Open-access content 10th September 2010
9 September 2010
Centre for Facilities Management Development at Sheffield Business School
by Cathy Hayward
Despite many of Connaught’s clients being in the room, it took until mid morning for the C-word to be mentioned in a session and speaker Paul Crilly, Reliance’s chief executive and deputy chairman, was typically robust in his response to a question from the audience. “Connaught’s demise was more to do with the way Connaught was managed, than government changes,” he said citing shoddy bidding practices, including bidding below cost to secure deals. “If a deal looks too good to be true, then it usually is.”
His comments were echoed by Iain Murray, immediate past chairman of the BIFM and conference chair of the conference, who as CEO of Connected FM has had to compete against organisations bidding with negative margins. “Buyers need to consider the actual cost of doing the work,” he said.
Connaught’s perilous financial situation over the past few months was reflected on by Mark Steed, Kier Asset Partnership Services’ operations director, who during a presentation of his organisation’s partnership with Sheffield City Council compared Kier’s debt-free status with Connaught’s debt-ridden position before its demise. “We want to grow our business and we do need to make a profit to do that; clients must understand that we cannot work for free,” he said. “Profit is not a dirty word. As you can see from the Connaught example, who wants to work with an organisation with wafer-thin margins that gets into financial difficulties.”
Two into one won’t go
If finding out how to do more with less was the main reason the couple of hundred public sector heads of estates attended the event, then they might have been put off by the opening remarks from the university’s pro-vice chancellor Mike Smith. “It’s less about doing more with less and more about doing the same with less,” he said. Murray was even more vigorous. “Doing more for less isn’t an equation that makes sense. Only less for less works.” And according to Crilly, many of the cuts and changes should have already been done. “Some of the austerity measures should lead you to do things that you should be doing anyway.”
Crilly blamed poor procurement methods citing an example of one client whose very inefficient practices were revealed in a specification When he asked them why they did something in a particular way, rather than a much more efficient and effective system, he was bluntly told to price the specification. “How about challenging the specification, challenge the way things are being done rather than doing it because it was always done that way.”
An inherent lack of trust in the FM sector was blame, Crilly said, whose business was involved in a government contract where the lawyers insisted they remove the word ‘partnership’ from a document because it implied a sharing of liability. “Why can’t we just sit down and have a sensible conversation about risk?” He went on to question the adversarial language used in specifications.
“Let’s talk outcomes,” he urged the audience. “If your outcome is a 40 per cent reduction in costs, we need to talk about that first.” The one team approach was the key to successful relationships, he concluded. “When you’re putting a team together, you need to think about who’s best for the job, not who pays whose salary.”
But suspicion still remained in the minds of the audience. John Greenwood from York University argued that on plain cash terms, outsourcing FM was not as effective as doing it in-house.
The glass half full/ half empty theme was continued after lunch with an engaging debate between three public sector FM experts: Dinesh Kotecha, Haringey Council’s director of facilities, Clive Wilson, director of estates and facilities at the University of Bradford, and Peter Wearmouth, development director at Inventures, formerly NHS Estates. The main problem facing the three organisations seemed to be not reducing costs, which as Kotecha is a rather regular occurrence thanks to the political masters, but getting the right type of property. “We need less of what we’ve got and more of what we haven’t got,” he said describing his estate as a mixture of family silver and broken crockery.
If the event was in danger of descending into doom and gloom, then the final presentation ensured it ended on a high. Colin Stuart and Bob Calver from EC Harris shared their vision on how to be world class and save £10 million in the process – a feat their organisation achieved for the Department of Children, Schools and Families (now known as Department for Education). It was, said Calver, an example of what can be achieved when you turn best practice into standard practice.
The £10m savings were achieved by moving two buildings (Sanctuary House and Caxton House) into one so there are now 2,250 people where there was once 1,600; the carbon footprint of the London estate has been reduced by 50 per cent; and the desk ratio has been increased to 8:10 and 9 sq metres per person. And much of the impact is unquantifiable, added Calver: all staff are now under one roof which makes for shorter internal communications, Informal meetings are convened quickly and easily. “When we asked people how the changes affected them, they said they substantially increased their operational effectiveness and collaboration.” The key to success, he concluded is to make change an opportunity not a threat “Change is happening for people not change happening to people. That’s the key to success.”
A longer version of this article, including a full case study of the relationship between Kier Asset Partnership Services and Sheffield City Council, will be published in the 30 September issue of FM World.