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Facility Management Metrics That Matter

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Performance measures are commonly used to track and improve our facilities operations. But some Facility Managers are not comfortable developing and using them. This presentation outlines some easy to understand ways to develop metrics that are useful. It will also examine ways that well-intended performance measures contribute to the wrong outcomes.

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Facility Management Metrics That Matter

  1. 1. ...How to Develop Metrics That Matter Presented to the Suncoast Chapter of IFMA January 14, 2016 Presented by Bob Lambe www.linkedin.com/in/lambe This document can be shared for non-commercial purposes. All content not noted otherwise is (c) RAL Location Strategies.
  2. 2. Background... WHY THE INTEREST IN METRICS AND KPI’S?
  3. 3. Performance Evaluation • Performance metrics and KPIs continue to surface as a topic of discussion. – We all have scorecards for our performance and that of our staff/providers. – We all are interested in measuring those things that can make a difference. We are sometimes not clear how these 2 things are related...
  4. 4. Information Overload Every day, facilities managers get information from a multitude of systems: • Corporate finance systems • Corporate HR systems • Facility work order/CMMS systems • CAFM/CADD/BIM systems • Project plans • Equipment sensors • Occupancy sensors • Security systems • Cameras • Meter readings • Spreadsheets • Building Audits • Equipment Alarms • Building Automation systems • Energy Management systems • Email • Text messages • Online data services • Industry publications • Benchmarking reports • Commissioning reports • Social media • Photographs • Technical/design reports • Regulations & standards • Industry cost guides • And more... Metrics can help us cut thru the noise, identify actions needed, and detect things of interestThis multitude of data types is one of the opportunity areas for “big data” analysis in facilities management
  5. 5. http://www.theinvisiblegorilla.com/videos.html 42% of viewers do NOT notice the gorilla when focused on counting the number of passes. We often do not notice unexpected things if we are focused on something else.
  6. 6. Even Simple Metrics Can Be Useful - 500 1,000 1,500 2,000 2,500 FACILITIES SERVICES - General Request ELECTRICAL - Light Out/Lamp Replacement FACILITIES SERVICES - Move Workspaces FACILITIES SERVICES - Conference Room Setup HVAC - Too Hot/Too Cold HVAC - General HVAC Repair HVAC - General HVAC Request PLUMBING - Fixture Not Working PLUMBING - General Plumbing Repair FACILITIES SERVICES - Move Misc Items FACILITIES SERVICES - Copier Service Request Number of WR (Avg 19,650/Year) RequestIssue(86TypesAvailable) Top 10 WR Issues by Number of Requests FY13 FY14 FY15 30% of Demand WO are from these 6 Issues
  7. 7. FACILITY MANAGEMENT METRICS THAT MATTER From a White Paper of the Same Name... Free download: https://ralstrategies.com/services-kpi.php
  8. 8. Let’s Start with the Basics... TYPES OF METRICS
  9. 9. Metrics - Measurements • Measurements are just data: – Cost – Size – Quantity – Temperature – Status – Yes/No – Time/Date stamp Emergency work orders wrench time last month Total wrench time worked last month
  10. 10. Metrics - Indicators • Indicators are typically total or average Measurements: – Total quantity work orders – Average cost per work order • Key Indicators are typically relationships between Indicators, and have a “target” range: – % work orders completed by month
  11. 11. Metrics – Lagging (Results) • Some metrics report past results • Best used to report actual performance and historical trends – Number of emergency repairs as % of total equipment work orders – Hot/cold calls per building occupant – Energy use by building by month
  12. 12. Metrics – Leading (Predictive) • Some indicators used to suggest likely future performance – Projected equipment downtime based on condition index at last service date – Projected energy use by building based on weather forecast • Some “real time” indicators used as proxy for leading indicators – Increase in hot/cold calls as measure of HVAC equipment needing service
  13. 13. Can Organize Types in 2x2 Matrix Results Indicator Tells you what you have done Performance Indicator Tells you what to do Key Results Indicator Provides perspective on how you have performed Key Performance Indicator Tells you what to do to increase performance
  14. 14. • A future measurement is a forecast • Forecast error is a metric, but it measures the accuracy of the forecast and not the reality of the measurement – Not a useful metric unless your business is forecasting! We cannot measure the future
  15. 15. Useful Metrics Are Situational
  16. 16. Useful Metrics Change with Role • CFO – Facility Cost as Earnings per Share • Facilities Director – Operating Cost per Square Foot • Building Manager – Cost per Scheduled Work Order • Building Engineer – Which WO need to be done today? Corporate Level Strategic Level Functional Level
  17. 17. A Matrix of Metrics? More related to organizational objectives More Key Indicators More specific Results and Performance Indicators More immediate (time sensitive) Less functionally specific Functionally specific Functional Role OrganizationalLevel
  18. 18. CREATING BETTER METRICS
  19. 19. Goodhart’s Law "When a measure becomes a target, it ceases to be a good measure." The Example of the Russian Nail Factory When the government created targets of output for the factory that were measured in weight, the result was that the factory produced a small number of very heavy nails. When the target was changed to the amount of nails the factory produced a massive amount of only tiny nails. Source: various internet sites, originally a joke or uban legend? Image source: http://lesswrong.com/lw/1ws/the_importance_of_goodharts_law/
  20. 20. • One challenge with metrics is that we often confuse process and performance, mixing up: – Goals / objectives, – Events / milestones, – Activities, – Critical Success Factors (CSF), and – Key Performance Indicators (KPI). • Goal: Safe workplace • Event: Regular safety meetings • Activity: Audits, Investigations • CSF: Safety oriented culture • KPI: Lost Time/OSHA Incidents
  21. 21. Establish KPI’s using KPQ’s • Often we start with the data we have and then figure out how to use it. • It is better to start with the questions that need to be answered to accomplish our strategic objectives – Our KPIs will be the answers – Start with your organization’s scorecard Strategic Objective KPQ KPI KPI KPQ KPI KPI KPI
  22. 22. Example KPQ’s • Do our facilities provide a safe and productive environment for customers and employees? • How well do we react to spikes in service requests? • Is our facility cost as low as it can be without jeopardizing the building condition? • Do we have qualified staff ready and willing to fill vacancies when needed? • Do our buildings perform (energy) as well as they should? • What sustainability investments would provide the largest benefit per cost?
  23. 23. Design KPI’s To Answer The KPQ’s A good KPI.... • Helps to answer one or more KPQ. • Is based on relevant, available data. • Provides actionable information for the intended user. • Is available on the required frequency. Strategic Objective KPQ KPI KPI KPQ KPI KPI KPI KPI Design Considerations: 1. Link to Strategy 2. Definition 3. Calculation 4. Purpose 5. Data Sources 6. Future Targets
  24. 24. Images source: http://en.wikipedia.org/wiki/Cockpit We need to continue improving our ability to understand key performance indicators to effectively “pilot” our organizations Presentation of KPI’s can be Important Airplanes are constantly off course, but metrics help them reach desired destination.
  25. 25. Presentation Methods Scorecards Dashboards Reports Typically used for tracking higher-level KPIs on multiple topics Typically real time info on Indicators or KPIs; Trend may be important Typically used for complicated lagging metrics and analysis
  26. 26. Format Helps Use Icons for Multiple KPIs Stoplights are one way to simplify large data sets. • Use of graphics, even just color, can help users more easily understand the metric Ineffective KPI Graphic Does not assist the user in understanding if action is required More Effective KPI Graphic Easy to understand current position and desired position.
  27. 27. BAD METRICS Dysfunctional Consequences and Other Things That Can Go Wrong
  28. 28. Avoid Bad Metrics with “Inversion Mental Model” It is not enough to think about difficult problems one way. You need to think about them forwards and backwards. "Indeed, many problems can’t be solved forward." says Charlie Munger, the business partner of Warren Buffett and Vice Chairman at Berkshire Hathaway.* • Simply stated, applying the inversion mental model is to start by avoiding bad solutions - avoiding stupidity is easier than seeking brilliance. • Here are 8 questions you can ask to determine if you have a bad metric.... * Source: https://www.farnamstreetblog.com/2013/10/inversion/
  29. 29. Avoiding Bad Metrics 1. Is it Understandable? 2. Does it Reward the Wrong Behavior? 3. Does it Conflict With Another Metric? 4. What Does it Measure (Mixed)? 5. Does It Matter (To User)? 6. Does it Show Significant Changes? 7. Does it Use Good Data? 8. Does it Need to Be Measured?
  30. 30. What About Big Data? It’s in the media, and headed our way... Big data in facilities: • Energy use • Various types of sensors • Everything else... Images source: http://www.ey.com/GL/en/Services/Advisory/EY-big-data-big-opportunities-big-challenges
  31. 31. Some BI and Big Data Systems And many more...
  32. 32. For more info...
  33. 33. www.linkedin.com/in/lambe StrategicFacilityGuide.com

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