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

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-20^th 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

Where Is FM Headed?

Every once in a while it is fun to gaze into the crystal ball, not only for the amusement factor but also because it is a strategic activity.  Strategic in the sense that you look outside your current circumstances and try to discern likely futures, and doing that can in turn shape the shifts you make in anticipation.  

So let’s do a bit of strategic gazing.  As we look at the future of Facility Management what do we imagine might be different in the coming years?  Here are a few suggestions.

Budgets will be determined at the strategic level and given to FM to prioritize and manage.  This shift will be driven by the need for agility in executing corporate priorities and the importance of aligning capital spend and operations in an increasingly complex and integrated technology environment.  It recognizes that executive leadership is best positioned to prioritize strategy while business unit leadership is best positioned to prioritize investments within a strategy.

FM will be elevated to the C-Suite.  There will be a second “CFO” in the suite, the Chief Facilities Officer (alternatively, the Chief Asset Officer).  The sheer value of FM is rising to the level that it demands front office executive attention.  As a result, business acumen will become the number one FM executive skill and many FM units will be headed by leaders who do not have a technical background.  MBA’s will lead FM, PE’s and professionals will remain in their traditional roles.

Service Level Agreements (SLA’s) will be prioritized to extend asset life cycles.  Financial investment in capital assets will be recognized as a significant lever on the overall health of an organization.  With this the primary emphasis of SLA’s will be shifted to maximizing the life of assets and contributing to productivity. 

Global recession fallout will be with us for the foreseeable future.  The forms this takes will be many.  Reduced capital availability and higher cost will limit options, placing an emphasis on space efficiency.  Coupled with a younger workforce and their work lifestyle expectations the trend towards increased use of alternative office strategies will continue.

The line between FM and IT will continue to blur.  Said another way, FM will become more and more dependent upon IT.  The mantra will continue to be streamlined processes that operate intuitively and require less and less intervention.  By definition that means a more complicated data sharing and dependency environment. 

Worker productivity will be the measure for everything.  FM value will be stated in productivity terms, including how the workspace is organized and maintained.  Service initiatives will support increased productivity and outcomes for most projects and initiatives will be measured and reported.  Why?  Because productivity is a root issue.  It leads directly to revenue, space, cost of services and everything else that affects the bottom line.

Building Information Modeling (BIM) and Integrated Project Delivery (IPD) will be the development vehicle of choice.  BIM and IPD are here to stay, and that’s a good thing.  BIM contributes to both the development goals of a project and its life long efficiency and sustainability.  IPD is simply what it says, a fully integrated approach to delivering projects.  It means partnering and working in truly integrated fashion, including sharing risk and rewards.  The payoffs are faster delivery, lower first and life cycle costs, higher satisfaction and more opportunity.

IPD, BIM, FM, Lean … All in One Place

Recently I have been working on a personal research project, looking to gather some of the more informative and interesting sources into one bundle.  You may be aware of most of these, but my contribution to the greater good this week is to put them all in one place, and maybe introduce you to one or two you were not aware of.  For those of us who work in the real estate, capital projects and operations side of facilities, these are good sources to have at hand.  Naturally, given where the profession is these days, lean, IPD and BIM are prominent.

The National Institute of Building Sciences’ Whole Building Design Guide offers a wealth of information on built environment standards and best practices.

The mission of the Open Standards Consortium for Real Estate (OSCRE) is to deliver global electronic real estate standards.  Members often compete in the business arena but collaborate within the OSCRE framework to further the development of standard real estate measurements and tools.  

The Building Smart Alliance focuses on building system interoperability and full lifecycle implementation to attain lowest overall operating cost, optimum sustainability, energy conservation and environmental stewardship.

The Journal of Building Information Modeling (JBIM) is a publication of the National Institute of Building Sciences which focuses on Building Information Modeling’s (BIM) application to the lifecycle management of the built environment.

Tradeline, Inc. produces excellent conferences primarily geared towards the academic environment.  Register on their site and you have access to a wide array of research reports which will be beneficial regardless of which sector you operate in.

The Construction Users Roundtable is an offshoot of the Business Roundtable.  Founded in 2000 its mission is to create a competitive advantage for construction users by focusing on cost effectiveness, improving construction planning and what Owners allow, require, and accept responsibility for on their global construction projects.

The Lean Construction Institute conducts research on project based production management for capital facilities.

The American Society of Quality’s Design and Construction Division works to advance quality and improvement within the industries that provide services to the built environment.

Stanford University’s Center for Integrated Facility Engineering, strives to be the world’s premier academic research center for virtual design and construction.  Its focus is research and education, with main objectives to improve schedule performance, cost conformance, sustainability and globalization.

Projects@Work is a good source for project management information and development.  Here you will find PM case studies, PM leadership tips, and general information of the profession.

For those interested in learning the basics of Integrated Project Delivery (IPD), you can check out this article at McGraw Hill’s Continuing Education Center.

IPD FAQ’s by the California Council of AIA.

CMAA’s College of Fellows paper entitled Managing Integrated Project Delivery provides insight and understanding that practitioners can build upon.  Its ideas are thoughtful and sometimes contradictory, as they should be in an intellectual interchange.

The Building Information Management blog reports on a national IPD study conducted by AIA, pointing to demonstrated efficiencies and cost effectiveness.

Learn the Right Business Continuity Lessons the Right Way

Someone once told me that practice does not make perfect as is so often claimed, and they were correct.  Perfect practice makes perfect.  I was reminded of this recently when conducting a table top exercise to test our ability to respond to an emergency event.  In disaster response and business continuity planning it is always important that you practice the details correctly.


When faced with unusual circumstances humans quickly conduct a database search in their brain, looking for similar experiences to use as a reference point.  They then act as they did then or as they observed.  That is why training correctly is so important.  What you do in training is what you will do when the real thing happens.  For example, if your assignment is to record information and you have specific logs for that purpose then use them when training.  Do not use blank sheets of paper or a handy whiteboard.  Practice using the tools you've been given and set that mark indelibly in your brain.


There is another way to practice of course.  That is to experience an actual event without preparation beforehand.  Not the preferred way of learning in my book.  


In his new book Business Continuity Management Michael Blythe addresses questions we should all be asking ourselves in the BCP arena.

• Did pre-crisis assessments identify risks and prioritize them appropriately?
• Did mitigation efforts offset the damage?
• Were managers well equipped?
• Did they implement contingency plans?
• What post-incident risks were not anticipated?
• How should strategies be modified in light of this experience?
• What tactics, training and policies need to be revised?

Personally, I would rather learn the answers the easy way, by anticipating and practicing correctly, identifying gaps and re-mediating them before being faced with a real situation.