Creating a workplace ecosystem: anticipating and managing unprecedented change
[2019 Award-winning Article] Organisations must blend the diverse skills and knowledge of FM, HR, IT, and Finance professionals to produce a complex ecosystem capable of sustained performance.
By Bruce Barclay
Fall 2018; W&P #10
Tags: ecosystems • facilities management • collaboration • infrastructure • cross-functional
The Work&Place Editorial Advisory Board applauds this article as one of the eight best articles we published in 2019. We recommend it highly for its candor, its thoughtful critique of workplace design and management practices, and its call for more attention to the complex “ecosystem” that surrounds and includes the workplace.
The natural world is a story of constant change and evolution.
Animals, plants, insects and micro-organisms exist in an ecosystem, adapting to relentless changes in their environment, where they are influenced by habitat, climate and their co-habitators. They respond to change faster than humans, because they are not tied by the same restraints and conventions. They are compelled to adapt to changing environmental conditions – or die. They are interdependent and reliant on each other, on competitors and on cohabiters for mutual advantage.
“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”
– Charles Darwin
As humans move into what Klaus Schwab, Director of the World Economic Forum, has called the “Fourth Industrial Revolution”,i there is much we can learn from nature, particularly regarding the workplace environment. The transformation of an organisation’s real estate, facilities management, IT, and HR functions into a workplace ecosystem has been discussed publicly for some time, part of the natural evolution of the business world.
Professor Franklin D Becker, known as one of the founding fathers of FM, coined the phrase “organizational ecology” to demonstrate that all organisations are essentially complex systems characterised by the interdependence of the social and the physical. ii
“Changes in any one aspect of the system reverberate throughout the system. Organizational ecology conceptualizes the workplace as a system in which physical design factors both shape and are shaped by work processes, the organization’s culture, workforce demographics and information technologies.”
Organisations are, Professor Ilf Price later argued, “ecologies produced by variation, selection and retention, acting on replicating narratives, representations, signifiers or discourses.” iii
In 1992, the International Development Research Council (IDRC) looked at the ways the corporate real estate world was changing. In a series of studies, known as CRE2000, the IDRC examined how real estate was moving up the value chain from stage one, being seen as taskmasters (concerned with the technical aspects of supplying buildings), to stage five, a business strategist, where the real estate professional focuses on influencing competitive advantage, productivity, and shareholder value. That role involves becoming business partners with other areas of the organisation, such as HR, IT, and Finance, the study argued.
These views were echoed in the 1999 publication, ‘The Competitive Workplace’ iv , which viewed the workplace as an ecosystem, an integrated system of interactive parts, requiring a holistic understanding for strategic planning. The workplace is not just physical infrastructure to be managed by real estate and facilities but “the entire spectrum, from the organizational structure to real estate and facilities which shelter and support the work of a corporation.” v
In the introduction to her 2010 Liveable Livesvi report, Ziona Strelitz pointed out that the report was aimed at both HR and CRE professionals, alerting them to the tensions faced in managing work and life commitments when long travel time is involved. She went on to argue against centralised workplaces and for “narrowing the physical distance between the workplace and employees’ domestic and family realms” which she saw as an “HR aspect of corporate real estate”.
A common gap for misunderstanding
But there is a common gap in understanding among the real estate, FM, IT, and HR functions in most organisations, described by James Ware and Paul Carder in the first Raising the Bar vii report sponsored by the Royal Institution of Chartered Surveyors (RICS). “We have seen this gap in many situations, over many years; improvement has occurred, but there remains a long way to go.”
FM is embedded within a complex web of relationships, each of which has the potential for strategic significance, and each of which presents particular challenges to FM professionals.
Workplace can be the focal point in the relationship between these functions, they argued. They went on to demonstrate that FM is “embedded within a complex web of relationships, each of which has the potential for strategic significance, and each of which presents particular challenges to FM professionals.” viii
More recently Gartner analyst Paul Miller has argued that strategic partnerships between support functions such as CRE, FM, HR and IT departments “empower and engage employees in all phases of their journey through the digital workplace” ix.
The Stoddart Review x, meanwhile, went one step further and proposed a Chief Workplace Officer, or CWO, acting as a ‘super connector’ who removes obstacles, fosters collaboration, and oversees an environment in which peer-to-peer information sharing, collaboration, and production can occur. Crucially, the CWO is an interpreter between the different business units. essentially refereeing the turf wars between the support functions and bringing them closer together.
This concept was something that Paul Carder raised in the first issue of Work&Place, in August 2012: “We are convinced that a new role is needed to bring together the several corporate functions that do not have enterprise-wide leadership…. Who brings together the ‘when, where and how’ to work, to set policy and options that can support employees?” xi
Dr Graham Jervis has developed this insight further, arguing that changes in socio-economic and political worlds, developments in technology, and changes in workplace culture are significant adjustments that shift the FM focus from physical asset management to design, development, provision, and maintenance of workplaces that encourage and support peoples’ productivity in all the types of work they do.
“However, asset maintenance and provision of building-based services remain, making the job of the FM very demanding and probably too wide to do alone. The collaboration of other service functions (HR, IT, procurement, legal, etc.) and the business itself is, and will be, the foundation for the management of workplaces.” xii
Separating the functions that contribute to the workplace experience has even been called “a folly” by Dr Rob Harris, who argues that “the increasing fragmentation of workplace disciplines runs counter to the trend of greater convergence in the way people work.”xiii
This fragmentation has resulted, Harris says, in the customer not sitting “at the centre of our complex industry, but on the fringe.” Workplace Management, he says, brings together all the fragmented parts of the design, construction, real estate, and facilities sectors into an integrated management function, allied to its colleagues in HR, Procurement and Technology, among others, to provide an integrated Workplace Resource Management function. xiv
But Neil Usher argues that a Chief Workplace Officer (CWO) role, while interesting, “is premature” xv. Firmer foundations are needed, he said in his recent book The Elemental Workplacexvi.
The convergence of FM, HR, and IT has been building for over a generation. Some have called this trend infrastructure management; xvii it has been described as having three phases: the first beginning with the introduction of enterprise-wide technology platforms known as enterprise resource planning; the second with the individual support units developing technologies that provide “discrete process and workflow management of each of their data sources and applications.” The current, third wave of convergence, provides “interoperability between these discrete business unit solutions.”xviii
Most commentators over the past few decades agree that removing the silos and turf wars between these support functions makes good business sense by enabling the organisation to function more effectively. The ‘why’, putting the workplace experience and productivity at the heart of business performance, has received much air-time. ‘How’ to achieve this goal and ‘what’ needs to happen in practice has received far less attention.
The How: Implementing a workplace ecosystem
The challenges facing the real estate and facilities world are now so complex that they cannot be solved by individuals working in one function. What is needed are groups of interrelated subject matter experts working together in cohesive workgroups or ecosystems to co-create value and co-evolve into a highly effective one-team solution.
Continual change is one of the fundamental laws of nature, and just as the animal kingdom is constantly adapting, we as humans, are living in an era of unfathomable change.
This exponential rate of change is referenced in Herman Miller’s report, The Office: a facility based on changexix, published in 1968 but just as relevant today. “The office in its relationship to the organisation it serves must now obey the dynamic new factors this imposes.”xx
Former CEO of General Electric and widely recognised business guru Jack Welch described the necessity of change and its intrinsic friction this way: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” xxi
Technology-driven advances are happening at an exponential rate, changing our habitat and with it the very fabric of society. Everything we do is becoming enabled and enhanced through new technology, apps, and intelligent machines. To survive and thrive in this new digitally-enabled, consumer and experience-driven world, businesses must completely rethink how and where they supply their product, service, or other value proposition. Manufacturers, service providers, and retailers will have to reinvent themselves to compete effectively in a rapidly-changing, highly-demanding world.
The old corporate-centric models with rigid hierarchies, silo mentalities, and traditional business strategies are slow to respond and are rapidly becoming disconnected from today’s world. We need to be bold enough to break conventional methodology to form new alliances and strategic partnerships, way beyond the concept of the simple outsourcing models of the last five decades.
Forbes describes this capability as a Responsive Organization. This type of organisation is less focused on efficiency and more on responsiveness; it is moving away from hierarchies to networks; and from customers and partners to a community xxii.
What is required in the new world are dynamic networks and communities made up of a much wider range of internal and external specialist contributors; working with a shared vision and interacting with each other to create and exchange sustainable value for all participants, with each entity benefiting from the co-creation of value and co-evolving. Such value co-creation dramatically increases innovation and the impact of a product or service, ultimately boosting core organisation performance.
The challenges facing the real estate and facilities world are now so complex that they cannot be solved by individuals working in one function. What is needed are groups of interrelated subject matter experts working together in cohesive workgroups or ecosystems to co-create value and co-evolve into a highly effective one-team solution. Today’s businesses need strong support functions – real estate, FM, IT, and HR – sharing the same values and working collaboratively together to solve these challenges.
An article in Harvard Business Review by James Moore xxiii looked at how in an increasingly dynamic and interconnected world of commerce, the successful businesses are those that evolve rapidly and effectively.
“They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks In a business ecosystem, stakeholders co-evolve capabilities around a new innovation: They work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.”
Ecosystem model in the workplace arena
What value could be created by adopting this ecosystem model in the workplace arena?
A structured ecosystem focused on the workplace experience that enables stakeholders to learn faster and accelerate performance improvement in the core business, especially in environments that are shaped by increasing uncertainty and unexpected events, will secure a profitable future for FM. This is an approach for thriving in a world of increasing and rapid change.
Knowledge – focus on the generation of insight and accurate advice
The main outcome of knowledge processes is accurate data and strategic knowledge, and it includes network nodes where the knowledge is created and retained.
Innovation – focus on business innovation and adaptation
Innovation processes occur as an integrating mechanism between the exploration of new knowledge and its exploitation for value co-creation in business engagement.
Engagement – focus on understanding and enabling the business
Performance improvement and value is delivered to the core business through engagement processes aligned to business need and leveraging co-created value through knowledge and innovation.
The What – the infrastructure to achieve this kind of ecosystem
Traditionally, people have seen competitors as rivals who battle each other for dominance and profit. The same can be said of support functions that battle each other for share of a budget and the ear, and favour, of the board. Today’s organisations operate in a more complex world. They compete and cooperate in innovative and unexpected ways, and they need each other in order to survive. This is the new world of business ecosystems.
The Deloitte organisation defines business ecosystems as dynamic and co-evolving communities of diverse actors who create and capture new value through both collaboration and competitionxxiv. We’ve seen this concept play out in examples of competing businesses coming together to solve problems under what V. Frank Asaro, author of A Primal Wisdom: Nature’s Unification of Cooperation and Competition, described as ‘co-opetition’. xxv
Rivals BMW and Toyota have worked together on carbon-fibre and hybrid technology to develop a hybrid sports car. Supermarket retailers are sharing transportation costs to reduce carbon emissions and cost, but they still fight it out at the supermarket shelves. More businesses than ever are getting involved with joint ventures, with research from McKinsey xxvi revealing that 68% of companies believe they will be involved in more JVs in the coming five years.
Ecosystems enable and encourage the participation of a diverse range of participants, including business function and supply chain stakeholders, as well as enlisted subject matter experts, who together can create value and business impact beyond the capabilities of any single entity.
This kind of collaboration provides the requisite variety for a healthy and sustainable business solution. Participants are bonded by a combination of shared interests, purpose, and values that incentivises them to collectively nurture, sustain, and protect the ecosystem because there is vested interest and shared benefit.
This approach is about designing the organisation structure around the purpose of the organisation and putting the customer at the centre. Every business will be slightly different and will apply this idea differently. However, with the creation of a workplace experience ecosystem there will be different stakeholders with different points of view all focusing on the same goal – making the workplace experience the best it can be, enabling improved business performance.
The IT experts will discuss the latest technology they’re introducing. The HR specialists will talk about the impact of new labour law changes, for example, or how to support people adapting to changes in how and where work is done. The FM professionals will look at how cleaning/catering or security regimes might need to change to accommodate workplace sensors. And the real estate experts will focus on how the property footprint might need to change to adapt to the latest changes in the business and its supporting technologies.
Rather than these functions all working separately, and often duplicating work and not sharing information, in an ideal world they will all work together in a One Workplace Team delivering an outstanding workplace experience that enables the core business.
Some might argue that the HR team, for example, will have subject-specific work that does not involve other specialities. But this rarely the case. A new training programme, changes in headcount, a wellbeing drive, and new legislation, all affect the workplace experience. As does an upgrade in technology infrastructure introduced by the IT team.
In addition, a One Team approach, whereby different organisations and/or teams work together in a non-competitive way, provides a unified solution for the end-user, the individual in the workplace. Rather than be sent from pillar to post with a query that may fall between the HR/ IT/ FM silos, they get an immediate response from one person who takes responsibility for dealing with the issue, whoever’s former remit it falls into.
This approach speeds up the response to end-users and enables them to get on with their core job, delivering value to the business, more quickly. Whichever way you look at it, the Real Estate, FM, IT, and HR functions work better in a workplace ecosystem where they are focused on delivering the core needs of the business.
This view was reflected in the RICS report ‘Raising the Bar’, which confirmed that:
“the workplace can be a focal point in the relationship between the RE, IT, and HR functions, and in the development of a comprehensive workplace strategy. The physical workplaces and facilities are vital to organisational performance; everyone needs a comfortable and productive place (or places) in which to work (including, increasingly, places not under the organisation’s control, such as home offices, co-working operations, and other public spaces).” xxvii
In that report, Ware and Carder argued that HR is becoming a vital infrastructure partner for FM, creating the policies and conditions to support knowledge workers in their quest to become more mobile and flexible. Meanwhile, the IT infrastructure is also clearly essential, to facilitate ease of access to the tools that we need to work, including network access, Wi-Fi and peripheral equipment. The report urged FMs to address the gap between FM and the other support functions by building relationships between RE/FM, IT, and HR, to create a workplace strategy.
But building relationships is just part of the task. Key to the success of any ecosystem is the creation of the environment and conditions in which the various stakeholders can engage with each other and collectively thrive.
Dell EMC’s ‘One Team’ initiative
A good example was the recent One Team initiative formulated and delivered by Dell EMC. The real estate and facilities senior leadership had a clear directive to create a One Team ecosystem, better enabling the core business. The One Team system would provide a seamless service to the customer by using shared business intelligence, gained from different experiences and differing perspectives, as well as the analysis and interpretation of detailed data. Internal players and external commercial organisations from environment, health and safety, FM, real estate, and security, as well as business partners in HR, IT, and Procurement, were brought together.
HR is becoming a vital infrastructure partner for FM, creating the policies and conditions to support knowledge workers in their quest to become more mobile and flexible.
A shared vision and values were co-created, and a common operating platform was put in place to provide structure and alignment. The group formulated specific working practices to co-create value and innovation, and it generated new tools to monitor and measure performance. Collaboration, sharing, and openness were key to making a difference, even among members who were commercial competitors outside of the group.
In addition to creating operational efficiencies, generating significant cost savings, and improving overall employee wellbeing, an additional unexpected outcome emerged. The One Team participants found they had renewed credibility with the customer and started to engage on a more strategic level. In addition, they gained insight into competitors’ innovations that they were able to bring back to their own business and introduce to other clients, improving those relationships as well.
Are we getting leadership from the professional institutions?
The British Institute of Facilities Management’s recent decision to rename itself the Institute of Workplace and Facilities Management (IWFM) reflects the growing importance of the workplace as a defined discipline, albeit a relatively young one – especially as the Institute has announced it is seeking Chartered status.
But this change very much emphasizes workplace as a facilities discipline, not an organisational one. Although the Chartered Institute of Personnel and Development (CIPD) has supported IWFM’s chartered approach, we need to see professional bodies from all support functions working together. And not just with Memoranda of Understanding that gather dust. The joint effort must be an ongoing dialogue focusing on how these professional bodies can encourage their members to collaborate effectively to drive the success of their core businesses.
The steps to forming an effective workplace ecosystem are easy to define, but much harder to initiate. Business leaders must break free from the traditional corporate models and embrace a whole new way of working.
We need to recognise the ecosystem as a key engine of future performance and move beyond the notion of high-performing individuals or teams. Like Darwin’s theory of natural selection, those who don’t adapt and prepare now for the next great wave of transformation will be left behind W&P
About the Author
Bruce Barclay is an experienced real estate and workplace professional who most recently worked for Dell Technologies, the world’s largest privately-owned technology company. His international career in business leadership and development includes twenty years at senior management level for organisations in a variety of business sectors from financial services to hospitality. He is the author of the British Institute of Facilities Management’s Good Practice Guide to Managing FM Teams Across Borders.
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