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Tuesday 6th October 2009
6 October 2009
by Adam McNestrie
This is the question of the inaugural London FM Conference, posed in these words by Asset Factor chief executive Oliver Jones, but asked just as forcefully by BIFM chair Iain Murray earlier in the day, and echoed by a number of delegates throughout the conference.
The conference, organised by the BIFM and lobby organisation London First, and hosted by Chelsea Football Club at its ground Stamford Bridge, did not have an official theme, but speakers and delegates returned again and again to the implications of the recession for the industry.
"A pure opportunity"
Jones told a full-house that the time for the FM industry is now. He called the recession "a pure opportunity for those focused and able enough to take advantage of it".
He warned, though, that there would be a heavy cost for organisations that refused to adapt themselves to the changed conditions of doing business. "Anyone just doing what they used to do a few years ago will not be in business when we come out of the recession. Sitting there doing the same-old same-old isn't going to bridge the gap for you."
He urged delegates to work harder and smarter if they wanted to survive and prosper, lifting their gaze from squeezing cost savings from individual FM functions towards more radical and innovative initiatives to transform the operation of the business and the use of its property portfolio. FMs need to look at cash avoidance, mini-PFIs and IT flexible-working solutions that actually release revenue, he said.
BIFM chairman Murray had launched the unofficial recession theme earlier when he told delegates that focus in the built environment had shifted rapidly in the last year under the influence of the downturn from procurement to operational management.
Drawing the contrast between the FM sector and other parts of the economy, the Chard FM supremo said: "I think this recession has been a bit of an opportunity for FM to step to the fore." With finance directors crying out for efficiency savings, the urgent question facing the industry in his view is: "If we're not going to step up to the plate and do it at this point - when are we gonna do it?"
Baroness Valentine, chief executive of business lobby organisation London First, also insisted that in a cost-conscious environment the FM function has a chance to demonstrate its potential. "After salary, the second largest cost to business is property. And it is here that the largest efficiencies can be made. It is up to FMs to find ways to achieve this."
"A long way to go"
If the recession is an opportunity, then FMs have a long time yet to take advantage of it according to Deloitte director Guy Palmer. Following an analysis of the parallels between the recession of the early 1990's and the current downturn, Palmer warned: "I would say that for property and FM, although GDP may now be picking up, we may still have a long way to go. The cost cutting may be here for the next year or so."
Deloitte's most recent survey of business opinion shows that 95 per cent of chief finance officers expect to see the focus on cost control continue for a year into the life of the recovery.
He did strike a more bullish note on rents, though. Following the recession of the early nineties Palmer said that rents had been flat for three years, but he expects a better performance this time round because of greater supply constraints.
"Ethics do sometimes go out the window"
However, the recession isn't just an opportunity for the FM sector due to its increased prominence and the greater scope that it is going to be given to develop ambitious solutions. Recessions are also a chance to make workforce changes, letting some staff go and bringing in their more talented peers to replace them, according to Oliver Jones. The opportunity to "trade up your team" is even greater in the FM sector than in the wider economy because of the severity of the fall off of demand in allied sectors like construction and capital projects.
Jones said: "I don't want to pay for someone who doesn't want to be there - someone who doesn't want to be at the vanguard of delivering great services."
In the next session, the chairman Angus Robertson, CEO of Power Perfector, prefaced the speeches by warning that FM had to be wary of losing its soul in the recession. "In these difficult times, times of pressure, ethics do sometimes go out the window. And we have to make sure as an industry that that doesn't happen. I think it's a fundamental in business - if we don't have ethics, we shouldn't be doing business at all."
There was some talk of the impending recession in the public sector, Anne Lennox-Martin asking the panel from the floor about the shape that the impending squeeze would take. Two delegates, representing public sector organisations, answered from the floor that it was not a threat looming on the horizon but a reality that had already materialised. The first speaker said that she had been asked to develop plans for a 15 per cent spending cut in the next three years. The second, an FM at a London higher education institute, said that his funding had already taken a big hit this year.