James Ware, PhD
This is the third installment of a series of observations about how an organization’s operational capability impacts business performance. In Part One (at this link) we explored the basic concept of strategy and suggested that operational capability is an absolutely essential component of business strategy.
Then in Part Two (at this link) we expanded on that idea and offered a history lesson showing how information technology exploded out of the “back room” a decade ago to become a strategic resource.
Here in Part Three we personalize these ideas, and suggest how senior facilities and corporate real estate professionals can/should “make the case” to the business that they too deserve a seat at the table.
Can a facilities strategy and operational capability impact a business strategy? Clearly, we think so, and so do the most experienced facilities professionals we know.
Just for starters, consider this: rethinking and redesigning your workplace strategy—including flexible workplaces and flexible work arrangements—can produce an ROI of more than 40 percent, and double profit margins in many businesses. We’ve seen it happen many times, and we even suggested a few years ago that CEO’s who aren’t implementing flexible work programs and reducing their real estate footprint should be called on the carpet by their shareholders (“What are You Waiting For?” – July/August 2009).
But we also know that making facilities strategic isn’t just a matter of cutting costs. We’ve also pointed out that there are at least five additional ways that effective management of facilities operations can enhance workforce and business performance:
- Increase workforce productivity;
- Help to attract and retain talent;
- Increase organizational agility;
- Reduce the business risk of disruption; and
- Reduce traffic congestion, air pollution, and environmental impact more generally.
We’ll expand on each of these strategic impacts just briefly; we’ve written much more extensively about them elsewhere (for example, see “How Come Distributed Work is Still the Next Big Thing?” Work Design Collaborative, 2006).
Increasing workforce productivity
Every time we’ve helped a client implement a flexible work program that enables the workforce to work outside the corporate office on a regular basis employee productivity goes up substantially. At SCAN Health, where we’ve supporting mobility for over five years, employees who work from home 2-3 days a week are at least 15% more productive than their office-bound counterparts.
And others have regularly found the same kind of results. There are many factors interacting to make this happen: less commute time; better work/life balance; a greater sense of control over one’s work activities; greater clarity about what is expected and what constitutes success; and less time spent in unproductive meetings and other corporate time-wasters.
Do you want to have a strategic impact: design and implement a flexible work program. Get people out of the office (some of the time), and they’ll produce more, and better work.
Improving workforce attraction/retention
There’s no question that employees who participate in flexible work programs are more satisfied, more highly engaged with the company and their work, and more likely to stay. And it’s easier to recruit new staff into an organization that trusts its employees enough to let them work from home, or from more convenient locations, part of the time (we’re avoiding the specifics of flexible work program design here; the concept is what matters, not the details).
Clearly, higher rates of attraction and retention do not just make life easier for HR recruiters; they also reduce the need for temporary staff, and for constantly training and retraining new staff. And of course, HR costs go down as well. This is an obvious opportunity for facilities managers and workplace strategists to have a strategic impact on both the HR function and line management.
Increasing organizational agility
I define organizational agility as high-speed reaction to external events, whether it means rapid growth, rapid shrinkage, or the capacity to “turn on a dime” regarding products, markets, or workforce skills. And the biggest barrier to agility is usually high fixed costs in outdated facilities, factory equipment, or obsolete workforce skills.
Facilities and real estate can increase organizational agility through creative restructuring of the CRE portfolio, by renegotiating lease commitments, and by enabling the organization to recruit, hire, and deploy needed talent no matter where that talent resides. In other words, flexible work programs can help the organization as a whole become far less dependent on geography; hire the best people on the planet for the job at hand, no matter where they are located. And restructure the real estate/facilities portfolio to reflect current needs, not past requirements. Avoid long-term commitments if at all possible.
Reducing the risk of business disruption
All the comments above about increasing agility apply as well to reducing the risk of business disruption. An agile organization can respond quickly to natural disasters like weather events and earthquakes, and to man-made difficulties like transportation disruptions, terrorism, or political protests. When the work isn’t tied to a specific place, the organization can “reconfigure” itself almost instantly to keep things going no matter what is happening the outside environment.
Reducing traffic and air pollution; enhancing sustainability
The contribution that workplace strategy and flexible work programs can make to sustainability and to healthier, more attractive communities is also self-evident. When employees work from home or in their local neighborhoods 2-3 days a week the impact on local commuting (traffic, public transportation) can be dramatic.
As we have pointed out on other occasions, if all US-based employees worked from home just one day a week, our dependence on foreign oil for gasoline would disappear overnight. Now, we know that isn’t going to happen, but that statistic just shows the kind of impact that flexible work could have not just on individual organizations but on the national economy.
Think Strategic; Act Strategically
Our point is obvious. If you want to be a strategic facilities leader, apply these five strategic impact factors (plus dramatic cost reduction) to your own organization. Figure out what’s possible, and then make the case to your senior leadership.
Be relentless; include at least one of these improvement strategies in every conversation you have with the executive committee (with your own staff as well; you want to get everyone pulling in the same direction).
But more importantly than talking about these ideas, start implementing them now, so you can talk about actual results, not pie-in-the-sky promises.
Here’s one more piece of advice: take a close look at your personal calendar. What kinds of activities dominate? If you are like all too many heads of real estate and facilities, your calendar is filled with day-to-day operational issues—firefighting, problem-solving, monitoring current performance. Vow today to change the balance; spend at least two-days a week focusing on strategic challenges, and before you know it you will be a strategic leader.
Those CIOs I described in Part Two last month didn’t get invited to the executive table because the CEO or COO understood on their own that IT could have a strategic impact; they got there because they led initiatives that demonstrated how they could change the business models. And they talked to their executives about the results they produced.
Whatever else you do, remember that actions speak louder than words. Act strategically, and you’ll become a strategic leader.
What do you think? Please send your comments directly to me or post a comment here. I look forward to learning from you.