by Melissa Securda — In 1978, The People’s Republic of China embarked on a mission to liberalize market policies, and in the years since, the country has experienced extraordinary growth. The economic engine got a boost in 2001 when China joined the World Trade Organization (WTO), and the resulting economic boost drove the economy to its current status as the second-largest world economy. During this 30-year progress era, the population urbanized, a middle class emerged, and property development raged.
Controlled evolution has been a key ingredient to China’s transformation. The government maps out a blueprint for the country every five years, and China’s Twelfth Five-Year Plan targets the following key areas for rebalancing the Chinese economy:
- Increase household income and encourage private spending; transition economic development from reliance on manufacturing and exports; open up China’s service sector
- Inclusive growth; distribution of economic prosperity across a broader population, including historically prosperous coastal cities, as well as more economically challenged interior cities
- An evolving business model that supports innovation and R&D for Chinese enterprises. Sectors of focus: health care, energy, technology — known as strategic emerging industries; improved access for MNCs to invest in China’s strategic emerging industries
- Sustainability/energy targets; environment-related
- Increase minimum wage; raw materials price reforms; education reform
The government’s attention to its strategic emerging industries will result in a larger office worker demographic. Premier office space in growing cities will continue to be in high demand as companies expand and emphasize brand and image creation. Corporate real estate, currently in its infancy in China and driven in large part by multinational corporations (MNCs), is making larger strides toward greater sophistication. Shining a spotlight on the facilities management (FM) sector reveals a burgeoning industry making inroads across the country.
FM is a rather recent trend in China, and this segment of the real estate pie is starting to show signs of improved sophistication. FM operations tend to be highly tactical in nature with a project-by-project mindset. However, a growing number of facilities managers in China endeavor to enable productivity in the workplace, incorporate sustainable strategies for building management and enhance the infrastructure to prolong the life of the asset. A new approach to FM is emerging in China; one in which strategic building management contributes to a more valuable organization. The role of the facilities manager and the plans in place will become more and more strategic in nature as FM influences all aspects of the workplace.
Sustainability’s Role in FM
Sustainability will continue to influence design and construction and will change the way FM is carried out in China. As in other parts of the world, there is a premium placed on sustainable buildings, therefore it is critical to integrate sustainability into FM and link back to the organization’s strategic plan to show the value add. Most of the focus in China is on energy use — it’s the piece of the pie FM managers can control. Building operations and their effective and efficient management are becoming more significant than the building’s initial construction. Facilities managers have the ability to adapt and modify the existing building structure when they begin to measure and track consumption.
China has seen significant growth in green building certification over the past five years. The US Green Building Council now reports more than 80 million square feet (7.4 million square meters) of LEED-certified projects in China. China began its own certification program, Three Star Green Building Certification, in 2006, and current estimates include 200 buildings certified in the program. Certification creates accountability for energy efficiencies, reducing operating expenses over time and creates a meaningful contribution to resource preservation. Most of the certified stock is government owned, but the trend will continue to spread over time. Facilities managers can integrate the sustainable agenda into building operations and make the business case for increased sustainable measures by tracking progress. Companies — mostly MNCs but also a growing number of state-owned enterprises and national Chinese companies — are starting to implement strategic FM planning with the goal of operating the building for maximum efficiency throughout the building’s lifecycle. This is achieved with FM working in tandem with project management; working in committed teams to create creative solutions and measurable goals.
Powering through the Challenges
The biggest challenge to implementing strategic FM operations lies with the local culture. Chinese corporate culture generally does not support risk taking and internal collaboration. Many traditional Chinese firms have the mindset that failure is not an option and often have a very linear process that does not promote taking initiative and innovative ideas. Access to advanced FM training and exposure to a more collaborative business environment will eventually decrease the impact of traditional cultural influences in the organization. Guidance from MNCs and global service provider companies can help inspire greater self-confidence and the ability for local Chinese facilities managers to trust their decisions. The local industry needs greater transparency and integrity as it continues to evolve.
Facilities managers need to do more to create awareness within the organization about the long-term benefits and value FM can bring to the business. Allan Fan, Senior Facility Manager, Greater China for Life Technologies, suggested that facilities managers move forward with the mindset that proper FM brings enormous value to the organization.
“Spend time with the sales people and understand the core business,” he advised. “Link facilities management to company performance.”
Doing so will increase transparency and improve service delivery between FM and business operations. Within the FM department, there is also a need for improved branding and marketing skills. Despite greater strides toward sophistication, most facilities managers in China are very technical, and it’s a challenge for them to communicate the department’s value-add to senior leadership.
Facilities managers need to demonstrate how the FM function and energy efficiency are critical to the business by using more sophisticated communication skills to sell FM achievements across the business. Doing so will ultimately benefit FM in the form of management respect and the potential for additional financial resources when needed.
Facilities management is in catch-up mode in most national and state-owned enterprises. Many companies rely on outsourced partners because of the lack of internal expertise. Developing more mature, locally sourced FM leadership in China is essential for the continued sophistication of the profession in China.A recent panel of local Chinese facilities managers was asked to describe the most pressing issue facing FM in China. The lack of available, skilled FM talent ranked at the top of the list.
“There are not enough people in the industry,” said Fan, “but we are eager to learn and want to catch up.”
FM is not an officially recognized profession by the Chinese government. Companies that perform these services must apply for a license as a property management company, though there is a significant distinction between the two functions. Currently, there is no formal degree at Chinese universities for FM. A greater focus on education would help generate more interest in the industry and let students know that FM is a strong career path because it is an integral part of business operations.
About the Author
Melissa Securda is Director of Knowledge & Research at CoreNet Global. She can be reached at msecurda@corenetglobal.org.