Boardroom CONNECTIONS

Building Operating Management, Jul 2004 by Sullivan, Edward

DATA-DRIVEN STRATEGIES are at the core of a solid relationship with top management

It may not be every facility executive's worst nightmare, but a complaint from the organization's president about a problem in a building is, at a minimum, high on the list of headaches. Whether a call like that sets off alarm bells in the facility executive's brain, or is basically one more item on the day's agenda - albeit the most important one - depends largely on how well prepared the facility executive is to address the question. In fact, the ability to take on tough questions is arguably the most important element in a good relationship with top management.

How much will it cost to construct a new facility to accommodate a business unit's plan for growth? Does a business unit actually need more space? What kind of space will best support a new way of working? It's by providing solid answers to hard questions - whether about a problem-plagued building system or another department's workplace needs - that facility executives earn the respect and attention of top management.

"Senior business leaders don't want to be put in a position of making decisions on the basis of emotions," says Karen Pritchard, vice president, real estate services, Fidelity Real Estate Company. "It's essential to have data to help the corporation decide how to use very expensive assets to support how it does business."

At the University of Miami main campus, located in Coral Gables, Fla., a call about a problem with a building sets off, not alarm bells, but an orderly process of data analysis. Like other facility executives who enjoy a solid relationship with the boardroom, Victor Atherton, associate vice president of facilities administration for the university, has built his reputation on a data-driven management style.

"Data is an opportunity," he says. "Having performance measures and benchmarks tells us how we're doing on a daily basis in terms of our own systems. We can respond to our customers and to the administration in just about any situation because we have data for everything."

NUMBERS TALK

The University of Miami is a major private research institution and a sports powerhouse. But its Coral Gables campus is also a lush 260-acre site with a tropical garden and more than 100 buildings - a physical environment that plays a significant role in attracting students.

Data about the condition of buildings is essential to top administrators of the university. But details about blisters on a roof or the ages of chillers aren't likely to win points in the boardroom. Instead, Atherton uses a facility condition index to give top executives a snapshot of the state of physical assets on the campus.

"The board of trustees and senior administrators really would like to know the condition of a university's facilities," he says. "In the beginning they don't know to ask. But, once they know, they are interested."

The facility condition index is deceptively simple: It's the deferred maintenance backlog divided by the replacement value of the building. The lower the number the better.

"The facility condition index is a tremendous communicator because it's a very succinct number and it's either getting better or worse," Atherton says. In his annual report to the board of trustees, Atherton not only provides the current facility condition index, but also benchmarks that number against the previous year's tally and against the national average.

"The national average is 20 percent," Atherton says. "So if you're below 20 percent the board thinks that's pretty good. Well, our department likes to be below 5 percent."

SUPPORTING BUSINESS NEEDS

Quantifying a deferred maintenance backlog takes one kind of data; answering questions about the impact of new server or wireless technology requires very different information. It's the facility executive's job to determine what information matters most, then figure out a way to get it.

The result can be some very nontraditional facility strategies. At Fidelity Real Estate Company, an all-consuming effort to understand how the real estate staff can support business needs has produced a real estate department that doesn't directly manage real estate and facilities. The company will hire people with no real estate background and increasingly doesn't even have the words real estate in job titles.

"The majority of our real estate workforce is not engaged in the management and operation of our real estate on a day-to-day basis," says Pritchard. "Instead, they are engaged in partnering with Fidelity's businesses to understand what kind of work those businesses do and where they're going. It's essentially a client service management organization. They are now more geared towards understanding what the workplace needs to be and how to get it there rather than on implementation."

With $860 billion under management, Fidelity is the largest mutual fund company in the United States; it's also the largest provider of workplace retirement services, serving 13.9 million retirement customers. The real estate department's job is to use the 8.5 million square feet of space that Fidelity owns or manages to help the company stay on top.