After more than a decade of listening to the constant drum beat of Corporate Real Estate (CRE) professionals shouting the prized battle cry, “to the C-Suite”, I would swear I chant it in my sleep. No longer a lofty goal, this is now an imperative. There are many theories on the path to getting a seat at the table, and I propose that one of the best routes is to create great strategies that are well-executed. Strategies that enable growth and change, that empower business operations and that impact the bottom line. This gets attention. Making the leap between strategy and execution, though, can be a treacherous step and the chasm is wide. To bridge this gap and help ensure positive results, we need to master the art and science of Planning.
In 2009, the International Facility Management Association (IFMA) published an essential thesis on Strategic Facility Planning. In this white paper it was noted that there are “three key outputs of facility planning” : the strategic facility plan (SFP), the master plan and the tactical plan. The authors went on to outline the SFP process and describe the difference between a strategic facility plan and a master plan. In this paper, I would like to dive into the third output mentioned, the tactical plan, where I believe a good strategy can die the death of a thousand cuts or an implementation can be set-up to fail. Before we take that plunge, let’s make sure we understand two things: 1) what differentiates strategy from planning, and 2) what differentiates the different types of planning.
Strategy is the art of synthesizing a response to envisioned changes to the current environment. The use of the word “response” here is intentional, but don’t get me wrong, strategy is not simply reactive. In fact, as Dr. Harry Yarger states, “good strategy seeks to influence and shape the future environment as opposed to merely reacting to it” . This quote is from a paper Dr. Yarger authored as Director of the Strategic Studies Institute at the U.S. Army War College. This publication may not be on every facility planner’s reference list, but I believe it should be. In the paper he articulates an impressive understanding of what strategy is and what it is not. He goes on to say that “strategy is not planning”. They may share common elements and follow similar processes, but strategy requires a different mindset and, especially in our fast-changing times, involves working with a high level of environmental uncertainty. We will explore more about that later.
Planning is the art and science of making strategy actionable. From ongoing strategic planning through master planning and tactical planning, planning activities set the stage for the execution of strategy objectives. According to industry analysts, much of our recent global financial crisis is due to both institutions and individuals who either executed poor strategies or executed good strategies with poor planning. We can do that in the CRE world as well, such as implementing space reduction projects to meet financial objectives without giving due diligence to the impact on business operations. Space reduction alone is not necessarily a poor strategy. We have all heard of the potential cost savings, but without thoroughly integrating that strategy with other drivers like operational initiatives, technology strategy and workforce strategy, we risk the real possibility that CRE financial gains may be overshadowed by losses in operational efficiency or workforce productivity.
As already noted, there are three primary planning activities in the facilities planning world: strategic facility planning, master planning and tactical planning. You have probably heard of other related terms such as occupancy planning, migration planning and move planning. These activities have several commonalities, including a similar process (see figure 1 below), relatively common success measures (plan suitability, feasibility and acceptability) and the presence of some level of strategic thinking . Yes, I said strategic, not strategy. Strategy implies a response, if only in what to think. Strategic thinking is a cognitive process by which the strategist responds to the environment and a planner anticipates the impact of each plan decision. Simply stated it’s a way of thinking, the art of planning. So what sets these planning activities apart? I believe two key factors help us to distinguish between them: the level of certainty and the element of time.
Recall that strategy is a response to envisioned changes, so at the strategic facilities planning level there is a fair amount of uncertainty surrounding change. Our strategies inform us about what we anticipate the future to be and direct a response; the strategic facilities plan is that response. Based on data from the current environment, extrapolated projections regarding the future and the strategies of various corporate entities impacting the facility portfolio, the development of a strategic facilities plan adds a degree of certainty to the planning process. As we move through master planning, occupancy planning and tactical planning activities, we begin to add data, assumptions and decisions to the plan that increase the level of certainty (the science of planning). We may add limitations on geography, define specific occupancy requirements, add construction schedules or even identify new related initiatives.
The element of time also helps distinguish these planning activities. The IFMA white paper mentioned earlier states that the SFP typically spans two to five years, but the strategic facilities planning activity itself should not be so time-bound. If we think about the impact of the overall planning process and the subsequent execution process, we realize that those activities ultimately impact the very workforce and facility portfolio targeted by the strategic facilities plan. Depending on the rate of change in your particular industry, periodic review of the SFP is prudent. Conversely, tactical plans are very much time bound, which aids in increased certainty. Depending on the scope of the tactical plan, it may span the course of a few months or several years. Tactical plans typically revolve around the accomplishment of a specific facilities or occupancy objective or goal set forth by a master plan or strategic facilities plan, and those plans usually prescribe a time frame for that goal. For example, a corporate headquarters re-stack may be required to be completed within six months or a year based on operational requirements or budget constraints. A university occupancy migration plan may span two years to accommodate academic calendars and renovation schedules.
Now that we have established a baseline understanding of strategy and planning and discussed the basic levels of planning, we will dive deeper into the tactical planning process to understand how diligent planning and strategic thinking at this level can drive effective project execution and help ensure strategy success. We will do this by walking through the four phases of planning identified above in the development of a typical occupancy migration plan, and by identifying some key factors that have the potential to significantly impact execution success.
Occupancy migration planning takes one or more objectives of the strategic plan from the existing occupancy and facility conditions, the start state, and by a process of data collection, analysis and scenario planning, creates an implementation plan that can drive execution of the strategic end game.Understanding – As with any planning effort, information is king, making the collection and study of the right information at the start of migration planning critical. This information can be consolidated into the four categories listed below.
The Start State – this includes information on the supply of space and the demand for space in the impacted portfolio, such as current and projected staff levels by line of business, location and type, current and projected space capacity by type, building and floor, current space conditions and facility improvement initiatives.
Planning Guidelines – this information provides key data on the primary business or CRE initiatives driving change as well as strategy and policies through which potential plan tasks must be filtered, such as fundamental business shifts (merger, new LOB), lease-own strategy, workplace strategy, IT strategy, department initiatives, planned construction and financial constraints.
The End Game – this is the projected or desired result on the impacted portfolio and may include future capacity changes and future occupancy by group, by building and maybe even by floor. Depending on the extent of strategic planning efforts, there may be building stack plans or even high level “block plans” indicating area boundaries for the future occupants, and there will likely be a budget forecast for executing the change.
Time – this final category of information required to begin migration planning efforts will include a calendar spanning the anticipated duration of the migration efforts broken out by periods (months, years, quarters, etc.). These periods can also be used to highlight such events as company holidays, utility black-out dates, technology migrations or community events that may pose constraints on plan execution. Additional time related information can include construction schedules, building elevator or dock time restrictions, key lease dates and critical operations events.
Analyze – Next, an analysis of the collected data is performed to determine the potential impact of non-construction factors on major plan activities, as well as the impact of major plan activities on departments, occupants and facilities. Key schedule dependencies are identified, potential schedule efficiencies analyzed, operations or strategy constraints are identified and mitigated and potential resource capacity issues are analyzed. Key considerations during this phase of plan development could include:
Impact of operations calendars on available move dates
Impact of taking critical training, lab or conference space off-line
Roadblocks to construction due to IT or department move black-out dates
Roadblocks due to contractor, IT or internal resource load restrictions
Opportunities for efficiency with related initiatives
Opportunities or concerns surrounding swing space or lease requirements
It is in this phase of migration planning that scenario planning begins. As in strategic facility planning, scenario planning “will guide decision makers and provide advance consideration of potential impacts of different facility decisions”. Note that, because tactical planning activities also assume the increased level of certainty discussed earlier, the number of viable scenarios will likely be more limited than with strategic planning activities.Plan – The plan phase utilizes the information gathered and analyzed in the previous two phases and employs that information in the synthesis of an action plan in the form of a migration schedule (see figure 2). The start of the plan phase often dovetails with early scenario planning activities as decisions regarding migration sequencing of specific groups are mapped to identify possible scheduling or resource conflicts.
In this phase, valuable opportunities and additional execution threats are often uncovered as the relocation of each group is mapped by period, identifying move timing, locations, scope and dependencies. The final migration plan may include the following components:
- Potential construction schedule threats (critical move dependencies)
- Key schedule milestones (vacating a floor or building for construction or disposition)
- Natural work streams (a group of moves critical to a strategic objective such as lease vacate)
- Construction/relocation resource “choke points” (potential resources overload periods)
- Potential schedule efficiencies (using temporarily vacated space for swing space )
- Opportunities for department/facility initiatives (upgrading space while vacant)
Document – Since the purpose of tactical planning is to provide a deliberate roadmap for executing specific strategic facility planning objectives, the final phase is the development of plan documentation. This should be the shortest phase since most of the content has been created in the preceding phases, but final documentation is key because it will help promote plan adherence and enable effective plan communication. Plan documentation may include the following elements depending on project complexity:
- Plan Overview – An executive summary of overall plan information.
- Occupancy Migration Schedule – a graphic illustration of the final migration plan. This schedule maps the migration of each group to temporary and final locations across the plan periods.
- Occupancy Phasing Report – a report identifying summary information for each group by location for each plan period.
- Program Packages – a set of reports and possibly floor plans detailing a specific group’s purpose, headcount, space requirements, ‘from’ location and ‘to’ location.
- Building Stack Plans – a set of graphics or reports identifying the placement of groups within each building by floor. This may be provided by plan period, month, year, etc.
Before drawing our final conclusions, let’s go back to our strategic thinking discussion for a moment. In strategic planning activities an alternative future is synthesized, while in migration planning the end game is prescribed by the master plan or strategic facilities plan, so it is important to consider approaches to planning at this level. The authors of a Harvard Business Review article on the power of using analogies in strategic thinking note that credit for strategic decisions usually goes to two methodologies, deduction or trial and error. While I think analogical reasoning (looking for the familiar, something you have faced before) and deductive reasoning (weighing the alternatives and making a rational choice) are strong methodologies at the strategic planning level, we can find that when creating a migration plan bound by a start state and end game, the trial and error method (mapping a move and analyzing the impact) has considerable merit in that it can help identify new threats and opportunities. I have also found myself using what I now know to be a popular method used in game theory and military mission planning, retrograde analysis. Former navy seal Chuck Pfarrer describes how operators were taught to assemble a mission backward, starting at the successful completion of an operation and working in retrograde to identify critical nodes . Depending on the scope of the effort, this same backward induction can be used to understand what moves are critical to emptying a leased facility or filling a new headquarters building. The point is this; even though strategic facilities planning may share a similar process, there is often a different type of thinking required at the tactical level.
Conclusion – Creating great facility and occupancy strategies that are well-implemented can be the key to CRE getting the attention of the C-Suite, particularly when those strategies are successful and positively impact the company bottom line. To facilitate that success requires a firm understanding of what planning is and is not. The facilities planning process involves much of the same information compiled in strategy development, shares a similar process and requires the ability to apply strategic thinking to specific plan decisions, but it is not the place to formulate strategy. It is the place to enable strategy. Understanding this and the value inherent in creating a tested step by step plan for implementation can help ensure strategy success and a seat at the table.