This week we’ll finish our discussion of FMO Maturity Model Level 4 with a look at Performance Improvements.
Before getting started, a quick preview of my plan for next week’s post – we’ll take a look at a competency-based workforce management approach used at the National Park Service (NPS), as presented by Elizabeth Dodson at the recent Federal Facilities Council Workforce Management Symposium on April 22. Dodson, an NPS manager, gave a presentation entitled, Facility Management Competencies: A Tool for Learning.
Now, on to this week’s topic – When I think about performance improvements, there are a number of source materials that come to mind – frameworks and approaches – all useful. But at the core of this concept is the need for a basic understanding of the parent organization’s motivations and goals, so that the FMO can not only be responsive to changes in strategic direction but also provide fundamental support to goal execution.
These are different for public and private sector organizations, as highlighted in a National Research Council publication entitled, Core Competencies for Federal Facilities Asset Management through 2020. While public sector FMOs tend to state their overall goals in terms of “mission effectiveness,” private sector organizations report their motivation as building company value or ensuring returns to owners and shareholders. In turn, this alignment has an impact on how financial goals are set, whether efficiency is a key driver of performance, who sets budget priorities, and ultimately, how success is measured. I recently read the book and found its analysis of alignment differences in these areas insightful.
Setting Financial Goals
For private sector organizations, the financial goals are often summarized as profitability – the bottom line. However, market share growth, innovation, and creativity are often highly valued, and the FMO can use these to support internal performance improvement initiatives. For example, the evolving concept of efficient office layouts and systems furniture can trace their history to these types of efforts.
Some public sector organizations do have resource generation goals, but they would never describe these objectives in terms of profitability. Instead, the goals tend to focus on cost reduction and efficiency, although management accountability and stewardship are just as frequently highlighted as objectives.
Efficiency as a Performance Driver
With the absence of profitability as a driver, public sector organizations tend to orient themselves towards the objective of overall efficiency. A line needs to be drawn carefully between this objective and simple cost cutting in order to ensure that good service is delivered. FMOs should seek out the voice of the internal customer organization, and stakeholders such as taxpayers, legislators, and internal customers to make sure that the approach is aligned with the broader vision.
Private sector FMOs tend to be less concerned about efficiency and more oriented towards maximizing revenues or profit by satisfying clients, although from time to time, attention will turn inward for periodic reviews of operations that are perceived to be inefficient. In these cases, the owners, shareholders, and bond holders are most likely to voice concerns.
Budgeting Priorities
As with the other areas, customer needs are the budget drivers for for-profit organizations. Investment decisions are usually made in order to leverage customer satisfaction as the source of success.
Increasingly, public sector FMOs speak of their internal customers and ensuring their needs are met during strategy-setting discussions. These objectives are not the final priority setting methods, however, as organizational and political leadership tend to be the source for such matters.
Critical Success Factors
For the private sector, beyond profitability, success is often defined in terms of speed to market, innovation and uniqueness, and the applied use of technology in operations. Within approaches such as balanced scorecard or lean six sigma efforts, each of these objectives is brought into alignment with overarching goals.
The public sector also uses these approaches, and those factors are highly valued as well. However, consistency of delivery and standardization can be more important, given the size of the public sector enterprises, where there may be thousands of employees and hundreds of locations. In these cases, consistency and standardization help create economies of scale and the ability to roll out large-scale initiatives.
Finally, a good friend offers wise words on this topic: “Things that do not change remain the same.” It is simply the nature of organizations to change – it’s inevitable – so, the real issues boil down to how often to change, what drives the need for change, and how wrenching does the change need to be to meet emerging requirements. In developing the facility response these initiatives, the FMO is well served to be sure and understand the nature of the change – is the organization dealing with a customer/stakeholder issue, realigning financial goals, or improving operations with new technologies – in order to formulate a performance improvement strategy to address it.
As I mentioned, next week we’ll take a moment to review the facility management competency system at the NPS before moving on to the Maturity Model’s Level 5 competencies. As always, thanks for reading the FM Notes from the Field blog, and thanks again to Steven and IWMSNews.com for hosting it.
Please drop a note to me at jim.turner@iwmsnews.com if you would like more information on the material in these blog posts.
