Performance Excellence in Facilities Management

This presentation will examine the use of a Business Excellence framework to improve performance (the journey to excellence) within a Facilities Management (FM) business unit.

The following areas will be addressed:

  • IR’s strategic objectives
  • Facilities Management
  • What is Business Excellence and why use it?
  • How the framework has “Changed FM”
  • What we have achieved (so far)

IR’s strategic objectives

Inland Revenue is New Zealand’s principal revenue agency, with three main responsibilities:

  • Collecting revenue. IR collects 80% of core Crown revenue, $56billion in the last FY.
  • Administering social policy programmes. These include kiwisaver, student loans, and child support.
  • Providing policy advice.

IR’s strategic plan, IR for the Futuresetsout six strategic priorities:

  • retain and develop the right people
  • improve voluntary compliance
  • move customers to digital channels
  • work with other agencies and companies
  • use our information well, and
  • ensure our systems meet our current and future needs

Facilities Management

In 2011 there were three teams in the facilities area. These were; Facilities, Property, and Assets. At this time a number of pain-points were identified, if a comparison was made between the facilities area, and what one would expect in an exemplar Corporate Real Estate (CRE) business unit within the NZ State Sector.

The pain points were:

  • The teams were siloed.
  • The service offering was unclear.
  • The team was not delivering on 90 day plan initiatives.
  • Resource constraints existed, a mix of both capacity and capability.
  • There was a lack of governance, and management controls.
  • Data and reporting was unreliable.
  • Contract management was poor.
  • No Asset Management Plan existed.

To address these pain points a restructure was undertaken in 2012, and a Facilities Management business unit was established. At this time the Group Manager’s reporting line moved to the CFO, who is a member of our Executive Leadership Team. The restructure saw the creation of a performance excellence team, essentially formalising the adoption of business excellence to drive the business improvements needed.

There are approximately 120 personnel in FM, in four teams:

  • Business Service
  • Property
  • Operations
  • Performance Excellence

There is an annual operating budget of approximately $50 million, $30 million of which is leasing costs. FM supports over 6000 staff and contractors in 16 towns and cities around the country. There are 26 leased buildings, IR does not own any buildings.

FM staff are located in all buildings where IR has over 150 people, elsewhere services are delivered remotely using a Service Desk based in Wellington and regular visits by FM staff.

FM responsibilitiesinclude:

Operations:

IR’s travel contract, Fleet management, multi-functional devices, mail rooms, stationary, meeting room support, and the receptionarea at the Asteron Centre (Wellington). This team also operates a national service desk taking over 30,000 calls per year (e-mail and phone).

Property:

Project management of IR’s fit-outs, relocations, maintenance, and insurance.

Business Services:

Lease, asset and contract management.

Performance Excellence:

Strategic planning, performance measurement, continuous improvement, and intranet

management.

There are a number of external and internal influences on FM, these include:

  • Delivering Better Public Services. The Government is expecting all government department to deliver more for less. This is the value for money discussion.

Of particular importance to us are Results Areas 9 and 10:

Result areas 9. New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business”.

Result area 10. “New Zealanders can complete their transactions with the Government easily in a digital environment”.

IR has a large programme called Business transformation which is an organisation-wide effort to design a modern revenue system that meets our customers’ changing expectations and Government priorities.

Property Management Centre of Expertise (PMCoE). ThePMCoE was established in 2010, and is the functional lead for Property across the state sector. Their mandate requires IR to take a whole of government approach to all property related activities.

What is Business Excellence and why use it?

FM is using the Baldrige Business Excellence framework, which is supported in NZ by the NZ Business Excellence Foundation. The Baldrige criteria were developed by the US Department of Commerce (named after the Secretary of Commerce (Malcom Badrige) who was instrumental in the development of the criteria. The program has been running in the US since 1988.

The framework consists of seven categories:Leadership, Strategic Planning, Customer Focus, Workforce Focus, Measurement & KnowledgeManagement, Operations Focus, and Results.

The criteria are regularly updated to ensure that they reflect successful management practices identified in high performing public and private sector organisations. The framework is non-prescriptive, and envisages that organisations would use a range of continuous improvement tools such as Lean and Six Sigma. The important thing is to be undertaking improvements in all areas of the framework.

Each category is broken into items and multiple requirements. In all there are 103 multiple requirement areas so it is a very comprehensive framework for analysing business performance.

If one was to apply for an award under the Baldrige criteria, then an organisation would be evaluated and awarded points out of 1000. 550 points are awarded in the process categories, with a further 450 points being awarded in the results area. So without being able to prove your results, you will never achieve excellence.

400 points are required for Bronze, 500 for Silver, and a score of 650 or above is required for a Gold award.

It is worth noting that the average New Zealand organisation scores around 230 points, based on data from many hundreds of assessments conducted in NZ over the past 20 years. The highest score ever awarded was to Purina in the United States who achieved 830 points. Purina manufacture pet food.

Since 1993 in NZ only six companies out of 61 applications have won a Gold award under the Baldrige criteria.

Attaining a Gold award is typically a journey, many report up to 10 years. Navy achieved Bronze status in 2003, Silver status in 2006, and a Gold award in 2009.

It is interesting to note that on their journey to Gold they:

  • Researched frameworks
  • Obtained senior leader commitment
  • Adopted Baldrige in 1999
  • Launched Nx – naval excellence (BE team)
  • Created a vision - to be the best small nation navy in the world. Simple, clear, everyone gets it.
  • Developed their first strategic plan in 2001
  • Articulated their values
  • Reviewed who their customers were
  • Developed corporate performance measurement framework,
  • Attitude survey

So adopting the BE framework forced them to look across their entire business.

How the framework has “Changed FM”

Using the framework has forced the FM business unit to go back to basics & answer some fundamental questions like:

  • What is our Vision, Mission & Values?
  • What are our key/core processes?
  • Who are our customers?
  • How engaged are our staff?
  • How we are performing?
  • How do we ensure that our people are with us on our journey?

What has FM achieved (so far)

FM has undertaken a number of significant activities since 2012 when the BE framework was adopted.

Governance

A BE governance structure has been implemented to ensure that everyone is committed to driving excellence across FM. All FMLT members have been allocated a category to champion.

FMLT Terms of Reference (ToR)

A ToR, has been developed which includes meeting protocols, as well as details on what will be reviewed weekly, monthly and quarterly.

Strategic Plan

The FM strategic plan reviews the operating environment, BE journey, and includes seven critical success factors, linked to the criteria.

  • Demonstrate effective leadership & governance
  • Undertake integrated , robust, effective planning
  • Deliver agreed services to our customers
  • People have the right knowledge, skills, and are responsive to changing business needs
  • Fiscally prudent, operate within budget
  • Recognized as a Valued business partner
  • Buildings are fit for purpose

In completing the strategic plan, a SWOT and PESTLE analysis was undertaken. Many will be familiar with SWOT analysis, (strengths, weaknesses, opportunities and threats). The PESTLE analysis examines political, economic, social, technical, legal, and environmental issues.

Customer Surveys

FM has segmented its customers in order to understand their requirements. Not all customers are equal, yet the previous restructuring and service catalogue had driven FM people to treat everyone the same.

Regular customer surveys have been undertaken since December 2012. The survey targets those who have accessed FM services through the FM Service desk. Tasks are allocated a priority (1-4) with a Service Level Agreement specifying the response and resolution time required. The average survey result is just over 90%. FM is currently reviewing how to expand this survey to pick up other services provided by FM such as lease, asset, contract, and project management.

Knowledge Base

Drupal is used as the intranet knowledge base. FM maintains a large number of customer facing and team facing pages. 1500 pages for FM, 1200 for the wider group.

Workforce Surveys

Up until last year IR used the Gallup survey to measure employee engagement. It would be fair to say that organisationally IR’s engagement was pretty average.

In 2011 FM scored 3.32 against an IR result of 3.77. The Gallop 50% percentile was 3.97. In 2012 the FM result increased to 3.78, so FM was the same as IR which had increased to 3.78. An increase of 0.46 was a fantastic result as a change of 0.20 is regarded as a significant change.

The problem with Gallup, and similar tools, is that the surveys are not frequent enough, most organisations undertake these surveys annually. So you need to take some form of Pulse check, say quarterly.

FM undertakes a FM Pulse survey every quarter. The first of these was undertaken in December 2012. The average result since then is 3.9.

Value Stream Mapping

FM has undertaken six VSM’s, a continuous improvement tool, all of which are nearly completed. Examples are:

  • office move requests
  • stationary
  • plumbing faults

FM has produced a Balanced Scorecard (BSC) in order to drive improvements in our performance. The BSC has five areas, those typically seen in work by Kaplan and Norton (Customer, Financial, Internal Processes, and People), and a fifth area has been added (Leadership, Governance & Strategy) as this area is not represented in the work by Kaplan and Norton.

FM Our performance 2014-15

Stakeholder

FMLT members each have a number of key stakeholders to manage, and quarterly they obtain a score from these stakeholders as to how they think FM is going. While subjective it is yet another indicator of performance. The score is obtained from eight people, and includes one external, the Director of the PMCoE.

Workforce. FM Pulse survey, referred to above.

Customer Satisfaction. Customer survey, referred to above.

% Jobs Completed Within Agreed SLA. FM recorded over 31,500 incidents in Remedy (IT tool) last FY, achieving 95% resolution within the Service level Agreement (SLA).

Occupancy Rating. The PMCoE set a target for all Government departments of 12-16m2/FTE, this has recently been changed to 13m2/headcount. This reflects the fact that most government departments are still using dedicated desking.

Property Costs / Headcount. This is ameasure reported to the PMCoE.

Co-location opportunities are investigated particularly at smaller sites, so that IR can share resources, and optimise the use of their space.

Culture

Culture is what happens in an organisation when no-one is looking. A lot of organisations have Vision statements, and their values are clearly articulated, however when you examine their:

  • Processes and Procedures
  • Symbols and artefacts displayed in the workplace
  • Behaviours and attitudes

then there is often a disconnect with the desired culture. It’s difficult to measure culture, there are many tools available.

FM approached it’s culture journey by firstly undertaking an exercise across all of their teams. They looked at what was called above and below line behaviours. An example is from Auckland. This team chose the waaka, because FM had often spoken about being on a journey to excellence. Above the waaka is a paddle, everyone paddling in unison. Below the surface is the shark and the squid, the poor behaviours.

Having completed this exercise, it became apparent that in general, FM team was regarded as:

  • Hierarchical
  • Siloed within our four teams, we kept information to ourselves
  • Slow to market, and
  • The FM leadership team didn’t trust their staff

At the same time as the teams were completing the above/below line exercises a review was undertaken of some work completed by IR’s Business Transformation team. This allowed FM to describe the attributes of high performing teams.

  • Courage
  • Collaboration
  • Commitment
  • Contribution
  • Communication
  • Capability

To improve the culture it was acknowledged that FM would need to build on IR’s leadership development, break down silos, and have more courageous discussions about performance.

A mouse-pad was developed.

  • FM Vision
  • FM Mission
  • One FM symbol (buildings, people, and improving), three lines rather than four teams, working as OneFM
  • FM values – support IR values, shown at the bottom.

We developed the FM values as our IR values didn’t really resonate with everyone.

  • How FM acts:
  • Courage
  • Collaboration
  • Commitment
  • Contribution

The how we act statements came from research into high performing teams. Once again, FM did not want to replicate good work already done within IR.

FM launched its culture Journey in May this year.

A Stop, Keep and Start exercise was completed, this exercise was completed by all teams.

  • StopStrategic, Tactical and Operational.
  • KeepRecognizing goodperformance, beingconscious about this.
  • Start
  • Internet policy (c.f. previous to current 500MB and 20 minutes. No trademe/facebook.
  • One FM operating with PACE objective in our PDP’s.
  • Leadership development. The FMLT has undertaken a LSI survey, which is a tool from Human Synergistics.

Every team has completed their own action plans, and these are reviewed and updated regularly at team meetings. A FM Operations team in Takapuna, completed the journey map. This is an example of work being undertaken with teams across FM.

Recently FM added another question to the FM Pulse survey, which is:

‘On a scale of 1-10, with 1 being poor and 10 being world class, how well are we doing in terms of working together as ‘OneFM’?’

The first result was 6.15, the latest result is 6.8.

Successes

  • FM culture launch (video)
  • Suggestions scheme
  • Complaints scheme
  • Making FM a great place to work network
  • Video welcome from all FMLT members to new people
  • Introduced a FMLT catch-up with all new staff within the first 5-6 weeks (coffee or phone call)
  • Positive feedback from a lawyer in Asteron
  • Positive feedback from Takapuna
  • Pink for a day, FM raised over $2500 from the cancer society

Next steps

It is early days on the Baldrige journey with many organizations taking typically around 8-10 years to achieve excellence under the criteria. It is however pleasing to note that FM are already starting to see real and tangible progress on it’s journey.

They have developed a two year plan to move towards “World class”. Next year FM should be at about 350 points, and in 2016 they aim to undertake a full internal assessment against the criteria. They are aiming for 500 points (silver).

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