testing ideas on a small scale before applying them to larger scale situations. This approach is called rapid prototyping, which means think big, do small, and learn fast.
For example, rather than roll out a workplace plan for a business unit of 200, the facility manager can test ideas and get valuable feedback by conducting a pilot test (prototyping) with 10 to 20 workplaces. By spending the time and resources up front and incorporating the lessons learned, value is created in several ways:
- Lessons learned on a small scale allow streamlined development and implementation of solutions to the rest of the business unit.
- Prototyped workplaces result in few change orders and lower cost when the larger installation is implemented.
- Professionals can develop and test measures of performance and expressions of success on a small scale to establish expectations of impact on the larger business unit.
- Involvement of workers in testing and developing solutions is part of participative change management—key to successful workplace change.
It is an accepted maxim that people are the most valuable asset of organizations. They represent one of three types of capital, human capital. (The other types of capital are financial resources and capital goods.) Facilities are capital goods, along with technology, production machinery, and other physical things that help the organization function.
These three types of capital form a triangle, but each side is not equal. People are not only the most valuable asset, they are also the most expensive. For every dollar business spends, 80¢ goes to people (salary, benefits, training, etc.). For every dollar spent on people, most organizations spend only 10¢ on workplaces.
Why is this important? Because investing the workplace dime can have significant impact on the people dollar. The 10:1 ratio represents major leverage. No other expenditure of resources has the potential for greater return. Consider these facts:
- Businesses do not get $1.00 return on effort for every $1.00 spent on people. In other words, people do not perform at 100% efficiency or effectiveness. Input from human resource professionals (and supported by HR data) suggest most organizations get about 60% performance levels from their workforce. In other words, organizations are getting about 60¢ return on effort for every $1.00 spent on people.
- Workplace has a significant impact on work behavior and performance. A number of studies over the past 20 years have demonstrated this fact. Performance improvement attributable to matching workplaces with work behaviors as reported in quality research studies averages about 12%.
- It doesn’t cost more to deliver workplaces that support improved performance than it does to develop those that don’t improve (or otherwise impair) performance.
The Language Of Business
Too often, FM professionals assume others understand their language—floor plans, energy consumption, lease terminology, design idiom, and other expressions. It is easy to get submerged in the FM world and fail to recognize or understand that others are not familiar or comfortable with expressions those in the field take for granted.
People process information in several different ways. Some are comfortable with numbers, others with words, still others with graphics or images. Finally, there are those who are most comfortable with the spoken word.
Facility professionals must become skilled at providing explanations that communicate on all these channels. To succeed in the future, FM must become skilled at translating FM-speak into terms that others recognize and understand.
Those in upper management need financial justifications, but they also need more than just numbers. Increasingly, business leaders are turning to story telling to communicate and understand issues. So, facility professionals must learn to illustrate how their specific contribution delivers added value at acceptable cost in ways that resonate with stakeholders.
Just as dimes and dollars have been used successfully to demonstrate the relationship between people and workplaces, facility professionals need to become more skillful at communicating not only the numeric side of the FM value story, but the human, understandable side as well.
As Albert Einstein once said, “doing the same thing in the same way and expecting different results is one definition of insanity.” Using this definition as a basis, it is clearly time to overhaul FM. A change is needed in the way workplaces are planned, delivered, measured, and valued.
FM professionals are smart, skilled, and battle tested. The future of work, the workplace, and FM requires an application of those skills, smarts, and experience to find new and better ways to change the FM paradigm. By delivering value, improving performance, and anticipating change, facility executives can ensure their success and the continued growth of their businesses and the other members of the FM profession.
The following case study illustrates this double-sided approach:
The Client: A Fortune 500 Company
• $5.8 billion annual sales.
• A global workforce of 20,000 employees located in 15 countries.
• Midwest regional headquarters is 2.5 million square feet; houses 4,500 employees.
• Cost reduction and better space utilization.
• Workspace to convey organization’s fast paced, collaborative corporate vision.
• Physical environment needed to attract the best and brightest talent.
• Avoid adding real estate during a period of double digit growth.
• 90% of the staff handles IT related activities (system analysts, programmers, developers, and project managers).
• Support cost reductions and revenue growth objectives.
• Global leader in providing information products and solutions to a wide range of diverse customers.
• Continually enhances its position as the preeminent provider of information and knowledge.
• Core competencies are information technology and information transfer.
• Cultural integration, growth, speed to market, quality, and cost containment are the organization’s key drivers.
Corporate Vision. To become the leading provider of information products and solutions to an ever expanding global market-place.
Business Goals (key success factors):
• Retain, attract, and develop top notch personnel;
• Continually share knowledge;
• Develop and sustain an unparalleled spirit of innovation, teamwork, measured risk-taking, and the will to win;
• Maintain the highest levels of integrity;
• Develop and sustain a customer-centric focus;
• Develop and sustain a “technology company” approach;
• Sustain an appropriate level of investment in quality new products and services; and o Consistently optimize all resources.
Work Environment. The new work environment solution developed to support the critical business success factors included the following:
• Consolidate staff into one main campus (increase density);
• Support cultural change;
• Grow the organization, contain costs, and maximize investment;
• Become a global player in the company’s industry segment;
• Improve space utilization; and
• Meet the needs of the changing organization.
Elements of the new workplace environment included:
• Teaming spaces;
• Soft seating areas (such as armchairs and other comfortable seats);
• Computer labs;
• New individual work stations were redesigned to balance the need for privacy with the ability to move a chair into a team environment or into a soft seating area for an impromptu meeting;
• Whiteboards were placed everywhere.
Key results of the new workplace included:
• 20% increase in population density;
• 5% increase in organizational performance (flexibility and adaptability);
• 6.9% reduction in employee turnover;
• 12% reduction in cost to attract and retain employees;
• 62% reported worker satisfaction response;
• 20% reduction in cost to enable and support changing needs and business requirements (churn rate and technology integration effort);
• 60% reduction in cycle time; and
• #1 ranking on regional “Best Places To Work.”
As former principal/partner of Foresight Assocates, Springer ispresident and founder of Geneva, IL-based HERO, inc. andfrequently writes and speaks on a wide variety of issues affectingorganizations, work, and workplaces. For other columns from Springer, go to From Where I Sit and for future musings from Springer, visit his Web site.