13 March 2017 | Kevin Stanley
A key component affecting the health of contractual relationships between client organisations and facilities providers is the link between the service delivery teams on the front line and the client.
Greater control and creative input for the frontline team can directly improve service delivery to meet the client’s requirements. But this will only work if the contractor has flexible processes and procedures and the local managers are given control to make changes.
“This is one of the single biggest advantages that smaller providers have. They can allow their frontline staff to be creative and actually make changes to processes and implement them. This directly leads to the client receiving a more fit-for-purpose solution and ultimately receiving greater value which grows a greater relationship,” says Andrew Hulbert, managing director at Pareto Facilities Management.
Colin Kenton, managing director of FM services at KBR, believes that frontline teams being empowered with greater autonomy or control almost always leads to an increase in end-user satisfaction and an improvement in the relationship between FM provider and client.
“The people on the ground are empowered to deal with ad hoc situations immediately to satisfy the customer’s needs rather than delay the resolution by having to defer to their superiors.”
Kenton thinks there is a general consensus in the FM sector that small and medium-sized businesses typically offer the best levels of customer service delivery to clients. “SMEs often have a stronger, more visible, culture and empower frontline staff with greater autonomy to make decisions on the ground rather than go through more formal systems and processes,” says Kenton.
Getting the ethos right
Guy Stallard, director of facilities at KPMG LLP, says delegating greater autonomy to frontline specialists enables the client to focus on setting – and testing – the overall ethos and standard of the service required, within a given budget, whilst empowering the FM provider to do what it does best.
“The value derived from the relationship is increased whilst maximising efficiency of communication between the teams. The frontline teams achieve greater job satisfaction, the client has greater ability to test that the service provided is aligned with the service required and efficiently communicate if there is any discrepancy, which in turn creates an amicable and sustainable client- supplier relationship.”
Yet John Bowen has a different view. “I don’t think that enough people are even aware of it, let alone embracing it,” he says. “People say that they want a more partnership style of approach, but too few really understand what that requires of them. They see it as something that the supplier will bring to the table. It’s the clients that drive the KPI models and service specifications that will turn into straitjackets that strangle any genuine efforts to provide a really proactive service.
"They want to manage the supplier and in doing so they crush any opportunity that they have to make best use of the contractor,” says Bowen, who wants to see some level of autonomy granted to frontline employees but feels that outsourced contracts tend to become very process-driven as suppliers strive to do the most for the least.
“Meeting the KPIs at the least cost becomes the key driver and standardisation is aimed for at the expense of innovation. This is demotivating for many frontline staff. Giving them limited authority to react to what is needed in any circumstance can make a substantial difference. You get the dual benefit of a satisfied end user and an employee who feels good about their actions,” says Bowen.
Drawing a line between greater empowerment and a happier, more successful and longer-lasting client-contractor relationship, then, is more complex than perhaps first thought. Giving staff greater autonomy will only ever be truly productive if there is also time invested in supporting staff so that ideas can be implemented at a higher level.
“The key is allowing empowerment and then delivering a philosophy of significant interaction with those staff and senior management,” says Hulbert. “It’s the frontline staff that spend most, if not all, of their time working very close to clients so they would be best positioned to come up with ideas for improvements.”
Johan Venter, group chief operating officer at Servest, takes a similar, but more holistic approach. “Contract management represents the organisation and will be the showcase of what the organisation wishes to portray. Good-quality management will naturally expect to be empowered and be afforded the opportunity to demonstrate their capability. This all-important transfer of responsibility creates a positive environment where management and team members alike really benefit from the service they deliver and this in most cases is noticed by clients,” he says.
On the flip side, we must also consider whether greater autonomy exacerbates divisions or improves the client-supplier relationship. Contract relationships often break down over small matters that accumulate over time.
A failure to communicate
The main reason for such breakdowns is a disparity between what the client requires or expects and what the service provider delivers. Several factors may have led to the breakdown: changing client requirements, incorrect success measures driving the wrong supplier behaviours, and unresolved or recurring issues that require too frequent input from the client to resolve.
“What all these factors have in common is that they could have been overcome, resolved or preferably avoided with effective communication,” says Stallard. “By regularly reviewing service standards and measuring performance against mutually agreed targets, each party has clarity on what is being achieved, and if there are issues what measures have or will be taken to resolve.”
Hulbert believes that small issues accumulating into large problems can be a result of contractors not investing in account management. This means that line managers often become too busy to invest time in their staff and clients. There is also a greater focus on profitability on these managers and people management is not given the same importance.
“Pareto is built on the philosophy that we employ exceptional account managers and they spend significant time with their staff and clients. If our managers don’t see our sites then how will they implement innovation and how will we ensure continuous improvement?” asks Hulbert. “The industry is so poor at supporting its contracts and it’s something that we deliver almost as a USP. Employ great operatives, work with great clients and spend significant amounts of time together,” he says.
Once problems occur, says Bowen, it is tough to get things back on track. “It isn’t impossible to reverse a slide, but it is very difficult and often there isn’t time before the contract is up for renewal,” he says.
“An important element is in the gap between the contract specification and expectations on the ground; the client may have asked for one thing, but do their own frontline teams understand what the contractor is supposed to deliver? That can lead to an expectation gap that exacerbates the problem.”
While contractual KPIs are performing to expectations, clients express their dissatisfaction around service delivery. Further investigation in most cases finds the clients’ contract management relationship has broken down. It may be because management has not responded to these small matters that have now become bigger problems or it may be due to a cultural mismatch between management and the client.
“To prevent this from happening, regular management visits at a more senior level must be conducted to identify these concerns, which are often not identified through the performance of KPIs. Useful data adds significant value and raises warning indicators that contract relationships are not where they should be,” says Venter.
Indeed, data management is now playing a vital role and although it must be used carefully it can be very helpful.
“The real-time availability of data for our staff and our clients is one of the cornerstones of our service delivery. All of our staff systems are online so at anytime our staff can access our HR, finance, helpdesk systems and also their important files such as overtime, holiday bookings, pay slips, purchase orders and work order processes,” says Hulbert, “For our clients we use an online server that gives them real-time access. All client reports, statutory data, health and safety information, helpdesk statistics and any other bespoke information are updated in real time and available at any time without or special access required.”
Beware data overload
Data enables discussions on performance by suppliers and internal teams to be derived from fact rather than anecdotal perception as well as allowing service provider contracts to have risk and reward criterion.
“However, it’s important that data overload does not occur with performance being concentrated on key measures,” says Stallard. “Data analytics has become a key business requirement because of the rich stream of information available, but too much data can cloud key messages.”
Venter agrees. “The move by clients from a traditional ‘people’ to a ‘people and data’ focus has dramatically changed what clients are expecting.”
In addition, costs have necessitated clients to drive down their own internal management costs, so they are more reliant on contractors to supply them with the necessary data to determine whether services are delivering per expectations.
“At the same time, and conscious that costs will continue to be challenged, data enables clients and contractors the ability to analyse the data and identify further efficiencies,” says Venter.
Ultimately, perhaps, the answer is simple: a rigid and process-driven environment can lead to mutual antipathy permeating through both organisations. Empowerment is positive, but only if communication and collaboration are at the forefront.