How the FM industry is shifting focus: More tech and data, fewer costs
My latest conversation on the New World of Work featured Neil Longley, Founder and Director of Opale Management Services, Ltd., a facilities management consulting firm based in England.
Neil shares his key learnings from his industry, the role of facility managers in bringing people back to the office, and the increasing importance of technology and business intelligence in FM moving forward.
Tell me a little bit about yourself, your consulting firm, and your role.
Neil: I'm the Founder and Director of Opale Management Services, based in the UK and operating for about 29 years old now. It's an independent facilities advisory practice, typically for the private sector. We work with clients like HSBC and Barclays, providing them with advice on a whole raft of facilities management challenges, not least of which is the COVID-19 we all face at the moment.
Speaking of COVID-19, what can you say so far being in facilities management consulting that you've seen are your biggest learnings?
Neil: Well, that sort of rests on three levels.
I think for a lot of client organizations, the understanding of home working and working from home as a segment of space that they can deploy their resources into has become a real lesson. This [crisis] has proven that actually, you can do that and still have people working from home for a reasonable period of time.
That's a big learning for companies, and for facilities. Getting their heads around what their responsibility will be to those home workers is quite a challenge at the moment. There's also been a real understanding of the cost of everything. COVID-19's really crystallized that.
Some of the facilities that are provisioned for the employees are extremely expensive. And, sometimes that's hidden when you're seeing it within the context of the income in general, but especially when the income starts going as we've seen in a lot of businesses in the UK. The stark reality of what you've been spending on your office space becomes really quite clear.
So, from an FM perspective, there is a much clearer understanding, and desire to understand how much all of this stuff is costing.
"There has been the learning of what you can do without, from an FM perspective. I'm going to be very cautious not to say a reduction in service level, but we are seeing service levels that are tuned differently. So, there’s a much greater emphasis on techniques such as business-focused maintenance in order to reduce the overall cost of the service without taking too much risk on infrastructural matters, dynamic cleaning, processes."
We're also seeing a flattening of the FM structures as we look forward. And, that's all because the reality is, we've got to provide these services in our view for 30% less cost than in January of 2020. And that's a massive challenge.
Definitely. I know a lot of businesses are at different phases right now. But let's talk a little bit about the return to work. What have you seen from companies that are ready to bring employees back? What are they talking about? How are they being forward-thinking, not so much reactive, more thinking about in the future?
Neil: Well, of course, we have to group this depending upon what those organizations are doing.
A lot of the manufacturing space was not really impacted by social distancing because they were naturally more than two meters apart as a normal part of their daily activities, and they're very cellular in most manufacturing organizations.
"The challenge became how to get people into the facility and out of the facility, not in operation within the facility itself."
We’ve seen a lot of impact on welfare space segments such as restaurants, just not opening or being severely restricted because that's obviously where the social distancing challenges really lie. They don't lie in the day-to-day operations, they lie in where people go for their coffee in a nutshell.
But, office space is very different, and we've seen several different reactions to it. The biggest implication at the moment for the office space, from our perspective, is that the biggest proportion of it in the UK is inside the M25. The problem with big cities is that we can’t get resources into the city in the first place. There isn't enough capacity in public transport to achieve that as it was before.
So, we automatically have fewer people to accommodate because we get fewer people inside the city to go to work. And, anything over five floors is a real challenge to get them through the door and cleared if you’re going into the building.
"What you end up with is a scenario where, if you take Canary Wharf, which is our financial sector, to get people into some of those buildings, you're talking about a mile and a half queue of people to get through the reception and up through into the building. The buildings can't accommodate under these social distancing rules that level of occupancy."
What you end up with are two broadly different techniques. These are a sort of forced environment where those people that have to have an office to work from are given the space, those that don't are sent home. And that stayed, I think, relatively obvious to all.
And then, you've got others that do 50% on, 50% off hybrid techniques, all driven on the basis that offices can accommodate maybe 40% of their original resources. Now, that poses a big challenge from a cost perspective because now, we are running millions of square feet worth of office space at the costs that they incur now, for 50% of the resources that we used to provide those services for.
There's one other observation I would make. I don't know that we particularly took a view on productivity when we were in normal working, if you will, pre-COVID-19. I don't think anyone really knew which metric was measuring the productivity of the individual in each of their given roles.
And so, of course, when we go home working, we don't have an equal measure to deploy on asking, "Is home working as productive or more productive or less productive than it was prior to COVID-19?" We don't have that data, so it's all anecdotal.
Going back to being forward-thinking, what are you seeing in terms of technologies? Are you seeing any new or any kind of technologies that are being put into the spotlight now that we are trying to get people back into the office or some businesses are?
Neil: Well, we’ve had a challenge in FM, because innovation in FM, certainly in the UK, and certainly in my view across Europe and broader, has always been a bit stagnant, a bit traditional. FM has not had the reputation for being innovative. Let us put it that way.
Now, today, COVID-19 creates a catalyst to do something different. COVID-19 is creating the catalyst to investigate and to be innovative around home working and working from home. That's a spotlight now.
And therefore, there is an effort from the marketplace to say, "How can we make that work?" And the technologies to do that will subsequently appear. They're not there today, but they will appear at some point. There will be new technologies, incidentally, and there'll be adaptations of solutions that have already been out there for many years.
Within the office space, I think in recent years, there's been a move toward creating what we call business intelligence insight. And, that is data-hungry. So, we've been using devices to capture data. For example, calculating how many times the restroom door opens, to give you an indication as to how many people have been through so that you can maybe re-engineer your resources to match peak times to make it cleaner and nicer for the staff.
“Technology has been steadily providing us with data. What we will have is an increase in that, because we now want data in order to re-engineer our organizational design, so that our target operating models are much more efficient. We need the information, and with that information, we can optimize how we do what we do. That ultimately means that we can do what we do at the right level but at a lower cost.”
So, management information is key, and it's business intelligence that matters. And, you can't be intelligent in running FM if you don't have management information. That's sort of where it sits.
That's a good segue into my final question which is, thinking about future facility managers or facility management consultants, what do you think the criteria are for leaders in this space going forward?
Neil: What do we think is going to happen to the FM marketplace looking forward?
In the UK, COVID-19 has identified that we have to do FM at less cost by 30% in our view and with fewer resources. That's worldwide, but, in the UK, we've got Brexit as well. So, we now have the challenge of what was an economically challenging time on top of real economically challenging time called COVID-19. Lifting above it all, we have to deliver FM in broad terms with less money and fewer resources. That's it.
And, if we keep it at that level, and we look at the consequences of that position, it means that within the FM supply chain, we will be spending less money. So, therefore, there has to be different techniques or methods of doing FM that that marketplace has to provide because our marketplace is diverse in terms of white-collar, blue-collar type resources. Unfortunately, that means that there will potentially be a dearth of resources at that level.
And therefore, you've got a reduction in structures. We’ve got to have techniques where we can increase the productivity of the individual so that we can focus those individuals on just the activities we need them to do.
"We will move more to a dynamic type of FM position, where we’re fixing only where there are holes, and nowhere else. And I think management structures will collapse; they will get much more compact in FM. This means that the individual resources have to become much more competent over a wider range of services that they will ultimately be managing."
We won't necessarily have structures that have a building maintenance capability, a catering capability, and a cleaning capability, all built into the structure.
We might just have one person that has to have enough knowledge and understanding of all three of those subjects as an example, as it collapses into a much more economically viable state. For the suppliers, of course, that means that they are looking at a reduction in their turnover. And, that's got its own consequences commercially.
So, clearly some big challenges there.
Neil: There are a lot of challenges that people are just now realizing are challenges.
We've called it the COVID-19 oscillation - there was a progression, wasn't there? It started with reacting to the next guideline, the next change. Every day, there was something massive happening. And, I think, FM managers were on a rollercoaster, just putting black masking tape over all the holes as they appeared.
Then, we went to the stop phase, which was that we eventually needed to stop because we didn’t have any more money to spend. We said, "Don't spend anything because we've got no money, we've got to hold what money, we've got to do what we need to do looking forward when we come out."
And then, we hit the recovery phase. But, of course, we're now oscillating between recovery, stop, recovery, stop, which is again what we call it the COVID-19 oscillation. Within that, people aren't sure what to do next. But, the reality is that they have to plan. So, what we're saying now is, plan to spend 30% less, and put all of the structures into doing that. Take every penny you can, do you can to cut costs. And, that's what our message is.
"Cost is king, cash is king. Businesses need cash in the bank, they haven't got much and they're burning it at a rate that they don't want to. Stop burning it, that's the message."
On that note, it'll definitely be interesting to see how the space changes over the next few months and years even. But, thank you so much for your time, Neil, and hopefully, we can continue the conversation when things are a little bit less chaotic in the future, I hope.
Neil: I look forward to it. I really do look forward to it.
Thank you again, Neil Longley!
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