When it comes to the bottom line,
there are two ways that organizations can look at the facilities they occupy.
The traditional approach is to see facilities as a
cost. This focus on the inputs to a business process leads naturally to cost
control and expense cuts as organizations strive to reduce expenditures, cut
staff, economize and minimize. Many real estate and facility executives report
that their organizational
culture and priorities drive them to this
exclusive focus on cost containment.
there are two ways that organizations can look at the facilities they occupy.
The traditional approach is to see facilities as a
cost. This focus on the inputs to a business process leads naturally to cost
control and expense cuts as organizations strive to reduce expenditures, cut
staff, economize and minimize. Many real estate and facility executives report
that their organizational
culture and priorities drive them to this
exclusive focus on cost containment.
But there is another way of looking
at facilities, and it gets back to the reason organizations have buildings in
the first place: to get work done as efficiently and effectively as possible.
Seen from this perspective, the facility can have a positive bottom-line impact
by helping improve employee productivity.
at facilities, and it gets back to the reason organizations have buildings in
the first place: to get work done as efficiently and effectively as possible.
Seen from this perspective, the facility can have a positive bottom-line impact
by helping improve employee productivity.
We might call the older approach an
input-oriented perspective: Corporate real estate and facility executives are
simply suppliers of workplaces, providing complex products - buildings,
furnishings, technology - and services. These executives have little direct
concern about the ultimate impact of their products and services on the
organization as a whole.
input-oriented perspective: Corporate real estate and facility executives are
simply suppliers of workplaces, providing complex products - buildings,
furnishings, technology - and services. These executives have little direct
concern about the ultimate impact of their products and services on the
organization as a whole.
Contrast that worldview with a newer
outlook - output-oriented, if you will. These facilities organizations focus on
helping the core business to be more effective and competitive by helping
employees to be more productive. To them, the buildings, with their furnishings
and support services, are means, not ends. Economy, efficiency and skillful
management of physical assets are still necessary, but will no longer suffice.
These workplace service providers are committed to outcomes such as improved
productivity, rather than inputs such as desks and chairs. Top priority goes to
meeting the needs of the occupants, by adding value to core business processes,
and responding to changes in the core business workforce, all to best
contribute to organizational success.
outlook - output-oriented, if you will. These facilities organizations focus on
helping the core business to be more effective and competitive by helping
employees to be more productive. To them, the buildings, with their furnishings
and support services, are means, not ends. Economy, efficiency and skillful
management of physical assets are still necessary, but will no longer suffice.
These workplace service providers are committed to outcomes such as improved
productivity, rather than inputs such as desks and chairs. Top priority goes to
meeting the needs of the occupants, by adding value to core business processes,
and responding to changes in the core business workforce, all to best
contribute to organizational success.
Top facility executives have only
recently started to think about how to increase the added value to the primary
process, or core business, of their organization. These executives realize that
they must not only address the issues of cost control and income, but also must
develop and implement a strategy to support the core business.
recently started to think about how to increase the added value to the primary
process, or core business, of their organization. These executives realize that
they must not only address the issues of cost control and income, but also must
develop and implement a strategy to support the core business.
What kinds of facility and real
estate departments seem to be focusing most on productivity? Interestingly, the
move toward productivity generally began in centralized facilities and real
estate departments, not departments that are part of individual business units.
That's the opposite of what one would have expected: Decentralized departments
should, in theory, be closer to their customers and have a better sense of the
real needs of the organization. But, in reality, these executives typically focused
on cutting costs or on increasing the value of the real estate portfolio.
estate departments seem to be focusing most on productivity? Interestingly, the
move toward productivity generally began in centralized facilities and real
estate departments, not departments that are part of individual business units.
That's the opposite of what one would have expected: Decentralized departments
should, in theory, be closer to their customers and have a better sense of the
real needs of the organization. But, in reality, these executives typically focused
on cutting costs or on increasing the value of the real estate portfolio.
By contrast, adding value to the
core business, or optimizing the core business, became a top priority for a
surprising number of centralized facility and real estate departments. This was
true even though, in traditional corporate organizations, the central units are
the least integrated with specific processes of the business units.
core business, or optimizing the core business, became a top priority for a
surprising number of centralized facility and real estate departments. This was
true even though, in traditional corporate organizations, the central units are
the least integrated with specific processes of the business units.
Why did this role reversal happen?
Perhaps because the centralized departments saw that their internal customers -
the core business units - might decide at some point to buy workplace services
and support direct from the marketplace, i.e. not from or through an in-house
facilities department. That meant the facilities department had to see itself as
competing with firms already in the marketplace - powerful discipline to focus
on the customer.
Perhaps because the centralized departments saw that their internal customers -
the core business units - might decide at some point to buy workplace services
and support direct from the marketplace, i.e. not from or through an in-house
facilities department. That meant the facilities department had to see itself as
competing with firms already in the marketplace - powerful discipline to focus
on the customer.
In any case, over the last few
years, there have been signs that the decentralized departments have also begun
to focus on productivity. To the extent that this trend continues,
decentralized departments should be well-positioned to add significant value to
their organizations.
years, there have been signs that the decentralized departments have also begun
to focus on productivity. To the extent that this trend continues,
decentralized departments should be well-positioned to add significant value to
their organizations.
Of course, not all organizations -
centralized or decentralized - walk the talk when it comes to management
priorities. Some do indeed give first priority to serving occupants; for years
their management has been building this perspective into their group culture.
For the rest, the focus on the customer is the destination, but not yet the
achievement, at the hands-on staff levels.
centralized or decentralized - walk the talk when it comes to management
priorities. Some do indeed give first priority to serving occupants; for years
their management has been building this perspective into their group culture.
For the rest, the focus on the customer is the destination, but not yet the
achievement, at the hands-on staff levels.
Satisfaction Plus Delight
Adding value to the core business
includes meeting the needs of work processes as well as of people; it also
includes going beyond what is recognized as necessary and is explicitly asked
for. Economy and efficiency are of course necessary but not sufficient. This is
periodically confirmed by an ongoing survey of true facility end-users:
hundreds of thousands of occupants of facilities provided by the U.S. General Services Administration's
Public Buildings Service (https://www.gsa.gov/about-us/organization/public-buildings-service). The survey has found that good service and good technical
performance are expected, even taken for granted. They only become an issue for
occupants if significant deficiencies exist.
includes meeting the needs of work processes as well as of people; it also
includes going beyond what is recognized as necessary and is explicitly asked
for. Economy and efficiency are of course necessary but not sufficient. This is
periodically confirmed by an ongoing survey of true facility end-users:
hundreds of thousands of occupants of facilities provided by the U.S. General Services Administration's
Public Buildings Service (https://www.gsa.gov/about-us/organization/public-buildings-service). The survey has found that good service and good technical
performance are expected, even taken for granted. They only become an issue for
occupants if significant deficiencies exist.
PBS established a goal of increasing
customer satisfaction to a specified level. It found from the survey that a
huge increase in effort to upgrade basic technical performance, such as HVAC or
cleaning, in thousands of smaller buildings would not bring occupant
satisfaction up to target. Nationally, the top driver of overall satisfaction
was "responsiveness with regard to procedures for obtaining services"
and that was more of an issue in large buildings than small.
customer satisfaction to a specified level. It found from the survey that a
huge increase in effort to upgrade basic technical performance, such as HVAC or
cleaning, in thousands of smaller buildings would not bring occupant
satisfaction up to target. Nationally, the top driver of overall satisfaction
was "responsiveness with regard to procedures for obtaining services"
and that was more of an issue in large buildings than small.
The added value, expressed as
delight, comes when workplace innovations make it easier for people to do the
new necessary tasks that are being invented at the same time. Workplace changes
must keep pace with changes in work processes and people while respecting the
workers' priorities for quality of life.
delight, comes when workplace innovations make it easier for people to do the
new necessary tasks that are being invented at the same time. Workplace changes
must keep pace with changes in work processes and people while respecting the
workers' priorities for quality of life.
Integrating Facilities
Workplace improvements need to be
integrated with appropriate HVAC
maintenance and work processes. As time goes
on, the management of workplaces will be integrated into the management of
business processes. Consider the history of corporate management information
systems (MIS) over the last two decades. MIS was once a stand-alone department.
CEOs relied on their MIS managers to oversee the corporate computerized
business systems and the mainframe hardware on which they ran. Business units
and headquarters each identified information technology (IT) requirements and
relied on the MIS department to develop application programs and deliver
information. CEOs and line managers delegated to the MIS people the role of
identifying needed IT investments and of recommending priorities in MIS support
for the business.
integrated with appropriate HVAC
maintenance and work processes. As time goes
on, the management of workplaces will be integrated into the management of
business processes. Consider the history of corporate management information
systems (MIS) over the last two decades. MIS was once a stand-alone department.
CEOs relied on their MIS managers to oversee the corporate computerized
business systems and the mainframe hardware on which they ran. Business units
and headquarters each identified information technology (IT) requirements and
relied on the MIS department to develop application programs and deliver
information. CEOs and line managers delegated to the MIS people the role of
identifying needed IT investments and of recommending priorities in MIS support
for the business.
That is no longer good enough for
companies that use IT to gain strategic advantage. IT has become a core element
of their business plans. It can make viable a widespread empowerment of
managers and staff by giving them access to the information they need for
decision-making. It can be the core of new products and services. IT is
integrated into almost every work process of retailers and petroleum,
pharmaceutical, airline and trucking companies.
companies that use IT to gain strategic advantage. IT has become a core element
of their business plans. It can make viable a widespread empowerment of
managers and staff by giving them access to the information they need for
decision-making. It can be the core of new products and services. IT is
integrated into almost every work process of retailers and petroleum,
pharmaceutical, airline and trucking companies.
CEOs are recognizing that strategic
management of IT is at the heart of companies' business processes. These
processes, such as the order fulfillment cycle or the product delivery process,
bridge divisions or departments of the organization. Today, some CEOs are
former senior executives of MIS, and many have sufficient expertise to manage
IT as an integral part of their role. Further, they are distributing IT
expertise and leadership in support of business processes instead of delegating
IT responsibilities to a central, separate support group.
management of IT is at the heart of companies' business processes. These
processes, such as the order fulfillment cycle or the product delivery process,
bridge divisions or departments of the organization. Today, some CEOs are
former senior executives of MIS, and many have sufficient expertise to manage
IT as an integral part of their role. Further, they are distributing IT
expertise and leadership in support of business processes instead of delegating
IT responsibilities to a central, separate support group.
As IT becomes pervasive, it enables
a transformation of the workplace. Much work that a decade ago could only be
done on corporate or government premises has become location-independent. New
processes made practicable by IT happen in places chosen for convenience of the
buyer, not the seller. For instance, making a bank deposit or transfer was once
done by going to a branch bank or mailing paper to the bank; now it is done by
the customer, whether at an ATM in a shopping mall or on the street, over the
telephone, or from a desktop computer in the customer's office or a notebook
computer anywhere.
a transformation of the workplace. Much work that a decade ago could only be
done on corporate or government premises has become location-independent. New
processes made practicable by IT happen in places chosen for convenience of the
buyer, not the seller. For instance, making a bank deposit or transfer was once
done by going to a branch bank or mailing paper to the bank; now it is done by
the customer, whether at an ATM in a shopping mall or on the street, over the
telephone, or from a desktop computer in the customer's office or a notebook
computer anywhere.
As with IT a decade ago, workplaces
are starting to become an identified component of business competitiveness.
They are becoming key to emerging business processes. To some companies, the
automobile has already graduated from a transportation vehicle to a primary
workplace. A field engineer who has the tools to operate anywhere, anytime, may
need an office desk, not a private, permanent office. Indeed, small cubicles in
an open-plan office might be shared among several engineers on a part time,
as-needed basis.
are starting to become an identified component of business competitiveness.
They are becoming key to emerging business processes. To some companies, the
automobile has already graduated from a transportation vehicle to a primary
workplace. A field engineer who has the tools to operate anywhere, anytime, may
need an office desk, not a private, permanent office. Indeed, small cubicles in
an open-plan office might be shared among several engineers on a part time,
as-needed basis.
The corporate paradigm is shifting
from command-and-control hierarchies to teams that drive processes. Expertise
in providing and supporting workplace facilities and services will be a
necessary and accepted component of those teams, as today's CEOs recognize the
corporate advantage in their interconnected information processes.
from command-and-control hierarchies to teams that drive processes. Expertise
in providing and supporting workplace facilities and services will be a
necessary and accepted component of those teams, as today's CEOs recognize the
corporate advantage in their interconnected information processes.
