How can facilities management’s strategic role be enhanced?
MARCUS BOWEN, commercial director of Occupiers’ Journal Limited, and MARTIN LEITCH, chief executive officer of fmedge, discuss how facilities management can be a strategic management discipline.
There have been many assertions over many years that facilities management should be ‘more strategic’. Through our research for the Royal Institution of Chartered Surveyors (RICS) report, Raising the Bar – Enhancing the Strategic Role of Facilities Management, we have evidence that it can – and, more importantly, for a high-performing organisation, should – be a strategic management discipline.
We reviewed the current ‘state of the practice’ of facilities management, drawing on a survey of almost 400 professionals across six continents. Our insights were enriched by direct conversations with a selection of senior facilities management and corporate real estate (CRE) executives, as well as thought leaders from academia and international professional associations.
It is clear to us that, to be effective, facilities management leaders must work on a number of multidisciplinary relationships across their organisations. They must ‘look sideways’ more to their peers in business units and functions, first to gain (and maintain) a better understanding of the strategic imperatives of the organisation as a whole and, second, to gain the buy-in needed to provide meaningful workforce support. To make more time for this, facilities management leaders need to be able to spend less time ‘looking down’ into the supply chain – the latter must also raise its game.
Some facilities management leaders may ‘raise the bar’ by managing multiple infrastructure functions in shared enterprise support teams (or similar). In doing so, their role will become more strategic and their career paths will see new doors opening, if they can more clearly articulate and communicate this broadened scope across their organisation.
Our global study was designed to review the state of the practice of the facilities profession in 2012, to identify critical facilities management challenges and to focus especially on the relationships between facilities management and other key functional areas, such as corporate strategy, business unit leadership, CRE, finance, human resources (HR) and information technology (IT).
WHAT STANDS IN THE WAY OF RAISING THE BAR?
First, the head of facilities management is often poorly led from above. Not enough thought goes into considering the organisation’s business strategy and translating that into tangible targets for facilities management. We rarely see a cause-and-effect chain mapped out to guide facilities management strategy.
This is why the heads of facilities management are so often told to cut (or freeze) their budgets without reference to the causal chain of consequences for the workforce, for work and for the bottom line that flows from those budget cuts.
Without understanding the consequences of these budget cuts, facilities management has become a commodity rather than a professional skill in many organisations, often procured at lowest cost. Worse still, the facilities management industry does not yet have the sophistication to be able to analyse and report on the consequences of lowered standards and reduced (or lower cost) resources.
One could say that the facilities management industry knows the cost of everything, but the business value of little. This is a recipe for lowering the bar, rather than raising it.
WHAT HAS BROUGHT ABOUT THIS REALITY?
Executives and heads of facilities management, together, are not asking the right questions. They should be asking how the facilities function can strengthen the company’s strategic positioning with customers, with employees (and prospective employees) and with the communities where they are located.
Operational strategy is not an oxymoron. Operations, including facilities, can clearly help an organisation to be competitive in the marketplace. But, the key idea is differentiation.
In hard times, cost cutting, with minimal reflection of the consequences, may be necessary. In most cases, however, an effective operational strategy must be fact-based and must support differentiation. It is rarely enough just to have lower cost facilities than your competition.
What are the questions that must be asked? Those that relate to competitive advantage:
- How well does your facilities/workplace strategy contribute to your business strategy?
- Is facilities management aligned with the requirements of your business units in the locations where you need to be?
- Do your facilities support your talent recruiting and management strategies?
- Are the workplace designs consistent with the business’s technology needs and strategy?
And, importantly, but not solely, the usual question of does the facilities management cost structure support the company’s financial strategy and cash flow requirements?
Facilities management has had mixed success achieving strategic alignment with other elements of the business. Only about half considered themselves well-aligned with their peers in IT and just over 40 percent believe they are in alignment with HR and other infrastructure groups.
MULTIDISCIPLINARY, CROSS- ORGANISATION APPROACH REQUIRED
For individual facilities management leaders there are several additional, more personal questions:
- Do I have a deep understanding of my business’s basic strategy and sources of competitive advantage?
- Am I paying attention to the right measures of facilities management performance and its impact on the business (not just what is easy to measure)?
- Do I have effective personal relationships with my functional peers and with the senior business leaders in my organisation?
- Have I delegated my unit’s operational responsibilities far enough down or out to service providers, so that my direct reports and I can focus our attention on enhancing the business’s achievement of its strategic goals?
These questions cannot be answered alone; they require a multidisciplinary, cross-organisation approach. Our research shows that, no matter where facilities management is situated within the larger organisation, it is embedded within a complex web of relationships. Each has the potential for strategic significance and each also presents particular challenges to facilities management professionals.
We believe that the future for facilities management is bright as the profession becomes more critical to organisational strategy and effectiveness. To avoid creating a shortage of the talent needed to move facilities management toward its legitimate role as a strategic resource, facilities management must now raise the bar.