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5
Communicating Outcomes and Risk
Obtaining funds to maintain and repair the federal government’s buildings
and infrastructure has long been challenging (GAO, 2008; DOD, 2001). Senior
executives of federal agencies and departments are inundated with requests to
support funding for a wide array of mission-related programs, each accompanied
with compelling messages and evidence of the need for funding. In 2011 and
beyond, the challenge of making a compelling case for investment in facilities
maintenance and repair may be greater than at any time in the recent past, given
the current fiscal outlook (NAPA and NRC, 2010; GAO, 2011c).
Federal facilities program managers who use an outcomes-based approach
for developing maintenance and repair funding requests will need to communicate
the outcomes and the basis of their development persuasively to other decision-
makers and colleagues. Although carefully designed and implemented commu-
nications to staff and upper management will not guarantee success in obtaining
the required funding for maintenance and repair activities, poor communications
are likely to doom such a request.
ISSUES RELATED TO EFFECTIVE COMMUNICATION
Communication is the science and practice of transmitting information in a
manner that succeeds in evoking understanding (NRC, 2004a). Effective com-
munication is more than a good presentation or a dynamic messenger: it is about
the quality of the message, the credibility of the information, and the deliberations
that ensue (NRC, 2004a).
Between the formation of the present committee in November 2009 and
its first meeting in December 2009, three events illustrated the importance of
72
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COMMUNICATING OUTCOMES AND RISK 73
e
ffective communication in evoking understanding of and securing support for a
proposal. In one instance, U.S. public-health officials were criticized for not pro-
ducing sufficient H1N1 flu vaccine and for not insisting on its use (Klass, 2009). In
two other instances, proposals to change mammography protocols were criticized
(Goodman, 2009; Kolata, 2009), and a program to install smart electric meters in
homes was found to upset many consumers (Wald, 2009). Those three examples
were not strictly speaking communication failures. However, the failure to com-
municate clearly made complicated proposals difficult for the public to understand
and consequently difficult for the public to accept and support.
In comparison, the maintenance and repair of federal facilities is a less vis-
ible issue, unless there is a system failure that leads to a death, serious injuries,
substantial economic or property losses or public embarrassment. Nonetheless,
effective communication is a necessary ingredient for making a compelling case
for funding maintenance and repair activities.
The barriers to effective communication include “lack of a common terminol-
ogy; lack of trust in the source of information; poor interpersonal relationships;
differing individual and group values; and unexpressed assumptions” (NRC,
2004a, p. 63).
Lack of a common terminology can easily lead to miscommunication about
the purposes and anticipated outcomes of investments in facilities maintenance
and repair. In the federal government, there is a great deal of variance in the ter-
minology related to maintenance and repair activities, in the measures used for
outcomes, in the definitions applied, and in the thresholds used to determine what
activities fall into a particular budget category. When agencies are communicat-
ing with congressional committees, with the Office of Management and Budget,
with other oversight groups, and even among themselves, that variance results
in inconsistent and conflicting messages, which cause confusion. Confusion, in
turn, leads decision-makers to call to question the credibility of the messenger
and the message.
Effectively communicating the links between outcomes of maintenance and
repair investments and an organizational mission has also proven to be difficult. In
part, that is due to the difficulty of predicting rates of failure of facilities systems
or components, the difficulty of predicting remaining service life, variation in
costs of maintenance and repair of specific systems and their components, and the
difficulty of quantifying the adverse consequences of potential failures.
Typically, three predominant approaches are used by federal program man-
agers to calculate required maintenance and repair funding: a percentage of the
current replacement value of the entire facilities portfolio; a sustainment model
such as that used by the Department of Defense; and the total cost of deferred
maintenance and repair projects. Although industry experience and practice are
sufficient to support the applicability of those approaches, senior decision-makers
may not find them compelling.
For example, it is not intuitively obvious how a request for 2 to 4 percent of
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74 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
the current replacement value of a portfolio of facilities will contribute to meet-
ing an agency’s mission. Nor is it obvious how a statement that a department has
a backlog of billions of dollars of deferred maintenance and repair projects will
m
otivate a decision-maker. In fact, agency presentations to the committee indi-
cated substantial negative reactions by senior decision-makers to methods based
only on deferred maintenance information. A strong negative message may also
lead senior decision-makers to believe that investment in maintenance and repair
is not worth addressing unless there is a direct health, safety or legal compliance
issue (Koren and Klein, 1991; Siegrist and Cvetkovich, 2001). Research also
shows that a historical record of volatility and lack of predictability is likely to
reduce support for investment (Weber et al., 2005).
A related issue is persuading decision-makers and others of the importance
of maintenance and repair investments to prevent actual failures of systems or
components. Despite difficult conditions, federal facilities personnel do their
best to keep deteriorating systems running through work-arounds. The result is
that systems seldom fail in a highly visible manner, so the risks associated with
deteriorating systems and the benefits of timely investments in maintenance and
repair are not readily apparent to decision-makers and the urgency of investment
can be difficult to convey.
COMMUNICATION STRATEGIES USED BY
PRIVATE-SECTOR ORGANIZATIONS
As noted in Chapter 4, the private-sector organizations whose representatives
were interviewed for the present report were able to secure adequate funding for
maintenance and repair for a variety of reasons. In presentations to the committee,
the organizations were explicit about the importance of effective communication
for receiving that support.
Each private-sector facilities management organization presented a clear mes-
sage on the management of maintenance and repair requirements and budget. That
has allowed them to develop the practices and the understanding—the culture—of
what such investment means to a company as a whole and an understanding of the
processes and procedures involved. This translates into a consistent message that
can be understood by decision-makers at all levels of the organization. All of
these practices are consistent with other best-practice organizations, which do the
followng (NRC, 2004a, p. 2):
i
Establish a framework of procedures, required information, and valuation criteria
that aligns the goals, objectives, and values of their individual decision-making
and operating groups to achieve the organization’s overall mission; create an
effective decision-making environment; and provide a basis for measuring
and improving the outcomes of facilities investments. The components of the
framework are understood and used by all leadership and management levels.
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COMMUNICATING OUTCOMES AND RISK 75
The framework of procedures helps to align the values and objectives of dif-
ferent groups in the organization. Components of the framework include common
terminology, a business case analysis, and clearly defined evaluation processes
that incorporate multiple decision points (NRC, 2004a).
Two clear messages that came out of the private-sector presentations dealt
with the need to address two points of context and content: total cost of ownership
and adding to the competitive edge.
When communicating about the total cost of ownership, facilities program
managers in private-sector organizations discussed maintenance and repair activi-
ties in terms of system and component renewal, sustainment, planning, disposal,
and life-cycle costing. In doing so, they implied that maintenance and repair
investments and activities should be well integrated with current operations. As
noted in Chapter 4, one way to do that was to identify safety and potential regula-
tory violations, vet them, screen them, and present them to senior decision-makers
as must-fund requirements that should be paid for out of operations accounts.
The Association of Higher Education Facilities Officers-APPA, which focuses
on facilities owned by colleges and universities, has developed a framework for
integrated decision-making that also looks at managing the total cost of owner-
ship of a facilities portfolio. Total cost of ownership is divided into three separate
categories: nonrecurring costs (such as costs of planning and construction of new
buildings and additions); annual recurring costs (such as costs of maintenance,
operations, repairs, and utilities); and periodic recurring costs (such as costs of
recapitalization, remodeling, and replacements) (Rose et al., 2007). The framework
was developed, in part, to make it clear to university presidents and other decision-
makers how investment in maintenance and repair affects the overall value of the
facilities portfolio.
With regard to adding to the competitive edge and the bottom-line profit
message, facilities program managers in private-sector organizations spoke about
the relationship of facilities to workforce recruitment, risks to missions, and the
alignment of facilities to operations—referred to as right tasks plus right skills
plus right places. That approach is consistent with portfolio-based facilities
management, which treats facilities as enablers of missions that can contribute to
an organization’s competitive edge, as opposed to being simply a cost of doing
business. Effective communication and links to organizational objectives were
demonstrated by the presentation of allocation models that began with deliberative
assessments of current and future needs and flowed to funding requirements and
company benefits. Various feedback loops tied organizational levels together and
provided multiple decision points and opportunities for reevaluation and adjust-
ments of strategies as necessary.
As noted in Chapter 4, one way that some private-sector organizations link
maintenance and repair requirements to the bottom line is to group maintenance
and repair projects by component, such as roofs, heating ventilation, air-condi-
tioning, and fire protection. Grouping all the projects related to a component type
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76 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
makes the benefits and risks associated with projects more transparent to decision
makers. It also allows them to more easily vet, screen, treat, and then set priorities
among the projects that should be funded first to ensure that the organization’s
profits are not adversely affected by unreliable systems or components.
The private-sector organizations also touched briefly on the importance of
building relationships and trust within an organization. Trust—unquestioning belief
in and reliance on someone or something—is important for the success of almost
all forms of human interaction (NRC, 2004a). Trust is built among decision making
and operating groups in organizations by ensuring that everyone has access to the
same information. A 2004 National Research Council study found that “facilities
management operating groups had gained or retained credibility and built trust at
the institutional level by providing sound information, by incorporating rigor into
their analyses, by giving high-quality presentations, and by submitting realistic,
reasonable requests for investment proposals” (NRC, 2004a, p. 64).
That federal agencies do not have a single integrative bottom-line focus com-
plicates their efforts to build a strong message. Nevertheless, theory and practice
suggest that the value of investing in maintenance and repair activities can be more
effectively communicated than it has typically been.
COMMUNICATING THE VALUE OF MAINTENANCE AND REPAIR
TO A MISSION
Communication theory emphasizes three elements of persuasive communica-
tion: identifying shared objectives, defining the approach and acknowledging others,
and supporting the approach with solid research (Bettinghaus and Cody, 1994).
Federal facilities program managers who seek greater funding support for
maintenance and repair activities should show senior decision-makers precisely
how a proposed request for funding meets the objectives of the entire organiza-
tion, not just the objectives of the facilities management group. Given the reality
that senior decision-makers often stay in their positions for only a few years, it
is prudent to present the results as outcomes that are directly tied to explicit and
implicit missions and other public policy objectives for which senior decision-
makers will be held accountable.
To gain more support for maintenance and repair investments, federal facili-
ties program managers will also need to communicate that there is a disciplined
and deliberate approach for funding requests, that requests will result in outcomes
that are directly tied to their organization’s mission, and that the funds received
will be invested effectively to achieve the predicted outcomes. Federal facilities
program managers will also need to track how the funds are invested and report
the resulting outcomes in comparison with the predicted outcomes. The approach
embedded in the Mission Dependency Index and the approach used by the U.S.
Army Corps of Engineers described in Chapter 4 illustrate how maintenance and
repair requests can be clearly and effectively tied to a mission.
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COMMUNICATING OUTCOMES AND RISK 77
Senior decision-makers will also want to know the return on investment or
expected value of investment. Facilities program managers should understand
and be able to communicate effectively the economic value of a component or
system to a mission, and the cost of protecting its value. To do that they will need
to identify the types of deterioration or other adverse events that will lead to loss
of mission, the vulnerabilities of facilities to the adverse events, the potential
loss of economic value if a failure occurs, the accumulation of potential losses
until the system is repaired, and how vulnerabilities can cascade into additional
failures. For example, facilities program managers should be able to identify the
consequences if a component in a heating system causes the entire system to go
down for 2 days in the middle of winter or if a roof leaks or collapses and inter-
rupts research or other activities or destroys computer equipment. They also need
to identify what can be done to prevent such situations, how much it will cost to
avoid the risk, and how much it will save in other costs.
Program managers will need to be able to characterize and explain the level
and types of uncertainty inherent in a funding request. Uncertainty is the lack of
sufficient information to describe an existing situation (such as unpredictability
of a budget) or projection (such as remaining service life). They will need to
communicate their level of confidence in the information that they are presenting
and identify unavailable information that if available could affect the prediction
of outcomes.
The literature offers several suggestions for increasing the chances of suc-
cessful communication about maintenance and repair investments. A realistic
request is the first. Federal facilities program managers should make sure that their
outcome estimates can withstand the scrutiny of colleagues and outside experts.
Second, transparency is essential: the basis of outcome estimates needs to be avail-
able. Senior decision-makers may support an outcomes-based approach, but they
will be concerned that the outcomes will not materialize as predicted. Hence, it is
prudent for facilities program managers to propose a midcourse evaluation of the
outcome measures. They should also be prepared to acknowledge the strengths
and weaknesses of this approach in comparison with other options.
Federal facilities program managers should be prepared to explain the value
of an outcomes approach because of its complexity. They should expect resistance
from some managers on the grounds that an outcomes-oriented set of measures
obfuscates a request in an unwieldy sea of numbers. For that reason, they should
plan for multiple internal and external communications. No one should expect
that a single written deliverable to senior decision-makers will suffice. The chal-
lenge is to produce a set of measures of outcomes that will satisfy colleagues
and yet be defensible in front of multiple skeptical audiences (Muto et al., 1997).
One way for federal facilities program managers to develop consistent messages
quickly would be to share lessons learned among agencies about the messages
and measures that gained the greatest acceptance with decision-makers and about
the messages and measures that created skepticism.
