Outflanking Nokia

Outflanking Nokia

This week has seen another pillar of industry bite the dust.  Along with Kodak, Tower Records and John Brown and Son.  All of them reached the top of their industry and stopped.  They were outflanked and didn’t react quickly enough to industry changes. They were complacent.

I have grown up with Nokia.  My first mobile was a Nokia in 2001 and for 6 years after that all I had were Nokia’s – they were the best – other manufacturers tried but couldn’t topple Nokia.  But then Steve Jobs changed all that. 

What the iPhone did was make a computer fit in to your pocket and they included a phone. Internet device first, phone second. They threw in an iPod, which had already changed the music industry, for good measure.  “An iPod, an internet communicator and a phone” Steve Jobs stated.

Nokia were making great phones with add-ons.  They didn’t invest in the software that powered the internet and more importantly apps.  Apps made the iPhone – it was the killer feature.  No one cared what the phone looked like anymore – what they cared about what the software and what you could do with it.

That is where Nokia went wrong – but they needn’t of – they had in in the palm of their hands in 2007/2008. But they continued to invest in the software that had put them at the top and held them there – Nokia still shipped more phones in 2007 than any other provider.  The smartphone software they were developing was seen as niche and specialist.  They didn’t divert resources to it quickly enough.  Once they realised smartphones was the way to go they backed Windows instead of Android.  If they had backed Android – Your Samsung Galaxy could have been a Nokia.

The messages from history are the same.  John Brown and Son shipbuilders on the Clyde didn’t adopt modern manufacturing techniques.  Tower records didn’t move to the digital music revolution  Kodak continued to produce 35mm film instead of digital devices and photo software.

The message is simple.  The change you created to put you where you now has to change again to put you on top in the future.  You can’t stop.  Because if you do, you will be outflanked. 

Perfect proposals

The key to successful proposal writing

Companies who supply FM services cannot survive without winning new business through writing proposals and completing tender exercises.  So often I see poorly articulated proposals.  What’s that you say? You run out of time? Not enough resources?

Buyers use the proposal to find out who the best is out there.  Less than ‘first class’ proposals can mean reputational damage, being taken off vendor lists or poor business motivation, let alone not winning the work you have spent time, effort and money trying to win.

Here are my 5 tips for ensuring your proposals leaves the client asking… when can you start?

1.       Pick the right battles

Why chase tenders that you are not going to win? Good qualification is key to ensuring you get off to a good start.  Only chase opportunities that are real, you can deliver and you want to win.

2.       Know your customer

Being prepared for a tender is essential.  The key to this is to establish relationships with the customer so you can understand what they really really want and they have a good idea of your capabilities and competitive advantages

When buyers receive proposals they don’t like those that don’t address their specific needs – who wants to read stuff their not interested in? No one – so write about stuff your customer will be interested in – how your going to address their needs.

3.       Build your solution to get to the winning price

A lot of people say that it always comes down to price and the proposal is secondary.  I don’t believe this is the case.  The key is to build a solution that drives the right price – for both you and the customer.

4.       ATFQ (Answer The Full Question)

Answers need to answer the full question. It has to be customised and specific to the needs of the customer. Make sure it is easy to understand and has a simple clear layout.  Evidence and examples of where you have done it before are a must and build credibility.  Avoid waffle, incomplete answers, generic standard offers, and talking about yourself.  If every paragraph/sentence starts with your company name, we, us or our – you are talking about yourself not the customer.

5.       Present your proposal in a fitting way

So you spend hundreds of thousands preparing a tender which is worth millions to you.  You have to win the job.  So why do you print it on poor quality paper, bind it in a plastic comb or in an off the shelf lever arch file? Your printed bid is your shop window, give it justice and dress it the best it can be.

Zero Hour Contracts in FM.

Zero Hours contracts have risen to public prominence over the last couple of weeks.  They are widely used in Facilities Management, especially in the security industry.  I have used Zero Hour contracts and as an employer.  They are useful, however we should not loose sight of the employee, their wellbeing and the potential uncertainty they can create.  Here are 5 top tips on using Zero Hour contracts:

1.       They should only compliment and support full time contracts

You will always need a core compliment of staff to provide a service.  This core compliment should be staffed by contracted hours staff.  It saves on back office administration and provides a stable workforce for your customers.  A common use of use zero hour contracts is for holiday, sick cover and surges in demand.  You can calculate how many staff you will need for holiday cover.  Managed well you can smooth the demand throughout the year. This allows zero hours contract staff to have a steady stream of work.  I have worked based on less than 10% of your workforce are on zero hour contracts.

2.       You need to give ample notice of when staff will be needed

Giving 1 hours notice does not help you or help the staff. It puts unnecessary pressure on both parties.  You should give a forward plan of work to staff so you can plan your business and the staff can plan their lives.  Zero hours staff providing holiday cover does this, sickness is harder but it always will be regardless if you have zero hours staff or not.

3.       Give staff first refusal on new opportunities and new vacancies

Zero Hour staff are members of your workforce and they should be given first refusal on any contracted hours posts in the workforce.    This incentivises staff to stay in the organisation and help you because turnover of staff in Facilities Management is usually quite high and opportunities will naturally arise.

4.       Provide employee benefits

A common issue raised with zero hour contracts in that there is no employee benefits.  No sick, no holiday, no pension etc.  Why not?  You can pay all of these things to staff retrospectively based on the actual hours worked in the previous month.  This provides some security for the staff when there may not be guaranteed income and doesn’t cost the business any more than employing contracted hour staff.

5.       Communicate, communicate, communicate

Above all it is important to maintain regular communication with staff.  Be clear on what is happening and if there is likely to be work in the future or not.  Be clear what flexibility, benefits and issues there are and be clear that they are every part of the workforce as staff who have guaranteed contracted hours.

What puts the 'total' in Total Facilities Management?

Until the facilities management industry can agree on a clear definition of TFM, the service model will never truly deliver the value it promises.

Ask 10 people what the ‘total’ means in Total Facilities Management and you will get 12 different answers. This creates a problem for TFM – an identity crisis and, more importantly, a value crisis.

There have been debates since time began on what this ‘total’ is and the answers, in reality, probably will not deviate from a common theme. I believe most people see TFM as a collection of services, such as cleaning, security and maintenance, managed collectively and supported by a single helpdesk.

 
Having no industry definition inhibits our understanding of TFM value
Even this loose belief means different things to different people. For example, if an in-house FM says they operate a TFM service but on further discussion and understanding, different contractors deliver their services - is this still TFM?

This brings different opinions and understandings of the value that TFM can achieve. You may have heard some of these different perceptions. Some say ‘TFM didn’t work for us’ or ‘we prefer a single service model’; but without a definition, how do people know if TFM provides the value that they think it might or if TFM provides a better service than any other approach?

TFM should deliver greater value/cost saving than a single service model
The consensus is that a TFM solution drives better value and/or lower cost than the comparable single services added together. Driving this are economies of scale and less duplication of management overheads.

The converse argument is that ‘specialisms’ are lost. You will naturally need a larger supplier or a more general management team that can manage multiple technical disciplines to deliver the services, as opposed to specialists who will deliver a single technical area alone. You may have seen the role ‘soft FM manager’, which normally bundles cleaning, catering and security – all of which are very different technical disciplines.

Large TFM suppliers in the industry will cross-skill staff. This extracts further value because staff up-skill to do jobs that otherwise would have been completed by more qualified engineers, for example, as in the case of fire alarm testing undertaken by security officers.


TFM is about more than just the blue collar services
The majority of TFM delivery models are focused on blue collar delivery. This leaves a number of missed opportunities. Expanding the ‘total’ FM service into the following areas could yield further value:

• Integration with the real estate strategy of the organisation would combine the traditional white collar aspects of the property service with the blue collar FM service delivery
• Expanding into other areas of workplace support as opposed to just physical buildings
• The re-organisation of staff into a TFM model goes further than the cross-skilling described earlier. It is a re-design of the workforce from, for example, ‘cleaner plus’ to ‘soft FM services operative’.
• Ensuring that the service specialisms are not lost so that TFM benefits from best practice and emerging themes in service industries.

 

There is a natural tendency towards TFM in the market over time

The bundling and unbundling of services naturally occurs in a contract cycle, as buyers search for better value by coming to market in a different way to their current provision. There is also a less frequent in-source/outsource cycle. Buyers who believe they do not get the value desired from their outsourcing drive this.

Single service providers sell based on their specialism. However, they have a natural tendency to diversify into other services to grow their business as their single service business reaches market saturation. This will naturally move those providers towards being able to provide a TFM model.

The UK is currently in a period of unprecedented budget cuts, which is pushing the requirement for higher productivity and cost savings in non-core business areas such as FM. This puts strain on prices and will force suppliers and buyers to innovate in order to maintain margins and save costs. One way to do this is to bundle more services together to create value and protect revenue and profit.

In recent FM industry debates, there is evident a desire for FM to be ‘strategic’ within the organisation. To do this, FM will need to have a bigger presence in the organisation, deliver more value and have a larger share of the overall budget. Therefore, FM needs to pool budgets together. This allows the enlarged FM department to have more leverage to prove its worth.

 

Developing the standard would allow FMs to manage the journey to TFM

If we look at a similar industry, say ICT, this is predominantly a support service to an organisation. It is multi faceted and it only takes one service failure for the world to fall apart. Sound familiar? The ICT industry has quite a robust set of frameworks and standards for the delivery of services so that customers know what a good service looks like. Supporting this is a ‘maturity model’ that measures and defines where an organisation would like their service to be.

If there is a natural trend towards TFM then should we try to figure out what exactly it is so that suppliers and clients have a defined TFM framework or benchmark to evaluate what level of TFM they are delivering or providing? This would ensure that facilities managers extract full value to avoid the ‘it didn’t give us what we thought’ shortfall we commonly see in TFM - because clients would be able to manage their service against a common benchmark and put actions in place to deliver the value.

Robert Cunliffe is a Director in Capita Symonds’ facilities management team. He is currently seeking to develop a maturity framework for TFM to help clients and suppliers define, measure and manage their path to a true TFM solution.

What we must fight to protect

What we must fight to protect

Recently I met a Local Authority manager who runs a local authority children’s centre.  It is a fantastic facility for young people.  There is play equipment, BMX track, outdoor cinema, kitchens and sound recording studio.  There are 10 of these in the local authority and in recent years their opening days have been cut bit by bit.

The manager told me a story.  He asked some of the children who visit where chips come from?  The response was “Iceland”.  The manager planted potato seeds with the children and taught them where chips come from.  He then went on to challenge the children to see how many people they could feed with £10.  Most came back with meals that could feed 3 or so people.  But after growing vegetables in the centre garden and some basic cookery lessons the children soon knew how to feed 20 people. 

This is just one example of the fantastic services local authorities operate.  Some people may read this and say that this learning should be done in schools. However, these centres are open after school finishes - If these centres are not open where will they go?  Local Authorities are required to make savings and it’s tough to decide where the axe falls.

You may wonder why I, a FM practitioner, have such a passionate view on this subject. Well I believe that although FM is a non-core, non-front line service, it deserves strategic input in to the core services of a Local Authority.  Local Authorities property and support service portfolio is currently experiencing rapid change as a result of the decisions being taken to make budget.   It is up to us FMs to deliver services to local authorities that support their changing business.    Here are some thoughts on how to do this in Local Authority FM:

1. Right size the estate to the projected size of the organisation

Understanding how much space is needed is obviously key.  Keeping space open plan and flexible will minimise costs of churn.  Perhaps keeping some “swing” space which can be used if needed or let to new local businesses – can Local Authority FMs become a local traded service, generating revenue?

2. Establish facilities to co-locate services reducing the quantity of smaller properties

Can a library be the job centre, children’s centre and housing offices all in one?  If these can be collocated it would save in all areas whilst protecting the services.

3. Centralise all FM budgets across all departments to maximise synergies

Point 2 is rarely achieveable if budgets aren’t centralised.  There are also big procurement benefits if only one department is buying all FM goods and services.  A single point of decision making will also help with points 1 and 2 to speed up change and maximise efficiency.

My view is that once we deliver at this level waste will be removed, costs will come down in non-front line areas and the axe may not need to be as big on the front line – especially on services future generations rely on.

Proving our worth

Proving our worth

Following on from the Workplace Futures 2013 debates of the last week I was thinking about how FM can get its seat on the board – get its voice heard – and prove its worth - to the organisation.  In times of budget cuts and shrinking margins FM is seen as an easy target, a non-front line service that won’t matter to the organisations business goals.

Wrong! – here are 5 steps to making FM strategic:

1. Combine the property strategy with the FM service provision

Most organisations (public or private) will grow or shrink their property portfolios to suit their business.  The FM team need to change their delivery model to adapt to this change.  Supporting the workforce in the workplace change – be it space planning or minimising moves disruption will go a long way to maintaining a productive business.

2.Support the workforce and the changing nature of the workplace

Can FM move itself away from the “Facility Manager” to the “Workplace Manager”?  One manages buildings, the other manages workplaces.  The workplace is changing, there is a higher proportion of home workers, field workers and hot-deskers. - Is this a reason for needing less office space?  Providing workplace support will move FM in to areas of ICT, Fleet, and Regus style services – expanding the role of the Facility Manager.

3. Have a demonstrable effect on the businesses goals

Whatever the business, there will be primary business goals.  If the FM service can measure their impact on those business goals, then they will be directly proving their worth to the organisation.  For example, in Local Authorities this could be local employment, training local people or supporting local businesses.  FM can buy local, employ local people and train those employees.  This contributes to the economic development of the local area – and Local Authorities will see this as a benefit.

4. Provide a highly efficient and modern service

In a constantly changing business environment, any service can ill afford to stand still.  There is no getting away from the need to constantly be providing a cost efficient, lean and productive service.  Either if FM is in house or outsourced – innovating through continuous improvement will keep the service modern and cost efficient and be seen less of an easy target.

5. Award Winning

What could be a better endorsement of your FM service than an industry award.  There are many available – Go for it! and don’t just prove your worth to your organisation – Prove it to the industry.