Facility management is a complex discipline that requires the coordinated efforts of multiple stakeholders. In this article, we discuss an example of using the Balanced Scorecard framework to document and execute a facility management strategy.
New driving forces, such as post-pandemic changes in the demand for corporate real estate, have increased interest3 in using the framework for its primary purposes, such as strategy execution and navigating strategic change.
In this article, we discuss an example of a Balanced Scorecard for facility management. This strategy scorecard can focus on a specific facility and align with other strategy scorecards, or it can be used as a template to propagate a similar strategic approach across the entire facility management company.
You will also find examples of how these ideas can be automated on the BSC Designer platform, which you can sign up for under the free plan and try out in practice.
Stakeholders of Facility Management
A good starting point for strategic analysis is stakeholder management. In the case of facility management, the list of stakeholders includes:
- Property owner
- Tenants
- Facility team
- Regulators
In BSC Designer, use the stakeholders analysis template to formulate the list of stakeholders, and define their strategic ambitions, resources, and priorities.
Strategic Analysis
In our template, we have some objectives formulated on the strategy map. These objectives serve as examples, but in a real situation, we are interested in analyzing the external environment, and competitive and legislative landscapes to develop strategic hypotheses and project them onto the strategy.
Among the recommended frameworks are the PESTEL analysis for external factors and Five Forces for analyzing the competitive landscape. In a different article, we discuss business frameworks and their role in strategic planning.
For example, depending on your location, the current state of facility management is shaped by the following factors:
- Sustainability and energy efficiency
- Cost management
- Regulatory compliance
- Adoption of AI and AR (augmented reality) technologies
Strategy Map for Facility Management
Our example includes a strategy map. According to the principles of the classical Kaplan & Norton Balanced Scorecard, the map is divided into four perspectives:
- The first two perspectives – Finance and Customer – where we formulate the expected results for the stakeholders.
- The Learning and Internal perspectives – where we formulate the actionable part of the strategy.
Facility Management Scorecard. For example, one of the strategy drivers is the “Digital Architecture” goal mapped in the Learning perspective. It is supported by internal implementation via the “Integration of Digital Architecture with Daily Workflows” goal.
Following the cause-and-effect logic defined by the arrows, we can track the results of these drivers in the Customer and Finance perspectives. In this case, the results are cost-effective facility operations and, ultimately, sustainable growth.
The cause-and-effect connection is not just logical. In this example, when connecting two goals, the platform suggested linking them with data.
Facility Management Scorecard. For instance, “Digital Architecture” is quantified by two lagging indicators: “User Adoption Rate” and “System Downtime.” This lagging performance is used as an input or leading indicator for the “Integration of Digital Architecture with Daily Workflows” goal.
In the user tutorial on the strategy map function, you can learn more about creating strategy maps.
Decomposition into KPIs, Initiatives, and Risks
The high-level goals on the map are too abstract to be achieved. For that reason, we break them down or decompose them into more tangible components.
Let’s, for example, analyze the goal “Employee Training and Development” within the internal perspective.
Facility Management Scorecard. Inside, we have:
- An initiative “Implement a culture of continuous learning and innovation” that can include classical project management details like start and due dates, and budgets.
- A lagging indicator “Post-training performance assessment” that quantifies the effectiveness of training programs.
- Various leading indicators like “Alignment with strategic objectives” that don’t directly impact the performance of the goal but help to quantify success factors.
- Another leading indicator is “Continuous Analysis of Training Needs,” which, apart from being a leading indicator, is also connected to the goal of the same name in the Learning perspective.
- A risk “Lack of Measurable Impact” quantified by risk impact and probability, with its own risk mitigation plan.
For each of these components, we can assign a stakeholder to explain the reasoning behind it, as well as an owner – a user who will receive notifications and see these components on their personalized dashboard.
Full List of KPIs from the Facility Management Scorecard
Below is the list of KPIs from the Facility Management scorecard. For basic (definition, weights, target setting) and advanced (weights, calculations, tracking over time) automation functions for KPIs, access the mentioned template via the BSC Designer platform.
Total Cost of Operations Property Owners: efficient and cost-effective facility operations Tenants: comfortable and well-maintained space Facility Team: efficient workflow processes Facility Operating Income Integration of Digital Architecture with Daily Workflows Return on Facility Management Investments Time to resolve maintenance issues Perceived security and safety measures Regulatory Awareness and Monitoring Technology Adoption Rate Communication Satisfaction Employee Training and Development Security Compliance Rate Digital Architecture Workflow Efficiency Gain Reduction in Error Rates Dependency on External Providers Regulatory Compliance % of documented compliance policies and proceduresStrategy Execution and Continuous Monitoring
We have passed through the analysis and description steps of the strategy process. The next step is actual strategy execution.
Your team can start working on the defined plans:
- KPIs are updated with fresh data.
- If targets are not met, the owners can note down their comments.
- Relevant documents are attached to the KPIs and goals as evidence of proper strategy execution.
The management team can track progress via dashboards and scheduled reports.
Facility Management Scorecard. Cascading Strategy into Specific Facilities
The discussed Facility Management scorecard can be used as a template to define the strategy and track performance for various facilities.
Conceptually, this involves:
- Creating a template with shared goals, KPIs, and initiatives.
- Testing the template on a small scale for a few facilities.
- Adjusting the template according to best practices.
- Cascading the template to more facilities.
Each of the sub-templates can be connected to the main template by data. In this way, the scorecards for individual facilities can be grouped and measured as a cluster.
Aligning Facility Management with Overall Strategy
Facility management is not isolated from other sub-strategies. In this case, we are talking about connecting the facility management scorecard with other scorecards.
The alignment can be done by data when specific KPIs are connected, or by context, where a contextual record is created.
For example, we can connect the Facility Management Scorecard by context with Safety, Compliance, or Training scorecards.
There might also be a contextual connection with scorecards for Sustainability and Innovation.
Summary
Facility management is a complex business discipline that involves various stakeholders and operates in a complex business landscape.
In this article, we discussed how to:
- Define and describe a strategy for an individual facility,
- Scale it up to overall facility management, and
- Connect it to other strategy and functional scorecards within the organization.
- Performance evaluation in facilities management: Using the balanced scorecard approach, D. Amaratunga, D. Baldry, M. Sarshar, The University of Salford, UK, 2020 ↩
- Performance Measurement in Facility Management Department Using Balanced Score Card, Tony Nurdiansyah, Bandung Institute of Technology (ITB), 2014 ↩
- The Balanced Scorecard: Repurposing a time-tested strategic framework for the New Model of Work, Jenn Shelton, FMJ (International Facility Management Association), 2021 ↩
Alexis is the CEO of BSC Designer with over 20 years of experience in strategic planning. He has a formal education in applied mathematics and computer science. Alexis is the author of the “5 Step Strategy Deployment System”, the book “10 Step KPI System”, and “Your Guide to Balanced Scorecard”. He is a regular speaker at industry conferences and has written over 100 articles on strategy and performance measurement. His work is often cited in academic research and by industry professionals.