Blog Series: Workplace Strategy and Facility Management
Part 1: Workplace Strategy For Facility Managers
Last year JLL and IFMA published a White Paper entitled: Redefining the Executive View of Facility Management. The paper detailed the need to change C-suite attitude towards the role of Facility Managers.
The importance of Facility Manager involvement in corporate workplace strategy was specifically highlighted. Furthermore, the need for Facility Managers to create a conversation with executives was addressed.
Strategy at the Facility Manager level is growing in importance. When Facility Managers get involved in a conversation at the strategy level, the C-suite view towards the FM profession changes. Facility Managers are viewed as creating value rather than just minimizing costs. The result can be separate and meaningful facilities budgets and more clout in workplace design.
The Workspaces Blog has created a 4-part series to address strategy in the Facility Manager role. Each post will take a deeper look at the trends and tools Facility Managers should be exploring. The series will also serve as a resource to help Facility Managers join the executive level conversation on workplace strategy,
For a meaningful discussion, it is important to first understand the changing context in which executives view workplace strategy.
A Volatile Business Environment
Business is becoming increasingly volatile. Global competition is fierce and connectivity makes distances smaller. As a result, companies from around the world can connect with customers and provide competitive pricing. Additionally, smaller organizations are able to punch above their weight using technology.
2 examples of the latter are AirBnB and Uber which have, respectively, disrupted the global hotel and taxi business. These disruptions occurred quickly. They showed the potential for rapid disruption in any industry.
These are not isolated incidents. Global consulting firm Deloitte addresses the issue in their 2015 Report – “Operating Models that Navigate Business Volatility”
Facility Managers know that broad changes in an industry mean changes at the facilities level. The negative economic condition of an industry and company can create tighter budgets. Conversely, positive conditions create growth and new hires. We examine the strategic changes that executives are looking to make and how these changes impact Facility Managers, below.
From Castles to Ships
Deloitte sums up the need for different operating models with the phrase “Moving from Castles to Ships.” Castles are large and immovable. This refers to industry giants that have built a strong market position and are set on protecting it.
On the other hand, ships are smaller, but nimble. The next Ubers of the world will be ships. For large firms, or castles, to survive, they must change their operating models. As a result, we are currently seeing business shift from castles to ships.
Facility Managers at the Helm
Executives are using new strategies to create more nimble and innovative businesses.
From an initial glance, the link between these business strategies and the Facility Manager role is not obvious. However, many of these new strategies involve new ways of organizing and leveraging the workforce.
A brief look at 3 strategic-level changes that affect the workplace, makes the role of the Facility Manager clearer in this transition.
Workplace Strategy Changes
Being more competitive often means being more efficient. For executives, efficiency includes managing real estate costs.
Fitting more workers into less space results in cost savings. As a result, executives can present better numbers to their company’s Board of Directors. During tight times this is especially important. For example, the 2008 financial crisis saw a shift towards a more efficient use of space in office environments.
The savings can be substantial. In their report on space utilization, CBRE quantifies potential savings per floor in an office building. In the US, annual savings of close to $350,000 per floor exist, by recapturing under-utilized space. In order to achieve these savings, Facility managers must manage new layouts that maximize space utility.
Flexible workplaces also create efficiency. Telecom advances have made flexibility easier. Using a mix of hot-desking and remote working, more employees can work in a smaller space. As a result, Facility Managers must manage hot-desking setups and hoteling software for booking private or meeting rooms.
Flexible work results in more productive employees as well. A Bentley University study found that 77% of millennials say flexible work hours would make their workplace more productive. More on meeting the needs of the workforce below.
Talent Attraction and Retention:
There is pressing need to attract and retain the brightest talent possible.
Flexible and open workspaces allow for more employees per square foot, but these costs savings are a secondary driver for some. This is when compared to talent attraction. In PwC’s 2016 Emerging Trends in Commercial Real Estate, it’s noted that, for some, workspace redesign is foremost a tool to attract and retain key talent.
Having the best talent will help any firm better compete on the global stage. Workplace strategy is changing to attract this talent. Flexible work policies in addition to other features aid in talent attraction and retention. Take for example, these 10 workspace features that Millennials and Gen Z want.
Depending on changes required for talent retention , the burden often falls on Facility Managers. This can include anything from a new layout or renovation to a new site search and move.
PwC’s 2016 Global CEO Survey showed that CEOs want to “build better innovation and people capabilities to address changing customer expectations”. It’s no wonder then that firms are looking to design innovative spaces. Innovative spaces usually share a couple of distinct hallmarks.
Tim Kastelle, innovation expert, says that hierarchy is overrated. In his Harvard Business Review article, Kastelle notes that firms with a flatter structure tend to be much more innovative.
For Facility Managers, a flatter organization means less private office space. Additionally, flat org-structures aim to increase innovation through idea sharing and collaboration.
The resulting space and strategy looks different from an office with cubicles in a core, surrounded by private offices. Rather, an open office that incorporates formal and informal meeting or “huddle” areas is needed. Facility Managers are the ones tasked with making and managing these changes.
Change may take the form of one, or all three of these strategies. However, each alone will have an impact on a Facility Manager’s role.
Therefore, it’s important that Facility Managers provide input in creating their workplace strategies. The C-suite knows that changing an organization is difficult. They need help. Facility Managers can be vital in ensuring success throughout the change process.
In their report, JLL and IFMA highlight communication as essential. Facility Managers need to get involved in workplace strategy discussions with executives.
In the remainder of this blog series we explore several specific topics related to managing this workplace strategy change. Use the posts and discussions as resources to become part of the executive conversation on workplace strategy.