What strategic value does your Facilities Management organisation bring to your company?
While most organisations will say that their employees are most valuable resource; infrastructure (real estate, facilities and related assets), in fact, makes up the most significant portion of business costs. Thus, for the Facilities Management organisation, the key challenge is to build a functional bridge between the built and human environments that allows their organisation to operate at peak efficiency, garnering the best of both worlds without compromising the ability of organisation to meet stakeholder objectives. In this way, Facilities Management can contribute to the competitive environment by providing the physical infrastructure necessary that will continue win business.
The highest performing Facility Management organisations of businesses today can influence and/ or lead strategy by providing a progressive workplace and leading edge environment for employees by developing facilities strategies and programs that:
Lead transformational change throughout the business – and beyond, into the community,
Create the optimal set of conditions for business processes change at every level of the company, and
Contribute to organisational transformation by adapting the environment to the organisation.
Few organisations, however, seem to recognise the potential for Facilities Managers to be leaders in their own right and how they can actually help drive innovation in ways that:
Adapt the organisation to changing business needs, such as asset restructuring and essential business process re-engineering to meet changing business need,
Provide a healthy and stable workplace for employees to innovate,
Assimilate the potential for new technologies into existing and new assets that allow for that innovation to occur, and
Promote stewardship over external and internal resources leading to environmentally sustainable practices.
It can further be asserted that Facilities and Real Estate departments should be managed as part of the enterprise, not in isolation to it, with a Facilities Management Executive Board member ultimately accountable for how Facilities Management contributes to the "business of the business".
This view intersects with what many corporate Facilities Management professionals would acknowledge as the primary role of Facility Management – to focus on the needs of the occupants of the workplace. There is an even higher strategic value that Facilities Management can exploit – and that is to demonstrate to stakeholders their knowledge of maintaining and improving asset value over time. For example, when a project is transformed from business need to physical reality, during the process of financing, design, build, and operation, unless Facilities Management is involved in the formulation of the business case for the project, it tends to be relegated to the non-core stage of “operate” – the typical domain of facility management. Any strategic impact Facilities Management can have in a project becomes limited at this point. However, the high performing Facilities Management Leader who is adept at corporate finance, shifts their domain expertise from that of tactical operator to strategic advisor and will be not only be a stakeholder, but also a leader in developing the business case for major initiatives. For the Facilities Management Leader who can lead in these ways, there is a unique opportunity to position themselves to not only penetrate the inner circle of the Institutions leadership team but also have a driving influence from within.
So the question remains why you – as a Facilities Management Leader in your own right in your organisation with these skill sets – are still on the outside of the Executive Boardroom of your company with at best, non-board director status with an occasional invitation to the Board Room to discuss Facilities related issues. Is it because your company has already marked your department as a potential business outsourcing opportunity – simply a support service – a range of non-core activities to be managed as economically as possible?
To deliver the vision of Facilities Management as a strategic core business discipline – one that adds specific measurable value to organisational life, a profession that must be leveraged in such as way that it drives business forward, Facilities Management Leaders can no longer let their profession be seen as a support or supplementary function to core business, but a function that is mission critical to business strategy and part of the dynamic to change – essential to developing a sustainable competitive advantage in the institutional world in the future.
I firmly believe the Facilities Management profession in Australia is beset by a number of paradoxes, among them is the aspiration to the status of a strategic discipline when most Facilities Management Leaders still function at an operational level. It remains common in the organisational hierarchy for Facilities Management to be seen as an operational subset of finance and administration whose mandate is more transactional and less strategic – and therein lies the dilemma.
I think the 5 key issues (or dilemmas) are as follows:-
Facilities Management has too tactical a focus,
Facilities Management, as a profession, has an identity crisis and needs to be “rebranded” to capture more of what it is really capable of – so the Executive “gets the message” of what Facilities really does “top to bottom” and the organisation understands that Facilities Management provides a broader and far more strategic service than just being known as “wrench turners”,
Facilities Management, (the industry as a whole), has a credibility issue. Architects, Engineers and other Trades – having been established for hundreds of years – have the necessary Guilds and professional associations with a “history” to support them. Facilities Management has a 30-year + professional standing (IFMA/ FMA). This has led to a credibility issue at the Executive level that does not get FMs the necessary buy in at the top. Correct titling – and accreditation – breed credibility.
Passivity in external focus: FM’ers are so focused on technical, service and operation matters that we overlook prime opportunities to influence external factors affecting the core business. The key to elevating the Facilities Management profile is to develop and maintain business acumen that aligns with the Executive.
Organisational paradigms: Most Facilities Management professionals have been groomed in, and for, an industry focusing on functional excellence – or as one post on LinkedIn recently said “highest quality service at lowest cost”. This is an organisational definitional paradigm that is destined to set FM’ers permanently in the minds of the Executive as a service delivery entity; one that is expendable and very easily “outsourceable”. Once you are on this path and seen as a “commodity” it is very difficult to recover your position and be viewed as having a internal strategic value proposition to the Executive. (This is world FMers find themselves when subject to Procurement regimes.)
A good starting point for determining the relevance of Facilities Management to the Institution is to define your value proposition, which requires an understanding of your organisation's competitive strategy (yes, your Executive does have one!) as a precursor to aligning it to the core business and external environment. It is absolutely essential for Facilities Management to proactively articulate the value it offers to the business rather than passively accepting an ill-defined objective or deferring to other parts of the organisation. While value propositions appear simple on the surface, they require considerable thought to arrive at one or more that are effective in addressing how Facilities Management can positively influence institutional outcomes.
The key is to avoid Facilities Management vernacular in constructing the proposition. For example, the following elements should form at least the basis of the business value proposition:
Provide shelter (physical space or envelope)
Optimise workplace (learning platform)
Reward stakeholders (fiscal responsibility or financial return)
It can also be observed that Facilities Leaders are often frustrated about not receiving clear directions from the Executive, but they struggle to define their contribution in terms that are relevant to the organisation. The typical Facilities Management output measures have failed to reflect the necessary change to core institutional business, with the executive generally believing that any FM solution is considered performance in relation to measures of core business success, i.e., outcomes rather than outputs. For example, Facilities Management should translate their measures assessing the workplace and practices for their impact on outcomes such as:
Speed of knowledge creation (innovation)
Speed to market (competition)
Impact of built environment upon employee productivity and innovation
Impact on unwritten rules and protocols (i.e., culture) of the University
Agility in dealing with rapid and dynamic business cycles
Some Facilities Management groups have successfully aligned to the business by implementing the concept of client relationship manager (CRM) as a single point of contact with a line of business. Progressive companies i now employ full-time CRMs who work with business unit leaders and senior executives in crafting business strategy in line with asset demand and supply to ensure continuous and smooth lines of communications between facilities and the financing arms of the organisation. However, Facilities Management groups with limited size staffs may view this as a luxury. Either way, some form of relationship management with each line of business is necessary to ensure adequate spatial and financial forecasting is made. This closer alignment at the business unit level allows for a closer alignment at the executive level and therefore promotes clearer definition of direction, reducing immediate risk.
Also, an important aspect of alignment is that Facilities Management must be willing to deal with strategic risks of failure as well as the customary operational risks. Risk is often a function of uncertainty of the future; the further out the future, the more risk. The strategic approach for Facilities Management focuses on management of this uncertainty, which requires moving closer to the core business strategy.
Enterprise alignment is most important aspect of getting from the basement to the boardroom. Enlightening the Board and the CEO with timely and effective information that feeds into, is predictive of and adds strategic value to Institutional goals positions the Facilities Leader beyond the position of just a tactician, whose department is next outsourcing opportunity.
Facilities management is on the cusp of a new dawn where the opportunity exists to either to head to the Boardroom as a strategic partner with the Executive or be redefined as a commodity and become the next outsourcing opportunity.
Where will you decide to lead your organisation?