Monday, December 21, 2009

Merry Christmas

This is a special time of year for all of us. At my house we celebrate Christmas. It has important and deep spiritual meaning for our family, but it is also a time to celebrate the love we share with each other. Sometimes that can include a little silliness.

My father-in-law had a couple of favorite animated toys that would come out this time every year. We have continued the tradition at our house and the video shows just a small fraction of them. Consider this my personal Christmas card to each of you and a reminder that life is what we make it, and it doesn't always have to be so serious.

Merry Christmas and a safe and prosperous New Year to us all.

I will be back in January with more FM tidbits. Enjoy your holiday.

Saturday, December 12, 2009

Data Center Energy Efficiency: The Savings Are in the Details

We all know that data center energy usage is growing at a pace that far outstrips demand growth in other areas. Gartner’s 13% Combined Annual Growth Rate metric has been in place for several years now and remains constant, while global non-data center engergy consumption growth averages 2.5% each year. As if that weren’t bad enough the cost of energy is soaring at the same time. Data centers, yours and mine included, are part of the problem. New server technology and increasing densities are part of the equation, but they are only a part. And they are a part that most FM’s do not have control over. When it comes to the data center most of us say we are in reactive mode most of the time, responding to IT initiatives that we may not have known about until the trouble calls started coming in. What then, can FM’s do to be ahead of the curve, increase energy efficiency, decrease energy expense and contribute to good environmental stewardship?

Not all of the answers to these questions are difficult or expensive. Even if you are not undertaking a major project you can work the details inside your data centers and likely improve performance in each of these areas.

Chase the Air: Start by making sure air flow efficiency is maximized in order to minimize cooling energy consumption. Walk the floor with a keen eye and look for leaks or improperly placed air grilles. Pay attention to plenum penetrations for piping and cables and make sure they are tightly sealed. Pull cabinets away from the wall and look for openings that may have been allowing air leakage for years. Check the ceiling and do the same. Look everywhere, find the leaks and seal them. All that wasted air flow means an air conditioning unit is running to produce it, and that means wasted energy consumption, not to mention increased maintenance costs.

Investigate the Air: Investing a few engineering dollars to develop Computational Fluid Dynamic (CFD) models of your data center air flow will likely be an eye opening exercise if you haven’t done it in some time. The CFD analysis will show you where your hot spots and cold spots are and illuminate other air flow issues.

Organize the Air: Use the CFD analysis data to prioritize low cost and self-help projects that will improve operational efficiency, such as creating hot and cold aisles that will cool your equipment in the most efficient manner. If the analysis points to bigger issues then use the data and science of the analysis to justify capital investments required to take on more substantial projects.

Data center operations can be thought of as a three legged stool. Mechanical systems that provide air to cool the center, electrical systems that provide power to both the mechanical and computing systems, and lastly the computers themselves. In order to truly maximize data center operations efficiency you will need to apply the same rigorous discipline to each leg, chasing the details and resolving issues where you find them.

Good luck in your search for the holy grail of data centers – infrastructure efficiency. It may be a long and arduous task but the rewards are well worth the effort. Besides, just think of how green the grass will be then!

Monday, November 9, 2009

Commercial Real Estate Catches A Break, Or Does It?

New guidelines recently issued by U.S. government agencies are directed at preserving the health and welfare of banks holding commercial property loans. The CRE market sector is in trouble with thousands of properties representing nearly a trillion dollars either in default, foreclosure or bankruptcy. The crisis represents a greater risk to the nation’s banking industry than the residential mortgage collapse.

The FDIC, Office of the Comptroller of the Currency and the Federal Reserve have intervened with new guidelines that ease the pressure on banks. Essentially, they relaxed the definition of “performing” loans so that properties experiencing problems with cash flow, equity, or extended delays in selling can still be counted in this category. That means they will not be counted in “non-performing” categories and thusly not affect bank ratios negatively and push holding institutions into failure.

It gives the lending institutions a chance to work with their Commercial Real Estate (CRE) debtors in a more problem-solving manner, encouraging extensions, work outs and the like.

Good news, right? Yes. Well, maybe.

It is true that banks catch a break on this one, but what is really happening here? Yes, it helps ease the immediate pressure and that is important not only to the banks, but to their commercial and individual investors and customers as well. Taking the pressure off this way means the government does not have to come up with another trillion dollar rescue program – at least not for now.

But it does have the sense of “extend and pretend” about it. The numbers aren’t changing at all. These new guidelines don’t make properties any more valuable or speed a recovery. They are more about avoiding or delaying a collapse.

There is an opportunity cost to the market, however. Large capital has been staging on the sidelines waiting for distressed properties to become available at bargain (some would say rational) prices. This move by the Fed and other agencies will keep many properties out of the sale arena. That means new capital will not enter the system and brokers, architects and contractors will remain on the sideline. There will be a direct effect on rising and extended unemployment rates in these labor sectors.

Allowing CRE to undergo the kind of failure that residential real estate experienced would be yet another catastrophic blow to the economy, especially to those invested in organizations holding large CRE liabilities. On the other hand, it would have allowed properties to be purchased at prices which enabled the revitalization of not only the properties themselves but also an important labor segment, which in turn would have had a positive affect on the economy at large.

The economic crisis we still endure is a very complicated matter. There are no easy choices. In this instance the government acted to support the financial system. Let’s hope it turns out to be a wise decision.

Monday, November 2, 2009

Lease Green, But Know What It Means

Green leasing is in vogue these days and I suppose that’s a good thing. As with any initiative, however, it is important that it be done right; and that can vary from tenant to tenant and landlord to landlord. Many companies are taking advantage of current economic conditions to leverage concessions from landlords, renegotiating leases to lower rates in exchange for extended terms. More and more frequently green leasing is included in these discussions. For some it may even be a prime goal.

It is important that landlord and tenant agree on what their particular form of green lease will include. For some it may be as basic as assuring that building service providers use green products or that a good recycling program is in place. Others may set standards for common spaces, ventilation, natural light or other elements. Some property owners are investing in green building projects as a way of differentiating themselves in a tough market.

Aside from requiring consensus on what green means in a particular case, a green lease also brings accountability for measuring and reporting performance against the green lease standards. The parties must agree here also. What will be measured? What is the standard? How will it be reported? How often will it be reported?

The lease should also be specific and fair in how projects will be capitalized and benefits allocated. For example, an owner will have a hard time justifying capital to retrofit building energy systems to increase efficiency if the resulting benefit goes primarily to tenants. In short, the lease should be crystal clear on the questions of who is responsible for paying for projects or initiatives, how benefits are shared, tracking mechanisms and how differences of opinion will be resolved.

Tenants who occupy a majority or very large portion of a building have more leverage with the landlord and can help move the green initiative along. If this is you, don’t forget to network with other tenants in the building. Including them in the process will be beneficial to them and you, demonstrate your recognition of their role in the building and help speed acceptance by other tenants and the landlord.

Monday, October 26, 2009

Too Beautiful Not to Post

This post has nothing to do with facilities, operations, sustainability or leadership. Those normal subjects take a back seat (if there was one) to these beauties. For the car enthusiasts and speed freaks among us....enjoy.

Sunday, October 25, 2009

Solar Power Goes Racing

Australia's World Solar Challenge race is off and running.

A Shifting Global Economy - Who’s Gaining and Who’s Losing?

You need look no further than the large corporate merger and acquisition scorecard to see that economic power is shifting around the globe. Ken Smith’s article in the June issue of the Harvard Business Review makes the case nicely and points to both risks and responses. But first, who are the gainers and the losers?





























Czech Republic




Hong Kong










As with any shift scenario this one presents opportunity and risk. Organizations involved will need to work out operational details, resolve cross-border governance and decide how deep the shift will go. Will executive management location for the acquired unit remain or move to the gaining country? That is a key decision since moving the executives means that other key support functions such as Finance and Corporate Real Estate are likely to follow in order to maintain strategic and operational alignment.

Competitors will feel pressure to match an acquisition if they percieve a need to match either growth or offering expansion. Doing so smartly can help maintain competitive balance, executing poorly can create competitive separation.

As these M&A’s occur CRE and FM groups are challenged to keep pace. Operations must be aligned; and reporting and management systems must be integrated or shifted. Portfolio strategy and key alliance relationships will inevitably be affected, and CRE’s/FM’s must be proactive in doing so.

Sunday, October 18, 2009

If You Can’t Follow the Moon Then Live in the Cloud

In the July 26 post to this blog I discussed the “follow the moon” strategy being implemented by some data operators. As beneficial as the moon strategy may be, however, it is only viable for organizations which possess both the need and capacitiy for such a distributed infrastructure. Most companies do not fall into that category. What then is a small to mid-size organization to do by way of providing needed computing capacity and application diversity while still supporting a green data initiative? One answer is cloud computing. Reduced to its basics, cloud computing is an infrastructure in which applications and their attendant servers belong to someone else. This “software as a service” (SaaS) approach allows you to access applications that are held remotely while the resulting files are maintained locally. Your subscription fee for the service then pays for not only the application license but also your proscribed share of development and operating costs.

David Bradshaw, International Data Corporation research manager for European software as a service, says "… it is clear that SaaS has become accepted by the mainstream of user organizations around Europe. This will result in continued strong growth, making SaaS a rising star in a very largely depressed European software market." He goes on to note that that the overall European SaaS market will grow from €237 million in 2004 to a projected €6,005 million in 2013 (as of April 2009).

Here in the U.S. we see a similar pattern. One noteable market segment that is shifting to cloud computing is the education sector. In some cases entire college districts or systems are converting to a cloud architecture, allowing the system or students to purchase netbook computers at a typical cost of $200 USD instead of something ten times that amount. This is a good example of a disbursed enterprise with diverse computing needs. The cloud solution allows standardization on an affordable computing platform with access to a wide array of software.

In a small business context the solution may be as simple as Google Apps, Yahoo’s Zimbra or one of the other products of similar ilk. Again, this allows you access to a wide variety of software at a fraction of the cost of owning the software, shifts responsibility for software updates and maintenance to the provider, and allows you the option of downsizing the cost of your computing hardware.

Following the moon isn’t for everybody and neither is cloud computing, but the cloud offers substantial benefit to a much wider set of enterprises. Software diversity, cost avoidance, time saved supporting your software and other advantages are all make the cloud an attractive solution.

Sunday, October 11, 2009

Report on IFMA WorldWorkplace 2009

As you no doubt noted from my last post, there was no shortage of fun in Orlando. But, we also networked, sat through numerous educational sessions and walked our way through the exhibition floor learning about new products and technologies. Although the event was smaller this year (no surprise there) the content quality that I experienced seemed to have improved over my last visit to WorldWorkplace. Kudos to the IFMA team, volunteers and especially to those who took the time to prepare and present information that FM practitioners need to improve our own quality and outcomes.

As you might suspect renewable energy, LEED, and all other things green were in prominence. It was appropriate then that Andrew Winston, author of Green to Gold present the opening keynote address to set the tone. In some regard this felt a bit like “preaching to the choir” since FM’s are keenly attuned to the issue of environmental responsibility. Still, there were good reminders and insights that may help you make the green case in your workplace. Here are a few attention getters from Andrew:

75% of MBA students believe that Corporate Social Responsibility is a requirement.

Every year China builds the equivalent of 31 Manhattan’s – not one year, every year.

Being “lean” is no longer just smart, it is becoming a necessity as resources are diverted to developing and emerging economies.

The U.S. automobile industry didn’t collapse so much because of the credit crunch as to market forces. Companies like Honda, Nissan and Subaru all grew year over year because they had the right energy efficient products.

Toyota’s Prius is the most successful green product ever (to date).

In another session Dave Alpert focused on recent and developing environmental legislation in California that will directly affect FM’s operating in the state. Assembly Bill (AB) 32 for example requires renewable energy be a part of every development project. Exactly what that means is yet to be determined, but the message is clear. Renewable energy is a key element of California’s forward strategy. AB113, modeled after European Union regulations will require the monitoring and reporting of energy use by large facilities. And in Dave’s and multiple other presentations it is clear that Cap and Trade legislation is now presumed. Some companies are investing in green technologies to lean new projects underway now in anticipation, spending now to create a new revenue stream when Cap and Trade legislation becomes law.

Those are just a few of the many highlights. To those of you who missed the trip we’re sorry you weren’t there and hope to see you next year in Atlanta.

Thursday, October 8, 2009

IFMA WorldWorkplace - Orlando

More to come later but for now, check out the happenings in Orlando.

A smaller crowd this year as expected, but a lively one none the less. Lots of good info and maybe just a bit of fun as well.

Here's a product for your new home office

Break time

Exhibition Floor

OK, we had some fun too

Monday, October 5, 2009

Green Bites to Start the Week

Energy storage gets its own agency

Helix to power cell phone towers

Who knew California has money?

I knew I need to visit Australia!

Really small things could have big impact

If we can’t turn water into fuel then why not water bottles?

Smart grid, smart choice

Vermont (among others) does the right thing

Solar roofs without the ugly

Soap Box Derby goes green?

So you wanna race ‘green’ cars huh?

Wednesday, September 30, 2009

Commercial Real Estate – There is Bad News and Good News

Jones Lang LaSalle just released a forecast that both sobers and offers hope. In short, more pain to come but a commercial real estate recovery is on the far horizon.

The numbers tell the bad news side of the story. Commercial property sales during the second quarter of 2009 totaled $5.2 billion, $25.5 billion lower than 2Q08 and $109.5 billion lower than 2Q07.

On the good news side of the ledger JLL projects a slow paced turnaround beginning in 3Q10 which they expect to take a full decade to mature.

If accurate then we have another nine months of decline to endure before commercial real estate begins its rebound. That is an optimistic forecast compared to what we are hearing from most other prognosticators. Some project that CRE will not begin a turnaround for three years in a best case scenario. One advantage of a slow paced recovery is that it will have a more conservative, some would say more rational, financial foundation than we saw in the euphoria that preceded the crash. Let’s hope that no one has an appetite left for risk taking of the kind that exposed us to the current fall.

What is the bottom line on this message? Simple. Keep your seat belts fastened and watch the dashboard very closely.

Sunday, September 20, 2009

Why Renewable Energy Is Our Future

In his September 16 New York Times opinion piece entitled Have a Nice Day, Thomas Friedman makes a strong presentation of how and why the U.S. is dropping the renewable energy ball, and the consequence of doing so.

As Friedman posits, the green revolution has moved from being a “cause” to the mainstream and is now becoming a prime engine of economic growth. Countries like Germany that have incentivized renewable energy and encouraged its widespread adoption are now positioned to be technical leaders and reap the rewards as the world follows. That means economic power and jobs will flow to them, along with the ability to influence and maneuver.

Some will tell you that green and its various components, including renewable energy, are the future, not just for the environment but for economic development as well. In a time when we must make extremely difficult investment decisions sustainable energy seems a wise choice. This is where innovation is occuring and this is where jobs will be created. The jobs we need to drive economic recovery.

It seems these days that we are all about rescuing companies and policies that have failed. Why not rescue our future with investments and policies that encourage sustainability at a national level. Grass root efforts will be stymied unless they find deeper roots and nourishment in national strategy and policy. And that’s what the U.S. needs now.

Let’s get serious and get busy with sustainability.

You can read Friedman’s article here

Monday, September 14, 2009

Strategy Questions Are Big Questions

As FM’s it is easy to step into the trap labeled “tactical success.” It’s easy because our job is about providing and sustaining work places that support the success of our organizations. We are doing our job when we take care of the details and make sure everything is as it should be. But that isn’t our only job. As FM increases in importance and visibility to the C-Suite then we are challenged to become more strategic. And that requires a different way of thinking.

In my experience questions make all the difference. When I am engaged in a tactical problem solving issue I ask myself and others tactical questions that deal with details and nuance. My guess is that most of you would say you do the same. This is where FM’s live and breathe – in the detail. There are project schedules, contracts, move – add – changes, systems operation and a host of other requirements that make living in the “now” and the tactical easy and natural, and for many it is the comfort zone.

But “now” only works if it has been properly envisioned, thought about, decided and empowered. In other words, “now” only works if the strategy that led to it was well conceived and executed. Strategy. There’s that word again. So how can FM’s shift their mindset from tactical to strategic?

It’s all in the questions you ask.

Think of the strategic planning process as a funnel. When you start at the top the questions are open ended and broad in scope. Each hypothesis or conclusion then leads to a new set of questions, gradually increasing in detail as you work your way through the process. Finally, at the bottom of the funnel, you have very tightly constructed questions leading to very specific answers.

Importantly, strategic questions are big questions. They may focus on supporting corporate strategy, goals and objectives (alignment) or they may deal with the unknown (risk/opportunity management). What if revenue fell or increased 20% in a year? What is FM likely to be required to do in response? What could we do instead that would be more beneficial, given the chance? How would we recognize the situation in advance and begin to prepare ourselves? How could we most effectively communicate these options? How would this situation affect critical alliances? What do I need to do at each phase of a crisis? How will I recognize one phase from another?

Timing is important also. Being strategic is about being ahead of the curve, anticipating possible events or trends and thinking in advance how to take best advantage of the opportunities they present.

There are a number of tools available of course and you should expect to use many of them. Decision trees, risk analyses, SWOT analysis and a host of others will become your friends, and good friends they are. They bring clarity amid ambiguity and lead you to the bottom of the funnel. And they all start with the questions you ask.

Think strategic. Think big picture. Anticipate, question, analyze. Then communicate - share the process and wisdom.

Saturday, August 29, 2009

Influence: The Capital of Leadership

This article is taken from archives and goes back nearly twenty years. It’s premise, however, remains valid today. Influence pays long term dividends. The article has been updated only to add a more recent historical reference.

Today’s volatile capital markets are affecting us all. We listen daily to market reports to determine what has happened during the trading day - and lately that has been a lot! There have been large swings up and down. A six hundred-point drop in one day sends commentators spinning into a spiral of “what ifs?” and each of us is forced to re-evaluate our investment strategy. Then a quick resurgence settles nerves, we blink, and go on about our lives. Yet, in the background, there is a recognition that things aren’t like they used to be, and probably never will be. The world’s capital markets are re-defining themselves and we are along for the ride.

Each of us, however, possesses another kind of capital. We spend it, give it, receive it, and collect interest on it everyday. It is the Influence we possess - our ability to have an impact and make a difference in the world and lives around us. And in this case, we choose on a moment-by-moment basis where and how it is invested.

My guess is that most of us have little idea of the amount of influence we carry. I recently received an e-mail, one of those great stories that make you stop and think. It was about a very simple act of kindness and the life-saving, life-changing impact it had - all of which was unknown to the person performing the act. In this particular true story, a young man was a student at a new high school where he simply did not fit in. Teasing, intimidation and mockery were his daily diet. Alone in a new school and not able to make friends, he was miserable. Walking home one day he dropped his books. Another young man saw this, crossed the street and offered to help. Assisting his new acquaintance he helped the boy home. Over time the acquaintance became a deep friendship. Years later this young man sat at his high school graduation ceremony listening to the Valedictorian, the boy he had helped that day, describe the impact of friendship on his life. He was stunned to learn that on that fateful day his friend was walking home with the intent of committing suicide. This class Valedictorian, captain of the baseball team and honor student had been in such despair that he was about to do the unthinkable until a simple act of kindness changed his course.

The point of this story? The boy who performed the act of kindness had no idea of the dire circumstance that was playing out, yet his action though casual and unplanned had an enormous impact. In short, he was unaware of the influence he was having. I think the same can be said for most of us. Here are a few simple thoughts on Influence for you to consider:

Everyone Influences Someone: At every level of our lives we are in constant contact and interaction with others. Even the most introverted person cannot escape the reality that they personally influence thousands of people. But beyond casual influence, there is a purposeful influence that is a key to leadership. This kind of influence is thought out and implemented by design, not haphazardly. Its motivating desire is to help shape the thoughts, development and character of those being influenced.

We Seldom Know Whom or How Much We Influence: Although these questions are generational, you can ask them of people and get immediate emotional responses: Where were you when Pearl Harbor was attacked? Where were you when President Kennedy was assassinated? Where were you when the Challenger exploded? Where were you on 9/11? Those were big events; we expect them to be indelibly written in our hearts. But there are in each of our lives a host of smaller, character-building, career-enhancing and life-defining moments and relationships that the entire world doesn’t know about. In my own life I think instantly of a high school teacher, a friend of my parent’s, a fellow aircrew member, and a mentor in my professional career. Each of these has left a mark on my life that will never be erased – none of them set out purposefully to do so.

The Best Investment in the Future is a Proper Influence Today: The question is never whether you will influence someone, rather it is twofold: Who will you influence, and who will you allow to influence you? I count myself fortunate to have had mentors who decided to invest themselves in my life and career. It is a partnership, and not always an easy or comfortable one. This investment runs in both directions, unable to be given if the intended receiver is unwilling. An appropriate challenge to each of us is to consciously think about whom it is that we wish to be influenced by in our professional career. Who is it that models the professional development and character that you wish to attain? How can your relationship with that person be strengthened so that you can closely observe how they have obtained and share their influence, and be in a position to gain from their experience?

Influence Is a Skill That Can Be Developed: Yes, there is hope! Leadership and Influence are inexorably linked, you cannot have one without the other. Fortunately both are learned skills. There is no course or class, no diploma to mark your passing to a “position of influence.” It is one result of your experiences as you think about, envision, plan, and live the life you choose. Your career will bring success and success will bring recognition. With recognition comes the opportunity for influence on a wider scale. Do you know what your personal “Influence Quotient” is? Do you know where you need development in order to gain more influence? Do you know how to exercise your influence? Have you engaged in an influence development partnership, either as a mentor or the one being mentored?

Financial markets will fluctuate on a day-to-day basis and the value of the capital invested in them will vary greatly. But the investment decisions we make with our “Influence Capital” are under our direct control, captive to no one else. What we do with them will go far in defining the quality of our lives and our leadership.

“Influence.” We all have it. How are you investing yours?

Wednesday, August 26, 2009

Most Companies Not Prepared for Lease Accounting Rule Changes

Although timing of accounting changes has not been resolved yet and likely remains several years away, the impact of the changes to corporate balance sheets will be significant. A recent survey jointly conducted by Jones Lang LaSalle and CoreNet Global indicates that 99% of respondents have not yet evaluated the impact of proposed changes on their balance sheets and P&L statements. Twenty-three percent said they were not even aware of the changes.

See for more information.

Sunday, August 23, 2009

Aligning FM With Enterprise Strategy – Pt. 4

Improving the FM Value Quotient

In the process we made sure to analyze and communicate everything in core strategy and business terms. If an option did not support a core strategy then it was discarded no matter how attractive it may have otherwise been. When we communicated risks and benefits we did so in business and strategy terms. In other words, we “spoke to the Board Room, not the Boiler Room” as the adage goes and created a direct link to strategy for each project and initiative.

Aside from successfully implementing this set of projects we achieved other notable gains.

Demonstrated objectivity as a key discipline: The facts took us wherever they took us. We used best data gathering and analysis practices to pull wisdom from information. Once something was identified as wisdom it became nearly unchallengeable.

Acted as a thought leader: Challenging the organization through insightful analysis and business cases we demonstrated diligence, knowledge and alignment. We anticipated needs that executives had not yet realized and provided solutions to problems they did not yet know existed.

Strengthened our culture of excellence: Demanding excellence of ourselves and all provider and alliance organizations has long been a trademark of our group. With this initiative, however, we turned that same intensity and discipline to the strategy arena, improving our alignment, relationships and value.

Alignment between corporate and FM strategies sounds like common sense and it is. All too often, however, the alignment is shallow or out of date. When this occurs FM can lose leverage because it is viewed as being out of touch with the business or worse, unable to understand the real “business of the business.” Developing deep and lasting strategy alignment, however, demonstrates not only business acumen and agility, but also real value and leverage.

Value and leverage. The importance of those two qualities has never been more than it is in today’s world. Make sure you are working to secure both. Doing so can only benefit you and your organization.

Sunday, August 16, 2009

Aligning FM With Enterprise Strategy – Pt. 3

A Case In Point

Several years ago our organization adopted improved collaboration as a corporate strategy. As the FM group supporting academic research we thought of our job as providing quality conference rooms and maintaining them in a way that assured staff acceptance and use. We made sure the rooms were functional and clean, and that technology was reliable, working with what we were given to maximize their appeal and functionality. We didn’t necessarily ask if it was still the right technology or if our room mix still met the needs of the research community.

With the adoption of the collaboration strategy, however, we began to ask ourselves how we could contribute to its success more directly. We questioned things like the number and size of conference rooms, how efficiently they were utilized, what kinds of technology would best help and how we could minimize cost to speed implementation and adoption. That led us on a journey of discovery. We benchmarked with peer organizations, queried the market about emerging technology and took other actions to inform ourselves about products, resources and trends.

At the same time we looked inward. Undertaking a serious study of conference room utilization by size, time of day, location and technology configuration gave us insight into our customers’ use patterns and preferences. We identified key stakeholders in that community and brought them into our process, pulling important information from them and gaining advocates in the process.

Next we developed a set of initiative options and scored each against several criteria including risk, life cycle position, cost, how effectively they furthered the collaboration strategy and how adaptive and easy to use the technology was. We then ranked them and developed project outlines and budgets in partnership with other team members.

At the end of this process we knew which technologies were right for us, why they were the right ones, how they would be implemented, how much they would cost and how we would pay for them. We demonstrated direct linkages between increased collaboration capabilities and specific corporate strategies such as revenue growth and development of new offices. The result was an easy ‘go’ decision that led to mid-year funding for previously unanticipated projects because the wisdom of doing so was obvious.

Next week: Improving the FM Value Quotient

Sunday, August 9, 2009

Aligning FM With Enterprise Strategy – Pt. 2

The Strategic Alignment Process

Viewed as a continuum the strategic alignment process differs little from a classic change management process, precisely because that is what it is. Understanding that simple truth helps de-mystify the effort. Some stakeholders will be the same (FM staff, other departments) and some will be a different set of people than you normally work with on change projects (executive staff).

It is also important to recognize where you are in the alignment continuum. Evaluating your organization to determine its current alignment maturity and reaching consensus on this point is notable because it marks the common understanding of your starting point. Understanding the definitions of the various levels provides a roadmap for improving maturity.




Level 1

Ad Hoc

Enterprise / FM strategies and goals not aligned

Level 2


Enterprise commits to alignment

Level 3


Alignment team established, focused objectives determined

Level 4


Strategy alignment, FM value recognized

Level 5


Strategies and adaptation fully integrated

Luftman, J., Addressing Business Alignment Maturity

Note in the model depicted above that Level 3 requires a team approach. It is much more beneficial to engage other leaders as willing co-conspirators early on, as opposed to later engagement. Doing so helps lower boundary hurdles, speeds integration and drives recognition of FM value. Also note that it is at this stage that focused objectives are agreed upon. Agreed upon by whom? By the team, including senior non-FM managers with whom you must integrate and by executive leadership. The former will want to make sure that your alignment goals really do align, that they agree to compromises required to achieve alignment and that their organization’s interests are protected; the latter will look to increase gains to the overall bottom line and assure that balance is maintained.

Early on I mentioned the importance of developing a good understanding of FM and corporate strategies and their resulting goals and objectives. Often times FM’s attention is focused on maximizing value in areas FM’s know best, space utilization efficiency or quality of maintenance for example. Those are by definition good things to do, but they likely do little if anything to align the FM organization with the overarching strategic doctrine of the enterprise. In order to begin the alignment process you must understand the starting point and develop a comprehensive gap analysis.

The gap analysis will identify corporate strategies that are not supported, or may be poorly supported by current FM strategy. The basic premise is this: Filling the gaps forces FM to look beyond its’ own needs and plans to identify missed opportunities that it may not have realized exist. Basically the question to ask is, “What can FM do to further progress on these corporate strategies?” The answers to that question will begin to illuminate opportunities.

Next you will develop FM strategies and goals that support corporate initiatives to which you have previously not been a substantial or intentional contributor. By designing FM strategy and plans in a manner that directly and materially supports key corporate strategies you effectively link the two together, thereby increasing the importance and value of FM to the programmatic and economic success of the organization. An important step at this stage is designing Service Level Agreements (SLA’s) and Key Performance Indicators (KPI’s) that relate directly to strategy. These KPI’s will then be reported out to the C-Suite and Board of Directors giving them a direct view of FM performance, value and leverage.

Always an important part of any improvement initiative, Customer Satisfaction is important here as well. “Customer” in this case may refer to executive staff or other internal departments. The point is that after engaging them in the initiative to improve alignment and having developed strategy linkage you must now continually monitor strategy performance and adapt as performance and strategy shifts dictate. In order to do so you should routinely monitor the satisfaction of key stakeholders. By focusing priorities through their lens you will be able to accelerate the value of increased strategy alignment, making continuous changes that demonstrate your attention and agility.

Next week, a case in point.

Sunday, August 2, 2009

Aligning FM With Enterprise Strategy – Pt. 1

Now more than ever the importance of aligning FM business priorities, practices and processes with corporate strategy is critical. In this era of financial stress it is incumbent upon each of us to maximize FM value to the organization and be a significant part of the solution. However, the current environment only puts a spotlight on a trend that has been evolving for some time as organizations recognize the advantages of leveraging FM, which represents a large part of most balance sheets.

The growing recognition of FM’s importance is evidenced by the increased attention it gets both in strategic and financial terms. Elevation to the C-Suite through the formation of Chief Facility Management Officer (CFMO) or Chief Real Estate Officer (CREO) positions is a sign that leadership understands the opportunities and risks that FM represents. With this enhanced stature comes increased responsibility. FM’s must understand that business acumen is more highly valued than technical expertise at this level. In order to compete for these positions you must improve your business sophistication and demonstrate increased value.

Now that we know what the expectations are, how do we go about achieving them? The good news is that it is relatively simple. At heart this is a change management process, and the change process is something FM’s know about.

Set the Environment

Start with understanding the two elements you want to bring together. By that I mean you should analyze and understand at a deep level the existing corporate and FM strategies and goals. Know why senior management has selected the strategies and goals they have so you understand nuance and underlying motivations.

After gathering information on both sides of the equation, analyze to develop a picture of the current alignment between FM and corporate strategies, and to understand where gaps exist. Gaps may represent risk or opportunity, or both; closing them will surely be your first order of business. Understand what that means. Do you have the resources to do everything you are currently doing and restructure your strategies and goals? If not, what needs to go and why?

Next, have a serious talk with your executive sponsor. Explain the initiative including its risks, rewards and requirements. Without executive support you risk being isolated when resistance materializes, as it may. Be prepared for that. Have your plan in place, communicate often and choose team members carefully, then plan and execute. It is amazing how resistance evaporates in the face of solidarity and success.

Be A Good Partner

As you work through the change process realize that you are dependent upon others. You need their active support. For example, you should be included in executive management discussions about strategy and allowed to see their view of the future state of the business. Develop your relationships with them and make relationship management a part of your plan. Pay attention to communication preferences and communicate with each executive in ways that match their individual style preferences. In other words, be intentional about the relationship management process.

Part of this effort will require transparency and a willingness to be vulnerable in order to achieve maximum benefit. Share information openly and help create a culture in which candid talk is valued. Share goals, risks and rewards; and demonstrate your sincerity by adapting where possible to increase alignment without endangering key strategies and goals.

Most of all manage the FM business to maximize value - however your organization measures that. Adopt those measures and make them a part of your own processes and metrics.

Next week – The Strategic Alignment Process

Sunday, July 26, 2009

Will Data Follow the Moon?

If you follow evolving data center trends then you’ve heard the buzz about data processing “following the moon.” Google is leading the way, having opened a data center in Belgium which has no chillers. Chillers of course consume a large amount of electricity. By transferring data processing from center to center data crunching will literally migrate around the globe, “following the moon” as the phrase goes, allowing processing to occur in dark zones with cooler temperatures, thereby avoiding the need for chillers.

The ability to operate data centers without chillers has enormous implications to power reduction. The key of course will be the ability to transfer data and processing routines in a seamless manner that provides for data integrity and security. Among other difficulties this will require large amounts of bandwidth.

Aside from simply consuming less energy the strategy also has the advantage of consuming cheaper energy, since dark hours are normally off-peak times with lower rates.

I suppose the ultimate marriage here might be this follow the moon strategy coupled with renewable energy sources. Wind and solar energy production is daylight centric, but lots of very smart people are working on larger and more efficient storage systems.

The Beatles sang about following the sun, but it was a melancholy song. Data following the moon, however, could have us all humming a happier tune.

Monday, July 20, 2009

“We Live in Interesting Times”

Don’t we though? We are celebrating the original Moon Walk, an African-American sits in the Oval Office, and the Dodgers have the best record in the major leagues for crying out loud. When was the last time that happened? Yes, these are interesting times indeed. Not always so pleasant though, eh?

This past week was full of meetings and as I am sure sometimes happens to you, I realized at the end of the week that there was a common theme. In each meeting there was conversation about where we are, where we are headed; and what values, strategies and actions will help move us in the right direction.

There are lots of data points to think about, and we should all be doing exactly that as we endeavor to take care of our own little corner of the world.

Commercial Real Estate Defaults Rising Stories are everywhere you look stating that commercial RE is “the next shoe to drop” in the economic crisis. With properties entering or already in default status having nearly doubled since the beginning of the year many would say the shoe has already hit the deck. Real Capital Analytics, Inc. reports that 5,315 buildings representing $108 billion are now in default, bankruptcy or foreclosure. Those making the direst predictions have already pegged this as the deepest failure in U.S. commercial property market history with potential economic impact that dwarfs the residential crisis. Some analysts predict $90 Billion to $140 Billion in losses to securities backed by commercial property loans. Depending on who you listen to the turnaround in this market is 3-4 years away since recovery here will follow recovery in other market sectors such as manufacturing and retail.

CRE’s and FM’s should see risk in this predicament, certainly; but there may also be opportunity. Check the financial health of your landlords and develop contingency plans for their failure. Some may have opportunities to leverage the landlord’s difficulty, offering to extend terms in exchange for concessions. Others may consider buying when the cost is right.

“Extend and Pretend” Programs Only Defer the Inevitable The delay actions currently being proposed and implemented largely fail to solve or effectively deal with underlying problems. We are crafting ways to defer solutions because of the pain and displacement doing so now will cause. We may be releasing immediate pressure but at what cost? The bills will still come due but with added cost in financial and human terms.

When possible avoid falling into the trap. It is like any other conflict, business or interpersonal. The longer you wait the harder it gets. In this case extending the crisis will impinge future options and diminish future capability. Organizations that can avoid “extend and pretend” scenarios will have big advantages over competitors who are forced to play the delay game.

Expect Increased Taxes Governments world wide are running large deficits and few are monetizing them through liberal use of their printing presses. That’s good, but it does mean that the ability to pay the bills will have to come from somewhere. Guess where that will be, Mr. and Mrs. Tax Payer.

Here in California we are living the realities of all of these situations. Past failures are coming home to roost and it hurts. Services are being reduced, important programs slashed, unemployment and foreclosure rates are surging. Eventually we will find a way out but all of us, families and businesses alike should realize that “we” are going to be a big part of the solution. Many companies are taking a strong look at their tax liabilities and while working to minimize them they are also increasing allowances to accommodate new taxes and increasing rates on existing taxes.

Like the man said, “we live in interesting times.” I don’t know about you but I certainly hope no one ever looks back and calls these “the good old days.” While my grand parent’s and parent’s generations lived and eventually succeeded through the Great Depression, I have no desire to pass this one on to my heirs or theirs. Of course it’s tough. But it will be easier now than later.

Monday, July 13, 2009

Data Center Development

There are plenty of factual and anecdotal indicators which point to continued development of efficient data centers even in the midst of the economic crisis. Essentially, evidence is growing that green data centers are growing in strategic importance even while the definition of what qualifies as green is shifting at the margins.

The biggest driver of course is reduced energy consumption. As the cost of energy increases the payback calculus improves. Large development costs associated with a major new facility become more rational as the cost of operating inefficient facilities continues to rise. But energy savings aren’t the only financial benefit. As new facilities are developed IT groups take advantage of the opportunity and capital available through the project to re-engineer architecture and operational processes. Rich Lechner, IBM’s VP of Energy and the Environment states “for every dollar they save on energy, they can save another six or eight dollars on operational efficiencies.”

Why is the continued development of Green data centers developing such momentum in an era of financial constraint? The answer is in the numbers.

· IT accounts for 2.5% of global energy use and carbon dioxide emissions, and is growing 12 times faster than total energy use

· 69% of respondents in a recent Digital Realty Trust survey indicated they are extremely or very concerned about government regulation

· 81% of survey participants in that same survey indicate that carbon credits are now part of their Green IT strategy, up strikingly from 18% just a year ago

· 82% of companies participating in a IBM survey expect cap and trade climate technology and regulations in the U.S. and Europe within the next five years

Virtualization, consolidation, site selection and bundled energy pricing are all strategies to improve efficiency. The struggle for some companies, however, will continue to be choosing between building for greater efficiency, conversion of existing facilities or outsourcing. No matter the choice the investment required will be substantial.

As FM’s we are an integral part of the project development team. If you are even tangentially engaged in data center support or development for your organization then you need to know what your IT cousins are dealing with, what their issues are and where their industry is trending. That will help put you ahead of the game and position you as an equal partner.