Most larger organisations have either an in-house property/facilities team and/or outsourced providers managing a portfolio of owned and leased property. The property function generally sits at a level three or four position within the organisational structure, reporting to the likes of a CFO or Corporate Services executive. for example.
As we’ve extolled in several thought pieces, the role of property within a large organisation plays a wider role beyond simply being the physical asset. It supports the brand’s expression, the attraction and retention of talent, team productivity, culture and wellbeing – and is often used as a catalyst to drive business change, for example.
So given the importance of ‘property’, how do business leaders know that the capability and capacity of their internal team, the competency of their service providers and the quality of their internal processes and systems are up to the mark?
Variable best practice
The management of owned and leased ‘occupier’ property portfolios is a relatively new management discipline. By ‘occupier’, we mean property used by the organisation to carry out its business activity (compared to an investment portfolio, for example).
As a new discipline, the development of best practice continues to evolve, supported by industry professional bodies and day-to-day practice.
It is probably no surprise therefore that the maturity and capability of many in-house teams varies considerably depending on the size of the organisation and portfolios. At one end of the scale, the portfolio may be managed as an extension of an administration or finance function with rudimentary systems and processes in place, and certainly no ‘property strategy’ for guiding planning and management.
In these cases, senior management often don’t fully appreciate the role property plays and its financial impact on the business. In essence, they may see property management as more of a simple administration activity.
By contrast, in many larger organisations, a dedicated team is likely to be in place supported by outsourced expertise and a well-developed operating model to govern and manage the property function. The overall effectiveness of the property function however, can vary considerably depending on a number of factors, including the competency of the key staff.
Diagnosing risks and opportunities
As a result, we’re often engaged to assist clients to review and assess how effective the property function within their business/organisation is and how it should be best managed.
Some of the questions business leaders often ask us include:
- Do we have the right skills in-house?
- Are our policies and procedures in line with best practice?
- Are our service providers performing and providing real value?
- How can we get increased delivery momentum to keep up with our growth plans?
- Where are our key risks and opportunities for improvements?
An internal property team within a business is no different to any other team. To be effective, it needs to be structured, resourced and managed well. Equally, the wider property ‘system’ within which this team operates needs to be appropriate for the size of the business and portfolio.
The reason we’re often engaged to help answer these questions is because we have diverse experience working in and around owned and leased portfolios across a wide range of sectors and asset types.
This gives us some practical insights into what others are doing and not doing well and real-life experience working directly alongside in-house teams.
Over time, we’ve built up a body of knowledge in how to best manage these portfolios. We colloquially call this the ‘strategy for managing the people managing the assets’ – to differentiate it from the Property Strategy, which is focused on the configuration and decisions needed for the portfolio/assets itself.
To help us better understand the current capability and effectiveness of the current property function, we undertake a ‘maturity assessment’. How mature is this function relative to best practice and to others with similar portfolios?
As part of our discovery and engagement process, we’ve developed our own TwentyTwo High Performance Framework© to assess the level of maturity.
This Framework looks at eight core areas of competency which we believe form the core of any mature property function:
- Strategy & Planning
- Portfolio Management
- Project Delivery
- Property, Asset & Facilities Management
- Reporting & Performance Management
- Financial Management
- Governance & Risk Management
- Operating Model (the business plan for the property function itself)
Sitting under each of these eight areas is a set of specific principles, processes, artefacts and outcomes that we use to score an organisation’s property function against.
Using this Framework, we then identify the gaps and key priorities for improvement/focus. Issues that may emerge include, for example:
- What level of resourcing and competency is needed?
- What is the most appropriate organisational design for the in-house team?
- What is the best balance between outsourcing/insourcing?
- How adequate are the polices, standards and guidelines currently in place?
- How can performance management and reporting be enhanced?
Design and implementation support
Depending on the issues we uncover, we typically work with the executive responsible for the property function (and sometimes the HR team) to design a specific set of solutions and recommended next steps.
These need to be carefully tailored. However, they may lead to several streams of activity such as:
Workstream A: (improving the property ‘system’)
- Priorities for changes in ways the portfolio is governed and managed
- Key projects/initiatives to develop the required principles, processes and artefacts
- Ongoing support for the business in a governance capacity
Workstream B: (developing a new Operating Model)
- Recommendations for how the property function is designed, structured and resourced
- A change programme to implement these recommendations
- Ongoing training and development of the in-house team
Within each of these workstreams, several priorities will emerge which allows the organisations to put in place a plan to improve their property function.
If you are unsure whether your property function is up to the mark and think an assessment against our Framework will provide you with some fresh insights, please get in touch and we can design a specific engagement for you.