Cutting Edge of Communication

Want to know a secret? Email is not a key source of communication anymore. I get more good information via snail-mail now than through my email box. People are on the move so often now that email is a burden for sending and receiving detailed information. It's great for passing along meeting notices though.

The artificial limitations built into email make it difficult to manage for a large number of users. Too many places limit the amount of storage space you can use. Another common issue is the size of files that can fit through the filters. Good information anymore is larger than 5MB. A good picture is larger than 5MB!

Email creates a way for trackable communication. If you need a timestamp to identify when you sent something then email is absolutely the way to go. For every other type of non-marketing communication email simply is not the best route anymore. FTPs create a simple way for safe file transfer or even a free website where you can upload files for someone to download. Need to share pictures use something like Flickr online which allows you to do more than simply view the pictures.

Information is more than 1 dimensional. Remember that the next time you are typing up that long email with lots of files. Think about if there's a better way to control the flow of what you need to share. New communication methods only make things easier for others, not harder.

The Carbon Neutral Smoke Screen

It is all the rage for companies to strive for carbon neutrality. A system has been set up to trade carbon credits on the open market where carbon neutrality can be bought at a price. No longer are companies applauded for simply reducing their footprint, it requires an additional outside investment in, usually, a non-profit carbon harvesting plan.

True carbon neutrality is impossible to achieve using even the most modern technologies. It is the marketing and advertising arms of large companies have convinced them that carbon neutrality is still achievable. It is one thing to be able to make the claim that you've reduced your carbon impact on the environment by 45%. It's another to say that you have no impact on the environment. This leads down the messy path towards carbon positive companies which I can only imagine is not far down the road due to typical corporate one-upmanship.

There is a better way to achieve carbon neutrality as a company that will put those additional dollars at least partially toward the bottom line: invest in carbon reduction technologies for your suppliers and customers. You make the investment for them and claim the carbon savings for yourself. Any agreement with them would be for them to pass along operational savings to your costs as well.

Retailers should invest in improved manufacturing processes for their suppliers. Manufacturers should invest in improved transportation modes from producers of raw goods. Real Estate companies should invest in the infrastructure of leasable buildings. Restaurants and grocery stores should invest in the growth of local agriculture.

The pay-back for reduced item costs is a bonus on top of the ability to claim multi-year carbon neutrality. The good will it will generate also has a value. Sure your competitors will benefit as well, but why should their good fortune keep you from making a wise business move? Is it really better to put your money into some carbon farm that has no financial benefit to your company other than the claim for one year of carbon neutrality?

Supplier Management

Far too often companies have a need for a supplier and after the contract is signed, simply hope for the best. However, working with a supplier on a regular basis is an on-going relationship that must be constantly evaluated and worked on. Rarely should a supplier be in a position to negatively influence your business and if you have a supplier that can hurt you, make sure that you have a backup plan in case of the worst.

For your typical business you probably get most of your supplies from a third party. It could be paper and office supplies from the local office stores or specialty products with logos and slogans from someone else. Whatever it is that you need to maintain your business on a day-to-day basis requires oversight and control. If you can't control them it's time for a change. If you are already in a situation where your suppliers seem to have too much control and are starting to impact your business it may be time for a heart to heart with them. If they aren't willing to become part of the team it's time to make a new team.

No company is in business so that they can let someone else tell them what they have to do and what hoops they must jump through; especially someone that they are purchasing through everyday. If communication isn't regular and friendly between groups, make a change.

Happy Pi Day!

I'm a numbers guy and pi is one of the ultimate numbers. Today just happens to be 3/14 so at 1:59 everyone should just stop and reflect on how this number effects everything you do....or just use it as a reason to stop working for a minute. Have a great Friday all!

Modular Wall Systems

One of the biggest questions on the minds of facility managers across the country is how to incorporate green products while saving money. The largest on-going cost in most facilities is churn caused by growth/contraction/relocations. Construction costs are regularly planned into the budget to make sure everything is in place for optimum performance. To that end I'd like to talk about movable wall furniture systems.

Almost all of the major workstation manufacturers have begun development on modular office systems. It's a natural progression to extend panels to the ceiling and provide attractive options outside of workstations and cubicles. The tough sell is that currently the cost is higher in most markets than traditional drywall construction - often high enough to put it outside the budget of your average company. Another difficulty is that since it is classified as furniture it is often excluded from a landlord TI allowance. However there is a growing trend in the real estate market for landlords to pay for these style walls within the TI assuming that they stay with the building at lease end.

With that being said, there are significant advantages to looking in the direction of a furniture system instead of traditional construction. The most important to a facility manager is cost. Wall systems are made to last up to 15 years. A typical payback period for a system of this type should be measured in terms of number of moves instead of years. Walls that are built to move are a cost avoidance over traditional construction. The electrical and data systems within them are built to be plug and play which makes things twice as easy. It is not uncommon for these walls to pay for themselves after even 1 reconfiguration. In more expensive construction markets they may even be the same price as traditional office construction.

The second reason is they are built to be environmentally friendly. If you are looking to have a LEED or environmentally certified space then these walls are the only way to go. Their use eliminates construction waste, they are often made from recycled materials and they can be reused many times. For a modest to good payback you are able to do your part for the environment.

If you are looking to undergo a workplace design change talk to your furniture vendor about this option. You may find that it fits well into your already existing plans. Or you can always contact us for help. We're always willing to talk construction methods.

US Manufacturing Should Embrace Green

With all the talk of recession lately I've been thinking about the new green economy that is being developed and what it could mean for the US manufacturing industry. There has been the lingering fear of manufacturing jobs eventually disappearing from US soil as they are slowly off-shored to cheaper labor markets. Sustainability dictates that the trend will reverse.

Sustainability principles put more weight on carbon than on price; regionally procured products are even one of the points available for LEED certified projects. As the market for green products grows, there will necessarily be a corresponding growth in regionally operated factories. There is a premium inside of sustainability for products produced and warehoused within 500 miles of the purchasing location. This also would mean a reemergence for the local mom & pop brick and mortar stores.

Whenever things seem to be going one way, there is usually a light at the end of the tunnel. In the short term sustainable practices offers higher prices and new ways of doing things. Long-term there is a potential for a rebirth of the good old days.

Real Estate Analysis

Everyone knows that it is important to get a regular checkup from the doctor. Just get a quick and easy assessment of where they stand as far as the basics are concerned. In the best case, the doctor will give them some tips on how to do better. Worst case the doctor tells them there is something wrong and tells them what they have to do in order to get healthy again. It's common sense to keep tabs on where you stand.

The same should be true of your real estate portfolio. Real estate is a constantly shifting arena: prices fluctuate daily, buildings are built and knocked down, the demographics of a region change. Whether you have one location or a hundred it is a good idea to make sure that you are in good positions that are not hurting your business. Just like for your own health, it's important to get checked out by someone who is an expert in the field.

When the topic of a real estate analysis comes up most people in business think they can do it themselves. However, where would you start in order to figure out if you are doing the best you can be? A surface look would point at cost per square foot as the key factor of whether you are doing well or not. If you know the market rate for your area and are at or below that then you are doing well, right? Not necessarily.

If that isn't the decision point, what is? To really understand how your portfolio stacks up you need to look at a diverse set of metrics that includes: square feet per seat, cost per person, average churn cost per year, and common/shared space allocation. Then you need to benchmark this against your industry competition. Why does all this come into play with your portfolio? Isn't this an HR issue? It's important because the real estate cost is the effect of HR and Real Estate not being in alignment which is often the case.

If you have a high square footage per person, regardless of if your lease rate is at or below market you are overpaying for your space. You have too much of it. If your churn rate (or cost to alter the space with changing business conditions) is above your competitors then you may not be in the right type of space. If your shared space doesn't meet the needs of your employees then you may not have an effective workplace strategy in place (which ties directly into real estate).

Is it possible to do this evaluation internally? Absolutely, but there is a reason that most companies do not perform this level of analysis on themselves: it requires a specific type of expertise and knowledge that is outside the core competency of the business and is not performed on a regular basis. If this sounds like something that may help you then look into it. An inefficient office is a terrible drain on the bottom line and it may not even be noticeable if you don't know where to look.

The Myth of Continuous Improvement

Continuous improvement is thrown around as the best way to stay ahead of the competition in business. It's used as a talking point for consultants, senior management, engineers and a wide range of others who have responsibility over a process. Six sigma is the king of continuous improvement still today. Take a documented process and set up metrics and means to improve it incrementally. By definition the process is known to be below standard.

Focusing on continual incremental improvements reduces the flexibility to implement the big changes that could take a process to the next level. Measuring against improvement gives managers a reason to never achieve optimal. If you know that you have to perform 5% better next year, you're going to make sure that you have enough capacity in the system to achieve that performance. The question becomes if you can't fix what you don't measure, how should you actually measure improvement?

Improvement is a relative term. Continuous improvement methods oversimplify the concept. Within business terminology improvement can mean anything from reduced costs, increased profits, better customer service, higher performance accuracy or quicker turn around time. Measuring performance should therefore take into account all the important metrics associated with that process.

The example I always look at is a department of 10 people that is in charge of customer sales:

Year 1: they set the performance baseline that everything will be measured against.
Year 2: department grows to 13 people. Productivity per person goes down, but profitability goes up.
Year 3: department grows to 15 people. Productivity per person goes back to Year 1 levels, revenue per person goes up and profitability stays flat.
Year 4: staff stays at 15 people. Productivity and all other metrics show improvement.

If you choose one metric to judge this department against there would be a down year at some point: productivity went down year 2, profitability didn't improve year 3. That doesn't mean it wasn't successful as a group, only that the situation was such that they improved in varying and changing areas.

Be open with your concept of improvement and make sure that overall things are directionally heading in the right direction. Just because one metric goes down does not mean that everything did. There may be a reason for the decline that will mean when it improves back to the baseline everything should rise proportionally with it.