HIghstreet 2.0

Highstreet 2.0

It’s been a bad year for high street retail.  Numerous brands have gone in to administration with some gone forever.  The question on everyone’s lips isn’t “Do you think anyone else will go?” but “Who will go next?

Where does this leave our high streets of towns and cities? Can they thrive on coffee, poundshops, charities and banks? Unlike the shops that have gone, the high street needs to adapt, innovate and change its business model in order to stop declining and thrive once again.

But who needs to do this?

The people responsible for our high streets are the local authorities where they reside.  In many cases this could be two or three different local authorities or in some cases a single local authority will be responsible for hundreds of high streets.  Under significant financial pressure themselves, local authorities need thriving high streets, they create tax revenue and create jobs easing the burden on social care costs

 But what do they change to and how?

Mary Portas makes some good recommendations in her recent report to shift the emphasis to the business on the high street.  How about shifting the emphasis of the high street to public services – like going to town to pay your council tax, speak to your councillor or hire a book from the library? Should public authorities move out of their offices in to the high street and provide more services on a Saturday afternoon?  How about a high street sure start centre in a old Blockbuster? Or the police station where HMV used to be? Or a doctors surgery, dentist and library in the old Republic clothing shop?

Hang on! – clogging up the high yield commercial outlets public services isn’t going to generate more tax or jobs?  No – it won’t.  However, it will remove boarded up shop fronts and add diversity to the high-street pulling in more customers for commercial shops that in turn will create demand for more shops. Which can only be a good thing for the high streets?

So – what do you think? Public service shops mixed in with Starbucks, Primark and Boots?

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.

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.

Cross charging your Facilities Management outsourcing

Cross charging your Facilities Management outsourcing

I know I have banged on before about a simple and clear pricing pro-forma for tender returns but this blog should also help if you need to recharge your FM costs to various internal departments.  This can be tricky, if the specification has changed, some departments may need more 'wooden dollars' that they were not expecting, or the way in which your pro-forma is designed can allow bidders to profile a price you were not expecting.  Usually during a tender re-charging is the last thing on your mind.  Therefore, here are my top tips for a successful tender and simple recharge afterwards.

1.       A clear and visible winner

Key is a pricing model that creates a clear winner. You need to be sure that you know who the winner is.  This avoids challenges from losing bidders and makes your internal approval process less stressful.

2.       Tailor your service to meet your budget

Sometimes you may not be sure what level of service you can afford.  Use your tender to ensure you maximise the quality of service for your budget. There are different options for input or output specifications so doing this could be the key to fewer disagreements when recharging departments.

3.       A transparent elemental build-up of costs

If you are recharging this is necessary – but it is also necessary if you have a changing estate or workforce.  Granularity is important to consider, you need enough detail to recharge and analyse prices but too much can be like trying to see the wood through the trees.

4.       Consistent parameters for all bidders

It is essential that parameters such as building data and inflation assumptions are the same for all bidders to allow an ‘apples for apples’ comparison.  However, things change, so it is also essential that if the parameter changes you know the impact on your costs. 

5.       Audit, audit, audit

Building in some audit tools is good practice so you know that your pricing model is crunching numbers correctly.  You do not need a degree in financial analysis to do this, some basic arithmetic tests and checks are usually sufficient.

Put it in Context



Bring me a dead cat and all I can tell you is that it was a cat and it is now dead.  Bring me a dead cat and tell me you found it in the middle of the road, what killed it? A car? heat exhaustion? 

What are we talking about?

Context!   -   The difference between road kill and a meal.

Context is critical for people to make up their minds and make decisions.

Recently I did some work with a public sector organisation who wanted to outsource their FM services.  Together we did some work to quantify the savings and the service improvements that would be guaranteed by a service provider.  The client needed to get the project approved by their board made up of people who didn’t know much about FM and elected members who represent the public. 

 “We will save £500,000 by doing this outsourcing”.  Is that good or bad? We don’t know until we attach some context to it.  A £ number is just that – a number – it has no meaning without putting it in context. 

“We will save 0.5% of the organisations budget”.  That doesn’t sound very good. 

“We will save 15% of our current expenditure”.  That sounds good! 

This means something internally but for a public sector organisation who is accountable to the public it may mean little.

“We will be able to employ an additional 20 front line jobs to support the community”.  That sounds great! 

Jobs put the sheer quantity of iphones
sold in to context for the audience

The presentation we put together had 3 numbers on it…

“By outsourcing, we will save £500,000 (15% of our budget) which is the same as employing an additional 20 people in front line jobs in the community”

The board now understood the importance of doing the outsourcing both for the organisation and the people they provide services to.  Needless to say the questions were not “Why should we do this?” but “How soon can it be done?”

How to win Competitive Dialogue bids – Inspired by Team Sky Pro Cycling and British Cycling

The Competitive Dialogue bidding process can take a long time – it is a multi stage, high cost procurement method.   However it is popular in the public sector as it clarifies the requirements and solutions between buyers and bidders and helps ensure bids are compliant.  There is a lot of contact with the customer and therefore a lot of opportunity to influence the direction of the bid.  But how do you do that amongst other bidders trying to do the same thing?

 

The head of Team Sky and British Cycling, Dave Brailsford, knows what it takes to win.  He has transformed British Cycling in to world beaters.  Over the past 2 years I have applied Dave Brailsford’s philosophy to my own bidding activities at the company I work for.

Dave Brailsford talks about a strategy called ‘Controlling Variables’.  This means that you take into account conditions which may vary during the bid (and possibly change the results) and control them to remove or minimise their affect on the result of the bid in your favour.

I see each bid requirement as a variable that needs to be controlled and managed so that the proposal is perceived as the best.  I can then start to see the variables I will be best at amongst the competition and the ones I need to improve. 

The Competitive Dialogue bid process is essentially a great big arms race. There are a lot of requirements to get right in terms of commercial proposals, service delivery methods, proposed operational people, the price and the quality of the written submission. 

There is no doubt you need to compete with the other bidders on all these variables.  Controlling the direction of discussion in customer meetings is important to ensure that the bid is perceived as the best, most innovative and compelling.

The way to do this is to make sure nothing is left to chance In terms of knowledge, preparation, other work pressures on the team, support, stakeholder knowledge, research, analysis of dialogue meetings and so on.  Work everything through in detail. It is all about finding the incremental advantage – the nugget of information or idea that the other bidder hasn’t thought about that improves your bid.

Dave Brailsford calls this – “performance by the aggregation of marginal gains.” He says, “It means taking the 1% from everything you do; finding a 1% margin for improvement in everything you do. That's what Team Sky and British Cycling try to do from the mechanics upwards.   For example, If a mechanic sticks a tyre on, and someone comes along and says it could be done better, it's not an insult - it's because they are always striving for improvement, for those 1% gains, in absolutely every single thing they do."

Naturally, all these tiny gains can add up to large gain – and that’s the approach that has underpinned Britain's phenomenal success in cycling.

So if a bid can be the best and the bid team performs to the absolute highest level, this is success from a process point of view.  If you start looking at the outcome in terms of just the result it is impacted on by so many other variables that you are putting yourself and your team under an massive amount of unnecessary pressure.

The one thing you are in charge of is being your best. It’s therefore critical to have the right people with knowledge and motivation. 

This is the most important variable. It is one you are totally in control of and can not be influenced by other companies.  The behaviour, attitude and motivation of your dialogue team is as important, if not more, than the actual nuts and bolts of the bid. 

There is always room for improvement here because to keep going for (in some cases) up to a year in Competitive Dialogue is such a monumental effort.  To carry on making the investment must largely be in the mind. That is where there is an opportunity. Psychology is everything.

After a long process, put yourself in the best place to win

In a Competitive Dialogue situation, part of the psychological armoury is that rivals simply look at the investment being made and think: well, there's no point competing. That is a clear advantage that didn’t need any innovation. 

This is one variable that each bidder cannot control, that is the rate of progression of the other bidders. So, if you perform better than other bidders and progress faster, you will cover more ground, leave less to chance or luck and be in the best position to win.