performance management

Building a performance management system

An expert explains how to translate key performance indicators into critical success factors
Friday, July 22, 2016
By Chris Hodges

Performance management systems in facility management can take many forms, from simple operations and maintenance plans and spreadsheets to complex integrated technology systems. These systems form the framework for implementing the facility management strategy. The gathering and processing of FM data and turning that data into useful performance information is one of the most important aspects of facility management that brings value to the parent organization.

Although these systems and tools are capable of generating vast amounts of data about facility performance, it’s how the facility manager uses that data that adds value. The facility manager’s ability to turn raw data into business knowledge is the key ingredient in making better facility-related decisions.

In facility management, value comes from the facility manager’s ability to assimilate organizational drivers into business processes. Creating value requires a deep understanding of the organization’s mission, vision, and culture in order to align the FM group with the organization’s needs.

Aligning with organizational mission

A structured performance management system facilitates this alignment by focusing on indicators that support the mission. Alignment comes from measuring the right things, turning metrics into key performance indicators (KPIs), and identifying trends in KPIs to build a reporting system that continues to demonstrate the value of the facility management.

Creating a performance management system starts with assessing the organization’s strategy and how facility management can best support that strategy. Aligning with organizational mission is at the core of executing a strategy that best meets the organization’s needs.

Every facility management organization should have a mission that supports the organization’s mission, vision, and values. That doesn’t necessarily require an elaborate FM mission statement. Sometimes, the best mission statements are concise and to the point. Here’s an example: “Our mission is to support the goals and objectives of our organization by providing a safe and comfortable workplace.”

The FM group achieves alignment when it thoroughly understands why it is there. The mission statement serves as a visual reminder of what is most important to the FM department and the organization. If the FM group has a deep understanding of the mission and aligns with the organizational strategy, it can improve the performance of facilities by improving decisions related to resource allocation.

Organizing and analyzing data

The commonly used phrase “data-driven decisions” can also apply in facility management. The facility manager should be able to construct a performance management system that enhances the ability to monitor, evaluate, and assimilate facility performance data — not necessarily lots of data, but the right data.

The keys to developing and deploying a functional performance management system are to organize performance information into the right categories and create a process to analyze them at the right level. The FM group gathers data — process and management metrics — at the tactical level to make facilities more efficient and improve the effectiveness of the FM workforce and its operational practices. Process metrics are used by the facility manager and supervisory staff to determine the efficiency of the workforce, and to monitor building efficiency, such as energy and water consumption. Management metrics are used by “middle-management” (often the facility manager and director level) to determine how effectively the organization is functioning. KPIs are used at the director level to demonstrate alignment with organizational goals and value to the organization.

However, all things that can be (and usually are) measured do not necessarily link to key performance indicators (KPIs). This process is depicted as a pyramid because the more strategic the information and metrics, the fewer the success measures.

Linking KPIs to critical success factors

Effective FM performance management systems measure the right data. It’s possible to measure and monitor at any level in an organization, but KPIs represent the most important indicators, without which the organization would be unable to fulfil its mission.

At the strategic level — the C-suite or facility director-level in a large organization — the metrics and measurements that signify success need to be aligned with what the organization considers success. These are often labeled critical success factors and may not have much to do with facility performance directly. An example of a common critical success factor at the organizational level is customer satisfaction. Although there may be many opportunities for the facilities to contribute to positive customer satisfaction, the facility itself may not be the primary driver, or the facility may effect customer satisfaction only tangentially.

Think of a call centre, where the comfort of the customer service representative is important, but not necessarily the primary driver of customer satisfaction at the organizational level. In that case, it takes some strategic thinking and process-mapping to determine how the facility links to the organization’s critical success factors and how facilities can make a positive impact.

There are often many facility management functions that contribute directly to an organization’s critical success factors. A performance management system creates the link between business success (critical success factors) and the KPIs that are used to define facility management success.

Demonstrating the value of facility management

Building a performance management system allows the facility manager to collect the right data, formulate that data into business information, and consider that business information in determining the efficiency and effectiveness of the facility management function. Knowing the efficiency and effectiveness allows for closer alignment with the mission, and creates a vehicle for continuous improvement that keeps the FM function focused on the critical success factors for the organization.

It sounds simple, but there are truly hundreds and even thousands of bits of data and information available to measure and monitor building and process efficiency. The facility manager is charged with managing many processes, including access management, operations and maintenance, security, food service, horizontal and vertical transportation, accessibility and comfort. An FM performance management system provides a framework for managing these important FM business processes.

The construction, development, and delivery of a performance management system is one of the primary strategic roles of the facility manager. Dashboards, scorecards, and reporting systems are the tools that allow the FM to report positive outcomes that support the corporate (or organization’s) mission.

The benefits of building a performance management system for FM processes and functions include better customer focus, a demonstration of value for money spent, a process for continuous improvement, and the ability to benchmark facility performance against others in the industry. Each of these benefits provides an opportunity for facility managers to demonstrate the value of the facility management function and assure their parent organizations that they are making business decisions that are aligned with and support the organization’s mission.

Chris Hodges, P.E., CFM, LEED AP, IFMA Fellow, FRICS, is a principal and co-founder of Facility Engineering Associates and is co-author of the book Sustainable Facility Management, the Facility Manager’s Guide to Optimizing Building Performance. Chris consults with clients on facility performance management and teaches facility management at George Mason University and Catholic University.

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