Giving Feels So Good

I've just returned from IFMA's annual convention and exposition, WorldWorkplace which was held in New Orleans this year. A lot could be said about the event, another impressive effort by IFMA staff, but what I really want to share is the Saturday experience. Out of the thousands who attended the week's events and toured the French Quarter, only 120 stayed for the volunteer work effort on Saturday. It may have been a small group, but we were a hard working bunch!

We took on four NOFD stations. Each team had eight hours to paint the interior of their station from head to toe, including the high bay "apparatus floor" where the equipment is parked. These stations were all in functioning neighborhoods which, I suspect, you would equate to second or third world country status. Their equipment is old, the protective turn out suits they wear when fire fighting are literally rotting, and the conditions they live and work in at the station houses are deplorable. Want to see mold? They can show you mold.

So what did we do? What did we accomplish? What difference did we make?

• We painted and sweated for nine hours and were exhausted at the end of the day. Some of us spent a good portion of the day on top of scaffolding painting the high bay ceiling, some of us "cut in" around doors and moldy window frames, and others cleaned and painted.
• We talked with the fire fighters. Heard their stories, their dreams, their frustrations...and shared ours with them.
• We laughed, hugged, and cried...and they did the same.
• Grainger and Bank of the West donated $35,000 to the FD's recovery fund, on top of the materials that were provided by donation.

For my money, that was the real event. Want to talk about a Value Add experience?

• I got acquainted with people in IFMA from all over the country (and one wanderer from Australia) that I didn't know before.
• I helped make a difference. At the end of the day this fire station was a different place, it had a different feel. We didn't solve all of their problems by a long shot, but we did something, it was important, and it was appreciated.

Kudo's to Will Rub, Bill Black, Francis Kuhn and the IFMA Foundation staff for putting this day together and giving us the opportunity to give back. It is two years since Katrina devastated the region and there is still much to do. It felt good to help out.

Understanding Roles and Needs Key to Successful Real Estate Strategy

FM’s are often uniquely placed and uniquely challenged when it comes to RE strategy and tactics. We are on the inside and know our organization and its needs and culture. We know our own strengths and weaknesses, how accurate corporate planning tends to be, etc. And as FM’s we are expected to translate what we know into forward looking strategy and tight execution tactics. Many FM’s, however, are not that well versed in the RE arena. If you have “grown up” in the profession on the services or maintenance side and not the RE side of the profession, then you may feel a bit uncomfortable when given this task.

Understanding who the players in the game are and what motivates each, what they need, their strengths and weaknesses is a first critical step a successful RE transaction. This knowledge allows you to leverage individual strengths so that team results can be maximized. For example, strong alliances with brokers who have strong business acumen will increase your effectiveness in the strategy domain, especially if RE and/or finance are not your strong suits. One mistake too many FM’s make is shopping for a broker with the lowest commission on a specific transaction, instead of forming a strategic alliance with the broker who has the best business knowledge and market intelligence.

But the issue of role definition and selection applies to all RE participants, not just the brokers. Here is a good cheat sheet that provides an overview of RE project principals.

	Brokers	Architects	Attorneys	Landlords	Contractors	CFO
Food Chain	Landlords	Reputation & referrals	Book of clients	Lender	Architect	Board of Directors
Strength	Deal making	Leverage over contractors, design	Document deal points	Increasing portfolio valuation	Complimenting architect	Driving the bottom line
Weakness	Occupancy issues	Designs that work (end user defined)	Simplifying deal	Paying attention to tenants	Commissioning	All things FM
Leverage	Who the know	Submittals, acceptance of work	Pre-negotiated Terms & Conditions	Access to capital	Project Management	Authority
Key Person Profile	Young lion, Harvard MBA	Firm principal or star associate	Seasoned partner, top regional player	Local principal with roots	Firm’s star associate	WYSIWYG
KPI	Sq. Ft. leased	Cover of Architectural Digest	Number of high profile deals	NOI, asset leverage	Annual volume	Bottom line

While the table is obviously not literally correct for every individual or firm, it is a good guideline that holds true more often than not. Which is simply another way of stating the age old truth…. Choose your partners wisely.

Outsourcing Best Practices

If you are about to go through an outsourcing exercise do a lot of research before getting too deep into the effort. Informing yourself is always a good idea, especially when dealing with something as important as deciding upon a long term relationship with a provider. Two of the best sources to start with can be found at www.outsourcing.com and www.outsourcing-center.com.

You may be surprised to learn that The Outsourcing Institute’s survey of Fortune 500 CEO’s indicated that improving company focus is the number one reason executives opt for outsourcing, with cost control coming in second. I suspect many of us would argue that order, but the survey says what it says. Other top rated benefits include access to increased capabilities, accelerating re-engineering benefits, and risk sharing.

To achieve these goals, concentrate on the “Two T’s” of outsourcing, technology and transformation. The former enables the latter and without the latter, your effort is in trouble. Why, you ask? Because transformation is the name of the game. If you are simply transferring the responsibility for performing the function without changing how it is performed, then it is likely that over time the outsourced option will become more expensive. Transformation is technology driven and provides time, cost, and quality improvements that you will not achieve otherwise.

Here is a starter list of things to be aware of, or beware of:

1. Culture match between buyer and provider is a critical issue.
2. Monitoring, compliance, and establishing a culture of best practices at the outset sets the tone.
3. Don’t let providers pigeon hole you into their “standard” solutions. You are unique, they should align with you.
4. Working with an outsource provider requires close oversight, but don’t micro-manage them.
5. You should be allowed full visibility into their cost structure, including staff salaries and benefits.
6. Beware of firms tied to one technology solution - are they selling you services or hardware?
7. When evaluating providers, look at their turnover metrics. Turnover has a direct bearing on the quality of people and performance you can expect.

Things you might want to include in your contract:

1. Require specific education levels and/or industry certifications of staff they employ on your account.
2. Require that a portion of the annual savings be returned to the staff who work at your site, or to your organization.
3. SLA’s and KPI’s rule the day. Make them the centerpiece of periodic business reviews and use them to determine penalties and rewards.
4. Include reward/penalty statements in each SLA/KPI.
5. Importantly, require the provider to report how they are meeting the SLA’s and KPI’s, not just the volume.
6. Include a clause that allows you to arbitrarily reduce labor and technology costs by a set percentage without penalty (especially if the requirements may sometimes change, as in the case of copiers for example).
7. Consider a clause that allows you to buyout unamortized technology costs and retain the technology in the event you terminate the contract.

That’s a good starter list, no doubt you have your own issues to consider. My closing caution is to remember that with outsourcing you are talking about a true business partnership. They are going to be in your house and working next to you every single day. Think carefully about the value proposition, the culture issue, and who you will be working with.

Recruiting and Keeping the Y Generation

Forget about “Gen X,” the new crop of young faces leaving college and showing up in your offices is commonly referred to as “Gen Y,” and they have different perspectives and needs from us “old heads” and even their close cousins, the X’ers. Given that the most important game in business these days is the talent game, it is important to understand Gen Y needs and how you can meet them.

Provide meaningful work that contributes to the organization’s mission. That may sound silly to you for an entry position, but it isn’t to them. And don’t assume that they will just “get it,” either. Tell them why they are doing what they do and how their work supports and advances important goals.

Mentor intentionally. The younger generation has a need to be and feel nurtured. Good mentoring will meet their need and simultaneously enhance their current and future value to the organization. And, don’t limit it to just one person. Mentoring by their first level supervisor can focus on tactical and organizational issues while mentoring from a more senior executive will help them feel validated and provide a more strategic view to their future.

Help them develop networks. Encourage their participation in professional associations and design networking events for your company. Importantly, Gen Y’ers want to know where the people who used to work for you are now. Have their careers been successful? The answer to that question will carry a lot of weight as they evaluate your organization and you while deciding to join or stay.

Focus performance reviews on the future. Poor performance or “issues” should be dealt with immediately, either at the end of the project or as soon as possible. The annual performance review may need to look back to those briefly, but should generally be a look forward. Discuss next steps in their careers and what it takes to accomplish those. One good way to do this is to think about their resume. Since their need is to be nurtured with an emphasis on career development, then put your coaching and feedback into that mold. Have them bring their resume to the review meeting and spend time discussing how what they have done over the past year enhances their resume. Use it to demonstrate your concern and interest in their development.

Bottom line, this generation of workers needs and wants to be nurtured, and they want to know how you are advancing their careers. You should not accept sub-par performance from them any more than you would others. But they are different and your method of communicating with them needs to adapt to the way they listen.

“Officle,” or “Awficle?”

A few weeks ago I was attending one of the major trade shows and sitting in on a case study presentation a friend was giving when one of those horribly awkward moments we all dread occurred. The case study centered on a major restack project in very trying circumstances, including the move to an open plan standard in order to accommodate growth. Not only was the staff of this professional services firm leaving private offices, but the new workstations were significantly smaller. Even Partners of the firm were making the switch due to space constraints. Needless to say, no matter how good the project was from an aesthetic design and implementation perspective, this project team had a very tall mountain to climb.

It was in the context of explaining this situation that my friend created the moment all speakers dread. In describing how the project team designed new amenities into the project to offset the sense of loss he mentioned that they installed sliding doors on each cubicle to enhance privacy, and quipped “some staff are even calling them Officles now!” Immediately from the middle of the room a loud bass voice boomed, “How are you spelling that? A-w-f-i-c-l-e?” Needless to say, the room went suddenly and painfully quiet.

My friend stumbled for a few awkward seconds, then recovered and went on. But the damage had been done. The presentation was itself, in fact, a perfect case study of a very good project that didn't get the credit it deserved because of the expectation gap. Sound like any open plan projects you’ve been involved with recently?

The fact is that offices are an emotional issue, and that will never change. When space and finances are constrained the temptation to increase space efficiency and improve operating costs becomes very seductive. But all of that advantage comes at a cost. As the FM leading or managing a large open plan transition project you have to anticipate and respond to the real, perceived, and emotional needs of your customers. This project team was on the right track, providing new amenities in the effort to overcome the negatives associated with squeezing the space. That is an important tactic, but it is only one. Here are a few others that you should have in your bag of tricks.

Know the “why” and sell it hard. The knowing comes from having done your homework, from having developed and analyzed multiple options until you arrive at a fact-based conclusion. Great. Now inform the staff. Don’t expect an initial positive response no matter how much you communicate or how hard you try to sell the outcome. And don’t become defensive over the reaction. It’s natural and part of the transition process. Your job is to help staff make that transition. Instead of meeting their initial resistance with a defensive or hurt attitude, continue to inform and advise.

Develop a set of guiding principles. Establishing clear project expectations and rules of the road at the outset will keep you on track and help diffuse the occasional wayward gripe. These principles should be viewed as your “True North.” They are litmus tests against which options and issues can be judged, helping to clarify and simplify the project. Again, communicate them broadly and draw the connecting line between them and your final solution.

Engage influencers from among your customer base as part of the project team. When you do this, make them a real part of the team. Let them help you identify the issues, options, and solutions. Give them an equal voice in the process and include them in all of your activities. Take them on the factory tours with you. By walking with you they will develop an understanding of the issues and be able to represent the project to their contemporaries in a way you cannot. Including them demonstrates to staff that you are making the effort to consider and respond to real issues even in the midst of a challenging project environment, you are not simply shoe horning people into the smallest possible footprint without engaging them. One big thing to remember is paying for their time. Include staff salaries and fringes in your project budget for these “non-FM” types you want to include on your project team. If they have to do it as an added duty you’re going to lose the priority game more often than not and be left with a sometime partner that you can’t count on and who is ineffective in their role. Buy their time up front.

Periodically ask all employees for their input. Do this only when there is an issue that has potentially significant affect on the office culture or project acceptance. Keep the surveys tightly focused and make sure that you share the analysis and conclusions. Later on you can draw another line, between this input and your design solution. For example, in one recent project we surveyed staff regarding operable windows at our new headquarters facility. Because of the fifty year tradition of operable windows the response was predictably strong in their favor. However, the survey identified tradeoffs required to support the choice for operable windows, such as difficulty managing the HVAC system to maintain comfort levels, project elements that would have to be cut in order to pay the additional cost, etc. It is easy to do surveys today using electronic survey tools which are readily available, but be thoughtful and strategic about using them.

Give something back. Everyone knows what the acronym WIFM means and everyone expects an answer. Your customers are no different. They are giving up space and privacy, make sure you give them something in return. This might be upgraded finishes or furniture, the ability to accessorize their space on the project budget, some limited form of personalization, or possibly other perks such as subsidized gym memberships or increased personal technology. There may be additional costs for providing these, but it will be a fraction of the cost of redesigning and reworking space because disgruntled staff lobby for and get changes after the fact.

Any time you are on a project that has this Private to Open transition element in it, you are in for a ride. But, it is also an opportunity to demonstrate leadership, develop connections, increase credibility, and deliver excellence. Make sure you take full advantage of it.