Be prepared when the tide turns
We’re now seeing more signs that the economy is starting to turn around after the worst recession for over 70 years. Many companies that had difficulties with declining sales and cutbacks, are now having to prepare for rising order books. New challenges are approaching, which need planning and good preparation. Are you ready?
We’ll remember 2009 as a year of international recession. In a series in Nova in 2008, we wrote about what clients should think about in a recession.* We’re following up on this theme by asking the question of what to do when the tide turns. AnnaCarin Grandin, Business Area Manager at Coor Sweden, has been through a lot of cyclical peaks and troughs with different customers over the years, and thinks that preparation for upturns is often underestimated.
Plan in time
“Caution after a recession is natural, while it’s unbelievably important to prepare for growth in good time. Once it’s happened, you can’t have any bottlenecks. Have you got enough space for a expanded operations? Are there enough services for increased staffing and production? Can we offer a better working environment to compete for labour? With a close dialogue with our customers, we bring our experiences and try to shed light on critical questions early on,” comments AnnaCarin.
Getting an early start is something AnnaCarin thinks is especially important. Some realignment processes take time, necessitating good collaboration between your FM organisation and operating activities. One good idea is to plan for different scenarios.
“With our customers, we often prepare action-plans for a number of scenarios based on differing rates of economic recovery, so that customers are well prepared,” continues AnnaCarin.
Levels and volumes – cutting your cloth
All FM operations have to be continuously tailored to changes in core business in terms of volumes and the structure of services. In each context, all FM clients need to strike a good balance between effective, productive and attractive levels of service. In a recession, the biggest emphasis is often on efficiency, but in upturns, productivity and attraction is more important, often resulting in higher levels of service.
“Levels of service and volumes must be adapted to the cut of your cloth. We take a big responsibility for the operations we deliver, and must offer good support to our customers in good times and bad. If the customer needs to cut its costs, we also need to contribute to this by reconsidering some services and actively proposing changes to provision – even if it’s at the expense of our own provision. Obviously, it’s hard to cut back on some basic services, but you can accept fewer internal mail rounds, less storage and warehousing space, or maybe even less frequent cleaning in some spaces temporarily. Service provision cannot be static. In an upturn, we still have to help our customers, proactively suggesting ideas and proposals that help increase our customer’s rate of production and optimising its business,” continues AnnaCarin.
Optimising premises is a concrete problem that often arises in economic upturns. Many companies that got rid of surplus premises during a previous recession, can encounter difficulties getting available premises to cope with high growth when the cycle turns. The result is optimising your premises by concentrating staff – but sometimes this is done in the wrong way.
“Concentrating staff is sometimes necessary, but it’s important to get it right and without compromising well-being at work. This is where Coor can bring its in-depth knowledge of the capacity and area optimisation of real estate, not least through our own experience of flexible, contemporary office solutions. We can also assist on sourcing new premises, which we’ve got substantial experience of,” adds AnnaCarin.
Flexibility gives you security when things turn
A flexible business model, enabling FM provision to be tailored to volume changes in customer operations automatically, is a prerequisite for a smooth collaboration between client and FM provider. Coor’s variable pricing model isn’t something necessarily held in such high esteem when contracts are signed, but ultimately, is something customers really appreciate.
“Our flexible business model means we avoid price discussions due to changing needs for service – something that otherwise, as a tendency to trigger irritation and consume energy. Our variable pricing means we get flexibility, which ultimately, our customers really appreciate. I think that our flexibility and great loyalty to customers is one of the reasons they choose to team up with us to such a great extent – and why they often extend their contracts,” concludes AnnaCarin.
* The following articles on FM in recessions were published in Nova in 2008:
- Co-operation vital in a recession (Nova issue 1/2008) – interview with Jan Mohlin, Director of Facility Management at Ericsson
- Public sector sharpens focus (Nova issue 2/2008) – interview with Eric Rydén, Municipal Director, Alvesta
- Who’s doing what in the crisis? (Nova issue 3/2008) – interview with Magnus Kuchler, Consultant at Ernst & Young