Developing FM
Innovation in FM PDF Print E-mail
Written by Mike Packham, BWA, 2007   
Mike Packham of BWA goes over some ideas and issues that have been around for a while in FM, but are only now starting to have a meaningful impact on service delivery. What specifications can be made in FM contracts that will encourage ongoing innovation?

How can innovation be implemented across all personnel involved in FM?

Another year, another buzzword - at least that is how it seems to me. Equally I am sure that for many 'been there, got the t-shirt' facilities managers, the concept of innovation in FM will be something of an oxymoron. After all, one person's innovative solution invariably turns out to be something that another has been practising for years.

Having said all of this, I detect in the marketplace an enhanced awareness of the need for change and a willingness to explore new methodologies for service delivery. This is starting to bring benefits for both sides of the supply/demand chain and alongside this, some evidence of commonality of the associated critical success factors is beginning to emerge. From the contracts that BWA has looked at recently, the latter include the following issues.

Use of output-based specification


Specification of the required outputs rather than the inputs enables the service provider to develop bespoke service delivery methodologies that are both compatible with the client organisation's requirements and their own preferred method of operation. Of course, a wise client will always seek clarification of a service provider's input resource proposals. A quick check of these against the previous regime will soon establish their practicality in terms of the required outcome.

Identification and appropriate allocation of risk


This means allocating risk o the party best able to manage it. All too often 'risk' is hidden away in the contract documentation and/or inadequately defined. There is little point passing risk on to a service provider when it can be better catered for by the client organisation.

Use of 'pain/gain' share mechanisms


These are based around a risk reward type of approach and should encompass consideration of issues such as:
  • True open-book accounting to ensure that the effect of any changes can be accurately assessed (flexibility has to be a key ingredient of any FM contract);
  • Appropriate length of contract - some 'innovative' measures may have a payback period of (say) three or four years and/or require service provider investment. In this sort of scenario, too short a contract period will act as a disincentive to the service provider;
  • A clear methodology for the allocation of any 'pain' or 'gain' - for example, should this be based on the first year only or over a period of time on a straight line or declining proportion basis (or even a combination of the two).
At present there are no standard, industry-wide protocols in common usage and as a result we see a wide range of mechanisms being implemented. Unfortunately many of these have not been properly thought through. Thus, to quote a recent example, the service provider stood to be penalised for a performance failure to the sum of £18,000 whereas the equivalent performance incentive equated to (literally) £51.27. From BWA's experience, any 'pain/gain' share type mechanism should be based around certain key principles and should as a minimum be:
  • Overt - the methodology should form a key element of the tender documentation against which service providers prepare their bids and should ideally be accompanied by a worked example showing how the mechanism is intended to work in practice;
  • Objective - any subjectivity should be avoided as it will inevitably be the cause of conflict between the parties;
  • User-friendly - to encourage acceptance;
  • Practical - some performance measurement methodology are too complicated and, as such, generating the actual performance results becomes a time and cost-intensive exercise diverting key resources from their main task;
  • Meaningful - any performance standard has to be clear in its purpose. For example, a metric requiring a service provider's helpdesk to answer a phone call within six rings: this measurement would be meaningless as answering within six rings does not imply that the call has been dealt with effectively. Equally, a response time of two hours fails to indicate whether the service provider has effected a permanent (or any) repair within that timescale;
  • Fair - to both parties. Any contractual performance measurement system must reflect genuine loss if it is not be regarded as a penalty provision and, as such, potentially be unenforceable at common law. Equally there should be a balance with any incentive element of the mechanism (the latter avoiding, of course, the rewarding of enhanced performance that does not benefit the client organisation).

Involvement of the full service provider supply chain


This means involving everyone from director level down to hands-on operatives in the process. Initiatives such as Employee of the Month can be incredibly effective in getting personnel to come forward with suggestions for service improvements.

Involvement of key stakeholders (users)


This can be via in-house committees, focus groups, user surveys and the like. Just as all levels within the supply chain should be encouraged to think innovatively, so too the demand side participants should be given the opportunity to contribute positively to the overall service delivery process. After all, as the recipients of the service being provided, they will have a good idea as to what does/does not work for them.

Regular innovation renewal events


Many contracts start out with good intentions to seek new, 'better' ways of delivering the services. However, all too often these good intentions quickly get subsumed by the daily pressures of FM service delivery. It is important therefore to hold regular renewal events involving both the client side and the service provider. These should both celebrate past achievements and look to the future by using these successes as a launch pad for new ideas.

Selection of appropriate personnel


Innovation (and FM in general) is all about the attitude of those involved. From personal experience, FM personnel tend to fall into three categories - those that are enthusiastic about the opportunities presented by change, those that are ambivalent about it, and those that would much prefer for things to remain as they are. The trick is to harness the enthusiasm of the first category to influence the behaviour of the other two.

Appropriate levels of empowerment


All too often we find good ideas not being acted upon because the originator has not been able to garner sufficient support or has been told that the idea is in conflict with current organisational processes and procedures. Innovative service provision is only possible where those charged with its delivery are suitably empowered to ensure that it happens.

Commonality of objectives


Self-evidently both the client side and the service provider need to be working to a common goal. However, both also need to recognise that the other will almost certainly have additional objectives outside of the direct contractual relationship between the two parties. These need to be openly discussed and any potential conflicts identified.

Trust between the parties


This is a difficult one and clearly something that can only be built up over time. The service provider needs to consistently demonstrate that they are acting in the best interests of the client organisation - even when this makes their own life difficult. The client side must equally demonstrate belief and confidence in the service provider's expertise and should therefore manage 'at a distance' rather than interfering in day-to-day operational issues.

Conclusion


To those of you familiar with partnership-type contracts, I am sure that the above concepts will be nothing new. As I intimated at the start of this article, many of these ideas have been around for a while but it is only now that they are starting to have a meaningful impact on service delivery. This derives, it seems, from an ever-growing awareness of the positive impact that good FM practice can have on an organisation's bottom line.

The characteristics identified are drawn from the many FM contracts that I have had contact with over the past year or so. These contracts have been in both the public and private sectors and have crossed much of the industry e.g. offices, industrial, retail, health, education and so on. No one contract has demonstrated all of them with 100 per cent success.

Can you imagine how powerful a tool for innovation it would be if you could get them all in the same place at the same time?
 
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