The 15 Trends Shaping Facilities Management Today
We live in a Facilities Management world where customer expectations change regularly and where the bar is often raised without warning to heights that sometimes appear both unreasonable and out of reach. The purpose of this blog is to help inform our Customers and the FM community at large how to stay ahead of the game. To do this, we need to set our sights on a course that will ensure that we understand where the winds of change are blowing and in turn to help our Customers become what they want to be. It is those individuals and companies that understand this, that will be ahead of the pack, and that will be best placed to meet each other on that path, with the right solution at the right time.
I have put together a list of what I see as the trends in the world of Real Estate and Facilities Management (REFM) that will shape our destiny in the future. Some of these may appear obvious some may not, in any event, we need to take on board scenarios that are different from those that we face today. Understanding these trends will enable us to prepare for the future and identify the forces at play that are shaping the industry.
1. Business Relevance
In many ways, we currently seem to lack no objective way of evidencing the value that FM brings to our clients business other than in the form of savings or cost reductions. If all that we measure is cost/m2 or cost per person, then this is the benchmark that we will be managed by. This is a huge risk as we are consistently being asked by our Client’s to demonstrate our value add and this sort of model just perpetuates the cost saving commoditisation scenario.
Increasing competition, shorter product life-cycles as well as increasing specialisation, differentiation and innovation are here to stay. REFM and services industry companies will have to find ways to help their customers stay competitive and maximise value. The key to developing this is a viable FM Model which evidences the value and impact on all stakeholders, not just shareholders as well as workforce productivity, health and wellness, absenteeism etc. To do this, managers will have to understand the key business drivers and indicators that promote value in their Clients’ organisation and how REFM and services industry can help their customers improve performance.
2. New Ways of Working and the Workplace of the Future
Corporations are implementing new ways of working and alternative workplace practices to promote corporate identity and foster more efficient collaboration, knowledge sharing, flexibility, speed, innovation and productivity. The workplace will continue a transition to being a social hub that is the physical manifestation of desired cultural and brand values, as well as a place of production. The traditional workplace will be seen as the alternative not the primary or desired alternative. FM managers will increasingly have to make use of online facility reservation and management tools that flag underutilized facilities, leading to better facility management and eventually better building design.
3. Technological development
Technological progress increases productivity, and we already see significant advances in intelligent technology, such as near field communication sensors, smart surveillance, security applications and smart robots, which will enable automation of more activities. Technology will take over more domains and functions as robot technology improves in quality, prices for advanced technologies decline and labour costs increase. Technological development is squeezing low-quality labour out of the market and creating new demands for skill sets. Cleaning, for example, is no longer an issue of “elbow grease”. Security is much more than a pair of eyeballs. New technologies require that people work in more intelligent ways.
4. Customer Experience
There is already a shift from a primary focus on building-centric inputs through to service outputs; this will continue with a greater concentration on customer-centric business-related outcomes. Customer experience will be seen as much about the way in which the service is delivered as the service itself. Our mindset will change to one of customer orientated delivery culture, where REFM teams need to behave or be equipped to sense, mediate and monitor for and with clients, customers and consumers. We will need to understand at a deep and meaningful level, the deeply the significant distinctions between each together with their value drivers and expectations, while providing a tangible difference to the business with much more attention to the evidence of how customer value is created or lost. Great consumer and customer experiences will differentiate REFM in the future by appealing to both the heart and mind of consumers while providing a tangible difference to the business.
Global warming is the main sustainability challenges for the coming century. To become more energy and carbon-efficient, societies around the world may be forced to restructure their economies and infrastructure. Sustainability challenges will have a number of consequences for the REFM and services industry in the coming decade, affecting supply and value chains as well as building design, management and maintenance. Systemic design will become more important. There are several ‘levers’ available to REFM to reduce carbon intensity, but all require a base of reliable data and performance targets. Five themes emerge as being important: behaviour change, standards, building and environmental performance management, knowledge sharing, and supplier management.
6. Focus on Health and Well-being
While the workplace is a place of production and the staff at a primary level are the units of production, FM will need to understand better what releases productivity for different people working on different tasks in different contexts. The worker and their needs (effectiveness) will be the primary FM focus, not the workplace (efficiency). Over the coming decade, an increasing focus on worker health will permeate the workplace as more life/workstyle-related disorders and diseases will emerge. The focus on health and a better life will lead to artificial and technologically enhanced human capabilities, creating a significant impact on the FM and services industry. A doubling of the prevalence of lifestyle-related diseases, like diabetes, will lead to new incentives in building designs to promote healthier and more productive lifestyles among company employees. Buildings will be assessed and intended to promote more active, comfortable, and productive lifestyles. REFM needs to support the economy of flexibility and engagement which will succeed economy of scale as a primary value focus for globalised business platforms.
7. Integrated Solutions
So-called ‘integrated solutions’ to date have tended to be little more than window dressing supporting existing operational and industry fragmentation rather than catalyse profoundly new ways of operating. Real integration needs to be based on partnerships, coordinated processes and data technology. Understanding and defining integrated problems will help the development of truly integrated solutions. Business benefits must drive the nature of integration, and not the other way around as is currently pursued.
8. Value Based Mutual Partnerships
There are multiple tensions inherent in the way procurement and FM operates today with their lengthy tick box based sourcing processes which cause a vicious circle of commodisation, dissatisfied customers and low margins that makes partnering a challenge, despite all the words to the contrary. When companies and prospective Customers use the term “strategic partnership,” all we understand as suppliers is that this means we will have to reduce our price.
True partnerships are driven by a shared vision for the relationship, mutually compatible goals, transparency, trust, and time and effort from all parties. A move the Vested model of What is in it for We (WiifWe) as opposed to What is in it for Me (WiifMe) will become more prevalent as value sharing is seen as way to unlock opportunities. In addition intangible value that cannot be easily measured will need to be articulated in different ways. New areas of value will emerge, such as timeliness and flexibility.
The year 2007 was a watershed year in the world’s recent history. It marked the start of the global financial crises. This crises threatened the collapse of the major financial institutions, which was prevented by the bailout of banks by national governments, nonetheless markets still dropped worldwide. Even today, nearly a decade after the crises broke we have not recovered from its structural effects. One of the many outcomes of this time was a massive desire by governments to regulate. The regulatory burden on companies in every industry has increased. The age of the compliance officer is upon us and this demand for compliance, will become a top risk in the FM industry over the next 5 years.
10. Knowledge Management
The issues of compliance as well as reporting, collection and control technologies are creating a mountain of data. The successful FM and services industry companies into the future will be the ones that can efficiently collect, store, secure, analyse and operationalise data to generate value and maximum benefit for customers. Truly effective Knowledge Management has potentially massive benefits for all stakeholders, but the challenge will be to manage all the data both explicit, tacit and implicit. Tacit and implicit data is both in our people and at the heart of our competitive advantage and therefore loss of knowledge in our people is a huge risk and needs to be addressed so the priority components of an effective KM approach will need to include enhanced data collection, categorisation, storage, retrieval, analysis, re-application, and disposal.
11. Service Culture
Service quality expectations may differ by stakeholder. For example the FM client will be more interested in overall value for money whereas end consumers of the service often have no cost reference and therefore expect timely and quality services. The need to recruit and train staff in enhanced levels of service excellence will mean that we need to turn to adjacent and complementary industries such as logistics, hospitality, hotel and hospital management. But as with all service industries the quality and attitude of the people employed in the service delivery is a critical issue, and so the rise of behavioural and attitudinal profiling during the hiring, performance management and retention processes are key issues that need to be embedded. Driving service quality is one thing but evidencing it is another and this will need to be supported by rise of effective qualitative performance measurement frameworks.
12. Intelligent Client
Whilst we are undoubtedly some way behind the northern hemisphere in terms of the prevalence of the ‘Intelligent Client’ but we are seeing more instances of this as global companies migrate into Africa. They come expecting northern hemisphere standards and processes from what is an improving but still immature supplier base. Behaviour is the key differentiator of the intelligent client together with their ability to form relationships of trust in their providers and getting them involved in coming up with solutions rather than just responding to predefined tasks, KPI’s or SLA’s. The ‘intelligent client’ has the most potential to be effective in a real partnership arrangement with a focus on attaining a synergy around business alignment, ensuring smart decision making at the right levels by the right people and so the skill sets required include strategic planning, change management and adaptability.
Innovation has become a fundamental imperative for FM. The pressure to innovate is rising as it becomes clearer that the industry and the primary FM value proposition are both at risk of flat-lining. This has come about through divergent service delivery, poor branding and lack of evidence to show that FM can make a difference. Innovation is expensive and it needs to be paid for and incentivised and the commercial models need to recognise this.
Historically there has been little incentive for innovation due to prescriptive requests for proposals, input-based SLAs, introspective measures, constant cost pressures, and a history of under-investment and fragile R&D all of which inhibits investment in systems, quality headroom and innovation in FM. With the noted improvement in co-collaborative partnerships as well as the advent of the intelligent client will come a change of mindset. A blend of boldness, tolerance and patience mixed with a culture of openness, reflection and questioning will encourage a focus on how practically to catalyse and foster innovation and the development of innovation tools and processes.
14. Attracting/Retaining Talent
Attracting, recruiting and retaining the best possible workforce will be increasingly complex and challenging for companies around the world, as the interests and motivating factors for workers from various generations are different. New regulations and heightened regulatory oversight are driving a surge in hiring of staff with compliance and controls-related skills. Those with backgrounds in risk management, compliance and internal audit are particularly sought after. However, FM regrettably isn’t high on the list of career possibilities of high-flying students and executives and so as I have alluded to in Service Culture above we will need to improve our hiring processes as too high a proportion of our talent intake probably occurs by ‘(un)happy accident’.
Part of the problem is the narrow ‘gene-pool’ that is typically considered, those with FM skills and experience by those with FM expertise and experience and there is a need to look more widely across different industries for talent that can build mature trust relationships. As the fourth-generation workplace will become increasingly familiar, It will be an essential factor for all FM and services industry companies to understand the motivational factors for each age cohort.
Globalisation has undoubtedly been one of the key drivers of change in the REFM industry over the last two decades, but arguably has it merely served to provide the same fragmented services on a much larger scale? Global Alliances in the REFM supplier space is on the rise with many of our European counterparts entering into consolidation of the local supplier base. Global Clients are also a factor with Blue Chip imports from Europe and America who have global FM agreements bring with them vendors who do not understand the dynamics of working in Africa. Globalisation makes us more alike while at the same time, it makes us more aware of local differences and so the ability to deliver African expertise to global standards will be the differentiator that will avoid efficiency of delivery gains at the expense of the customer experience.
Question; These are big subjects, and I can think of several that I have not done justice to here so if there are some howlers that we have left out, please leave a comment in the space below.