May 2012

Jim Ware

This is the second installment of a series of observations about how an organization’s operational capability impacts business performance. In Part One (at this link) we explored the basic concept of strategy and suggested that operational capability is an absolutely essential component of business strategy.

Here in Part Two we expand on that idea and offer a history lesson showing how information technology exploded out of the “back room” to become a strategic resource in almost all commercial and public-sector organizations by the beginning of the 21st century.

[An “Oxymoron” (from the Greek ὀξύμωρον, "sharp dull") is of course a figure of speech that is self-contradictory. Common examples include “jumbo shrimp,” “living dead,” and “open secret.”]

Last month (at this link) we cited Professor Michael Porter of Harvard University, a widely recognized expert on business strategy, to highlight what makes a business activity or resource strategic. Based on his analysis we suggested that there are seven nine different ways that an operational activity can affect business performance. However, for now let's just focus on the six most important factors:
 

(inspired by Porter’s seminal article in the Harvard Business Review, “What is Strategy?”)

Strategic business success is measured in many different ways: market share; customer satisfaction; revenue and profit growth; employee attraction and retention; and public, or brand, reputation. Note that none of the seven factors shown above is inherently strategic; it is only when a factor is central to a particular business strategy that achieving it makes a specific function strategic in its business impact.

To understand how these factors can affect a functional area, recall how the IT function (and technology itself) exploded out of the back room and landed in the board room between about 1975 and 2000. Let’s consider how IT impacted just three of these factors, and how those changes dragged senior IT executives into the executive suite.

Major impact on cost

Once upon a time information technology was essentially an accounting resource; its early use in business was to keep track of financial expenditures and, occasionally, to record product inventories and sales. Those were clearly “back office” bookkeeping activities. It wasn’t until technology was applied to core business processes like order entry, production scheduling, graphic design, and financial asset management that it began to have a truly significant impact on cost and capability.

Now, in 2012, technology is the primary interface between many businesses and their customers; the worldwide web has become the “storefront” and the brand, the checkout line, the cash register, and the customer service arm of most retail businesses. And the cost of those activities and processes is just a fraction of what it used to be.

But the impact of technology on operating costs isn’t just significant; it has been revolutionary. Just look at how companies like Amazon, Intuit, eBay, Visa International, Google, Facebook, Ford, and Apple have completely re-invented business models in industries as diverse as publishing, banking, music, home-based businesses, retail sales, and even manufacturing.

Attracting and Retaining Talent

Technology also has a deep and profound impact on talent attraction/retention. While basics like competitive salaries, benefits, and an organization’s “brand” do make a difference in recruiting, they have become little more than table stakes. What most job seekers are looking for today is a company that will equip them with modern, efficient mobile devices, hook them up the Internet and the internal corporate databases, and enable them to get their work done any time, any place.

Any executive team concerned about attracting and retaining the best talent (no matter where that talent is located) has to include its technology capabilities in its strategic thinking.

Enabling Creativity and Innovation

Certainly creativity and innovation have become strategic imperatives for any business competing on the global stage in 2012. Success today is driven by new products that are designed and produced more quickly than the competition, and marketed with distinctive global campaigns (think of Apple and Cisco Systems and Nike and Facebook and Google, among many other success stories).

Once again IT makes that possible. Technology tools give the workforce the power to find and create information—and to collaborate with peers all over the world—far more cheaply, more effectively, and more quickly than ever before.

Becoming Strategic

As organizations have learned to apply technology to these (and other) strategic imperatives, IT organizations and their senior leaders (the CIO, or Chief Information Officer, and his/her staff) have become central to conversations about strategy in the C-Suite and at the Board of Directors level.

Did CIO’s have to push their way into the Board Room? Not really. In most instances they were invited in because senior business executives realized what a strategic resource technology was.

But it wasn’t just a matter of opening the Boardroom door and walking in. IT executives, and their vendors/service providers spent many years, and gobs of financial resources, educating business executives—not only about what IT could do for the business, but what kind of organizational resources and skills it takes to create reliable, high-quality technology platforms.

And remember that, while IT had been contributing to improved business performance all along, for many years the productivity gains were relatively minor and incremental. It wasn’t until Michael Hammer’s now-classic Harvard Business Review article “Reengineering Work: Don’t Automate, Obliterate” (July 1990) that organizations finally began using technology not just to improve the way they did things, but to revolutionize their business processes and actually to do completely different things.

For example, I once helped a life insurance company reinvent the way it sold policies and processed policy applications. When we started examining the steps in a policy application we uncovered a paper-intensive process that typically took about 34 days from application to approval. When the team was finished with its “obliteration” of current practice, the entire process took less than 48 hours. That kind of order-of-magnitude reinvention wasn’t simple performance improvement; it revolutionized the company’s standing in its industry.

I have witnessed some bloody budget battles and even seen some CIO’s lose their jobs over their failure to meet project plans or even simply to achieve competitive parity.

Without belaboring the point, IT did not become strategic by fiat, or by simply claiming that it could make a difference to the business. IT leaders earned their place at the table by developing high-quality enterprise systems, by innovating beyond their competitors, by understanding how to use IT to create strategic advantage, and by ultimately making a difference in the business’s bottom-line performance and competitive positioning.

That, I submit, is the challenge facing other functional areas like HR and CRE/Facilities. It’s not enough to believe in your strategic value. You build credibility and influence by educating your peers and the C-Suite, and then by demonstrating how you can directly impact the activities, processes, and people in your organization to create new strategic value for your customers. Unfortunately, that is a much easier concept to describe than it is to implement.

It’s not easy being strategic. But is it worth it? Of course.

We will extend this line of thinking further next month, when we apply these lessons from the IT experience directly to HR and to the CRE/FM function.

What do you think? Please send your comments directly to me or post a comment here. I look forward to learning from you.

Here is a small sample of the stories and developments we are paying attention to these days. It’s our way of helping you stay on top of developments in the worlds of technology, workplace and facilities design, the workforce, and work design—any and all of which are going to affect the future of work, often in ways we can’t even imagine.

The Workforce of the 50s and Today

Workforce Management magazine is celebrating it’s 90th birthday (that’s not a typo!) by running a series of articles comparing workforce issues in 2012 with those of past generations. This thoughtful article also pays homage to the television series “Mad Men” by reviewing workforce generational challenges of the 1950’s with those of today. Here’s just one provocative observation:

The younger generation [today] also seeks a different type of employer, argues [Neil] Howe [president of consulting firm LifeCourse Associates], who is credited with naming the millennial generation. They're looking for "the perfect employer who will be their ally and take care of them." That reflects a marked change from the nomadic generation they follow, which ushered in terms like "value added" and gravitated toward entrepreneurism. . . . “We're seeing the return of the in-locus-parentus employer,” says Howe.

[Note: free online registration is required to access the full article]

For Google, the office is key to worker success

This article appeared in the Toronto Globe and Mail in late April. It quotes David Radcliffe, Vice President of Real Estate and Workplace Services at Google, on his goal of creating finding “urban spaces that can be turned into hip headquarters and design[ing] them to spark creativity, play and collaboration.”

It’s no small thing that in this era of mobility and flexible work programs companies like Google, Apple, and Facebook (all based in Silicon Valley) are going out of their way to create corporate offices that their employees want to use regularly. This article helps explain that line of thinking. It may seem counter-culture today, but it’s a perspective well worth understanding.

The Future of Work (on Yammer: The Blog)

This thoughtful, extended blog post by Maria Ogneva (Head of Community at Yammer) focuses on work as the intersection of customer, company, and employee. She addresses management and leadership questions in much more detail than physical workplaces, but she does suggest that the company of the future will be characterized by its collaborative workspaces, by a culture of transparency and ubiquitous learning, and more by a common vision than by any “command and control” mentality.

Stock and Flow, part one

I found this article by Jim Meredith (the founder of Meredith Strategy & Design) to be particularly provocative. Meredith took a close look at the workplaces of two very different companies, Kodak and Instagram. As we all know, Kodak declared bankruptcy in January 2012, in spite of being 132 years old and a recognized leader in the photography industry. At the time of its bankruptcy Kodak had 16,000 employees, down 78% from its peak, and a market capitalization value of $78 million.

In sharp contrast, Instagram, a digital photography startup, is two years old, has 12 employees (that’s right, twelve), and was just acquired by Facebook for $1 billion (that’s right, billion with a “b”).

Meredith is rightly intrigued by the stark contrast; in Part Two of this blog series (Stock and Flow, part two) he asks some very pointed questions about workspace design and the nature of the work that workspaces are supposed to enable and even enhance.

I encourage anyone who cares about work and workplaces to read both parts of this thought piece. Jim Meredith is a very thoughtful architect and work designer.

Brief announcements and notes about where we’ve been, and will be, holding forth in public conversations and other activities.

Recent Activity

"Raising the Bar"

As you may know, Jim Ware, in addition to his leadership of The Future of Work….unlimited, is also a co-founder of Occupiers Journal Limited (OJL). He serves as Global Research Director for OJL.

And OJL recently announced its first 2012 research project, “Raising the Bar: Enhancing the Strategic Role of Facilities Management.” See the April newsletter’s Feature Article for an extended discussion about that project and the questions it has raised. We are actively seeking research participants; there is no financial cost to contribute to the study.

The study is addressing the following kinds of questions:

• How is facilities management currently organized and governed?
• What are the most common organizational structures and reporting relationships?
• How well are FM and workplace strategies aligned with the business, with financial strategies, with CRE, and with functional peers?
• How is the FM function measured and managed?
• What issues and challenges are FM managers facing in 2012?

If you are a senior CRE or facilities manager in an “end-user” organization (not a consultant or a service provider) you can contribute to this study in two important ways. First, contact Jim Ware to schedule a one-hour interview; and/or second, complete our online survey.

Please complete the “Raising the Bar” online survey on the organization and management of facilities and receive a complimentary summary of our findings.

If you complete the survey in the next two weeks (before May 18) we will send you a free copy of the summary of our findings once the report is completed in June:

http://www.surveymonkey.com/s/OJLRaisingTheBar

And you can read more about the study here:

http://occupiersjournal.com/complete-our-survey-rtb/

IFMA Research Summit

If you go to one more conference in 2012, make it this one. The IFMA Foundation is sponsoring a two-day “Workplace Strategy Summit 2012: Research in Action” conference at Cornell University in Ithaca, New York, on September 7 and 8.

Attendance will be limited to 150 practitioners and thought leaders from around the world. The goal of the Summit is to define the workplace/facilities research agenda for the next five years. You will kick yourself for all five of those years if you miss this event.

The Summit keynote address will be delivered by Frank Duffy, founder and director of the architectural firm DEGW. Other notable presenters include Cornell University Professor Frank Becker, researcher Susan Stucky of IBM, Professor Alexi Marmot of London Business College, Philip Ross of Unwired Ventures (and the Worktech conferences), and Noborro Konno of KIRO (Knowledge Innovation and Research Office) in Japan.

The Summit proceedings will be documented in a book to be published by the IFMA Foundation. You can read more about the Summit and register to attend at:

http://www.ifmafoundation.org/summit

I’ll be there; I hope you will too.

Talking About Tomorrow

We have long wanted to engage more directly with smart practitioners and independent experts, as we all drive in parallel towards the future of work. Now we have found a way.

We took a first step towards creating an active community of workplace/workforce futurists on February 10, when twenty very smart people joined me for a one-hour free-wheeling conversation. Our subsequent calls have been equally engaging, and we now have a LinkedIn discussion group limited to “alumni” of these calls. Participant feedback has been overwhelmingly positive, so we will continue to host these calls, about once a month, for the foreseeable future.

The conversations are limited to no more than fifteen people who have registered in advance to ensure that they become active, meaningful conversations rather than one-way “pontifications.”

However there is still room for new participants on May 24 and June 14, the next two scheduled conversations.

To sign up for the May 24 session, or for June 14, just send an email directly to Jim. Please tell us your company name and position (to help us know who you are). We will then reply with a call-in number and related information. We look forward to exploring the future together!

Recent Activity

Facility Fusion 2012

We were actively involved in several sessions at IFMA’s April 2012 Facilities Fusion conference in Chicago during the week of April 9. Details of our individual sessions are available on our website.

Coming Up

Jim is just back from attending the Corenet Global Summit in San Diego, April 29 – May 1. He participated primarily in his role as Global Research Director for Occupiers Journal Limited.

Search the Twitter hashtag #cngsandiego to review all the tweets from the Summit. And check out the occupiers Journal blog over the next several weeks for summary reports of the most important sessions at the Summit.

And. . .

If we’re in your area and have a few minutes, we’d love to see you for breakfast, lunch, dinner, or a cup of something (depending on our other commitments).

And please follow us on Twitter for more current updates on the future of work and our future plans:

http://www.twitter.com/thefutureofwork and http://www.twitter.com/jpwoccupiers.

You can always check on our travels via our online calendar of events, on the website (http://www.thefutureofwork.net), in the right-hand column.

Give us a shout or send us a note, and if we can squeeze out some time, we’d love to say hello and share some good ideas the old-fashioned way: face-to-face, cup or mug in hand.

9 AM Pacific Standard Time

Free, but advance registration is required. 

The next "Talking About Tomorrow" conversation will be on Thursday, May 24, at 9 AM Pacific time. And the one after that will be on June 21 at the same time.

 To reserve a seat for either conversation just send an email to Jim Ware.

The May 24 conversation will feature some opening comments by Susan Bernstein,PhD, the a somatic psychologist and the founder of "Work from Within:  Bring out the best of you in the work that you do." Our focus will be on the importance of personal awareness and clarity in a world characterized by mobility and self-direction.

Jim will then moderate a loosely structured conversation that engages all the participants in a collaborative exchange of ideas and experiences on this topic.

There is no charge to participate, but the conversation will be open only to the the first 15  people who register to participate for any conversation. We limit the number of participants to ensure that we can have an active, meaningful conversation rather than a one-way “pontification.”

Our goals are simple:  to stimulate learning, to develop insights, and to begin building an active community of workplace/workforce futurists.

To register, please send an email directly to Jim Ware. We will reply with a confidential call-in number (regular long-distance rates will apply).

We also offer customized versions of these “on-demand” learning sessions for internal audiences. Contact us to discuss your needs and to explore how we can provide focused learning experiences for your executives, project team leaders, and functional managers.

... and receive a complimentary Executive Summary of the findings.

In my role as Global Research Director for Occupiers Journal Limited (OJL) I am leading the current GRID study, "Raising the Bar: Enhancing the Strategic Role of Facilities Management."

We are conducting a brief online survey to help us understand how organizations around the world (both private and public sector) are organizing, governing, and measuring the performance of the facilities function.

If you complete the survey in the next two weeks (before May 18) OJL will send you a free copy of the summary of findings once the report is completed in June:

http://www.surveymonkey.com/s/OJLRaisingTheBar

Please help advance the profession of facilities management by participating in the survey. We are addressing questions such as:

• How is the facilities function organized? Where does it report in the organization?
• How is the performance of the facilities team measured and evaluated?
• Which facilities functions are performed in-house, which are outsourced?
• How does your organization achieve strategic alignment between facilities and the business? Between facilities and peer functions such as finance, HR, and IT? What mechanisms are in place to accomplish such alignment?
• How does the head of facilities balance demands between day-to-day operations and longer-term strategic activities?

Please invest 15 minutes today to complete this simple survey:

http://www.surveymonkey.com/s/OJLRaisingTheBar

Thank you!

And please direct any questions or comments to me in my role as Global Research Director for OJL.

Principles for turning ideas into reality:

1. Look - keep your eyes open; attach stories to what you see. Use the eyes of a child; look up; be curious
2. Be wiling to do champions' work - it's lonely - use the time to practice and become great. We all get 86,400 seconds a day; use them well
3. How's your "want to"? Don't talk about it, be about it. A closed mouth doesn't get fed. Lead with courage. Courage is action, not words.(watching a video of a swimmer in 29 degree water at the North Pole! Why? To call attention to global warming) Be willing to fail, to learn
4. Connect on a human level. One random act of kindness can change the world
5. Five ingredients to a DREAM - dedication, responsibility, education, action, motivation. No dream is microwaveable.
6. Be bold, be audacious, go after something that scares you a little bit.

Kevin Carroll - very inspiring!

Live blogging the Corenet Workplace Community: What's the Future?

Come back for updates over the next 90 minutes

Kate North opening up, welcoming people, explaining the concept of WPC

Brady Mick - introducing panel

Jan Johnson, Steve Hargis, John Hampton, Georgia Collins, Julie Seitz, Melissa Marsh, David Barban, Roy Lopinski

Intention to have quick conversations on topics, poll the audience, reveal results immediately

Question One: harder to collaborate remotely or f2f? Panel comments - focus on technologies that enable collaboration; depends on managment - rely on results, not activities. Managers still don't see parallels between remote teams and local teams working outside the office. Another issue for global teams is multiple languages, dealing with remote time zones and expecting people to be on calls at midnight, etc.

Update: most people in group experience primarily distributed work with some travel for f2f. Second most popular is primarily f2f with some distr'd work

Many companies adding lots of informal collaboration space - for unplanned meetings, conversations. Technology helps.

Update: we confuse space with the protocols for use of the space. A library is an open place, but the expectation is of quiet and respect for others, so it's possible to concentrate in a public space. Collaboration is a shared activity, concentration is heads-down and individual.

Reality is that everyone still wants their own private space to be there when they want it - and they aren't willing to make advance commitments. But that means a need for more space.

Update: most orgs today have a clear mix of collaboration and concentration - very few are predominantly one or the other. [Audience poll]

Idea: we have third places; we need fourth places - that have qualities requiring us to behave in different ways.

Update: extended conversation about collaboration versus concentration - there are many different kinds of activities, some good collaboration, some bad, needs change over time, and from one group to another; one size misfits all - it's complicated, and we do a disservice to our companies if we seek overly simple solutions.

Update: what is the next disruptive technology? John Hampton: this conversation shows we really don't understand these problems very well. Q: will company role be to provide logins and access to databases, with 'ees bringing their own devices? Consensus seems to be "yes." Consumerization of everything is a big trend. But companies have to worry about storage and control over their IP.

Update: Companies do have to provide some enterprise-level technologies, like networks, servers, HD telepresence, etc. And they will want to offer lots of choices, but not allow "anything goes." Offer choices but not unlimited.

Update: most people have both company-provided devices and their own personal devices. Company tools are "free" to workforce, but sometimes limited in functionality. Chris Hood: younger people have very strong views about technology, but are not afraid of it either. IT organizations have to accomodate what they want.

But there are also industry factors - eg, medical information and regulations regarding privacy and security.

Update: we also need to factor in company culture and management practices - different companies expect different ways of using technology, and recognize differences in end user needs.

Workplace professionals MUST be in sync with IT and technology producers - so we can provision the workforce in the best possible way. Technology at work must be as easy and as cool as what consumers can get. And it affects workplace design - eg, avatars, robots who represent remote workers, etc.

Update: Rex Miller reminds us of Kevin Kelly's book "What Technology Wants." We can learn from the technological imperative - cannot use a screwdriver as a handsaw...

Important part of consumer IT is that users/consumers figure out what to do with the products after they come on the market. What if we thought of workspaces that way?

Update: Brady Mick: enabling change was the number one topic at our weekend class. How do we deal with change? Panel responses focus on "marketing" and widespread participation and training/informing With all due respect I don't believe they understand the psychology of change. Lots of room for improvement here.

Update: Rex Miller: see the movie "Money Ball" for lessons about change leadership. Patrick Donnelly: people like change, they just don't like the transition - we need to make the journey part of the vacation.

Wrapping up now - great conversation but lots of unanswered questions - and much work to do

I am sitting in the front row of the General Session - speaker having trouble with her teleprompter - now she is on a roll, describing CRE2020, the major research initiative. Panel discussion being led by Mark Gorman.

Also being streamed live via Corenet Global Connect. I will update as the program unfolds.

Mark: This is a Big Picture session - many big ideas

Update: 8 work streams

(missed the first two - will correct later

Partnering with Key Support Functions

Portfolo Optimization

Service Delivery

Sustainabililty

Workplace

Panelists: Sarah Abrams; Pay Wu; Sanjiv Awasthi; Tony Wong

Update: Discussion: where will CRE report in 2020? Will it exist?

Panel: it will be linked more closely to operations; will be about attracting and retaining talent, and about enabling people to work wherever they want to

Update: now the debate is the "bring your own device" - will knowledge workers be like carpenters and plumbers who have their own tools and just want to plug in to the network. We need to enable workforce to get their jobs done wherever and whenever they want to.

Update: factors driving location strategy havent changed in 50 years (Tony Wong): need for talent, market opportunities and presence, government policies, local communities

Update: Sarah Abrams worries about RE strategy driving the business instead of the business (and workforce needs) driving the business - we have to support business needs. Sanjiv: we need to be part of the real-time conversation with business leaders about how to thrive.

Update: Sarah Abrams: have to do scenario planning - can't get it "right" perfectly - explore options, look at alternatives. And focus on the costs of making a mistake. Worry about the downside; the upside will take care of itself.

Question: Does this perspective inherently make CRE conservative and a laggard, not a leader?

Update: Good service providers can be good partners; majority of people in room stand up to vote they have a good partnership with their service provider, or their client. But that requires each player to understand their role, strengths, weaknesses.

Sarah: whatever you say about service providers you can say about in-house CRE. Where do young professionals learn their trade? People will move back and forth across that "line" over their careers.

Update: Mark can we think of it as all one RE organization, no matter where you get your paycheck.

Pay Wu: today it's about Big Data - same developments we saw in the IT and HR areas; we need software developers who think in terms of business intelligence - help the client generate insight. That's what adds value and creates the true partnership.

Update: Why is change so slow (Michael Joroff, MIT). Response: (Pay Wu) Change is hard, have to fight entrenched interests.

Personal Note: I am beginning to think "change is hard" has become an excuse for not being aggressive enough to lead change. Every organization I have worked with includes people who want change, but don't know how to lead change from the "side" - without formal authority.

Update: table talk about how to help CRE/FM be seen as a more strategic resource. Challenge is telling the CRE story more effectively; if we don't tell it right they won't understand our expertise and value. CEO's are so focused on short-term stock prices, so they look for immediate low prices, don't think about the long term.

Update (10 AM). We have to insist that CRE leaders are trained professionals. CEO wouldn't put a generalist in charge of HR or IT - we need to ensure that CRE leaders are viewed as equals - they do need leadership skills, not just CRE experiences.

Update: Q: do CRE leaders need to be better educated about business leadership - not just your industry, but as an executive who is alert to not just company issues but broader economic issues and events. Be able to speak about broad issues, in the language of business. Relate to, and talk to, execs in other functional areas. Learn to use stories - using authenticity, facts, and do it in a compelling way.

Update: Ellen Keable: changing nature of work means we'll be working with multiple generations, with people we don't know well. We all "get" the idea of mobility and office hoteling, but in our hearts we still want that space to call our own.

Pay Wu: the reality is that we ARE mobile, and often our teams are distributed globally, so we have to learn to collaborate virtually, develop better ways of linking with people in other locations. Our firm has a once-a-month virtual town hall.

All this leads to rethinking what the office is for - and how we use it. We create events to bring people in for f2f meetings. Use the office for a variety of kinds of work - meetings, heads down, etc - lots of variety in space, so people can move around to different spaces as the work they are doing changes.

Update: Air New Zealand wants to be "greener in everything we do." Is that possible? Can a business meet a goal of having a sustainable side to every initiative. Where does sustainability fit? It's becoming ingrained in all of our lives - it's accepted as a necessity. Important for employee attraction, it's a given in conversations with landlords, brokers, etc. Magnitude has to grow, but the idea is there.

Question: does sustainability save the company money? Are we doing it because clients/customers want it? Because employees/recruits want it? Or because of government mandate? Government's role is to regulate for society's interests (because no one will do it on their own when others aren't)

10:30 - session over

Great beginning to the Corenet Summit this evening. Opening reception was on the flight deck of the USS Midway, docked in the San Diego Harbor. It was an important aircraft carrier during World War II. Sobering reminder of what war is all about. And a fun time remembering that wonderful Tom Cruise/Kelly McGinnis movie "Top Gun."

So tomorrow we move on to more serious things, like how workplaces contribute to business innovation and creativity. Opening session is thought leadership by John Kao, of jamming.com.