Importance of KPIs to the Facility Manager
According to IBM (2011) in their review of business markets, company executives generally share three problem areas. First, subordinate business unit leaders need goal alignment with stated organisational goals. The goals of each subordinate business unit should support the higher goals of the company and support other business units as necessary. For example, the facility performance goal of a warehouse operation has significantly different levels of performance than the goal of a business office that hosts important clients. The level of importance of meeting each goal is equal although the performance levels differ significantly.
Second, business unit leaders require clarity on which goals are important relative to others. The company goals generally flow from the organisational strategy. From a facility manager’s point of view, specific FM goals may differ based on the particular business unit supported. Some business units may desire to minimise costs, such as in an unoccupied storage space. Other business units may require high expenditure of labor and materials to maintain reliable performance, such as in a production area.
Third, organisational leaders require accountability and ownership of each organisational and business unit goal. A goal without a name assigned to it remains unmeasured and at risk of not being accomplished adequately. Executives typically assign facility managers broad goals in categories such as energy management, environmental sustainability, and performance of service levels (quality of maintenance, timeliness of response, etc.). Each subordinate business unit leader may require separate performance goals to support the unit’s particular requirements, which may differ markedly from other unit’s requirements.
Organisational goals link directly to the organisation mission (National Research Council, 2005). This is true at the corporate level as well as at the business unit level. Each business unit leader’s specific goals relate to the part of the organisation’s mission assigned to the unit. In other words, the goals are relative to the assigned mission. Facility managers support specific goals for each business unit as well as broad goals.
The global business consulting company Towers Watson (2011) reported on the link between facility management performance and employee engagement (the level of dedication an employee has to the organisation). In one case study, an employee survey of 51,000 employees (in 43 counties, covering 15 languages) included indicators of engagement linked to 64 production measures and 79 maintenance measures, or KPIs. The authors of the survey suggested a connection existed between the work environment and level of employee engagement. Facility managers should interpret this study as linking the expected quality of the work environment to the broader corporate goal of enhancing productivity. The link of FM to employee productivity may be an unstated goal in some organisations, whereas in others it is a key metric.
Facility mangers require KPIs to demonstrate their contribution and value to the overall success of the organisation. Points to consider when creating relevant metrics, or KPIs include (The Value of Key Performance Indicators, 2011):
- Start with measuring where are you now (starting point benchmark)
- Determine where you want to go (your measurable goals, which may be compared to other similar organisations, or past performance in the company)
- Decide who receives the data and what do they do with them (are the telling you anything actionable or of value)
- Derive conclusions from the data and how they are communicated appropriately
Other helpful points include:
- Quantity does not equal quality
- Measure a few key/important metrics
- Ensure people in the field and management agree on what is important
- Test the KPIs to determine the value of measuring them before implementing them
- Understand the value of what a metric tells you to the cost to gather the data (in other words, is the metric worth the effort to collect the information?)
In summary, successful facility managers recognise the importance of KPIs as tools to demonstrate their contribution to organisational and business unit goals, the overall mission of the company, and the impact of the work environment on the attitudes of employees (Performance Measurement). Facility managers also employ the KPI measures to gauge internal performance to assess the degree of progress towards the desired future condition of the company’s infrastructure. In that regard, the managers may use the metrics to forecast future investments and budgets needed to achieve goals, and validate past investments.
Appropriate use of KPIs enables facility managers to show the value of the facility team to the company executives. The managers who neglect the metrics risk high-level recognition, but not necessarily the kind they desire.Tim Parker The author is a senior technical writer and Doctoral Candidate for Organisational Leadership at Northcentral University