Improving InnovationWithin Your Facilities Management Contracts
March 30, 2014
Prepared by:Chris Payne
CSSConsultancy.com
Improving FM, Maintenance and SupportServices through clever thinking
T: + 44(0) 1698 901025F: + 44(0) 1698 901035E: [email protected]: www.cssconsultancy.com
Our missionWe work within the Facilities Management, Maintenance and Support Service sectors to radically improve service performance, enhance relationships and install tools that encourage clarity, innovation and positive change.
Chris Payne Innovation & Improvement DirectorCSS Consultancy
4|
What we will cover during this presentation
► What is innovation?
► Why is it important?
► What drives it?
► How do FM organizations currently innovate?
► Where do you innovate?
► How do you measure innovation?
► Improving innovation
— Implementing an Innovation Strategy
— Barriers to Innovation
— Building in innovation
► Next steps
► Some suggested reading
5|
What is innovation?
6|
What is innovation?
An idea?
7|
What is innovation?
An invention?
8|
What is innovation?
A better way of
working?
9|
What is innovation?
There are lots of
definitions
10|
Innovation is about people creating value for stakeholders
by implementing new ideas
What is innovation? Fresh thinking that creates value
Innovation is the creation of something that improves the
way we live our lives
Innovation is really about responding
to change in a creative way; it’s about generating
new ideas, conducting
R&D, improving processes or revamping
products and services.
Innovation is the creation of the new or the re-arranging of the old in a new way
Innovation lowers the costs and/or increases the benefits of a
task
Any creative idea, getting implemented or realized successfully, is Innovation
Innovation is converting ideas to numbers.
Something new or different introduced
The term innovation may refer to both radical and incremental changes to products,
processes or services.
Innovation is the specific instrument of entrepreneurship… the act that endows resources
with a new capacity to create wealth
The introduction of something new.
New products, business processes and organic changes that create wealth or social welfare.
Innovation: Something new and uniquely useful
There are lots of
definitions
11|
What is innovation? Fresh thinking that creates value
Innovation is the creation of something that improves the
way we live our lives
Innovation is really about responding
to change in a creative way; it’s about generating
new ideas, conducting
R&D, improving processes or revamping
products and services.
Innovation is the creation of the new or the re-arranging of the old in a new way
Innovation lowers the costs and/or increases the benefits of a
task
Any creative idea, getting implemented or realized successfully, is Innovation
Innovation is converting ideas to numbers.
Something new or different introduced
The term innovation may refer to both radical and incremental changes to products,
processes or services.
Innovation is the specific instrument of entrepreneurship… the act that endows resources
with a new capacity to create wealth
The introduction of something new.
New products, business processes and organic changes that create wealth or social welfare.
Innovation: Something new and uniquely useful
Innovation is about people creating value for stakeholders
by implementing new ideas
There are lots of
definitions
12|
What is innovation? Fresh thinking that creates value
Innovation is the creation of something that improves the
way we live our lives
Innovation is really about responding
to change in a creative way; it’s about generating
new ideas, conducting
R&D, improving processes or revamping
products and services.
Innovation is the creation of the new or the re-arranging of the old in a new way
Innovation lowers the costs and/or increases the benefits of a
task
Any creative idea, getting implemented or realized successfully, is Innovation
Innovation is converting ideas to numbers.
Something new or different introduced
The term innovation may refer to both radical and incremental changes to products,
processes or services.
Innovation is the specific instrument of entrepreneurship… the act that endows resources
with a new capacity to create wealth
The introduction of something new.
New products, business processes and organic changes that create wealth or social welfare.
Innovation: Something new and uniquely useful
Innovation is about peoplecreating value for stakeholders
by implementing new ideas
There are lots of
definitions
13|
What is innovation?
Innovation is about peoplecreating value for stakeholders
by implementing new ideas
Value• Cost• Advantage• Safety• Ease• Time• Satisfaction
People• Suppliers• Employees• Customers• End users• Consultants• Partners
Stakeholders• Suppliers• Employees• Customers• Users• Consultants• Shareholders
• Community• Partners• Industry• Investors• Government
Ideas• Efficiency• Complimentary• Evolutionary• Revolutionary
The evolution of innovation:• Technology push (‘50s – late ‘60s)• Market pull (Late ‘60s – mid ‘70s)• Coupling/interactive (Mid ‘70s – end ‘80s)• Integrated/process (End ‘80s – early ‘90s)• Networking (Early ‘90s – ’00s)• Open innovation (‘00s – ’10s)• Open innovator (‘10s onwards)
- Kotsemir & Meissner ‘13
14|
What is innovation?
Innovation is about peoplecreating value for stakeholders
by implementing new ideas
Value• Cost• Advantage• Safety• Ease• Time• Satisfaction
People• Suppliers• Employees• Customers• End users• Consultants• Partners
Stakeholders• Suppliers• Employees• Customers• Users• Consultants• Shareholders
• Community• Partners• Industry• Investors• Government
Ideas• Efficiency• Complimentary• Evolutionary• Revolutionary
Typically, innovation results are measured in financial terms based on Return On Investment (ROI) calculations. From a service perspective, this ROI can extend to encompass health, safety, quality and environmental metrics in addition to customer satisfaction levels and loyalty.
15|
What is innovation?
Innovation is about peoplecreating value for stakeholders
by implementing new ideas
Value• Cost• Advantage• Safety• Ease• Time• Satisfaction
People• Suppliers• Employees• Customers• End users• Consultants• Partners
Stakeholders• Suppliers• Employees• Customers• Users• Consultants• Shareholders
• Community• Partners• Industry• Investors• Government
Ideas• Efficiency• Complimentary• Evolutionary• Revolutionary
Author Wayne Burkan in his publication entitled ‘Wide Angle Vision’, suggests that innovation is driven by disgruntled customers, off the scope competitors, rogue employees and fringe suppliers.
16|
What is innovation?
Innovation is about peoplecreating value for stakeholders
by implementing new ideas
Value• Cost• Advantage• Safety• Ease• Time• Satisfaction
People• Suppliers• Employees• Customers• End users• Consultants• Partners
Stakeholders• Suppliers• Employees• Customers• Users• Consultants• Shareholders
• Community• Partners• Industry• Investors• Government
Ideas• Efficiency• Complimentary• Evolutionary• Revolutionary
Research shows that without new ideas, organizations often become complacent based upon past experience, partly driven by institutionalised behaviours and a focus on the internal development of their own structure.
17|
Why is it important?
Recent research on the Standard & Poor's 500 has shown that successful
companies today remain in business for only an average of 15 years. In the 1920s, this average lifespan was 67
years.
(BBC News, 2012)
6715
18|
Why is it important?
Recent research on the Standard & Poor's 500 has shown that successful
companies today remain in business for only an average of 15 years. In the 1920s, this average lifespan was 67
years.
(BBC News, 2012)
6715
Seven out of 10 corporate chiefs in the UK are over-reliant on fading revenues, and more than a quarter fear their business
model will no longer work by 2017
FT (28/4/2104)
7/10
19|
Why is it important?
58% of business leaders in large UK companies admit their management team is
failing to effectively lead for innovation
Eyes Wide Shut: Leading for innovation in post
recession Britain
58% 93.5% of 1500 CRE executives cited face-to-face collaboration as a critical success factor
in achieving innovation.
Cushman & Wakefield: Joint survey of CRE Executives conducted in partnership
with CoreNet Global 2012
93%
68.9% rated the physical work environment as an
important factor in innovation.
69%
20|
Why is it important?
When evaluating contract bids and tenders, 86% of people procuring bundled services
believe innovation is important, second only to cost
Time for change in FM - Interserve & Sheffield Hallam Research (October
2013)
86%
21|
Why is it important?
When evaluating contract bids and tenders, 86% of people procuring bundled services
believe innovation is important, second only to cost
Time for change in FM - Interserve & Sheffield Hallam Research (October
2013)
86%
Almost 80% of Facilities Managers are measured first on performance against Budget. As a cost centre it is an area where budgets can be cut to make
savings.
80%
RICS: Raising the Bar 2012
22|
Why is it important?
68% of CRE teams are seeing increased demand from senior
leadership to improve the productivity of the real estate
portfolio
68%
61%
72% of CRE teams experience demand to deliver clear
enhancements to workplace productivity
72%
48% of CRE teams view financial constraints as the greatest limitation on CRE
from enhancing its strategic position
48%
28% of CRE teams are “well equipped” to meet the demands of senior
leadership
28%
61% of CRE teams experience demand to deliver improved
worker productivity
JLL: Global Corporate Real Estate Trends 2013
23|
68% of CRE teams are seeing increased demand from senior
leadership to improve the productivity of the real estate
portfolio
68%
61%
72% of CRE teams experience demand to deliver clear
enhancements to workplace productivity
72%
48% of CRE teams view financial constraints as the greatest limitation on CRE
from enhancing its strategic position
48%
28% of CRE teams are “well equipped” to meet the demands of senior
leadership
28%
61% of CRE teams experience demand to deliver improved
worker productivity
Why is it important?
JLL: Global Corporate Real Estate Trends 2013
24|
What’s driving it?
Techno-logical
advances
Changing customers and needs
Intensified competition
Changing business
environment
Influence of global trade, economic cycles and government policies
Population profiles (age, em
ployment and affluence)
in addition to increased expectation of choice
Global trade, outsourcing and market diversification
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25|
”“Organizations are beginning to acknowledge their share of responsibility for the problem of the overwhelmed employee and take steps to solve it. 3.
””
””
”““
“““
What’s driving it?
Changing business environment1. Ernst & Young: Tracking global
trends 20142. Grant Thornton: Insights into FM –
Issue 9, 20143. Deloitte: Global Human Capital
Trends 2014: Engaging the 21st-century workforce
Estimates show that 70% of world growth over the next few years will come from emerging markets, with China and India accounting for 40% of that growth. 1.
Between now and 2050, the world’s population is expected to grow by 2.3 billion people, eventually reaching 9.1 billion. Over 80% of future demand will come from Asia. 1.
Instead of a “China strategy” or an “India strategy,” companies will begin formulating strategies for particular cities, or for city clusters. 1.
Over the last five years, FM deals involving international buyers have risen from around 5% of the market by volume to almost 20% in 2013. 2.
Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations' true nature is that of a community of humans. 3.
Techno-logical
advances
Changing customers and needs
Intensified competition
Changing business
environment
26|”””””“
““““
What’s driving it?Changing customers and needs1. Ernst & Young: Tracking global
trends 20142. IFMA: Facility Management Trend
Report: Emerging Opportunities for Industry Leaders 2014
3. JLL: Global Corporate Real Estate Trends 2013
4. Cushman & Wakefield: Workplace Transformation Survey 2013/2014
According to market research firm Frost & Sullivan, while sustainability itself was the main focus of FM in 2010, workplace management will lead the charge by 2020. 2.
Sixty-five percent of companies around the globe are having problems sourcing critical-skill talent. In the fast-growth markets, the problem is particularly acute. 1.
Economic realities and capital expenditure constraints have maintained pressure on CRE teams to implement short-term tactics, often to the detriment of longer-term strategic moves. This focus has been aimed at bolstering corporate financial performance through cost savings and/or capital release. 3.
Most CRE teams are finding it challenging to continue achieving year-on-year cost-saving targets through tactical means, as most of the easier opportunities within portfolios have already been realized. 3.
Occupiers cited human resource factors, such as recruiting, workforce productivity and improved work/life balance over cost factors, such as reduced facility costs and lower churn as drivers of workplace change. 4.
Techno-logical
advances
Changing customers and needs
Intensified competition
Changing business
environment
27|
“ ”“ ”“
”
What’s driving it?
Intensified competition1. Grant Thornton: Insights into FM –
Issue 9, 20142. Deloitte: Global Human Capital
Trends 2014: Engaging the 21st-century workforce
The deals that are seeing the likes of CBRE acquiring Norland, and Germany’s Bilfinger securing Europa are highlighting the trend for property managers to acquire FM providers and vice versa. 1.
Specifically, one of the big challenges that companies face when putting in place more centralised processes is to avoid stifling the innovation that can be generated within many quasi-independent entities. 1.
Techno-logical
advances
Changing customers and needs
Intensified competition
Changing business
environment
Corporations now compete globally for increasingly scarce technical and professional skills. 2.
Companies that succeed in building a global “supply chain” for skills will be positioned for success in innovation and performance. 2.
Target Name Acquirer Name Subsector Value £m
Enterprise Group Holdings Limited
Amey plc Utilities 385.0
Norland Managed Services Limited
CBRE Group Inc. M&E 321.1
May Gurney Integrated Services plc
Kier Group plc Maintenance/ Fit-out
221.3
Balfour Beatty WorkPlaceLimited
GDF Suez Energie Services SA
M&E 190.0
Inenco Group Limited Intermediate Capital Group plc
Utilities 150.0
28|
“ ”“ ”“ ”“ ”“ ”“ ”
What’s driving it?
Technological advances1. Ernst & Young: Tracking global trends
20142. RICS: Raising the Bar; City
Roundtables Report 20143. MoD: Global Strategic Trends out to
2040 4. BIM Task Group Website
All companies are in the technology business. 1.
The amount of digital information created each year will increase to 35 trillion gigabytes by 2020, requiring 44 times more data storage than in 2009. 1.
FM continues to be “bombarded” by new technologies –‘green’ technologies, the ‘Cloud’, wireless power; BIM, building sensors, and more. 2.
As building systems become more complex, advanced technologies have become readily available that allow integration of multiple streams of data, giving FMs an unprecedented level of access and mobility that did not exist just a few years ago. 3.
Techno-logical
advances
Changing customers and needs
Intensified competition
Changing business
environment
Innovation will create new opportunities and generate value, by successfully exploiting new and improved technologies, techniques and services, overcoming cultural and process barriers. 3.
Collaborative 3D Building Information Modelling (BIM) with all project and asset information, document and data in electronic format, will be required on all UK government construction projects by 2016.
The Nature of InnovationWithin Facilities Management Contracts
March 30, 2014
30|
How do FM organizations currently innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Delivery modelStaffingFulfilment
ReportingMonitoringMeasuring
Control / complianceBusiness systemsPerformance improvement
CultureScale and scopeRelationship
Delivery modelStaffingFulfilment
StructureGovernance
Communication
Growth / market / competitorBusiness modelFinance
Strategic Operational
31|
How do FM organizations currently innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Strategic Operational
Delivery modelStaffingFulfilment
ReportingMonitoringMeasuring
Control / complianceBusiness systemsPerformance improvement
CultureScale and scopeRelationship
Delivery modelStaffingFulfilment
StructureGovernance
Communication
Growth / market / competitorBusiness modelFinance
Needs improving
Focus of innovation
Seek alternative
32|
How do FM organizations currently innovate?
33|
How do FM organizations currently innovate?
34|
How do FM organizations currently innovate?
35|
How do FM organizations currently innovate?
36|
How do FM organizations currently innovate?
37|
How do FM organizations currently innovate?
38|
How do FM organizations currently innovate?
39|
How do FM organizations currently innovate?
40|
How do FM organizations currently innovate?
41|
How do FM organizations currently innovate?
42|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
43|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
44|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
HIGH IMPACT –LOW INVOLVE-MENTTypically done by specialists
HIGH IMPACT & INVOLVEMENTParticipation by many individuals and or groups, bringing diverse skill sets
LOW IMPACT & INVOLVEMENTFew people involved and the impact is generally low
LOW IMPACT -HIGH INVOLVE-MENTFocus is on continual innovation in low impact ways
45|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
HIGH IMPACT –LOW INVOLVE-MENTTypically done by specialists
HIGH IMPACT & INVOLVEMENTParticipation by many individuals and or groups, bringing diverse skill sets
LOW IMPACT & INVOLVEMENTFew people involved and the impact is generally low
LOW IMPACT -HIGH INVOLVE-MENTFocus is on continual innovation in low impact ways
46|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Where do they feel pain?How can the relationship be improved?What are the ‘strategic imperatives’?
Compliance / KPIs / SLAsEnd user fulfilmentR3 (Right Thing, Right Fix, Right Time)
Adoption planUtilization auditOpportunity review
Wasteful effortResource utilization
Improvement planning
47|
Where do you innovate?
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Where do they feel pain?How can the relationship be improved?What are the ‘strategic imperatives’?
Compliance / KPIs / SLAsEnd user fulfilmentR3 (Right Thing, Right Fix, Right Time)
Adoption planUtilization auditOpportunity review
Wasteful effortResource utilization
Improvement planning
Author Wayne Burkan in his publication entitled ‘Wide Angle
Vision’, suggests that innovation is driven by disgruntled
customers, off the scope competitors, rogue employees
and fringe suppliers.
“It is my belief that, by and large, there is one and only one source
of innovation, whether it’s internal IS/IT systems, recruiting
systems, or whether it’s the development of a technical
product. And that source is: Pissed-off people.”
Tom Peters
48|
How do you measure innovation?
Nine out of 10 FM providers polled have no mechanism to measure innovation within their
contracts or their business.
“We don’t”
49|
How do you measure innovation?
Nine out of 10 FM providers polled have no mechanism to measure innovation within their
contracts or their business.
“We don’t”
Adhoc innovation(on a case by case basis)
Through word-of-mouth
By copying others
Anecdotal evidence
Results
50|Source: http://timkastelle.org/blog/2012/04/the-innovation-matrix-explained-innovation-competence/
NOT INNOVATING VERY MUCH
THINKING ABOUT
INNOVATIONBEWILDERED
ACCIDENTAL INNOVATORS
FIT FOR PURPOSE
POTENTIAL STARS
UNICORNS STARS(AT RISK)
WORLD CLASS INNOVATORS
INNOVATION COMMITMENT
INN
OVA
TIO
N C
OM
PETE
NCE
Improving innovationImplementing an innovation strategy
51|Source: http://timkastelle.org/blog/2012/04/the-innovation-matrix-explained-innovation-competence/
NOT INNOVATING VERY MUCH
THINKING ABOUT
INNOVATIONBEWILDERED
ACCIDENTAL INNOVATORS
FIT FOR PURPOSE
POTENTIAL STARS
UNICORNS STARS(AT RISK)
WORLD CLASS INNOVATORS
INNOVATION COMMITMENT
INN
OVA
TIO
N C
OM
PETE
NCE
Improving innovationImplementing an innovation strategy
52|Source: http://timkastelle.org/blog/2012/04/the-innovation-matrix-explained-innovation-competence/
NOT INNOVATING VERY MUCH
THINKING ABOUT
INNOVATIONBEWILDERED
ACCIDENTAL INNOVATORS
FIT FOR PURPOSE
POTENTIAL STARS
UNICORNS STARS(AT RISK)
WORLD CLASS INNOVATORS
INNOVATION COMMITMENT
INN
OVA
TIO
N C
OM
PETE
NCE
Improving innovationImplementing an innovation strategy
53|
Improving innovationImplementing an innovation strategy
Starting your innovation journey
Decide where to innovate
Set incremental objectives
Define how you will innovate
Include everyone
Monitor, adapt, improve
54|
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Improving innovationImplementing an innovation strategy
Step 1Decide where to innovate
55|
NOT INNOVATING VERY MUCH
THINKING ABOUT
INNOVATIONBEWILDERED
ACCIDENTAL INNOVATORS
FIT FOR PURPOSE
POTENTIAL STARS
UNICORNS STARS(AT RISK)
WORLD CLASS
INNOVATORS
INNOVATION COMMITMENT
INN
OVA
TIO
N C
OM
PETE
NCE
Improving innovationImplementing an innovation strategy
Step 2Set incremental objectives
56|
Improving innovationImplementing an innovation strategy
Step 3Define how you will innovate
57|
Improving innovationImplementing an innovation strategy
Step 4Involve everyone
Business Unit
Supplier
Customer
End-user
IT Department
Consultants
Community Group
58|
Improving innovationImplementing an innovation strategy
Step 5Monitor, adapt, improve
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
Service
Organiz-ational
Strategy Technology
Process
Marketing
Customer
59|
Improving innovationBarriers to innovation
60|
Improving innovationBuilding in innovation
61|
Some Suggested Reading
IFMA/CBRE FM Trend Report 2014
Grant Thornton FM Insights
Deloitte Global Human Capital Trends 2014
KPMG Real Estate Outlook 2014
PWC Emerging Trends in Real
Estate 2014
RICS Raising the Bar Report 2012
Interserve Time for Change in FM 2103
Cushman & Wakefield 2014
Workplace Survey
Improving Innovation
Any questions?
March 30, 2014Prepared by:
Chris Payne
63|
Funding Innovation
Provider’s Idea
Customer’s Idea
Joint Provider / Customer
Idea
Total
Provider funded
35 4 16 55 (36%)
Customer funded
13 12 5 30 (20%)
Jointly funded
14 14 39 67 (44%)
TOTAL 62 (41%) 30 (20%) 60 (39%) 152 (100%)
Source: International Association of Outsourcing Professionals innovation survey; Lacity & Rottman (2012)
Q: Who funds innovation?Typically, the stakeholder who proposes an innovation idea usually funds the innovation project in full or in part.
Improving FM, Maintenance and SupportServices through clever thinking
T: + 44(0) 1698 901025F: + 44(0) 1698 901035E: [email protected]: www.cssconsultancy.com
Improving InnovationHow can we help you?