Investments in Federal Facilities Asset Management Strategies for the 21st Century (2004) / Chapter Skim
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4 Environments for Effective Decision Making
4 Environments for Effective Decision Making
Pages 62-75
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From page 62... ...
A framework also helps to create an effective decision-making environment and to provide a basis for measuring and improving the outcomes of facilities investments. This chapter first discusses the role of open communications, trust, and credible information in creating effective decision-making environments.
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From page 63... ...
Effective communication among individuals, business units, or a range of stakeholders can be difficult to achieve because there are many opportunities for distorting the message, information, and deliberations. Barriers to effective communications include lack of a common terminology; lack of trust in the source of information; poor interpersonal relationships; differing individual and group values; and unexpressed assumptions.
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From page 64... ...
Persons interviewed for this study noted 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. Among the specific examples cited were the following: · Providing good cost estimates the first time around.
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From page 65... ...
However, because such measures may focus on what has happened already -- that is, on investments already made -- they may not be particularly useful for planning for the future or responding to changing requirements. For those purposes, operational measures are required that focus on elements that are important to future financial performance, such as the level of customer satisfaction or the introduction of innovative products, techniques, or technologies.
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From page 66... ...
For example, the Mobil North American Marketing and Refining Company identified return on capital used, existing asset utilization, profitability, and profit growth as financial strategic objectives; stakeholder objectives included customer satisfaction in each of the market segments it serves and good relations with its dealers; internal processes included objectives for the performance of facilities, inventory management, and on-time delivery of products of specified quality; learning and group objectives included improving core competencies and skills and providing employees access to the strategic information needed to do their jobs (Kaplan and Norton, 2001)
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From page 67... ...
Sample performance indicators used in the Strategic Assessment Model are shown in Table 4.1; other indicators may be more useful for other organizations. The measures developed to evaluate the performance of the organization, operating units, or individuals in meeting strategic objectives must be developed internally.
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From page 68... ...
The inclusion of both qualitative and quantitative measures is an essential aspect of an effective performance measurement system. Quantitative measures, such as operating costs per square foot of a facility, are often readily available and reproducible.
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From page 69... ...
Because of the long-term nature of facilities themselves, longer-term feedback also is needed to identify methods to reduce facility transaction and operating costs and to improve decision criteria and processes. Did the facility investment meet the organizational objectives?
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From page 70... ...
The innovative aspect of this approach is that the internal auditors function as internal management consultants rather than as a policing function. The auditing group is tasked with providing management efficiency studies as well as monitoring active projects.
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From page 71... ...
Some private-sector organizations in the United States began instituting POEs following publication of a 1985 report by Michael Brill et al., Using Office Design to Increase Productivity. A number of organizations have since used POE as a tool for improving, innovating, or otherwise initiating strategic workspace changes (FFC, 2001b)
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From page 72... ...
. Private-sector organizations operate on a risk/reward basis, rewarding those individuals or operating units accountable for successful execution of an idea, project, or other activity and penalizing those accountable for less than successful efforts within their control.
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From page 73... ...
These issues are more fully addressed in Chapter 6. PRINCIPLES AND POLICIES FROM BEST-PRACTICE ORGANIZATIONS Based on a consolidation of research, interviews, briefings, and the committee members' individual and collective experience, the committee found that bestpractice organizations that successfully manage facilities investments operate under a number of principles and policies when they make decisions (all 10 principles/policies are repeated in Chapter 6)
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From page 74... ...
Best-practice organizations link accountability, re sponsibility, and authority when making and implementing facilities in vestment decisions. Private-sector organizations operate on a risk/reward basis, rewarding those individuals or operating units accountable for successful execution of an idea, project, or other activity, and penalizing those accountable for less than success 5This principle/policy and that in the Executive Summary and at the end of Chapter 3 together form Principle/Policy 1 in Chapter 6.
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From page 75... ...
Principle/Policy. Best-practice organizations motivate employees as in dividuals and as groups to meet or exceed accepted levels of performance by establishing incentives that encourage effective decision making and reward extraordinary performance.
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