Open-access content Friday 22nd February 2013
In 1991, more than 90 IBM employees bought out the company's FM division. The resulting business, Procord, went on to blaze a trail in outsourced FM provision before being acquired by Johnson Controls in 1994. In this interview, Leigh Carter talks to David Burnett and Ian Mills, two of the people who made the move from IBM to Procord and who became instrumental in the service contractor's success.
25 February 2013
Ian Mills (IM): Procord came about in 1990 when IBM as a whole was looking to reduce its operating budget by 30 per cent. That would have brought IBM Property Services below what we needed in order to operate, so we started to explore options. We considered ways we could sell our services to others, or possibly a joint venture with somebody else. In fact we ruled out both options and decided that the best thing was to spin off our operation into a new business.
David Burnett (DB): Our director at the time was John Jack, who then became managing director at Procord. John was the visionary, the leading light in setting up Procord.
LC: Did you know that you were trailblazers in the industry at the time?
DB: A lot of what we were doing when we started Procord was about defining what FM actually was. A few companies had started to bundle services together, but what was lacking was the glue to hold them together. They were still individual services - there was nobody taking on a management role. As a term, facilities management had been used in IT, but I think we were using it for the first time for asset and business support services.
DB: We recognised we were on the boundaries of something new; a new way of delivering services into a client organisation.
IM: My memories of those early days are of not having time to think about what we were doing because we were too busy doing it. There was an element of continuity, because we still went back to the same office on the Monday after we'd suddenly become contractors. We looked out on our office at the same teams that we'd managed before. The fundamental difference was that a lot of the issues I'd been struggling with inside the IBM corporate structure just went away. Instead there was a real sense of enjoying something that we now actually owned a piece of.
DB: IBM was our only customer at that time, so we knew we had to find new clients, and quickly. That was our goal in life really, to get out and present what we were doing for IBM to the outside world. That was quite a challenge.
LC: Tell me about John Jack, what was he like?
DB: Procord was a very people-driven organisation, and that was a major part of the solution we sold to our clients. Bear in mind that for most of the companies we were talking to as potentisl clients, this was first-generation outsourcing. Primarily, their concern was, 'I've got this in-house team of people at the moment, what's going to happen to them? How are they going to be treated? What sort of company are they going to join?' John had this ability to relate to individuals. He made clients feel comfortable that we were going to take care of their employees as they moved across to Procord.
IM: John had a quietly spoken authority. He was the right person in the right place in the right time. He had an uncanny ability to pick the right team member to do the best job. In that respect he seemed to place us in the right places to grow the business. He inspired confidence. He'd select you to do something, and you'd never doubt in your ability to do it, even if it was the first time you'd gone to do it. He was tremendous to work for.
LC: Can you talk about those initial contract wins - IBM, BP, British Gas?
DB: Because we had the IBM pedigree, the type of organisations we were targeting, and that were attracted to us, were similar in scale to IBM. We were fortunate that the clients we were trying to sign up were of a similar background to where we'd come from.
IM: We targeted companies that were undergoing similar sorts of stresses to IBM. So when you met your counterparts in those organisations we were talking a language they understood. The IBM account was tremendous, but it was tough, because we were never going to be allowed to earn any profit from it until we'd down-sized to the level that IBM had challenged us to reach. It was great to have IBM as a shareholder and reference client, but tough because at the end of that first year, we knew we weren't going to be able to afford the same number of people that we started out with. But the amount of energy that was released, just by moving people out of their corporate straitjacket and into Procord, was tremendous.
LC: What do you remember about the first contract win?
IM: I think BP Exploration was the first big one, closely followed by British Gas. We made something like 430 customer visits in the first year, but didn't book a single piece of business. However, when BP Exploration came on board, the floodgates opened. After that, the acceleration in terms of growth was tremendous.
DB: Gradually, as we got into BP Exploration and then the whole of BP started to open up, people saw that we weren't something to be scared of.
IM: There were always two sales going on. There was a sale to the client, because it was their contract that you wanted; but we never simply assumed that the people would come without
any communication. Talking about the transfer, about Procord, about how it would feel when they became part of our business, was all part and parcel of closing-off the sale. That underpinned our success, because people came willingly, knowing they were going to be a part of something that was going places.
LC: Then there was that game-changing win of the Atomic energy Authority (AEA) contract. What was the impact of 900 people all joining at one time?
IM: The process of visiting those sites, doing due diligence on each operation, trying to understand what the business plan would be to grow the business once we'd acquired it, was incredibly long and heavy in terms of workload. I remember on the day of the transfer, being in front of an auditorium full of people and the front row of the auditorium being made up of full-time union cleaners. I remember thinking that we were taking on something we couldn't manage. But actually the transition went relatively smoothly. That contract was valued at £360 million, with 960 people transferring on the same day. And yet it didn't actually feel life-changing at the time, again because we were all so busy making it happen. Being the AEA, the whole process and compliance issues became far more important. To have such a high-level process and such a regulated industry joining the business, that was a major change for Procord.
LC: So what would you say were the greatest challenges, and benefits of being pioneers?
IM: Outsourcing had been around for a while - 'contracting out', perhaps, rather than outsourcing. But what we developed was a completely different model. It didn't necessarily make the asset the central part of what we did. Convincing people that this was the right way to go was our greatest challenge. We also separated ourselves from the price-driven part of the market. I can't remember ever having had a detailed conversation with anybody about our prices, because the value was clear. In that respect a lot of benefit came out of the model we had.
DB: I also think IBM gave us a pedigree, because at the time, IBM was leading the field in terms of how its buildings were maintained and the quality level it achieved.
IM: We took a brief from our clients in terms of their business challenges, and what we did was turn that into a facilities management offering. This was a fundamental difference to what had been seen before.
DB: When we set Procord up, we had an operations group, the guys who delivered the stuff
day-to-day, a consultancy group and a projects group. At that time, to have that combination of all three was quite a first.
LC: How do you feel the industry has developed since those early Procord days?
DB: It's grown more than I thought it would. And we've drifted away from the people thing; it's now much more about cost.
IM: I'm delighted there's recognition that it is 'an industry'. I think the IFM/AFM merger to form the BIFM gave us a voice. Formal qualifications mean people can now choose to make a career in FM rather than falling into it by accident like most of us did, and be recognised for their achievements. I'm pleased the profession has gone global. As an industry it's now possible, as a client, to have all your facilities operated globally to the same standards by the same processes under one organisation. I'm a bit disappointed that the majority of businesses doing that have become very asset-focused. It's supporting the business rather than supporting the facilities that will differentiate between good and bad suppliers. For me, that's the one thing Procord did that has perhaps not been sustained through the industry as it's grown.
DB: Good service providers are not going to say, 'I can clean this table for a tenth of a penny less than you can', they are going to say, 'do you actually need to clean it? How often are you using it? Is the room used at all in the summer when everybody is on holiday?' Good service providers challenge the way things are done traditionally. That's the differentiator between a good FM and the rest; good FM providers challenge a client's thinking. When it does, the value for the client is tremendous.
LC: What contribution did Procord make to the development of FM as a discipline?
DB: It gave it an identity and some professionalism. I'd like to think that was something to do with the IBM heritage, that we were able to portray not only a technical organisation but a professional organisation. The sort of people we employed were professional people and were able to talk at a professional level.
IM: For me, the legacy comes from the people who came through Procord in those days. It would be arrogant to say we were the first or the best, and I don't think we were. But I think we got the timing and the model right.
LC: Looking back on your careers now, is there anything you would have done differently?
DB: I'd liked to have seen what might have happened if we hadn't sold Procord to Johnson Controls - what it would be today. Maybe it would have folded, or blossomed into something bigger. With the people and skills we had in the organisation at that time, I think we had the foundations to continue to grow and develop.
LC: What do you consider to be your career highlight so far?
IM: FM has been good to me, and that's my highlight. Clearly, selling the business to Johnson Controls gave me a financial highlight, but I still went back to work the following day, and I still enjoy doing what I'm doing.
DB: Starting as an electrical engineer, I never envisaged doing what I do in FM. It's enabled me to experience things that were never on the table when I started out. I think it's the diversity that's the profession has offered. It really is an ever-changing career. You never map it all out and say that's where I'm going to end up things just kind of happen around you, and suddenly you're the right person at the right time.
LC: What frustrates you about working in this industry?
DB: A lot of accounts are very process driven, and I struggle a bit with that. There are now a greater number of complex contracts, with SLAs in place and performance data etc. A much bigger IT package is needed to support it - this is all before you start maintaining anything! It's becoming a technology-driven industry, and I think the expectation of the client is increasingly that for all of the data you produce, you have to be able to justify why you're there and what you're doing.
IM: A lot of the processes today are, in my opinion, add-ons. They're camouflaging the fundamental needs, which are to communicate, to deliver what you say you're going to deliver, when you say you're going to deliver it - for the price and at the quality you've agreed. Perhaps that's the one thing that's changed, and not necessarily for the better.
LC: How do the challenges you faced at the beginning of your careers compare with the challenges faced by the current generation of FMs?
DB: All this IT is certainly a challenge for new FMs, and I also think there are challenges in the new European-wide and global-wide contracts. Getting consistency of service whether you're in Singapore or Birmingham is a real challenge. We're talking about different cultures, different
time zones, a whole range of things that influence how and when it's done.
IM: The challenge modern facilities managers face is that, fundamentally, FM is about communication. However you dress it up, that is what we do. It's one of those skills that I'm not sure any university degree teaches, unless perhaps in marketing.
DB: But there's also been huge progress: the fact that we can even start to think about European or global contracts, that we've got processes to support all of that. The service offering we are now able to provide is much broader than when we started out and it seems to be continually growing. For me, it's taking the word 'facilities' to its extremes. It's now about business support in a much wider sense.
IM: In some ways we under-sell what we do. It's fundamentally about dismantling a business and saying, 'What's your core business, what do you own?', and then positioning everything else as a support service to it. The positive for me is that there's true recognition as an industry that we will provide all those support services. I think that's allowed FM to come of
age. We're still to see a board director or type of director of business support services of FM, and that will be the point where we say now the industry truly has come of age.
LC: That leads me on very nicely to ask the next question: What is more important - formal qualifications and training, on-the-job-training, or experience?
IM: It's great that people can get a degree in their chosen career, but I don't think it's essential to have the degree before you start the career. FMs are inherently practical. The best FMs throw the rule book out of the window when it doesn't work, and still find a way of doing things. It's not necessarily something you can teach in a degree course. It's more about recognising somebody's personal attributes, and expanding and letting them use them, providing an environment where they can be successful.
DB: I've been fortunate on the major accounts where I've had degree-qualified people working with me. You aren't going to survive just by being practical. You need degree-qualified people working with you in your team, people with the capacity to understand process, understand
IT, about how it all fits together; you need those people as part of your organisation. Otherwise you won't survive.
LC: What advice would you give to today's facilities managers?
DB: Get out among the business. Understand it and talk to your customers, talk to your clients, understand what their needs are. Don't sit behind a desk, get out there and understand how it all works.
IM: I think I'd say, is there an opportunity to be a mover or shaker or leader in an industry
that isn't fully formed yet? If you want to make it your own industry, go and get it by the scruff of the neck and give it a shake.
LC: Finally, where do you see the profession going in twenty years' time?
DB: The buildings we are sitting in today will still be standing, they'll still need maintaining, so that aspect will continue. What will change is how we monitor them and demonstrate our added value to the client.
IM: I hope that there will be a seat in the boardroom for the facilities director. I'd like to think the BIFM will continue to grow. And I hope that, from a career point of view, people will have full career paths from leaving school through to senior facilities roles that they can plan instead, as we have, falling into FM by accident. The reality is that there's been so much change in the last 20 years that I've no idea what's going to happen - but it's going to be fun.
Name: Ian Mills
Qualifications: DTI 2nd Class Certificate of Competency, marine engineering.
2010 - Present: Self-employed management consultant
2011 - 2012: Interim manager at CBRE
2009 - 2010: EMEA senior operations manager
2008 - 2009: Owner/director MCP Racing
2003 - 2008: Deputy chief executive at Orbis Property protection
2000 - 2002: Senior director at Amey
1997 - 1998: Operations director at Symonds Pty LTD Australia
1991 - 1995: Director at Procord
1981 - 1991: Regional property services manager IBM UK
Name: David Burnett
Qualifications: HNC Electrical Engineering, ONC Mechanical Engineering, Full Technological Certificate in Electrical Installation Work, Member of the British Institute of Facilities Management.
1979 - 1991: Regional Facilities Services Manager IBM UK
1991 - 1994: Facilities director at Procord
1994 - 2007: Various roles at Johnson Control including commercial projects director, BP global account director, director, Centre of Excellence Europe and strategic account director for the BBC.
2007 - Present: Independent FM consultant