HR > Finance > CRE > FM
This is a simple post. It is intended to cause a good-natured argument amongst professionals.
I’m more interested in how things are achieved, by whom, than perhaps by the end result. Take workplace transformation as an example. I’m not an architect or interior designer. Pictures of cool new spaces don’t especially interest me. I gave up sitting in ball pools when my children grew out of them. Like my good friend Mark Eltringham, I agree that “the reality is that for the majority of people, the office of the future will be a sober and nuanced evolution of the office of the present“. People like to feel that they are being treated well, their comfort and happiness is somewhat important to their employer, and they see money being spent on their new environment. But trends, fads, gimmicks and aesthetics are very personal – one will never please everyone, so I take little interest.
What really interests me (and many of my colleagues in the OJL network) is how organisations cascade their strategic aims to the various “workplace” professionals in their team. And how that team organizes itself to deliver spaces and services which are aligned and support the organization’s goals.
In the past (vague, I know… lets say, 10-15 years ago +), we all talked about the Finance Director (or CFO), and what she wanted to achieve. Buildings, and fleets of buildings (real estate portfolios) were, and still are of course, a significant expense to most organizations. Cost reduction was king, and therefore the CFO was the focus. Corporate Real Estate (CRE) grew out of the 1980’s onwards, and became the lead function in managing real estate. Facilities Management (FM) was operational, and mostly reported into CRE.
Of course, the CFO’s office is still involved, especially in large capital programmes. But the fat on the bone of real estate portfolios has largely been well trimmed in many (most?) organizations. CRE leaders have realized that tinkering with FM costs is the proverbial water in the wind. The larger cost savings come via portfolio rationalization (as do energy savings, by default). Much of that has been done too. What’s left is ‘fine tuning’ of buildings, to operate as closely to the ideal of the efficient factory (sweating the assets) or the efficiency of the airport, with people coming and going, checking in and checking out, throughout every day. Hot desking – or at least, fairly warm!
In the present, the focus has shifted to the Human Resources function (CHRO, if you must). Especially now that the economy in many regions has slowly dragged itself out of the deep financial malaise we all felt since 2008/9. Organizations are moving from survival mode, back to competing. And competing for ‘talent’ is once again a hot topic. As is getting the most out of people and resources (productivity) once an organization has successfully recruited people.
HR has grown in strength and influence (imho), and in many cases has become more strategic and future-oriented than it was in the past. Tools such as ’employee engagement metrics’ provide hard data (there is literature supporting, and criticizing, most employee engagement efforts – but there is no denying it is everywhere). People are expensive, and if we know what makes them ‘tick’ then HR can drive transformations in many areas of the organization. Workplace is one area. It is believed (at long last) to make a difference to how people work.
So HR is currently greater than Finance,
…Finance is greater than CRE (Workplace still has to stick to financial constraints of course),
…and CRE is greater than FM.
HR > Finance > CRE > FM
For now, at least.
FM is still operational. This twitter discussion this afternoon convinced me of that. Once again. I don’t see much change from the picture Jim Ware and I painted in the RICS-sponsored “Raising The Bar” (RTB) reports we delivered in 2012 and 2014.
We are starting work now on the third RTB study, thanks to RICS continued support. So if you violently disagree with what I have written above, do please comment below. Or email me, or Jim. We would love to hear from you.