fundamentals of strategic facilities planning part i – the ......unum group disability, life and...
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Fundamentals of Strategic Facilities PlanningPart I – The Portfolio
Paul LarkinsCFM MCR.w CCIM MBA AIA LEED AP
Director of Corporate Planning and ConstructionUnum Group
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Agenda
Introductions
Understanding the Portfolio
Assessment of the Portfolio
Case Study
Translating the Process into the Business
Building a New Workplace Strategy Process
Case Study
Introductions
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Who am I . . .
Paul Larkins
Unum Group
Disability, Life and Financial protection
3 million square feet, 10,000 employees,
Planning and Design, Program Management, Transaction Management, Sustainability, Strategy
Headquartered in Chattanooga, Tennessee
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Please tell us . . .
Your Name
Your Company
Your Role
Where you’re based
Your most pressing Facility Planning challenge
Your favorite smartphone app
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Learning Objectives
Understanding Phase
Portfolio Analysis
Cost and Forecasting
Assessment Phase
Reporting and Performance
Space Management
Case Study
Workplace Strategy proposal
Translation Phase
Understanding
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Basics
Owned
Location, number and types of buildings
Size and age of each building
Cost/Spend of each building
Market comparable values
Replacement costs
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Basics
Leased
Location, number of leases
Types of leases (NNN, Modified gross, Full service)
Outstanding lease commitments
Lease remaining durations
Options for each lease (Termination, ROFO, etc.)
NPV and cost of capital
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio – Profile
Diversity
Office
Manufacturing
Educational
Retail
Warehouse
Research and Development
Other
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Snapshot - Example
0
10
20
30
40
50
HO1 HO2 HO3 HO4 FLD1 FLD2 FLD3
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
HO1 HO2 HO3 HO4 FLD1 FLD2 FLD3
Number of Buildings
Total Area of Buildings
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Discussion
How is this information managed?
IWMS directed – (Archibus, Tririga, Manhattan, FM:Systems, etc.)
3rd party service – Corporate services, Brokerage
Spreadsheet – internally
Don’t know
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio – Management
How is the Portfolio managed?
Internally
Externally
Hybrid
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Accounting
Components
Rent
Taxes
Utilities
Maintenance/Repairs
Consultants
Depreciation
Services
Security, Food, Waste, Operations, Moves, Grounds etc.
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Cost Snapshot - Example
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
HO1 HO2 HO3 HO4 FLD1 FLD2 FLD3
0
10
20
30
40
50
60
70
80
90
HO1 HO2 HO3 HO4 FLD1 FLD2 FLD3
Cost per Building
Cost per RSF
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Costs Dashboard - Example
ORent,
26,206,401
Taxes, 5,772,760
Utilities, 7,243,402
Maintenance, 6,605,622
Supplies, 1,588,911
Parking, 876,000
Consultants8,488,399
Revenue (120,000)
Depreciation, 17,001,111 Rent
Taxes
Utilities
Maintenance
Supplies
Parking
Consultants
Revenue
Depreciation
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio – Cost Allocation
Types
Allocation Basis – Employee level or business unit level
Chargeback method – Per person, space or square foot
Chargeback diversity – By building, site, region or company
Chargeback Frequency – Yearly or monthly
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio – Cost Discussion
Who owns the vacant space?
Real Estate or the Business
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Condition
Inspections/Audits
Functional – visual assessment performed by in-house staff
Maintenance – Capital equipment assessment bi annually by external consultant.
Cleaning – Internal assessment, external validation
ADA/Architectural – Demonstrate diligence and priority
Commissioning – Project related and retro commissioning if modifications are made
Focus on single points of failure and “poor” grades on critical equipment
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Condition
Facility Condition Index (FCI)
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio - Condition
Life Cycle Asset Plan (LCAP)
Monetizing the FCI
Existing Assets
Long Range Capital Plan
Understanding deferred maintenance
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Project Component Accounting - Example
Based on component life and cost, project has blended life of 23.68 years.
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Understanding – Questions
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Assessment
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Measurements
Gross Square Feet
Number of occupiable workspaces (offices, workstations, etc.)
Rentable Square Feet
Gross square footage minus vertical penetrations (most common)
Useable Square Feet (leased)
Total amount of space that is demised and excludes common spaces
Assignable Square Feet (owned)
Useable square footage minus circulation (primary and secondary)
Common Load Factor
For owned buildings, add-on factor is used (rentable/useable)
For leases, common load factor is typically provided by landlord
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Inputs
Seats
Number of occupiable workspaces (offices, workstations, etc.)
Seat types
Number of each type of seats and capacities
Space categories
Number of each categories of space (people, support, meeting, etc)
Areas
Total areas by portfolio, buildings, spaces, seats
Costs
Total cost by portfolio and buildings
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
RSF/Occupant
Occupancy allocation of portfolio
Fairly volatile due to turnover
Total amount of rentable square feet
Divided by
Total Occupancy (Employee, contractors.)
Equals
RSF/Occupant
2,930,000 RSF
Divided by
7,850
Equals
373 RSF
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
RSF/Seat
Capacity allocation of portfolio to gauge/compare for performance
More stable than RSF/occupant
Total amount of rentable square feet
Divided by
Total Seats (Offices, workstations, etc.)
Equals
RSF/Seat
2,930,000 RSF
Divided by
11,350
Equals
258 RSF
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
Cost/Occupant
Spend allocation of portfolio
Similar volatility as RSF/Occupant due to turnover
Total identified cost of real estate
Divided by
Total Occupancy (Employee, contractors.)
Equals
Cost/Occupant
$63,000,000
Divided by
7,850
Equals
$8,025 occupant
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
Cost/RSF
Market comparison of portfolio
External comparison’s difficult due to variability of components
Total identified cost of real estate
Divided by
Total amount of rentable square feet
Equals
Cost/RSF
$63,000,000
Divided by
2,930,000
Equals
$21.50/RSF
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
I versus We ratio
Collaboration comparison of portfolio
New metric that focuses on the growing need for more team space
Total Occupancy (Employee, contractors.)
Divided by
Total number of meeting seats*
Equals
I versus We ratio
7,850
Divided by
3,800
Equals
1 : 2 ratio
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Metrics
Vacancy rate
Can be expressed using space counts or square footage
Typically rate using space harder to determine given load factors and granularity of unassigned workspaces
Total unassigned seats
Divided by
Total number of seats
Equals
Vacancy rate
3,500
Divided by
11,350
Equals
30.8 %
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Occupancy
Expressed as number the of employees, contractors and temp workers occupying space (seats) within the portfolio.
Typically a higher number than headcount
WAH program reduces occupancy number
Number is exclusive of occupant who perform services and aren’t required to need a seat.
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Efficiency (Circulation Factor)
Overused word and one metric that has limited application/interest
Target is to understand the percent of circulation with a portfolio
Total space attributable to functions
Divided by
Total rentable square feet
Equals
Efficiency factor
2,256,100 RSF
Divided by
2,930,000 RSF
Equals
77%
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Utilization
Measurement of how much assigned seat are actually occupied
Valuable metric to have however the most difficult to obtain and revisit over time
Measurement can be obtained several possible ways:
Security badge data
User login activity
Workspace or seat sensors
Occupancy sensors
Physical inspections
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Case StudySeat study
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Case StudySeat study
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Case StudySeat study
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Utilization
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Utilization by space type
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metrics
Utilization by day
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Metric
Diversity Factors
People versus Support (expressed as space)
Business support versus Building support
Dedicated versus Shared meeting space
Training space versus meeting space
Employee amenities percentage
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Workforce
Employment Scenarios
Full-time, part-time, shift work, contingent status
Mobility arrangements
Work from Home – Full time, part-time
Demographics
Distance, Location, Age, Role
Turnover rate
Disruption and agility
Retention
Loyalty/Commitment/Length of Service
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Workplace
Space categories
Classification of spaces
Office, Workstation, Assembly, Service, Support
Space standards
Breadth of standards, mostly tied to workspaces
A (20x20 O), B (12x15 O), C (10x12 O), D (8x12 W), E (6x8 W), F (6x6 W)
Space types
Descriptive classifications
Food, Mechanical, File, Corp conf, Dept conf, etc.
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment - Workplace
Space Functions *Focus, collaborative, social, discussion, etc.
Attribute that is evolving and will need to be included in tracking of space
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Assessment – Questions
Case Study
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Future State
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Headcount Capacity 1% 2% 4% Linear (Headcount)
33% of workspaces are vacant
4% growth can be accommodated beyond 2020
$20.9 MM value of vacant space
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Measuring to Manage
82% Occupancy Ratio
4% growth can be accommodated beyond 2020
55% Utilization Ratio
0
100
200
300
400
500
600
700
800
DY1 DY2 DY3 DY4 DY5 DY6 DY7 DY8 DY9 DY10 DY11 DY12 DY13 DY14 DY15
Access Average Assigned Capacity
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Overview
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Capacity Add WAH Vacancy Utilization
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Metrics
342
472
284
267
256
170
432
846
0
100
200
300
400
500
600
700
800
900
LOC
1
LOC
2
LOC
3
LOC
4
LOC
5
LOC
6
LOC
7
LOC
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Total size 2,930,994 RSF
Space/Occupant 369/RSF
CRE Cost $63,089,628 (2014)
Capacity 11,770 seats (office/workstations)
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Portfolio Metrics
15.8
7
12.9
7
17.9
3
53.5
8
30.1
5
55.6
5
39.2
24.9
8
0
10
20
30
40
50
60
LOC
1
LOC
2
LOC
3
LOC
4
LOC
5
LOC
6
LOC
7
LOC
8
3,99
8
3,75
8
4,57
5
13,9
69
6,26
5
13,5
85
10,7
49
11,3
03
02,0004,0006,0008,000
10,00012,00014,00016,000
LOC
1
LOC
2
LOC
3
LOC
4
LOC
5
LOC
6
LOC
7
LOC
8
Cost/Seat $5,360/seat
Cost/Space $21.43/rsf
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Concept
Business
Alternative work settings
Innovative Collaboration
Real Estate
Master Planning
Enhanced Amenities Subleasing
Employees
Flex work Working
Alternatively HUB Centers
63% of occupants in office daily
33% of real estate vacant and unused
12% of employees working@home
PartnersHR GIG
Communications Procurement
Finance Risk Mgmt
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Goal
Enhance employee engagement
Cultivate employee innovation and collaboration
Create flexible environments for better productivity
Align resources efficiently and reduce annual expenses
Establish partnership team to drive evolutionary change
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Observations
Employee Innovate
Engagement Compliance
Work from Home (“flexible work”) has much broader application
•HR has classified 750 employees as WAH (home more than 50%)
•Corporate Real estate has 1,050 employees as WAH
•Survey performed on Service organization reveals 24% work flexibly
•Challenge:
•Command and Control structure of existing organization could limit
new program’s success.
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Observations
Work functions are often misaligned with space allocation
• Alternative environments and solutions being requested
• Conference rooms and technology are not distributed nor sized for
actual applications
• Employees who are at their desk the most often are in the smallest
workstations
• Challenge:
• Balancing company culture against alternative environments and
approaches
Business Flexible
Collaboration Evolution
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Observations
People are not at their desks as much as we think
• Preliminary security badge data suggests only 63% of employees are in
the office daily
• 33% of office space is vacant and unused
• Departments spend $2.5 MM on moves annually and often only moving
20 feet.
• Challenge:
• Entitlement needs to be put in broader context and realign the entire
environment with leadership demonstration and support.
Real Estate Alignment Enhance Reduce
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Next Steps
Employee/Mobility
•Broader, branded, enrollment program and formalized tracking,
policies and compliance
•Expand and integrate program into HR workforce strategy
•Create flexible co-working centers (HUB) to strengthen engagement
and productivity
•Progressively managed, staffed by CRE, centralized and flexibility
focused
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Next Steps
Business Environment
•Customer experience labs piloted, cascade to other campuses
•LIVE:lab created to demonstrate tools and alternative environments
•Dedicated business resource to lead change management and process
innovation
•Piloting of selected groups - Visioning, deployment and assessment
•Deployment will be paced against market interest and momentum of
real estate monetization
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Next Steps
Real Estate
•Aggressively address existing dark space for alternative use or
subleasing
•Master plan of campus locations for long range
consolidation/conversion
•Continued reassessment of strategy and efficiencies of
requirements in field locations
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Looking Ahead
Communication plan
–Focus all efforts on employee engagement, business process
improvement and space optimization. This should not be a cost
reduction initiative.
–Launch each program independently but with common theme
–Use social media for engagement using interactive sites such as
SocialCast, Chatter, Yammer, etc.
–Promote opportunities to experience LIVE:lab and business centers
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Looking Ahead
Milestones
–Customer Experience Lab – Phase One – 1st quarter 2014
–Pilot group(s) identification and visioning sessions – 2nd quarter 2014
–LIVE:lab launched – 3rd Quarter 2014
–Co-working HUB centers – 4th quarter 2014 (4 sites)
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Looking Ahead
Investment
–Program development for LIVE:Lab
–Pilot groups – Assessed independently and funded upon recommendation
–Field work executed around lease expirations
–Broad estimate to deploy new business work settings for potentially 1,000
employees
–Multi-tenant conversion of selected buildings excluding fitness or amenity
modifications.
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
High Level Timeline
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Tactical plan
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
What is a HUB
4% growth can be accommodated beyond 2020
A social internal co-working center. Workplace strategy incubator.
Hub offers enrolled participants (employees) a unique ecosystem of
resources, inspiration, and collaboration opportunities to grow the
positive impact of work.
Enrollment and access in this employee centric community of work
settings offers interaction of diverse departments will inspire, connect,
and enable them to develop their best work, connections to the
organization, and enhance engagement and provide support when
required.
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
CoCo
4% growth can be accommodated beyond 2020
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Gangplank
4% growth can be accommodated beyond 2020
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Parisoma
4% growth can be accommodated beyond 2020
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Case Study – Questions
Translation
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Plan meets Vision
Alignment to Business Objectives
Teach stakeholders something they don’t know – Find a new angle your customer will care about and shock them with the implications
Never, ever talk about cost or space density – Presentations must focus on things that the business actually cares about, productivity, profit, collaboration
Start with the problem, and not the solution – Stakeholders have no interest to buy into real estate proposals unless they align with something they need or want
Get stakeholder involved in creating the solution – Best way to build buy-in for a plan is to make the stakeholder feel they have ownership and involvement in its creation.
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Alignment
Speaking the Language of Business
Work output
Strategy
Product
Service
Work Mode
Collaborative
Concentrative
Work location/mobility
Office – Desk, conference, lab
Offsite – Home, customer, travel
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Alignment
Speaking the Language of Business
Collaboration
Individual v. collaborative
Spontaneous v. scheduled
Virtual v. face to face
Anchor tools
Things
People
Connectivity
Privacy
Acoustic
Visual
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Alignment
Speaking the Language of Business
Work activities
Analyze
Transact/Admin
Develop/Create
Present/Sell
Respond/Help
Visual
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Program Management
Strategic Project Management
Challenges
Coordinating the work – Multiple vendors and variety of means and methods
Sensitivity to staff, managers and business unit leaders, very personal
Plan for more meetings, updates and open communication
Leadership changes – understand potential changes in vision and direction
External events – M&A, organizational change and staffing levels
Monitoring and Controlling
Monitor cost, schedule, quality and scope
Pay attention to dependencies
Discussion shortfalls and gaps with responsible people
Make necessary adjustments
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Program Management
Strategic Project Management
Balancing needs and requirements
Business continuity
Introducing sustainability
Capital investment and accounting
Supply chain and procurement
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Plan Structure
Governance
Who is involved?
Core team – CRE, HR and IT (plus external providers)
Extended team – Finance, Compliance, Legal, Risk, Communications, Sustainability
Sponsorship
Leadership or Executive Sponsor – Ability to drive vision, demonstrate support and integrate message
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation – Plan Structure
Implementation – It’s a journey, not a destination
Review the mission regularly
Identify metrics and success criteria
Develop the project plan – Phases, Resources, Deliverables
Update team structure – Leadership, Resources, Service providers
Start-up
• Initial implementation
• Small scale
• Monitor results closely
• Identify lessons learned
Scale up
• Broad implementation
• Apply lessons learned
• Measure effectiveness
Integration
• Becomes the way we work
• Monitor changing business drivers and culture
• Focus on continuous improvement
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Influencing – Best practices
Network
Relationships are the foundation of influence
Find connections inside and outside your company
Invest time and build relationships – Light many fires
Get to know others outside your department
Help Others
“Run towards trouble”
Find ways to help others solve their problems
Volunteer to pitch-in
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Influencing – Best practices
Build Coalitions
People are more likely to support strategies when they see support by others
Find those with common interest
Broaden the issue to include more people who can work together
Be explicit about the coalition goals
Cultivate loose associations so members can contribute towards short term goals
Earn Trust
Establish your credibility and reliability
Provide quality and value
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Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Influencing – Best practices
Persuade and Negotiate constructively
Listen to understand the other person’s needs concerns
Ask for input on your project
Present your position in context of the organization’s needs
Be transparent about your motives
Build consensus around points of agreement and common interest
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Change management
Create a change management process
Plan: Prepare to be deliberate rather reactionary
Act: Use a range of tools to appeal to both sides of our brain
Create Understanding – Articulate the vision, business case for change
Build Support – Help people commit to new direction with chances to question, digest an adopt the cange.
Sustain Energy – Celebrate success; share best practices; capitalize on opportunities to highlight the performance and behaviors that are valued.
Test: Seek feedback early and often and adjust to lessons learned
42
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Educating Users
Create a change management process
Plan: Prepare to be deliberate rather reactionary
Act: Use a range of tools to appeal to both sides of our brain
Create Understanding – Articulate the vision, business case for change
Build Support – Help people commit to new direction with chances to question, digest an adopt the cange.
Sustain Energy – Celebrate success; share best practices; capitalize on opportunities to highlight the performance and behaviors that are valued.
Test: Seek feedback early and often and adjust to lessons learned
Fundamentals of Strategic Facilities Planning, Tradeline April 2014
Translation– Questions
Date:
Session:
Presenters:
Metrics
Tools
Resources
Innovative Ideas
Proofs
Date:
Session:
Presenters:
Metrics
Tools
Resources
Innovative Ideas
Proofs
Date:
Session:
Presenters:
Metrics
Tools
Resources
Innovative Ideas
Proofs