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How to turbocharge value for your organisation

Many organisations quite rightly seek innovative ways to add value.

But the problem with value is that it takes many forms – corporations talk about value delivery, shoppers want value for money, and marketing strategies are based on value propositions. Some companies are profit driven, others are driven by social purpose.

So the first thing to understand is: How does your organisation define value?

Construction Excellence’s report: Be Valuable offers one answer. The report suggests that the simplest definition of value is what you get, divided by what you put in. It’s the standard way we measure ROI.

However, the complication is that value is subjective, not an objective fact. Our own sense of value stems from our choices and is influenced by society’s values, our personal judgement, and what the payoff is. 

It’s rarely clear what value is most important!

To understand the value of anything we have to know who is judging, and, in a multi-stakeholder situation, what will determine the balance of view. This can quickly become very complicated.

For instance, a building with six stakeholder groups has fifteen lines of one-to-one exchange and a myriad of opinions of which values are most important.

 

 

 

 

 

 

 

 

 

 

 

Estates Managers can bring huge value to the organisation

Estates Managers often focus on driving down capital and operating costs, but these costs are small compared to the cost of buildings’ occupants and their output.

To identify the biggest sources of value, we need to know the long-term costs of owning and using buildings. Luckily, The Royal Academy of Engineering has already done this for us. They analysed the levels of spend for key categories on a City of London Financial Services building over a 20 year lifecycle and expressed these costs as a ratio – 1 : 5 : 200.

Simply put, for every £1 spent on capital investment – e.g. construction costs:

£5 will be spent on operational costs – e.g. rent, maintenance and building operating costs

£200 will be spent on business costs – e.g. staff salaries, which result in

£250 or more on business outcomes – in other words, business productivity.

Of course, each building’s ratio will vary, but we can see the sheer scale of value that the Estates Manager can deliver. Yes, it’s important to control capital investment, but the big prizes are found in reducing operating costs and even more so in improving the positive effect of the built environment on occupants’ well-being and performance, which are bound to improve the organisation’s outcomes.

Find out what your stakeholders’ priorities are

To make the most appropriate building performance improvements, you must first know your key stakeholders’ priorities and then understand how Building Performance can support these priorities.

Keep a record of all your stakeholders, listen to and engage with them, as well as other people who deliver (and benefit from) the estates services. A simple stakeholder engagement matrix could be useful.

We call this focus Building Performance, which Constructing Excellence has defined as: The measure of a building’s ability to support occupier performance by enabling effectiveness whilst containing operating cost.

Examples of improving Building Performance can include:

  • Improving productivity in workplaces through optimal layout and a healthy indoor climate, and adequate capacity.
  • Enhancing competitiveness, speed and effectiveness by ensuring that facilities are designed to be fit for purpose.

 

 

 

 

 

 

 

 

 

 

 

 

Identify which improvements to make and how to make them by asking occupants and estates team

Sometimes it’s not clear how Building Performance can deliver what your stakeholders want to achieve. Collecting feedback and suggestions from building occupants, and the people who look after the estate can be helpful.

Regardless of whether they’re employed by your organisation or your supply chain, take time to engage with people who do the job. Ask them what their issues are and get to know them. They’re more likely to come up with innovative solutions than the executives who manage the contracts.

Map out the value you can provide

Once you’ve spoken with your stakeholders, you can use a model to map out the value you can provide. We’ve given examples of two models you can use to map out and improve organisational value.

      Value in Design (Valid) model:

  • Create a clear definition of value to each stakeholder
  • Integrate stakeholder values into the business case
  • Design decisions made with awareness of stakeholder values
  • Supplier understanding of value can be maintained through design, construction and into use
  • The transparent approach builds confidence and focuses providers on key areas requiring attention

Another value model is based on Edward de Bono’s “six hats” approach, using six value dimensions. Bear in mind these need to be checked with your stakeholders’ opinions of value.

     Edward de Bono’s “six hats” approach

  • Human values
  • Organisational values
  • Quality values
  • Creativity and innovation values
  • Environmental and social impact values
  • Perceptual values

For more on how to enhance productivity, please visit here, and check back soon to download our soon-to-be-published guide on how to improve productivity in buildings or call John O’Brien Founder and MD on t: 01295 722823 to discuss how we can help you improve the value, performance and productivity you get from your buildings and estates.

 

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LCMB Building Performance Ltd

LCMB Building Performance Ltd. (LCMB) improves the financial and environmental sustainability of buildings and estates, and the productivity and well-being of the people using them. We do this by reducing building operating costs, energy used and improving workplace environments and building space utilisation. We offer Facilities Management, Carbon and energy reduction and project management support.

Our clients include Tata Technologies, King’s College London, Birmingham Airport, Nando’s, Howard Tenens and England Golf.

Contact John O’Brien MD and Founder if you’d like to discuss how we can ensure your real estate and building projects return more value and enhanced Return on Investments (ROI).

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