The office as we know it is at a critical inflection point in its tumultuous existence. The pandemic has revolutionised what was already an evolving model of how we work. The need for the office in how we get work done is again being called into question. As outlined in my previous post ’10 Workplace Questions All CEO’s Should Have on Their Board Agenda’ the value proposition for the office it is now something that every business leader is asking themselves.
But, Let me start with a riddle…
“What am I when…
The person who makes it doesn’t need it, the person who buys it doesn’t use it and the person that uses it doesn’t want it?…”
Ironically this riddle is equally true of the Office. I could probably fill this post with analogies of offices and coffins but that would be missing the important point that I want to make. A point so eloquently put by Chris Kane in his recent book ‘Where is my Office’ where he paraphrases Winston Churchill’s famous quote about Russia by saying “Real Estate is a riddle, wrapped in a mystery, inside an enigma”
The process of producing a typical office is unlike any other production environment and one that I believe is now seriously out of touch with the reality that we are facing. The future of work is changing and so is the office that is needed to support it and the needs of its users. However, the fundamentals of how the average office is conceived, designed, built, and who is considered the customer remain unaltered. This process contains tectonic fault lines that have the potential to undermine the whole industry.
The designing and construction of an office is a process that is generally adversarial and fraught by lack of cooperation amongst the team with silo’s, egos and poor information integration.
In an era when flexibility and agility are key, and it takes seconds to make decisions on the direction a company needs to take. Corporate Real Estate takes many years to make a single unit of production, whose proof of design is incomplete that often contain costly errors that could have been foreseen at the outset of the process years previously.
The office is a product that costs many more times to operate than construct and yet the design team continues to build what is profitable, largely without any reference or consultation to those people that are going to be responsible for paying for it and occupying it.
Worse still the development team are often guilty of forcing what is essentially an unseen and unproven prototype on the occupier and then proceeds to run away (pun intended!) throwing the keys over their shoulder with not a care in the world who has to catch them.
Bricks and Mortar have historically been seen as a gilt-edged asset that the investment funds want as an avenue to stable long term returns. This has given rise to a gold rush of property developers who stake a claim on a site, get consent and build as much as they can on a ‘build it and they will come’ basis. When a tenant is secured, the revenue stream is sold to an investment house or a property company that looks forward to long term stable income.
This short-term approach sees profits being the end goal for the developer who only recognises the investment houses as the ‘Customer’ to be satisfied. The investment house’s desire for long term stable income completely ignores the needs of the most important party …the tenant who pays the rent that makes this all possible.
As anyone that has read my pages before will know I have for several years now espoused the adage that “Organisations don’t want facilities they want and need a productive workforce” this is truer now more than ever with the proof of concept that remote working at least part-time can work, now a fact.
Occupiers of commercial real estate see themselves as the Customer even though the real estate industry regards the principal and most important Customer as the property or investment companies who have no use for the produce other than as a revenue stream.
Worse still, occupiers are paying millions for the privilege of being frustrated by an industry that sees long term stable income as the main aim and that treats occupiers with disdain, refusing to acknowledge them as Customers.
This disjointed value chain has 3 major stakeholders all of whom have different incentives. Is it any wonder that there is an unresolved tension that has seen the occupier frustrated with what often amounts to a grudge purchase. This is not a polyamorous marriage made in heaven and a divorce maybe around the corner.
The world has changed, technology has freed occupiers from a one-person one desk option. The remote working revolution has meant that occupiers no longer have an obsession with owning or leasing property rather they are now moving towards the idea of space as a service and are increasingly content to access and consume space on an as-needed basis.
Every smart business on the planet spends time and resources understanding what their customers want. The idea that the ‘Customer is King’ is the mantra in almost all industries. Regrettably, the CRE industry just continues to push out the same product over and over again rather than trying to understand their journey and asking what does the Customer need?
Commercial real estate is a product industry that is now faced with Customers that that expect services that provide agility and adaptability and that deliver a superior Workplace experience on an as needed basis. The industry’s preoccupation with this Henry Ford colour philosophy will end badly, and they would do well to remember the likes of Kodak, Blockbuster who also ignored the winds of change blowing through their industries.
The now-ubiquitous nature of technology has freed occupiers and their people from their desks and given rise to the idea that work is something you do, not somewhere you go.
The move to a more agile approach has been welcomed by the workforce as a relief from the relentless oppressive reduction in space brought on by designers controlled by accountants with an eye solely on efficiency and the balance sheet. The scant regard for the effect on engagement, wellbeing, talent retention and overall effectiveness has been costly but hopefully, the lesson has been learned.
Real estate expert Antony Slumbers says in his post on LinkedIn “This isn’t an acceleration, it’s a revolution” that what we are witnessing is not an acceleration of the remote working trend that existed before the pandemic but rather the start of a revolution that will fundamentally disrupt and utterly transform the dynamics of the industry.
If Facilities Management remains mired in the silo of managing assets and building portfolios it risks becoming marginalized to being a cost and support function that is ripe for automation.
With the increased focus on the Workplace and the integral role it plays in the organisation, FM needs to move to become a value-adding business function that has the opportunity to increase its visibility and importance to corporate competitive advantage.
After all, Workplace is in our blood. FM was born in the 1980’s as a response to the need to manage the ever-increasing Workplace complexity bought on by systems furniture and computerisation. Indeed the word ‘Workplace’ was mentioned twice in the International Facility Management Association’s (IFMA) original charter. So perhaps rather than an evolution, this is a Workplace reawakening and that FM is merely going back to its forgotten roots.
More and more, the Workplace will be a network of places and not one or two central locations. The facility manager will need to provide and manage integrated Workplace services where the Workplace is networked, distributed and global.
For facility managers to be strategically and operationally effective, they will need a deep appreciation of the company’s organizational structure, the overall business strategy the rationale for its locations, the preferred workplace configurations and the direction, speed and options for change.
A facility manager will need to understand his or her company’s culture, both in terms of how it attracts and retains key talent and how it presents itself to the marketplace by way of its communications and branding.
This in turn will drive many of the office design considerations, from aesthetics to functionality. It will also influence what “satisfiers” are embedded in the environment to nurture individual and team behaviours.
In my last post ‘How is your Workplace responding to Organisational PTSD?’ I repeated several dire statistics around engagement and performance of the Workplace pre COVID. One can only assume with the intervening period of remote and home working that these are likely to have deteriorated significantly.
As the supply side of the equation will need to change to meet the needs of the occupier so will the demand side disciplines of FM and corporate real estate (CRE) change. In organizations that are rebalancing their portfolios in moves to distributed, networked, global organizational structures these functions need to emerge from their organisation silos along with HR , IT and integrate their capabilities in to a cohesive Workplace team that has the improvement of human performance as their key objective.
Each partner will bring individual or bundled capabilities, and the complete service will be provided by a combination of staff from inside the organization and by external service providers. In addition, managing some relationships will be a matrix responsibility, primarily reporting to other functions in the design phase and to the facility manager during the implementation and ongoing operations phases. This will be particularly the case in the management of specialists. For example, in large and complex projects, companies will engage leadership development specialists to help optimize the synergy of worker, workplace and technology.
In those companies where the Workplace is considered strategic, such specialists will reside in a multi-disciplinary “Workplace strategy and execution team.” That is likely to consist of HR, IT, CRE where the focus is likely to be on people issues and where the Workplace is considered an enabler of the core business.
As the only function that is responsible for the delivery and integration of services in the Workplace, FM has the breadth of knowledge and experience to fulfil a unifying role aligning CRE, HR, IT, finance and the more traditional facility management functions. This will include the responsibility for managing strategic service partners. Managing these partners will be more complex than traditional outsourcing. As the integration and resulting synergy from the worker, Workplace and technology become inseparable from the business strategy and mission, co-sourcing will mature to being the preferred business model with service providers.
Assuming a leadership role also creates challenges for an FM professional that has not had exposure to a business orientated role.
Facility managers will need to become a strategic business partner and senior-level skills will be required to manage the multiple competency areas that facility departments bring to support the organization.
But, FM has the…
But we are going to need Core Business Skills if we are to be successful!
After all it is the organisation that can link the tripartite alliance of work performance, workforce performance and Workplace performance that will be the winners. So, if FM doesn’t take this once in a career opportunity and assume the Workplace leadership role someone else will, thereby relegating FM to the role of the building manager, divorced from the core business.