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JLL thought-provoking whitepaper, written in conjunction with The International Facility Management Association (IFMA), explores the prevailing executive perceptions of facility management and techniques that facility managers can employ to move from support-based cost center to strategic business partner.
Fundamentals of the FM/C-Suite Relationship
Research suggests that executives often perceive FM as a support function, with minimal strategic value. Furthermore, the C-Suite most frequently measures FM performance in terms of cost savings. As a result, many facility managers face a “glorified custodian” stigma that prevents them from gaining traction with the C-Suite and perpetuates the perceived gap between facilities, core business strategy, and, ultimately, profitability.
Changing the C-Suite Conversation: Value Creation
While FM’s rise to a more strategic role is still a work in progress, key shifts within the business environment have created tremendous opportunities for facility managers to advance their strategic value with business leaders. This convergence of trends (surrounding the employee experience, facilities as brand extensions and new metrics to benchmark performance, among others) has primed the business environment for facility managers to improve executive perceptions of the function and engage in increasingly strategic partnerships with business leaders.
Growing demand for employee-centric workplaces is one such trend, which allows facility managers to capitalize on the strong linkages between facilities, the employee experience and productivity. For example, a new HVAC system that improves air quality may be perceived as a basic cost increase. However, if this HVAC system also reduces employee sick days (and the corresponding productivity loss due to illness), then the net savings (and increased productivity) should also be considered as part of the cost-benefit analysis. This approach to work-life supports provides a strong business case for the strategic role of FM.
Emerging perceptions of facilities as brand extensions have also created an opportunity for facility managers to advance their strategic value. As organizations refine their approach to corporate real estate — often with fewer, more strategically located facilities — businesses have begun to assign a renewed importance to the brand experience that the facilities create for both occupiers and visitors. This increasing emphasis on the facility as a central brand expression allows facility managers to act as brand stewards and more closely align the FM function with the core business strategy as a result.
New opportunities to quantify and communicate FM performance (beyond cost savings) also offer facility managers the tools to prove their strategic value to the C-Suite. The Rocky Mountain Institute’s (RMI’s) Deep Retrofit Valuation (DRV) Guide provides an example of one such approach to evaluate both the quantitative and qualitative benefits of, specifically, facility retrofits. The DRV provides a framework to measure nine ‘value elements,’ including risk mitigation, employee engagement and property-derived revenues, among others, which go beyond cost savings to add value to retrofitted facilities. This methodology provides a useful roadmap for facility managers to use when conveying FM’s strategic value to executives, particularly because it measures factors that go beyond traditional FM performance metrics and which are integral to the C-Suite’s core business strategy.
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30 May 2016