Relationship Management Is Key to Strategic Business Alignment

When working to strengthen FM strategic alignment with the business do not overlook the importance of a strong relationship management program.  “Program” implies that this effort is intentional, as it should be.  Too many FM’s make the mistake of concentrating solely on the immediate project or task and do not pay enough attention to purposefully managing stakeholder relationships.  Relationship management, however, is a critical element of FM success, especially at the leadership level.

• A close relationship between functional leadership and customers ranked fourth among enablers that help increase strategic alignment.  (Luftman and Brier)

• Conversely, lack of a close relationship ranked first out of fourteen identified alignment inhibitors. (Luftman and Brier)

• Business executives repeatedly downplayed the value of formal organizational structure, but frequently emphasized the critical role of relationships in achieving strategic alignment. (Chan)

The best relationship management programs are not only intentional but also multi-level.  Peer-to-peer communication occurs on a routine frequency at all levels of the organization, informing the alignment process up and down the FM chain.

While it is beneficial that these interactions occur at all levels it is most important that exchanges at the business unit and executive levels be especially well tuned.  This is where the most important information resides and where FM has an opportunity to learn the most about stakeholder issues, plans and initiatives.  With this knowledge FM leaders can be proactive with projects and services in a manner that best supports core business outcomes.  That is, after all, what alignment is about.

At the strategic level executives will want to be intentional about maintaining contacts and a pattern of communication which shares information.  These conversations take many forms, some of them of a more informal nature.

At the tactical level there are many ways to increase the alignment dialogue.  One common methodology is to designate specific Customer Relationship Managers to interact with their counterparts or senior executives in business units.  Often this takes the form of a zone management program in which building specific information and projects  are shared, but it need not be that tactical.  If it is, the strategic dialogue should be a specific touch point as well.

Alignment, however, is not a one way street.  While FM may be seeking to align its strategies and operations with core business strategies this process also informs stakeholders about FM’s capabilities, forward leaning attitude and willingness to be a true partner in the business, not just a “call me when you need me” service provider.  It is a critical difference.  The more business stakeholders accept FM as a full partner in the enterprise then the more leverage FM can apply to positive effect.

Aligning FM with Enterprise Strategy – What Works?

Aligning functional operations and strategy with enterprise strategy first requires correctly understanding what alignment is.  I think the best practical definition I’ve run across is from Y.E. Chan who says,

“Alignment is best described not as a uni-dimensional phenomenon but as a superset of multiple, simultaneous component alignments that bring together an organization’s structure, strategy, and culture at multiple levels, with all their inherent demands.”

Multi-dimensionsal, simultaneous, and I would add, ongoing alignments.  Sounds like a messy process and it sometimes can be.  But there are a number of tactics that will help to make the alignment process successful.

A top down approach with a clear focus on business strategy is essential.   The changes required during serious alignment projects often require top-down motivation to overcome inertia and turf issues.  Senior executives are closer to enterprise strategy and have the ability to exert influence across the organization, and the ability to fund technology and other initiatives. 

The alignment framework must be strategy driven.  It’s all about consistently applying the same key strategies across the organization in a manner that maximizes adoption, market reach and shareholder value.  If the framework is focused on non-strategy issues then the lack of a unifying driver can present obstacles that stymie the effort. 

Operational metrics and customer satisfaction help to drive alignment initiatives.  Metrics to the rescue, again.  It’s hard to align something that you do not clearly see or understand.  Correctly quantifying operations and customer satisfaction provides a way to measure alignment gaps and prioritize projects based on expected benefit and importance to successive alignment initiatives.

Adopt continuous improvement and six sigma as alignment tools.   Hopefully you have already been using continuous improvement and six sigma protocols to optimize your own processes.  Alignment initiatives present the opportunity to take this to the next step, expanding the boundaries around your processes to include outside functions in which there is an important relationship in either direction.

Revisit mission statements to assure relevance and alignment.  It may sound obvious (because it is) but many organizations have not aligned their mission statements to be complimentary of each other.  If these statements are indeed the pointer on your compass to success, then different parts of the organization are moving in different directions at different speeds and with different levels of concern.  Making sure that mission statements express common values and outcomes all the way down the line helps everyone keep their eyes on the same goals.

Make alignment important to everyone.  You think it is now?  Maybe.  Making alignment a reportable element that influences performance reviews and compensation will guarantee it gets the attention you want it to get. 

FM Alignment with Enterprise Strategy

Strategic alignment of facilities management with core enterprise strategies may seem an obviously desirable state but it often remains an elusive one as well.  Recent surveys around the alignment issue indicate we still have a ways to go.

• 80% of senior managers (all support functions) believe that their function and the business is aligned, only 30% of corporate executive managers agree  (CIO magazine survey)

• 65% said ineffective communication of business strategy and goals between business management and functional management is a significant or moderate challenge (Deloitte Consulting)

• 60% of organizations reported a misalignment between the workplace and business operations because there was no integration with overall business strategy (Business Week)

The “why” of our misaligned state is a bit perplexing, especially given the attention given to business integration over the last several years.  I am willing to make a guess, however, that the following can be counted among the culprits.

• More attention has been paid to integrating functional silos than strategies
• Lack of leadership on the issue  - allowing alignment initiatives to languish
• Tyranny of the Urgent syndrome – “survival” mentality during the economic downturn
• Lack of buy-in for alignment initiatives below the top levels of management

FM’s operational and support function nature often separates us from being considered a core part of the core business.  FM work is largely transactional (projects, work orders, services) and not viewed as strategic.  Our main measurements are usually expressed in ways that do not relate to the core business ($/sq. ft., BTUH/sq. ft., etc.).  Further, our outlook is mainly short term, focused on asset development and management, cost reduction and capital minimization.

In short, we too often think about ourselves in terms we understand but which are largely irrelevant to our business partners.  That is not helpful to alignment .

Shifting our focus from operational outputs to business outcomes changes our perspective.  It reframes FM projects, services and processes as key business enablers; and encourages us to measure our performance impact upon business strategy and outcomes.  Attention is redirected to alignment, adjustment and continuous improvement in support of core business goals.

Shift your focus, FM.  That is the beginning of relevancy in today’s business world.

Integrated Project Delivery (IPD): Optimize, Collaborate, and Own the Project

Integrated Project Delivery (IPD) projects offer many advantages over traditional project delivery systems, including Design-Build and other fast track methodologies.  Integrated Project Delivery requires that entities which previously worked together on projects but with different goals and incentives now collaborate.  It also requires new behaviors, new attitudes, new contracts and new transparency.  Successful Integrated Project Delivery (IPD) projects recognize and exercise these IPD truisms.

Optimization Requires Collaboration:  The whole purpose of IPD is to optimize the project delivery process.  While there are many ways to collaborate with technology, the interpersonal aspects of IPD teams is critical.  Sharing documentation is one thing, rapid recognition of project issues and the ability to quickly convene and resolve them is another.  Although not an absolute requirement, many IPD project teams find that co-locating project personnel in one office speeds this process, encourages deeper collaboration, and results in faster decisions with greater cross-functional buy-in.

Collaboration Unlocks Creativity:  A natural outgrowth of good collaboration is increased creativity.  The free form flow of ideas and instant feedback feeds and helps to accelerate the creative cycle.  Design issues, constructability issue resolution, and every other facet of the project delivery process benefits from this outcome.

Joint Control Creates Joint Ownership:  Unlike traditional projects where separate contracts set up individual “fiefdoms” inside the project, each with its own set of priorities, incentives and penalties; IPD contracts create a project governance system that increases transparency and participation.  Shared decision making results in shared ownership of those decisions, thereby increasing buy-in and speeding execution. 

Challenge Stimulates Creativity but Fear Creates Defensiveness:  Every coin has two sides and IPD is no different.  As I mentioned at the beginning of this post, IPD requires new behaviors and attitudes.  When project participants are unable to make those shifts then the requisite trust among team members does not develop and the free exchange of ideas is inhibited, resulting in loss of project momentum and benefit.  Choosing IPD team members is a critical first step. 

Much of the benefit derived in successful IPD projects comes from enhanced collaboration.  But “it ain’t always easy,” as a wise man once said.  Participants need to make changes in the way they approach projects.  In traditional delivery systems project team members have individual aspirations.  They know how they define project success in terms of financial and other project outcomes.  But, they are not shared by all and sometimes differ significantly across the team.  Individual contracts do little to help and usually more to hinder.  IPD projects are based more on shared values.  IPD contracts unite all participants under the same set of goals with rewards and risks allocated by consensus.  Behaviors are enforced through rewards and consequences that are jointly agreed upon at the outset.

Characteristics of Successful Integrated Project Delivery (IPD) Projects

The Integrated Project Delivery (IPD) model requires behaviors, collaboration, and alignment of project incentives and risks at a level rarely seen in traditional project delivery systems.  Integrated Project Delivery is a holistic approach to project delivery that seeks to improve project speed, cost and quality.  Successful IPD projects exhibit a common set of characteristics which can be viewed as guidelines to forming your own project environment.

IPD Project Structure Supports Integration:  The project structure is possibly the single most important component in IPD.  Establishing project participants early on and bringing them together with common goals, incentives and risks is critical.  It requires that the Owner decide who all of the team members are long before the project is designed and bid documents are available, and that project control becomes a shared function.  By introducing transparency in control and decision making the group adopts collaboration and consensus as key behaviors, jointly agreeing on incentive/risk sharing and project targets.  This is not to say that the Owner relinquishes all rights.  The Owner establishes primary project outcomes and deliverables, establishes the budget and schedule.  How these targets are reached, however, becomes a much more “engagement centric” exercise than traditional projects experience.

IPD Contracts Serve as an Alignment Tool:  Traditional project structures and contracts create three distinct and often competing agendas.  When an Owner contracts separately with design professionals and Contractors the Owner assumes the responsibility and risk of coordinating project requirements and aligning entities that may be “working toward one common goal.”  At least that’s what we all say.  Reality, however, often suggests a different type of alignment, one in which three separate project teams each have their own set of requirements and definitions of a successful project.  Integrated Project Delivery contracts bring the Owner, Architect and Contractor together in one arrangement with one set of project definitions and goals.  This results in Sub-Consultants and Sub-Contractors also having the same outcomes in mind, as opposed to traditional models where they have more proprietary interests at heart.

Project Participant Mindsets Are Focused on Common Goals:  The transparency required of successful IPD projects engenders increasing trust and collaboration.  It is through these two channels that some of the most rewarding changes come.  Instead of compromising to protect their particular interests in a project all participants must adopt the common (project’s) good as their goal.  While the financial incentive of the shared reward pool is certainly a motivator, the importance and benefits of working together in close collaboration should not be under-valued in this sense.

Synergies Enhance Collaboration and Outcomes:  Technologies such as Building Information Modeling (BIM) and protocols like Lean Design and Construction are perfect bedfellows with IPD.  They accelerate projects while minimizing risk and improving quality.   It is no accident that most IPD projects are fast-tracked.  These tools and strategies are designed to do exactly that.  Greater visibility of design evolution and increased constructability input from the earliest stages contributes to early identification of design conflicts or other issues.  Lean Construction accepts time sensitive inputs and prioritizes design and decision making.