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07/01/2015

Put the “M” Back in FM

Change the cost center perception by running your department like a business

 

Change the cost center perception by running your department like a business.

Facilities departments are traditionally viewed by their organizations as an expense – one that can be cut back when it’s time to tighten the belt. This short-sighted perception ignores the value FM brings to the table and puts the department at risk of further budget cuts.

Changing this unfortunate view starts with changing the way the facilities department does business, both internally and externally. Shift the perception at your organization with these smart management strategies.

FM as a Cost Center
Traditional management techniques in the FM department tend to exacerbate the cost perception problem. Very few facility departments have a revenue stream at all, never mind a revenue stream that covers the department’s expenses, notes Michel Theriault, author of Managing Facilities and Real Estate and principal of Strategic Advisor, a facility, property, and asset management consultancy. Instead of attempting to drive more profit under your current business model, it may be more helpful to change the narrative instead.

“The basic thing that we have to consider is that we are, in fact, a cost center,” says Theriault. “But instead of focusing on costs, we need to think about our impact on the organization’s overall success, even in areas that can’t necessarily be measured monetarily. If we shift that focus to things like productivity, risk management, and cost containment within reason, we will be more successful as a profession.”

That change starts internally. Senior FMs tend to receive less training in leadership, business, and strategy than their colleagues in other departments, Theriault notes. While tactical education on mechanical systems and efficiency strategies is vital, it’s also important to improve your business know-how.

Back to Business: Training Tools for the New FM

Ready to change how the FM department operates? Consider looking into courses on these topics, suggests Michel Theriault, author of Managing Facilities and Real Estate.

■     Strategy
■     Writing and communication
■     Public speaking and presentation
■     Finance
■     Accounting (particularly a focus on budgeting)
■     Business fundamentals

Certifications like IFMA’s FMP (Facility Management Professional) designation address many of these topics as well as FM-specific subjects like O&M, Theriault adds.

“An FM, especially the senior person in the department, is actually competing with colleagues in other departments – such as IT, logistics, sales, or business development – for resources and attention from senior management,” says Theriault.

Where to Start
Greater visibility and respect in your organization starts with embracing the company’s mission, vision, and values and aligning the facilities department’s goals with these basic principles, says Nicole Lobb, client services and facility manager at the Centre for Health & Safety Innovation (CHSI), a Mississauga, ON, facility that houses two health and safety associations, a multidisciplinary healthcare clinic, and meeting space. Your goal is to deliver services that support the corporate strategy.

Next, step back from day-to-day building concerns for a minute and look at your goals and the facility’s upcoming needs.

“Do more thinking ahead about how to accomplish things. Instead of just going to senior management and saying ‘I need something,’ think about how you can sell that to your boss. Put together a compelling argument with facts, information, and arguments that your leadership relates to,” explains Theriault. “That will help drive it forward.”

To properly sell any initiative, you’ll need to develop your marketing skills. Most FMs aren’t used to promoting themselves, Theriault notes, but tooting your own horn is a key element of transforming the way the facilities crew is viewed at your organization.

“The next time you’re at a departmental meeting with your boss and peers, be very well prepared to talk about what you do,” says Theriault. “Promote your successes and even your failures – for example, ‘Around 2 a.m. this failed, but my team got it fixed so no one noticed when they got in at 8 a.m.’ A lot of FMs are afraid to mention that, but it shows you’re good at responding and fixing things. By acknowledging some of the problems, you may be in a better position to get funds or resources to fix them.”

These meetings are also a great time to raise occupant complaints. Track them in an easily demonstrable way that helps back up your funding requests – for example, repeated temperature complaints from a certain area of the building.

“Survey them and then use their answers as a tool to convince senior management that you need more resources to make changes,” Theriault recommends. “If that doesn’t work, senior management will now have to acknowledge that a certain level of service is all they’re willing to pay for.”

Realign the FM Mission
As you improve external perceptions of FM, it’s also important to streamline the department’s internal management. Defeating the cost center stigma requires change in both your daily operations and your long-term planning – namely, transforming FM into a profit center by running it like a small business.

Start by identifying potential sources of income. You’re already “selling” your FM services to the other departments in your organization, but your building or site may offer additional opportunities to bring in revenue that can then fund efficiency improvements or other initiatives. Potential money-makers include parking, retail space, food service, and leasing roof space for solar or cell phone communication installations.

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“The type of building and local amenities often contribute to revenue opportunities,” explains Geoff Williams, general manager at CHSI. “For example, the Centre for Health & Safety Innovation has parking, but we don’t charge for it. It could be a revenue opportunity in the future, but given our more suburban location, it would be unreasonable to charge for parking. If you’re in an area where there are a lot of local food choices, it may not be a wise decision to operate a food service in the building.”

Each one of those revenue opportunities is like a separate business that you’re about to launch, Williams continues. That means your next step is to develop a strong case for why your organization should back your efforts, including revenue projections and potential risks and liabilities.

“The C-suite is typically most concerned about time, risk, and money, and both time and risk relate to money,” says Theriault. “The FM needs to ask the CEO, CFO, or COO, as well as the IT person and the financing person, what they need to see in order to make decisions. Different organizations have different ways of representing financial analysis, so investigate what they would like to see – sometimes that means digging deeper into benchmarking information or talking to colleagues to find out what they’ve done.”

Steps to Implementation
Now operating as a business within a business, the facilities team at CHSI was charged a few years ago with expanding the reach of the organization’s Corporate Event Centre. Business grew nearly twofold in three years thanks in part to these steps.

1) Creating a strategy for growth. Starting with CHSI’s vision, mission, and values, the team focused on strategic marketing for the business, aiming to make the event center a “unique meeting place for applied learning and innovation and to inspire prevention in the community” per its mission. This goal statement closely mirrored the overall corporate objective: “Create a unique meeting place that advances and promotes the mission of CHSI and supports its partners and stakeholders.” The alignment between the organization’s goals and the event center’s goals ensured that the end result furthered both parties.

4 Questions for FMs

Building your plan to operate as a profit center starts with these four questions, say Geoff Williams and Nicole Lobb of the Centre for Health & Safety Innovation.

1)   How well do you understand your corporate strategic plan?

2)   How does the FM strategy fit into the strategic plan?

3)   Can you demonstrate FM successes against corporate goals?

4)   What can the FM do for the bottom line?

CENTRE FOR HEALTH & SAFETY INNOVATION

2) Developing a team that matched the size of the Corporate Event Centre’s requirements to ensure adequate services. This involved adjusting the responsibilities of some staffers to align each position to the corporate strategy. The former facility director became the general manager and is now tasked with managing the event center’s business, while the facility manager’s title changed to client services and facility manager, encompassing both managing the building and maintaining the relationship with the internal tenants who use the facility.

A new role, the guest services manager, was created to match the growth of the venue; this team member focuses on marketing the business, staying competitive, and maintaining relationships with event center clients.

3) Aligning the product to the customer. CHSI determined that three core groups were using its event space and tailored its approach accordingly.

Resident clients included paramedical clinics, health and safety associations, and other businesses headquartered at CHSI, which mainly played a landlord role for this group. Serving resident clients required an understanding of unique businesses and special attention to customer surveys and quality guest services.

Corporate Event Centre clients represented multiple business types (which required the venue to remain flexible), but the team decided to target corporate institutions as the venue offered a plug-and-play corporate meeting environment. Wooing these clients meant ensuring competitive pricing for rooms, free services (such as Wi-Fi), and on-site catering in order to compete with other meeting spaces. To meet that goal, CHSI re-evaluated its pricing strategy and invested in re-branding, targeted marketing, and collateral.

Finally, the community event clients utilized the organization’s health, safety, and wellness resources to benefit the surrounding community. Serving them required keen knowledge of community needs and the ability to satisfy multiple market segments at once. Here, CHSI focused on building its brand, defining its market, and increasing its own value in order to drive sponsorships from industry partners.
“A lot of the success was built on understanding both the product and the client,” explains Lobb. “With these tools in hand, CHSI grew our business nearly two-fold in three years.”

Build on Your Successes
The transition from cost center to profit center won’t happen overnight, so it’s vital that you keep pushing for change even after your first successful initiative as a small business. That attitude can make all the difference, Theriault explains.

“What I see is a dichotomy of facilities managers who are just treading water because they’re doing it the old way and the successful people who have been able to implement change, get money for resources, and have the ear of senior management,” adds Theriault. “When I look at where that comes from, the difference between those two people is business leadership and strategic skills.”

Continue improving that skill set through training and outside education as much as you can, Theriault recommends. In addition to general business training, consider looking into classes on communication or writing to help you polish your message.

“Start doing things differently,” Theriault urges. “Don’t keep doing it the same way. Don’t do it the way your boss used to do before you took over the job. Don’t do what all your colleagues did. Learn from people in other departments who are successful and have climbed up the ladder.”

Janelle Penny janelle.penny@buildings.com is senior editor of BUILDINGS.