FINDING THE SWEET SPOT IN FACILITIES MANAGEMENT
Facilities management is no longer a strange and new profession with several definitions from various professional bodies (IFMA, BIFM, FMA, SAFMA) based on their diverse understanding of its potency to solve evolving and emerging challenges in the built environment. In the quest to provide tailor-made services to clients, based on the need for flexibility aside interest to focus on their core area of expertise. Facilities management can thus be used to provide the expected results if the basic elements (People, Place, Process & Technology) are applied appropriately.
The sweet spot is thus a place where a combination of factors results in a maximum response for a given amount of effort or force. For example, in a game of tennis, squash, racket ball, baseball, cricket or golf a given swing will result in a more powerful hit if the ball strikes the racket, bat or chit on the latters sweets spot. How Facilities Management service providers and practitioners can identify their sweet spot or unique competing space to enable them to continually add value and make profit is dependent on the synchronization of these basic elements. Sweet spot is also where you operate at your best doing what you love and getting paid for it because the market seek for it. It is also a unique place where your strength and capabilities which is second to none lies. In the context of an organisation, it is the unique competing space where value output is at its maximum.
Considering the strategic sweet spot model according to Harvard Business review, the strategic sweet spot of a company is where it meets the customers’ needs in a way that rivals can’t, given the context in which it competes, (Collis & Rukstad 2008). This is also the firm’s opportunity space for creating a uniquely differentiated value offering as a“sweet spot”. This is the competitive domain in which the company succeeds in meeting customer needs in a way that its rivals cannot and it is value based. This space, once established for the firm, is competitively interesting for a number of reasons. It sets the firm clearly apart from its competitors. This has important implications for the firm’s reputation; this, in turn, has consequences, for example, for the firm’s ability to build its brand, attract talent, focus on value, and thereby gain access to new markets. It also provides a unique competing space, once established, has important economic pricing implications. It sets the firm apart from its competition in respect of its ability to price its value offering at a premium by virtue of the uniqueness and superiority of that value offering.
The firm’s sweet spot is the domain in which the firm creates and delivers a value offering in response to customers’ changing needs in a way that competitors cannot. The sweet spot portrays this domain schematically; the value proposition substantiates the essence of the unique and superior value offering suggested by the domain.
Strategic Sweet spot
You often hear – focus on your sweet spot. But what does that mean? For an FM business it might mean the intersection of its strengths, its customers’ requirements, its competitors’ weaknesses and by identifying this intersection it provides clarity, creates opportunity, maximizes success…
According to Rich Schetren, strategic sweet spot in business is the intersection of all its uniqueness its convergence of all its capabilities and provides the best competitive outcome. Now, owing to the sweet spot strategy that focus on providing unique offerings that its competitors cannot give the available customers in the FM market, it is important to link the sweet spot of facilities management which will serve as the company’s capabilities and the changing needs of the customer.
The above model can be reviewed as thus;
What most FM company’s should be looking for is to identify where they will be creating the biggest impact. Just like in the game of tennis, the centre of the racket is the sweet spot- the area where the ball would bounce most effortlessly and accurately off the racket. It gives the most powerful feeling, and a great sweer sound! The sweet spot of facilities management is where the best music is heard which can be synonymous to adding value continuously.
According to Steven (2015), facilities management should add value through the provision of reliable building services, pleasant facilities staff, solutions for facilities’ needs and demands, resourcefulness in solving facilities problems and innovation in increasing workplace productivity. He further added that the sweet spot of facilities management can be felt when it is used to reduce expenses. He identified four methodologies and strategies where facilities management may contribute in reducing its organization expenses are;
1. Productivity – increasing work place effectiveness and efficiency.
2. Innovation- initiating innovations that enhance facilities and business operations.
3. Quality – implementing improvements in operations and workplace quality.
4. Safety – incorporating safety in work activities to increase morale of workmen.
It is important that we consider the four (4) major elements/factors that can produce a sweet spot which add value to the customers’ unique needs. The four factors are people, place, process and technology;
In one of my recent article, “talent management in the built environment”, I discussed about the people aspect of managing the built environment as the most important factor which is required to stay competitive and enables an FM company to always have an edge in the market. Please see Facilities Management Ideas and FMTalk360 for more details.
In the end, no matter how fantastic the FM strategies may look like which obviously captures the process, use of technology as a process enabler, it’s still the people that will execute them. Hence, continuous delivery of value through the identification of the sweet spot, the people aspect of the business must be taken seriously with much strategies to keep the team up to date in customers’ service, new and emerging trends in FM practices and also motivate them to continually deliver value. As regards to the process aspect of FM, (Ruegg – Sturm, 2004) in Jausen, te al (2012) argued that “value – adding activities within organizations are predominantly achieved by managing processes.
According to Frederick Benchner; the strategic sweet spot is the place where passion, abilities, talents align with opportunities to solve; economic, social and environmental problems. Finding their strategic sweet spot is an essential for any business – it’s the spot where passion, purpose and potential merges with the needs of a targeted audience. Finding the strategic sweet spot is not easy, for example; in sports the professional athlete practices a gazillion time to find the sweet spot on their – chit, racket, bat and the same is true in business which requires focus and discipline to succeed eventually.
As a case study, I’d like to consider Caterpillar, an American Power Generating company in the early 1970’s. Robert (2006) explained that Caterpillar enjoyed a large market share in the earth moving equipment and spare parts business because this is where their capabilities lies. He added that they derailed in sustaining their sweet spot when they decided to acquire Tow Motor and started the Tow motor business. Robert (2006) argued that “the strategies of caterpillar and Tow Motor were incompatible, a mismatch that undermined both businesses, leading to huge losses and depleting CAT’s competitive advantage. This was in addition to the attack by their major competitor, komatsu during this period and they were already “eating the cat” which was their slogan at this time.
During this period, shareholders value began to dwindle because consumers (customers) perceived value was not in tandem with Cats’ current strategy. Hence, they cannot meet the bottom line of even breaking even in terms of profit margin. It was not until George Schacfer, CEO of Caterpillar (Cat) from 1986 – 1990 having recognized that his company was in grave danger that he had to review their strategies through a unique strategic thinking process that helped the company to make a remarkable and world record turn around.
With this revelation, Robert (2006) concluded that CAT refocused its energy and attention on the continuous provision of value which later help them to bounce back and take back their unique competing space or otherwise called sweet spot from Komatsu. He explained that the CEO Glen Barton (2000 – 2004) reminisced at that time that they went through a period of time in which they closed a lot of factories and tried to become a low-cost source, not necessarily to compete on price, but to make a profit on the prices at which we were already selling our products.
The sweet spot of facilities management can be discovered when the very best is obtained from each of the four major factors that defines a performing FM company. They have a highly motivated team with clear cut understanding of the vision and mission of the company with clarity to the fact that they also are self-fulfilled while meeting the company’s own corporate goal. With the process also infused into a workplace that encourage innovation, team development, forming and sharing of ideas. In relation to this, the technology as an enabler helps the company’s to synchronize all the three (3) factors together to provide an expected result which obviously meet the clients expectations and value for money.
According to Olaranwaju & Willmott (2015), the strategic sweet spot can only be found when the business dig deep into its real purpose, reasons for being, its uniqueness, its competence and its value. Therefore, the business must be strategically aligned with improving customers outcome at its core foundation. In the article “Hitting the sweet spot” by Paul O’Dea writes: in business the strategic sweet spot is where a target customers needs fit with what’s special about the business. Applying the 80:20 rule, 20% of customers deliver 80% of the profit: that 20% is the sweet spot.
Leading or start up Facilities Management organisations can find their sweet spots through rethinking the way they operate. This can be achieved through adjusting to growing trends in the FM Market which will inform the review of the four basic elements (People, Process, Place & Technology) as explained to see how it meets the current needs and future challenges in the built environment.
David J. collis and Michael G. rukstad (2008), “Can you say what your strategy is” Harvard Business Review.
Michel Robert (2006) “The Strategic Thinking, Pure & Simple” McGraw-Hill
Tunde Olanrewaju & Paul Willmott (2012), “Finding your digital sweet spot” www.mckinsey.com/business-tecnology/our-insights/finding-your-digital-sweet-spot, Accessed: 22082016.