Sunday, June 20, 2010

Three Pivot Points That Are Influencing the Future of FM - Part 2

This is a second in a three part post on pivot points that the author feels are currently affecting the Facility Management profession.

Pivot Point: Strategic Alignment in an Era of Ambiguity

FM’s ability to properly align itself with the organization and thus present a united and cohesive presence in the market place is critical in our current era of ambiguity. The unpredictability of events even now in the early years of the 21st century places a burden on leaders to navigate what is sometimes a very dense fog, without seeing or sometimes knowing the endpoint. As James Dewar noted, “We cannot know the future perfectly, but we can imagine the future and make plans for it…” Dewar, James, “Assumption-Based Planning, A Tool for Reducing Avoidable Surprises,” Cambridge University Press, 2002

Operating amidst ambiguity places a premium on flexible and agile organizations, buildings and assets. Being able to win the resources needed to be flexible and agile across these domains requires unified vision, leadership and planning. In a word - alignment. A key indicator of alignment in an enterprise is a unified FM process across diverse portfolios. The nemesis of alignment is an organization populated by operational and strategic silos. Silos represent everything that is not alignment. They cannot communicate quickly and with transparency, make and execute decisions with speed, and they don’t have the agility required to avoid missteps and take advantage of opportunities. Being able to accomplish all of these are hallmarks of an aligned organization.

A successful strategy in times of uncertainty is one that anticipates multiple paths and outcomes, establishes sign posts to identify which path is coming to fruition, and includes hedging and correcting actions to facilitate favorable progress.

The value of the FM portfolio demands executive level expertise and attention. As a result, business acumen has become the number one FM executive skill. Already it is not uncommon to find FM units which are headed by leaders who do not have a technical background. MBA’s are becoming the thought leaders of our profession as evidenced by the new roles of “Chief Facilities Officer,” or “Chief Asset Officer” as it is sometimes referred to. Finally, we have a seat at the C-Suite table. But those who are invited to take those seats often speak the language of business first as they learn the language of Facilities Management. Their preferred reading is The The Wall Street Journal, the Harvard Business Review and other publications of the sort. Why? Because it is here that they keep their finger on the world’s pulse, discern what shifts are occurring and develop strategies in response. The point here is that these are business professionals first and Facility Management professionals second. While some FM purists may chafe at this fact it is a growing trend, much as outsourcing was twenty years ago. It’s not going to go away. Outsourcing turned out to be a good thing (largely) and I suspect this move towards a professional business management class within FM will as well. One immediate benefit is that alignment between FM and other business functions is increased as a result of their common language. In some ways, it is a jump in the direction of alignment but one which requires that the non-FM professional pay close attention and have open ears and mind. FM is a unique discipline just as other business disciplines are in their own way. There is bound to be a fair amount of conflict as non-FM types take on the leadership of FM organizations, both because they sometimes will not understand the unique perspective of FM and because they will sometimes not be understood themselves.

Alignment amid ambiguity. It is a tough condition but alignment is critical in order for the organization to navigate its way through the fog of ambiguity. One way to increase alignment is to mandate absolute transparency. This strategy intends to identify misalignment in its many forms so that leaders can see, understand and resolve. Misalignment may reveal itself through conflict, imbalanced operations, a lack of understanding or a hundred other ways. It is important that leaders recognize these symptoms for what they are and deal with each directly and openly, without hidden agendas.

Candid talk, honest investigation and objective analysis while maintaining high standards of personal respect are essential when working to align operations. Leaders who know this understand the importance of respecting persons while being relentless in the pursuit of truth, letting the facts lead the way. Once they are known you can react accordingly to restore alignment. Said another way, don’t rush to resolve conflict between operations and issues too soon. Take your time and be diligent in pursuing issues to the core. Rushing to mend appearances only avoids the opportunity for discovery and real solutions, and adds to what? That’s right, ambiguity. When decisions are made to gloss things over without addressing the core issues everyone knows, and they know what message is really being sent.

Next week: Pivot Three – The Explosion of FM Data

Sunday, June 6, 2010

Three Pivot Points That Are Influencing the Future of FM

Students of history will tell you that most often the course of human events is a steady march.  Along the way there are pivot points which redirect the journey, sometimes in small ways, sometimes in dramatic ways.  Most often, however, history is a march of progress made in incremental fashion, each increment building on, expanding and improving those that preceded it. 
The same can be said of the history and future of Facility Management.  We are today a logical result of what has gone before and contributors to what will follow.  In that latter role it is important that we survey our profession and discern where today’s pivot points are and work to guide the profession through them.  In my view there are three pivots occurring now which will have near term and lasting effect.  These are social and economic changes occurring in the world, strategic shifts in how FM relates to the world around it, and finally the knowledge management shifts with which FM integrates with business.
This is the first of a three part post that will examine each of these pivots in turn.

Pivot One:  Social and Economic Change
We have all heard about the new generations of workers now flooding the employment ranks and their differences from older generations.  More profound, however, is the realization that the world’s population numbers are changing in broad and fundamental ways, as evidenced by the following data (Martin Walker, “The World’s New Numbers,” The Wilson Quarterly, Spring, 2009).
  • In 1998 the number of people in the developed world over the age of 60 outnumbered those below the age of 15 for the first time.  By 2047 the world as a whole will reach that point.
  • The world’s median age today is 28, by the middle of the century it will be 38.
  • Of mid-20th century demographic titans Russia, Japan, Britain, Germany, Italy, and the U.S., today only Russia, Japan and the U.S. remain in the top ten.
  • China, today’s demographic colossus, will have a shrinking population in 2050.
These population changes have direct implication to FM because FM has always reflected the realities of the world and businesses it serves.  As economic power shifts around the globe we will be challenged to be in front of the shifts, enabling government, business and society as the world adapts.  Those who are not cognizant of the changing landscape will be disadvantaged at the beginning.  Conversely, those who do understand will have opportunities in developing regions that have need but do not have the knowledge or technical infrastructure required to sustain development.  We will be increasingly challenged to envision, plan, build and support operations that span countries, cultures, and companies.
In concert with this fundamentally changing world population add economic stress resulting from continuing global financial challenges.  The challenges and the stress are going to be with us a while.  Recent difficulties in Europe and a potential “second dip” in the U.S. portend an extended period of capital fragility.  Governments are cutting back on programs across the board.  This idling of one of our largest development engines will have a near term effect as projects slow down, and a long term effect as the pipeline for future projects and initiatives further constricts.
It is true that a mild recovery appears to be underway in the U.S., but it is mild and global economic issues will continue to add pressure that may stifle the early momentum.   G20 Finance ministers yesterday dropped their support of fiscal stimulus plans, making it clear that they no longer believe expansionary policies are sustainable or effective as a way of supporting economic recovery.  From the G20 communiqué: 
“The recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability, differentiated for and tailored to national circumstances.  Those countries with serious fiscal challenges need to accelerate the pace of consolidation.”

Note especially the emphasis on individual nations being responsible for cleaning their own houses as best befits their situation.  
For FM’s it is important to realize what this global financial crisis means to us strategically and operationally.  This is the “dark side” of globalization.  It was great and now it’s not, and it’s really not.  The interdependencies that have become the nervous system of international finance affect us indirectly but quickly.  The U.S. and to a slightly lesser extent Europe are primarily consumer economies.  With governments now less able and less willing to spend their way out of recession pressure on the private sector to take a stronger leadership position is increased.  That is hard to do when unemployment prevents consumers from spending.
Employment indices for Europe and the U.S. paint the picture. 

Euro zone unemployment exceeds 10%  (EuroStat, June 5, 2010)

U.S. job losses are deep and long  (Calculated Risk Blog, June 6, 2010)

The combination of these two large events; the shifting of global population and age demographics along with extended and widespread financial stress, represent a pivot that has and will continue to change the course of human history.  Nations, industries, businesses, families and individuals are all affected, and all are reacting.  In this environment it is FM/CRE’s responsibility to steer a studied and well-considered course, to advise our constituencies, and to provide leadership when and where opportunities present themselves.

Next week:  Pivot Two – Strategic Alignment in an Era of Ambiguity