Building & Facilities Operations

Best Practice Definition

Methods and techniques that have consistently shown results superior than those achieved with other means, and which are used as benchmarks to strive for. There is, however, no practice that is best for everyone or in every situation, and no best practice remains best for very long as people keep on finding better ways of doing things.

~ Source: BusinessDictionary.com ~

Where do we go to find best practices? It’s a question most managers have asked themselves at one time or another.  At some point, we recognize that we don’t always have the answers we need for improving operating performance.  And with that recognition comes additional questions about where to look to get those answers.

Finding the best, and most relevant, sources for our particular problem can be challenging.  While there is no shortage of access to information these days thanks to the Internet, the volume we have to wade through can be daunting.   In addition to the Internet, there are industry associations, various publications and people we know whose opinions we trust and value.  I think one of the most overlooked sources of information on best practices is often right under our very noses, and that is the service partners that we work with every day.

We recently hosted a Webinar for our clients: “Field Service 2.0: Bringing Best Practices To & From the Front Line…Everyday.”  The webinar featured a company, UGL-Unicco, that provides facilities and maintenance services to the real estate and facilities management space.   While it would be easy to classify UGL-Unicco as a “cleaning company” at its core, that would be simplistic. They are an international powerhouse, a market leader in their space and are as sophisticated in their operations and business practices as any of the companies they serve.  They have achieved their place in the market through a relentless commitment to continuous improvement and managed the change required to support it.  They have successfully created a system for scouting  pockets of excellence and best practices from across their organization, as well as a means for sharing them with any of their clients to apply to many areas of their own businesses.

And the effort has certainly payed off.  In an industry where companies change vendors more than clothes, UGL boasts a 95% client retention rate.

The real beauty of looking to your suppliers for guidance on best practices is that it is in their best interests to help you- and doesn’t that help define what a true partnership with your service providers should look like?

The next time you have an internal discussion about process or business improvement and you are making your list of information and other resources, don’t forget to look internally and consider involving your service providers in the discussion.  Sometimes the answers are right under your nose.

I was intrigued to read an article in the New York Times the other day about how law firms are beginning to offshore some of their clerical processes to India in order to drive down costs.  They are doing this largely because their large corporate clients are insisting on cost reductions, not because they are particularly forward thinking.  Why pay for a New York based associate to copy edit a document at $250 per hour when it can be done for 1/5th of that rate by a double graduate in India?

Now, large corporate law firms are pretty darn conservative and not organizations that adapt to change easily, so the fact that this is happening is an indication about how much sectors of our economy are likely to change over the next 5 – 10 years.  We have all gotten used to hearing about manufacturing jobs being shipped overseas; those of us in the technology space know that the same is happening with jobs in our space, but this is an indication that other sectors, previously thought to be immune from the trend, will be affected.

This got me to thinking about property operations.  On the one hand, folks in this sector all provide services that are site dependent, like a hair stylist or plumber – until we figure out teleportation, you are going to have to pay a real live plumber to come and fix your dripping faucet: no way to offshore that service – so it should be largely unaffected by off shoring.  On the other hand, some of the property and asset management teams that I work with spend a lot of time on fairly low level clerical activities: copying, faxing, moving information from one silo to another.  These activities can (and will be) off shored.  Given the relentless downward pressure that owners put on asset and property management fees, this change may be forced on the property operations sector by its customers, as it is in the law profession.

There is a bright spot in all this: property operators that figure out how to streamline clerical processes and focus on providing their clients with higher value services will prosper.  Some of this value-add comes through using technology, like Building Engines‘ web based operations platform, to improve customer service, increase data liquidity and reduce operating costs.  I have run into a few that have made this a differentiator and who tell me that their clients are beginning to see it as a significant benefit.

The best defense is a great defense – Or so it seems to The National Football League (NFL), the nation’s premier sports league, which announced last Tuesday that it is relocating its headquarters to 345 Park Avenue in Manhattan and 175,000-square-foot,  down from its current 205,000-square-foot headquarters at 280 Park Ave.  This maneuver is no feint.  Faced with a down economy, an ongoing labor struggle, and declining attendance and viewership in all other major sports, the NFL has decided to protect its lead and play a little preventive defense.

This single commercial office transaction may be the clearest bellwether for the future of commercial real estate.   According to Eric Grubman, executive vice president of NFL ventures and business operations, the new space “will enable us to be more efficient.”  Apparently, NFL executives are as talented at the post-game empty quotation as their renowned players.   Reading between the lines, the NFL is in the midst of some serious game planning – a plan that still goes for the win, just with fewer players.   Let’s look at the stats.

A $7.8 billion dollar industry, the NFL boasts an average team value of $1 billion among its thirty-two teams; an average attendance of 67,000 and a consistent season-to-season winning record.  According to Plunkett Research, the NFL earns eight times as much each year for TV and cable broadcast rights as MLB, despite the fact that MLB teams play roughly ten times the number of games annually than do NFL teams.  Yahoo Finance says that “the pro football business is booming, and the expectation is that the NFL will set new records for fan viewership during the 2010 season.”  In fact, the NFL enjoyed a 9% viewership increase in 2009, and is expecting a 15% gain during the upcoming 2010 season.   To the TV viewer, the NFL is appointment television.  To the rooting fan, every game matters.   To America, the Super Bowl is iconic – the closest thing we have to commercialized war.   It is a growth sport, and is considering adding two additional games to an already profitable schedule.  In short, the NFL is giving the Heisman (read “stiff arm”) to every other major sports league.

So what’s with the contracting office presence?

The NFL is in the midst of a solid game plan; one they may share with the rest of corporate America – do more with less.   It embodies this new mantra.  Case in point:  In 2008, preparing for what it knew would be a tough 2009 and 2010, the NFL told 150 people that they did not make the corporate team.  To most industries, this would be sign of the apocalypse, but the NFL is expanding where other sports, such as baseball and golf, etc, are contracting.  Always good at cutting the wheat from the chaff, always a step ahead of its competition, the NFL is thinking ahead to a new sports economy – one underscored by efficient planning and cost controls.    Enable people to do more from the road.    Allow people to work from home.  Ask your employees to extend their hours and their signing bonus will be big – they’ll still have a job.

So look for fewer people in the seats – commercial office seats ? - a trend that may carry over to the balance of commercial America.  Growth through simultaneous expansion and contraction – expanding opportunity while contracting costs.   It’s a game winning plan.

We are all suffering from symptoms of information overload. The daily onslaught of more and more data means that some of it will inevitably fall through the cracks. You may file away 25 e-mails one day, and overlook ten other important ones. You may communicate important preventive maintenance data within one building and neglect the rest of the portfolio.  Let’s face it, there is only so much time in the day.  Every day we make hard decisions on which people, activities, and processes receive a piece of that “time” pie.

Because of this, the ways in which modern real estate processes interact are increasingly complex. Facilities and Operations Teams, business systems, and data must work seamlessly together in order to deliver on the promises of optimal productivity, improved occupant service and satisfaction, and quicker decision-making time frames.  A good workflow must allow for that information to seamlessly pass between people, systems and…brace yourself you’re not going to like this one…portfolios.

More importantly, a good workflow allows you to “automate the mundane.” A phrase we like to use a lot here at Building Engines – and not just because our operations and maintenance management system allows you to do it, but because we really believe it, is that people in the real estate operations business are always in overdrive and always putting out fires.  Once you get your workflow and processes in order, you’ll be amazed how much extra time is freed up for more valuable activities.

Building Engines will be hosting a Webinar in early August where we will tackle best practices for handling large teams, workflows that “automate the mundane,” and other valuable insights for increasing productivity and managing data across your organization.

Now, add that to your follow-up cue.

When the going gets rough, team cohesiveness can break down and productivity plummets. Declining conditions breed controversy and contempt among subordinates.  Good teams respond well.  Great teams excel. Exceptional teams turn the challenge into an opportunity and achieve greatness.  The latter case requires exceptional leadership. Your actions under fire set the tone for your company, your products and services and your life. Ten simple rules will help you bolster and harden your team in these tough times.  Heed them and perhaps you can follow in the footsteps of George Patton.  Ignore them and you may follow the footfalls of George Custer.

1. Slow down: Crisis will force you to act decisively, but that does not mean you should rush your decision-making.  In the heat of battle, with bullets and dirt flying, the best leaders, like the best athletes, slow the game down.

2. Think: Thought is the one of the most under-valued attributes of leadership.   When events take hold, the ability to stop and consider all circumstances and all options before acting is crucial to success.  Thinking will help you to master the detail; organize and orchestrate the details required to affect a positive outcome.

3. Be mindful of your Actions: Remember that your demeanor and your actions are the real indicator or you state of mind.  Never show doubt, discouragement or fatigue.   Act like a leader. You are the source of direction, as well as an example to others. A leader knows.  Leader ship is not a nine to five job – you have to live it.

4. Communicate: No news is bad news in a crisis.  The more your team knows about the situation and your approach to it, the more thoughtful consideration it will get.    Seek counsel of all reliable participants.   Demand a difference of opinion. If everyone is thinking alike, no one is thinking.  Effective leadership is consultative.  In the end, your message must be clear, unmistakable and delivered with conviction.

5. Go to the Source: Get your information from the front lines.  Do not rely on conjecture.  Find the source of the problem and move towards it with a mind to understand it better so that you can address it properly.

6. Keep it Simple: All statements, conclusions and tactics should be simple. Use the most direct language possible.   To do this, a leader must completely and comprehensively understand the mission, purpose, objectives and goals.  It is a precedent that you do your homework.

7. Remain on the Offensive: Do not relax with your success.  When you relax, your team relaxes.   Never dig in.  “a good Calvary charge i The best defense is a good offense.

8. Be One of the Troops: In cold weather, do not to dress more warmly than your team members. Use what they use, work with their tools.  Suffer with the team members and you will know them and the limits of their capabilities.

9. Maintain Balance: Do not sacrifice too much for too little gain.   Give equally and expect to get equally.  Know the content and quality of your adversary and measure it against your own.   Keep your confidence in balance.

“There are not enough Indians in the world to defeat the Seventh Cavalry.”  George Armstrong Custer

10. Be Decisive: Once you have made a decision, stick to it and see it through to conclusion.   If you have applied the previous rules, your decisions have a high likelihood of success – but only if given the chance to succeed.

“Listen to your heart and proceed with confidence.” George Patton.

Every 4 years the soccer world turns its focus to the world cup.  32 countries and their respective players practice and train for years simply for the chance to compete in this prestigious event.  While there are certainly favorites and teams that are expected to win, it seems nonetheless that every year there are upsets and the teams we expect to win don’t always oblige.

For example, in this year’s contest, the French team headed to South Africa with high hopes and was expected to fare well.  They had plenty of talent on the roster and many of the players had been there before and had the experience and skills to wager a successful campaign.  But as the first round comes to a close, France has been eliminated and will be heading home.  So what went wrong?

The team dynamics and overall attitude of the team played a major role in their failure.  They didn’t work well together, allowed  the egos of the players to get the best of them, and they did not put the team’s interests first.  The negative attitude of certain players and members of the staff poisoned the group as a whole and rendered them ineffective.  In the end, all the experience and skill in the world couldn’t fix the egos and bad team dynamics.

In business too, building the right team dynamic is extremely critical.  Do the members of your staff respect each other and work well together?  The most talented or skilled employees are not necessarily a good fit if they bring down team productivity and morale.  When evaluating a candidate for a position it is so critical to think about how they will interact and work with other members of your team.  Finding that perfect fit is far more important than finding the most talented person and taking this approach when building your company or team will prove to be invaluable and almost certainly translate to success.

British Petroleum is dead – deader than a petroleum jellyfish.

Old Ben Franklin had it right when he said “an ounce of prevention is worth a pound of cure” – in fact 95,000 barrels a day of cure.   The BP Oil spill is a perfect example of the idiom at work.  Plainly stated, to have relied on a single blow-out preventer when the well head is a mile below the surface in an environment where no man can go, in water that can freeze gas – well that is a planck weight, a veritable “nano-gram” of prevention, given the risk.   What would the cost of a second or even a third blow-out preventer have added to the cost of this deep ocean well?  In the wake, or should I say plume, of this disaster the cost would have been negligible.

As a result of the uncontrolled spill, BP’s stock plummeted yesterday losing nearly 15 percent of its value on the first trading day since the failure of the “top kill“.  Then it sucked the market down with it as the federal government announced criminal and civil investigations into the spill.  “We will closely examine the actions of those involved in the spill. If we find evidence of illegal behavior, we will be extremely forceful in our response,” said Attorney General Eric Holder in New Orleans.   BP, with an enterprise value of $137 billion, is losing market value with every barrel that emerges from the floor of the Gulf. That loss of market value puts the clean-up and recovery at risk as well as the companies struggle to survive.

So what is the lesson here?   There are certainly many to be learned – chief among them being that one cannot be too careful or take too many precautions when risking something of such enormous value.   Think of your own business and its assets.  Gauge their value to you and your future.  Large or small, it may be hard to imagine losing everything, but then British Petroleum seemed impossible to sink – too big to go bankrupt, fail or be acquired – yet it’s on its way there.

Prevention is not just prevention against disaster – it is prevention against a plume of related consequential costs to your organization and to those that rely on it.  BP is only part owner of the blown well.  Rig operator Transocean and oil services company Halliburton are also involved and, therefore, also at risk.  Cameron Inc., which made the blowout preventer that failed, is also in deep, deep trouble.   Moreover, we are in trouble.  We who rely on the strength of our economy; the health of the environment; the survival of the fishery, and the fitness of mother earth are all at risk.   So when assessing the cost of prevention to your organization in the future and imagining that, perhaps, you can risk taking a chance or two with an important asset – think of British Petroleum.   A desire to cut corners cut the business off at its knees and put our collective future at risk.

A planck weight of prevention is no prevention at all – how about putting a pound of it to work for you? If your cringing at the thought of your own preventive maintenance program, or lack of it, it might be time to get a little more proactive!

Walking on the beach one morning while on vacation last week, I saw a man in the distance digging a hole in the sand. As I got closer, I realized that this man, a maintenance worker for the property at this spot, was digging holes in which to bury the seaweed that he had previously raked into neat little piles.  There was a lot of beach and many piles.

I’m not quite sure whether this would qualify as a reactive or preventative maintenance task, but I do know that it couldn’t possibly be a very fulfilling task…pun intended.

We all have “filling hole” types of tasks that occupy parts of our day and most managers are guilty of creating and assigning them to their employees.  – You know, creating the reports no one ever looks at, the manual processes that might be automated and of course, the many meetings without purpose or clear objectives.

The insidious thing about of these types of  tasks is that although they generally begin with the best intentions, they tend to gradually accumulate and lose value until like a tick, they have embedded themselves and worked to suck the joy out of our jobs and those of our employees.  Additionally, our most precious resource, time, becomes the host for these low value parasitic chores.  It’s important to recognize these types of tasks and do what we can to clean them out of our daily lives and those of our employees.

As for the resort and the poor soul filling holes with seaweed in the hot sun; assuming a seaweed-free beach is a valuable aesthetic and important to their guests, what could they possibly do?  – Here are just a few ideas:

• Provide better tools – there must be some kind of power tool that could make this job easier.
• Share the task and cost of an automated pick-up system with their neighbor resorts.
• If they are really limited to the rake and shovel method, at least make sure the chore is spread among several people.

Much like spring cleaning, periodically review your own regular, recurring tasks and those you have created for your employees.   Figure out a way to improve the way you do the ones that you still consider valuable and discard the ones that offer no real value or have you just filling the holes in your work day.

With everything we have going on these days it can be easy to allow things to slip through the cracks. If you have 50 things to do, chances are that you will forget at least 1 of them unless you’ve documented your to-dos or have some sort of list to work off to help you to keep track.

Atul Gawande just wrote a book called The Checklist Manifesto. The book’s main point is simple: no matter how expert you may be, well designed checklists can improve outcomes.  He gives many examples of how checklists have improved the performance of surgeons, airplane pilots, rock stars, etc.  One of the main points the book makes is that there are differences between errors of ignorance (mistakes we make because we don’t know enough), and errors of ineptitude (mistakes we make because we don’t make proper use of what we know).  He suggests that the majority of failures in the modern world are due to this latter type.

The bottom line is that no matter how smart, organized or prepared we think we are, we can all benefit from making a simple checklist and verifying our work against it.  This applies to almost everything we do – from performing preventive maintenance work on an air handler to operating in the emergency room to doing the weekly shopping to getting dressed.  Yes, getting dressed.  As I stood at my gym locker this morning – sopping wet, I realized I had no pants.  My options were limited…wear smelly gym shorts to work or drive home and get a pair of pants.  If only I had made a list of the things I needed the night before.

Thought is integral to success.  The old adage “think before you act” isn’t a simplistic prescription for avoiding disaster, it’s a deliberate prescription for success.  Imagine success in advance by thinking through each detail and every milestone of your plan for achieving it.  Discipline your mind to foresee the obvious and hidden pitfalls before taking that first step.  Think of skiers Lindsey Vonn or Bode Miller visualizing their paths to victory in the 2010 Winter Olympics, seeing the turns; the ice; the ruts; the moguls and, hence, the victory.  Imagine Gary Kasparov anticipating his adversary’s moves, four of five moves from his current position.   You may even laugh at Chevy Chase’s credo to “be the ball” – but it speaks directly of the power of thought.

Thought matters.   Take two cases in point:

1. Perennial success story Starbucks Coffee.

In an effort to increase its overall cap value, Starbucks management made some impressive growth predictions in 2004, announcing that it would double its pace of expansion, with a goal of reaching 15,000 stores in the United States.  When gas prices rose and the economy soured, Starbuck’s predicted growth failed to materialize.  In an effort to meet its prediction, management thought to saturate local markets – placing many new locations in the south.  They failed to consider that long, sun-baked lines for hot drinks in plastic cups might not be a great southern business model.  The plan began to founder.   Instead of stopping and analyzing the data, they continued to add new stores each year, even with obvious signs that the strategy wasn’t working.  In the end, Starbucks shuttered hundreds of stores.

2. Compare the fallen Starbucks to the rising fortunes of Sam Zell

Sam Zell, the billionaire investor, made what is universally acknowledged to be one of the best-timed real estate decisions in history.  In 2007, he sold his 573 property; 125 million square foot real estate empire – Equity Office Properties Trust – to Blackstone group and others for $39 billion at the peak of the real estate.  It was one of the largest leveraged buyouts in history.  Zell thought hard about what the market was telling him.  He recognized that real estate values were vastly inflated and that enterprises bought office space based on local differentiators such as price and management, not on national differentiators such as brand name ? EOPs original play.   Zell recognized that lenders were underwriting deals based on unrealistic expectations of increased tenancies.   He knew that the credit balloon had to burst, so he got out before it did.  Yet Sam Zell isn’t perfect.   All that success must have gone to his head.  With his billions he bought the Chicago Tribune – oops.

Thinking long and hard before acting plays well in real estate, and in life.  Starbucks’ actions were not entirely without thought.  It simply failed to stop, wake up and smell the coffee before it acted.

Must have been the caffeine.