As with any vertical, Facility Management companies are always looking to set themselves apart from the competition. One way they may do this is by defining themselves as early adopters of PropTech. They want to be seen as innovative companies, embracing progress, implying that they are in a better position than their competitors to support those who use their services. However, there often is a disconnect between the corporate message and reality.
One of the issues revolves around the definition of the word “client” – depending on whether the FM company is an agent or an owner-operator, their clients are completely different, and this has a knock-on-effect on how the business is run and in whose interest. FM agents act on the behalf of building owners meaning that the owner’s satisfaction is the agent’s primary concern. However, for owner-operators, their clients are those who occupy the building – the tenants. This ultimately leads to an operational divergence in how buildings are managed and the company’s priorities.
The IWFM Customer Experience SIG refers to the building’s stakeholders as “customers”, which is meant to encompass all the people who interact with the building, from occupiers to staff, to owners. However in a commercial settings, those priorities are hard to keep at the forefront of the decision-making process.
The thinking is different for both parties as well. Owner-operators have an advantage over FM agents in that they do not have to get approval from a third party to make changes to building operations or their investment strategy. As such, the length of time between evaluation and adoption of new services or products tends to be shorter and simpler as there are fewer stakeholders involved.
In contrast, FM agents must first be convinced of the benefit of a new solution or process and then almost always have to refer back to their client, the building owner, for a final decision. In turn, the owner may or may not have any interest in the day-to-day management of the property which often delays the decision-making process further. This is a difficult dynamic for a PropTech vendor to navigate – they never get to present directly to the client and therefore must rely on the agent to accurately represent them.
Putting aside these differences, internal politics are a huge factor in many large enterprises and the importance of how to manage these cannot be understated. Companies may position themselves as pro-innovation, but their internal procedures may actively hinder any attempt at progress. Whilst risk assessment is an essential part of due diligence, any change or new technology can be perceived as a risk. In addition, if failure is admonished or even worse, punished, then the individual decision makers will always be reluctant to implement a new way of operating, even though the company may be actively marketing themselves as an adopter of PropTech.
We have experienced this first-hand, having been asked the same question repeatedly at presentations: ‘how many buildings in my company are you already working with?’ Whilst there is always interest in our product, there is always hesitation to be the first to push for change within the company.
At a recent UKPA (UK PropTech Association) meeting with a senior Innovation Manager of a large owner-operator, it became apparent to us that whilst the SLT were quite rightly including innovation and technology adoption in their five-year business plans and were strategically forward-thinking, the immediate reality was very different. The same strategists admitted they still need to ‘sell’ their conclusions internally and had very little influence on whether the company would push forward with any suggested changes. This was mainly due to the lack of direct incentive for the Facility Managers, who are already at capacity with managing the day-to-day operations and any changes were perceived as an unnecessary chore.
It is clear that change is wanted and needed but how can these issues be resolved so that the industry can move forward? If the FM industry is serious about becoming truly innovative then they need to start aligning staff priorities with their corporate vision – they need to take on board suggestions and be willing to accept that failure isn’t a bad word, but an opportunity to learn from mistakes and to continue to push forward. In turn, the PropTech vendors need to understand the individual motivations of all the players involved in the decision-making process – this way proposals can be an opportunity to reassure and demonstrate how innovation can be beneficial to all those involved whether as an owner, agent or owner-operator. Only when all parties are working towards a common goal can true innovation within the industry start to take place.