As Workplace Professionals and Facilities Managers we are constantly under pressure to deliver innovation in what we do, how we do it and how we charge for it. I believe that we need a perspective shift in how we approach innovation. As a prelude to a future in-depth look at innovation, I want to share my views on the current dilemma in FM and our desperate need for disruptive innovation.
If we are to achieve disruptive innovation, three conditions need to be present.
- There needs to be a shortage or starvation of resources;
- Increasing pressure on delivery and performance;
- A perspective shift in how we look at innovation.
I am sure you would accept that the first two conditions exist in abundance. What we now need is a paradigm or a perspective shift, both in our overall theoretical stance as well as our local practices.
The perspective shift will depend on our ability to understand what our customers want to become. We need to then ensure that we are ahead of them on their journey and meet them on that path with a value adding proposition that can be directly linked to their business outcomes, not just the outputs of our service.
This requires visionary leadership in a co-collaborative and cooperative approach between clients and providers to what after all, is a shared dilemma.
21st Century Workplace
We need to recognise that there has been a fundamental shift in the worldview. Productivity is not the same narrow concept to business as it was prior to the ‘knowledge economy’ and cannot, therefore, be measured in the same way. In addition, productivity means different things to different clients and it is, therefore, contextual.
If we recognise that productivity is therefore not an exact science we just need to understand how to reach agreement on how it should be measured rather than collectively sticking our heads in the sand. For each of the businesses we serve we need to isolate the drivers for those elements of our service that affect the business outcomes and understand the processes in how FM is going to support dynamic business change.
With the vast expansion in our scope over the last few years, it is fair to say that FM is not the technical discipline it once was. FM is a component of a more cooperative system which now involves IT and HR . So it is beholden upon us as FM’s to be able to measure the combined effect of all of these issues on value or at least to be able to estimate the enabling value that FM can bring to allow these other functions to provide value in their own right.
If the effect of FM can be felt in all these areas, we need to understand how ‘mission critical’ our services become as this will affect the risk profile in terms of rewards and penalties.
So it is clear that there is an overdue and chronic need to develop a model that demonstrates the value of FM to our Customers, not merely point at it. How do you change the thinking about the ROI from FM? Clearly, FM is part of a complex social behavioural and cultural business system, which is dramatically changing to meet the needs of both the organisation but perhaps, more importantly, these days the highly valuable talent that works in it.
How do you change the thinking about the ROI from FM? Benchmarking I hear you say! Unfortunately, FM Benchmarking usually models and measures its worth as if it were a stand-alone operation in a static business setting. In addition, comparisons are made with applications in different contexts with varying processes and outcomes.
It is not surprising therefore that there is a growing disdain for benchmarking in FM, as espoused by Dave Wilson in his article The Problem with Benchmarking which was published in FM World by the BIFM in June 2013. This uneasiness is brought on in part by the rush to apply it without thinking through its implications and limitations. In the absence of a suitable alternative and seeming inability to demonstrate the value of our offering means that our clients are left with little choice but to impose benchmarking with a deaf ear to its limitations.
Worse still is the industry’s clamour to focus on the cost side of the equation in terms of cost/m² or other such ‘bottom line’ metrics without understanding the context in which FM exists. If we continue to allow ourselves to be measured in this way then we only have ourselves to blame for the race to the bottom of the commoditisation ladder.
FM ‘Built on Sand’ ?
Due in part to the lack of focus on non-core issues within a business and in-spite the magnitude of the costs involved, it is a curiosity of FM that the money and resources that go into the provision of the service do not lead to any obviously measurable business outcome at the other end, this puts FM at odds with pretty much every other business service.
In all of the content I have read on Strategic FM, I have seen very little fact presented to underpin anything that we have said as an industry in terms of the value of Strategic FM. We cannot hope to survive with this lack of a demonstrable value proposition.
But here is the point, we are not dealing with fact in many areas, we are dealing with perception and it is the agreement around that perception that is important. This can only be achieved with a deep understanding of the context on a contract by contract basis. This is the messy, emotional and awkward side of the equation where value is perhaps more subjective and potentially fraught with idiosyncratic and awkward conversations and is a subject too hard to prove through empirical measurements.
Unless we address some of the fundamental relationships in our industry which are simply not fully understood or working as they should be. Then we are as Barry Varcoe suggested an “industry built on sand” we need a new storyline we need to move from being a coordinator to an integrator and moving beyond the cost to focus on value.
We need to understand our clients’ desired core business outcome first, and then work backwards to process and inputs from there. We’ve got to be brave and embrace change. If we don’t, heaven help us. We’ve brought it on ourselves, we’ve let ourselves become a cost-based industry that without a value proposition will succumb to a vicious spiral downwards towards an agonising demise.
FM Needs to Innovate
No matter what the mandate, much of The FM services sector is already commoditised. Further increases in the commoditisation of services mean Customers will buy smart and cheap unless there is differentiation through a powerful value proposition.
But there is a message for our Customers in this scenario. Whilst there is understandable pressure to reduce costs their applied pressure to innovate is costly. I would urge customers to look at their own business and asked themselves a question. Do you compete in your business environment on a lowest cost basis? If not why do you expect your service providers to do so? If you as the Customer insists on a cost minimisation FM strategy then you will compromise your ability to be effective in your own business if you expect your internal team or your external service provider to deliver never ending cost savings.
To make matters worse procurement department controlled reverse auctioning practices are upon us. Consequently, facilities and support services are seen as commodities to be procured at the lowest possible cost levels where objective costs get substituted for subjective value.
The sometimes myopic attention to cost reduction leads to a contractorised approach where there is no incentive for innovation on input driven contracts inhibiting investment in systems, quality headroom and innovation.
Few in management seem to understand that savings in costs are not the primary ‘value add’ facilities opportunities. Gains in productivity, effectiveness, well-being and talent retention in the rest of the organisation through innovative facilities strategies are far more significant.
This commoditisation of facilities has come about through divergent service delivery, poor branding and lack of evidence to show that FM can make a difference. We have no one to blame but ourselves!
FM now needs to innovate to survive, a form of evolutionary shift that the FM industry, the FM profession and the FM client all need desperately.
Some of you may not agree with me and may insist that FM is in the throes of reform. I would counter that the reforms are more about incremental improvement rather than providing something more fundamental. The conversation is still about cost control, who pays, unrealistic risk transfer, penalty farming and increasing pressure on standardisation. There is no reform in this conversation it is just more controls and imposed standards or better or different management.
If we are to counteract the commoditization of FM we must be able to effect changes to the Customer’s business otherwise, we cannot pretend to add true value and at worst we may just be perpetuating the fundamentals of an uncompetitive status quo.
Real reform comes when there is a fundamental change in the relationship with the service provider.
In real terms, this means a more balanced contracting approach, more collaboration, more joint discovery and a new strategy focussed dialogue. The move to adopt BS11000 is an encouraging and forward-looking step by some Customers.
True reform will shift thinking about the value provided as opposed to the cost incurred and this can only occur if the relationship between client and service provider is elevated to a more strategic level.
Please engage us in conversation and leave your comments below or answer our Question: What is your experience of the FM value proposition and how have you got Clients to buy into this?