4  FM quick reads on Facility management

1. The Right Language Can Help Gain Top Management OK for Energy Efficiency


Today's tip from Building Operating Management: Putting energy savings in terms of ROI instead of payback can help win top management approval for facility efficiency projects.

All too often, senior managers think of payback periods when they are evaluating proposals for energy efficiency upgrades. That's not surprising. Payback measures how long it takes for savings from a retrofit to cover the costs involved. That's a very simple metric that provides a comfort level for financially oriented managers who don't really understand the facility technologies involved.

But the use of payback makes it easy to set tougher requirements for energy projects than exist for other corporate initiatives. It's not uncommon to hear that organizations won't consider energy efficiency upgrades if the payback is longer than two years or even 18 months.

One way a to avoid that problem is to get top management to think in terms of return on investment, or ROI, rather than payback. Like payback, ROI is a simple measure. In fact, it's simply the inverse of payback. But the impact of switching from payback to ROI can be significant. A five-year payback sounds like a long time, but the return on investment is a solid 20 percent. A project with a four-year payback has an ROI of 25 percent. A three-year payback equates to an outstanding 33 percent ROI.

ROI is clearly a powerful tool for selling energy efficiency upgrades. How many corporate projects have an ROI of 50 percent? Yet that's exactly what a two-year payback requires. And an 18 month payback demands a whopping 67 percent ROI.

ROI isn't a perfect measure of the value of energy upgrades, but it's certainly better than payback.


2.  Seven Strategies Can Make Change Management Successful

Today's tip from Building Operating Management comes from Jodi Williams, a workplace consultant with HOK Advance Strategies: When implementing a major change, these seven strategies can help overcome obstacles to change.

Obtain executive support: Having an executive "walk the walk" is extremely important. Former Intel Chairman and CEO Andy Grove used to sit in an 8-by-9 foot cubicle like the rest of his employees because he felt it was the most productive way to work; New York City Mayor Bloomberg has also embraced this concept.

Ensure good communication: Both failing to get the message out and failing to listen are equally dangerous.

Overcome limitations of the organization: Lack of cross-functional collaboration or hierarchical issues can torpedo a change process. Sprint found that the Sprint Mobile Zone requirement for space change, behavior change and new technology resulted in the need for collaboration among human resources, information technology and real estate. This cross-functional collaboration was a critical element in the success of the process.

Establish clear goals: without a specific set of goals or vision, the change process cannot adequately prepare staff for the change. Nissan North America hosted strategic visioning sessions to explore the business' goals, developing and vetting a plan for a high-tech teaming environment to enhance collaboration.

Acknowledge staff: A change cannot be successful without full participation and recognition of the staff - whether through informal "attaboys" or more formal acknowledgements.

Develop clear plans: Great ideas don't just happen. One company moved a large group of employees from an old, crowded urban corporate headquarters to a new, suburban location. To ease the transition, the company provided a shuttle service from the downtown location to the suburban location. Unfortunately, however, a lack of planning and communication created employee upset when the company explained that the shuttle program was a temporary service, and would be discontinued after the initial occupancy period.

Be patient: Recognize that even with change management, adaptation is going to take time.

3.  Give Top Management Multiple Reasons When Justifying Projects

Today's tip from Building Operating Management: When justifying money for a project, offer top management as many benefits as possible for the project.

One of the biggest management challenges that facility managers face is justifying the funding for new projects. In some organizations, the facility department is seen as a cost center, and investments in facility projects are not seen as having a return. Even when top management understands the value of facilities, investments in facility projects still have to compete with other uses of corporate funds, including ones that may increase revenue.

When justifying a project, it is of course critical to highlight cost savings and cost avoidance. These should be hard numbers and should be estimated conservatively. Savings projections will be closely tracked and, if the project fails to deliver the promised savings, the facility manager will have a harder time justifying projects in the future.

While these hard numbers will have the greatest influence on top management's willingness to fund a project, they are not the only factor. Other cost related factors should also be highlighted. For example, if rebates are likely, it is worth mentioning that fact if the rebates are not included in the cost savings. Similarly, a reduction in the amount of time that staff has to spend maintaining an existing system should be reported. The time saved may not be a bottom line savings unless the facility department is reducing staff - but they will have time to tackle other projects.

Another important consideration is the reduction of complaints. In many cases, the complaints will have to do with comfort, but that is not the only source of employee dissatisfaction. A cumbersome access control system or poor interior or exterior lighting could also bring complaints.

Reliability is another factor that should be weighed. In some cases, this will be the primary factor for the upgrade, as when a hospital is dependent on a very old and unreliable back up generator. But reliability can be a factor in a range of other systems as well, and should always be considered.

Finally, consider whether the upgrade will bring safety gains.

4.  Strategic Thinking Can Help the Facility Department Add Value

Today's tip: Think strategically about facility management to help the facility department add value to the organization.

As much as facility managers complain about all the surprises they have to deal with on the job, putting out fires can become a habit, almost a sort of addiction. There's the adrenaline rush that comes with having to handle even a small crisis, plus the immediate gratification of solving a pressing problem. By comparison, things that are necessary for facility managers operating strategically — like analysis, planning and networking — can seem dull. Shifting priorities from crisis-response to proactive management isn't easy.

But facility managers who think strategically have learned to view the performance of the facility department in terms of its contributions to the overall organization. And that perspective can help facility managers gain credibility with top management, credibility that can translate into more access to resources for the facility department.

Even well-run facility departments are not necessarily operating from a strategic perspective. The Office of Facilities Management and Reliability at the Smithsonian Institution had good marks from customers and was about to embark on another five-year operating plan when department leaders decided it was time for a more strategic approach. For a department with 850 people, that wasn't easy. Developing a strategic plan, then communicating it throughout the department and getting staff engaged, took about 20 months.

"It needed time and [leadership] gave us time," says Judie Cooper, a workplace performance analyst at the Smithsonian. "That's a challenge that many facility organizations don't want to deal with." Facility managers shouldn't view the time as a cost, but rather as an investment in people, Cooper says.

When facility managers say they don't have time to think strategically because they're always dealing with urgent but unexpected problems, FM consultant Stormy Friday of the Friday Group answers this way: "Well, you're fighting fires because you aren't strategic. You're always playing catch up."


RELATED CONTENT:


Facility management , top management , energy efficiency , payback , ROI , return on investment



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