Facility managers have been adding value to the enterprise since buildings came into existence. However, formalizing facility management as a profession has been a daunting task, one that could prove to be overwhelming without an effective strategy and an appropriate tool to manage it.
In 2002, in its quest to elevate the field to a strategic level, IFMA began using the balanced scorecard to help its leaders map the best direction forward, meet the expectations of members and staff alike and measure, as well as manage, the association’s intangible assets.
Mapping the direction forward
It has been said that a picture is worth one thousand words. Since illustrations are usually preferred to lengthy text, IFMA uses strategy maps to tell its story. Although a written strategic plan still exists, like most voluminous plans, it is rarely consulted. In contrast, the condensed strategy map and balanced scorecard is used on a daily basis by the majority of the association staff. The alternate layout provides ease of reading and serves as an excellent reference when information needs to be looked up quickly. It is a visual representation of the association’s formal strategic plan. This one-page document—which reads much like a map—reveals IFMA’s destination, the way to get there, what everyone is trying to achieve and the people and resources needed to make the journey.
Nine strategic objectives
IFMA’s strategy map is a series of strategic objectives linked together in cause and effect relationships that describe how it intends to create and deliver unique value to its stakeholders. The nine objectives IFMA intends to accomplish are:
- Provide and engage stakeholders with opportunities that expand and leverage their collective knowledge and experiences.
- Provide career essentials for facility management professionals to advance their careers.
- Magnify the importance of the facility management professional worldwide.
- Ensure that appropriate governance, systems and processes are in place.
- Understand and respond to stakeholder needs.
- Strengthen and build collaborative relationships that advance the facility management profession.
- Motivate and inspire members to become committed and involved volunteer leaders.
- Create a culture and provide resources that instill innovation, passion, challenge and meaning with staff and volunteers.
- Maintain a viable fiscal position through good financial management, diversification of revenues and optimized asset utilization.
The strategic objectives are meaningful and powerful in themselves. However, if they are left to abide by a linear structure without context, one runs the risk of failing to achieve them fully. The context
and perspective that are needed to be able to interpret the objectives and to determine their application is found in the four perspectives in which they reside. These perspectives clarify and simplify
the objectives, as well as provide a level of understanding.
Meeting expectations
IFMA must meet the expectations of its many stakeholders if it is to be successful. The expectations come from many different perspectives. The four perspectives found in the strategy map and balanced scorecard system helps IFMA understand exactly what the expectations are and from where they originate. The four perspectives are categorized as stakeholder, internal, learning and growth and financial.
- The stakeholder perspective reveals what is expected from everyone and from every entity that has a stake in the facility management profession. In a for-profit business, this perspective would belong to the shareholder.
- The internal perspective indicates what the staff and leadership must do operationally to meet the expectations determined by the stakeholder.
- The learning and growth perspective states the ways that IFMA staff and leadership must learn and grow to be able to perform the operations. It is focused on human capital, information technology capital and organizational capital.
- The financial perspective provides the association with the context by which the finances will be managed and utilized. The financial perspective helps the leadership improve cost structures, increase asset utilization and expand revenue opportunities.
Global influence, community and operational excellence
The four perspectives are critical to understanding and achieving the association’s objectives. To further intensify the focus and clarity, IFMA senior leadership utilizes three strategic themes that provide parameters to the perspectives. The strategic themes govern the objectives as well as the perspectives. The strategic themes reveal what IFMA’s leaders believe to be essential to the success of the association. The strategic themes are global influence, community and operational excellence.
These three strategic themes govern the initiatives and actions that are chosen and budgeted in order to achieve the specific objectives within a particular perspective. For instance, when the association is working toward the achievement of magnifying the facility management professional worldwide, it is responding to the expectation of the stakeholder—which is why that objective is managed within the stakeholder perspective. When the association is working toward achieving the objective of creating a culture that instills innovation, passion, challenge and meaning, it is responding to the expectations of the association staff and volunteer leaders—which is why it is managed in the learning and growth perspective. However, both of these objectives are governed by the three themes of global influence, community and operational excellence.
Managing intangible assets
The balanced scorecard was created to help organizations manage their intangible assets more effectively. Intangible assets such as knowledge, databases, networks, information technologies and relationships cannot be measured by conventional financial measures, which are predominantly historical.
IFMA utilizes the balanced scorecard to measure the key financial metrics found in the financial perspective. These measurements and targets are both conventional and necessary. The “balanced” part of the balanced scorecard means that IFMA also measures non-financial metrics as well as current activity versus historical activity.
One great example of a non-financial metric is linked to the objective of understanding and responding to stakeholder needs. This objective resides in the internal perspective—meaning that it is the responsibility of the association staff and board of directors to make it happen. The measurement for this objective is the amount of time spent with stakeholders and the number and the result of that time—i.e., products or services delivered back to the stakeholders as a result of the time spent understanding. From this, management derives a simple ratio of offerings back to the stakeholder-to-time with the stakeholder. This simple yet effective metric is greater defined by its target. The goal may be a 1-to-30 target, (one new offering to the stakeholders for every 30 minutes spent understanding their needs). If this management process is done correctly then the intangible asset of time spent with a stakeholder can be measured in financial terms. As a result, the amount of time spent leads to a product or service that is eventually purchased.
In addition to successfully managing the intangible assets of the association and meeting the expectations of the stakeholder, IFMA has realized many other benefits from becoming a strategy-focused organization. Some of the benefits achieved include greater trust and synergy between the board of directors and the staff, continuity among volunteer leaders and a greater level of understanding and meaning among volunteers and staff alike. IFMA has also seen its strategy-focused culture be an incentive when recruiting key leaders at both the volunteer and staff level.
Translating strategy into operational terms
IFMA is committed to becoming a strategy-focused organization. One primary way to achieve this goal is by leveraging strategy maps and the balanced scorecard—thus enabling staff to make strategy their everyday job and to better manage the association’s intangible assets. Furthermore, IFMA continually aligns the organization and its budget to the strategy. The balanced scorecard truly helps the management team to translate strategy into operational terms and creates the mindset that strategy is a continual process and not an annual event. In simplest terms, the balanced scorecard provides IFMA with a recipe to combine all of the ingredients of the organization in the appropriate amount and order to create unique and long-term value. FMJ
The preceding article also appeared in the November 2007 issue of FORUM magazine.
About the author
Alan Thomas, CAE, is executive vice president and chief operating officer for the International Facility Management Association. He serves on IFMA’s senior strategy team, which is responsible for the execution of the association’s strategy. Thomas has a professional background in strategic planning and association management and has more than seven years of experience working with strategic planning. He may be reached at alan.thomas@ifma.org.
