The Intelligent Client

What do these words really mean? On numerous occasions over the past ten years or so the term has turned up for debate. Larch Consulting's Mike Cant gives us his thoughts.

intelligent-client-image-1We talk about how important it is to have an intelligent client in the Estates and FM sector; how it is vital if infrastructure services are to be delivered to standard, to best value and to the client’s expectations; how it is a must-have if a contractor is to deliver the promise. We say it makes a difference.

At Larch, we find the concept of an intelligent client more than a little demeaning – who would wish to suggest their client was not intelligent? But it’s a commonly discussed term in publications, so what is it really trying to say?

Intelligence is defined as having ‘intellectual power’. But perhaps we’re reaching for a slightly different idea – a client that can express their strategy, their service requirements, and their preferences in an intelligible way? Intelligibility could be the vital connection between what we are trying to say about the role of an intelligent client and the way this attribute can improve the quality and standard of FM in practice. Or perhaps it’s articulacy: so often clients know what they want but they are struggling to express it in the forms we require in facilities management.

Recognising the intelligent client
The intelligent client is a reflective practitioner, a person who has an objective view about what he or she understands, knows where more help is needed, where there are gaps in knowledge, or experience, or skill, or time. Senior Estates and FM professionals on the client-side necessarily have a limited experience of the full range and scope of organisations and sectors. The smartest clients recognise that exposure to a wide range of influences and approaches is likely to bring them fresh ideas, and that the most innovative concepts may not be found within their own circle of familiarity.

A sense of curiosity and an openness to learn from anywhere and everywhere are certainly characteristics shared by the clients who commission the most interesting research, who make the boldest changes.

Certainly corporate bodies are much more aware of the importance of ensuring estates and facilities services are aligned to their business model. For instance, retail has at last seen FM as one of the essential foundations in delivering a sustainable business. Shoddy refrigeration or displays equate to a customer perception of poor product quality – even if the product itself is unaffected. Supermarkets know that shoppers do not buy yogurts from fridges when the display lights are not working. FM is the golden thread - the umbilical cord - that joins corporate strategy and direction to design and delivery of its infrastructure and facilities operations. 

At Larch, many of our clients are not ‘client-side’ in the FM equation, but are service providers. An independent, objective perspective is of as much value in developing route-to-market strategies, in understanding competitive positioning and differentiation, in working out the new dynamics of co-opetition. The market has changed dramatically in the last few years. Pre-recession, with new buildings opening up every month, there was plenty of new work around. Now almost every contract win involves dislodging an incumbent who already has the knowledge, the relationship, the track record - and this requires a different, more thoughtful and intelligent approach.

Out of the Stone Age
Let’s be honest: FM has been on a journey and we’ve all been on it together – clients, service providers and advisors. When the first wave of outsourcing began, very few tenders had been run for FM services and very few contracts written. Many of the most important and valuable lessons have been learned through bitter experience, and this has been a learning approach which has often been painful and expensive. Service and relationships definitely suffered in the first run of many of these contracts. Reel back twenty years and we had a couple of qualifications in FM, undertaken by a tiny handful of people. Everyone was working it out as they went along, and what we’ve seen is that knowledge and innovation has leap-frogged from client to service provider during this journey.

The first really bold, intelligent thinking came from the pioneers who span out their FM teams into separate, entrepreneurial businesses (Procord, FM2) and the service providers who quickly saw the opportunity to broaden themselves from single-service specialists to a wider offering. The innovators, the smart thinkers, the entrepreneurs wanted to be leading the development of these new FM services and bringing them to a virgin market. 

The next thing that happened was that the market lost its blush of innocence and wised up pretty quickly. In some cases this was due to the fact that the service providers were making it up as they went along - and it showed. Clients were not so easily led and thought much more carefully about what they wanted from their FM. By the mid 2000s, the smart brains were those on the client side, envisioning a proactive, seamless partnership-based FM relationship that many contractors were failing to provide, having focused on replicability at scale rather than the tailored, touch-sensitive customisation that is most likely to satisfy a sophisticated client.

We were just beginning to see that FM could be considered as a value-add not a cost, looking after people and their well-being, offering ‘delight services’ and a choice of comfortable, attractive and teched-up work settings.

Then along came the recession and ruined everything. Part of our challenge these days is that FM hadn’t quite finished making its case, and we were relegated back to an overhead. We had to apply our brains to what we could reduce, not introduce.

I’d argue, however, that the paring back of FM has been an interesting learning exercise, as it has made us re-evaluate what is important - and of course this has changed over time with the advent of new technology and the arrival of Generation Y into the workplace. Our priorities are evolving and so too must our thinking. Another advantage of the turbulence within FM, both client and contractor-side, is that people are switching sectors, switching sides, switching from buying to selling, switching contract models, switching measurement approaches. All of this movement means that knowledge and ideas are being shared around much more widely. Couple this with the dramatically improved diversity across our sector, and the cross-fertilisation is far more interesting these days.

Gods and Demons
With all of this talk about intelligence, and with the undeniable gains in articulation and understanding of the field as it has emerged, it is rather disappointing that many organisations are taking such a wooden-headed approach to their FM. Are ‘unintelligent clients’ to blame for treating FM as a commodity, a price-based purchase? Is it the fault of service providers who, determined to stay in the game at any cost, bid for contracts at sub-margin prices where added-value services simply can’t be offered within the financial constraints? Can we pin it on the procurement people for failing to understand how to buy the services we offer? Or does it come back to our responsibility if we’ve failed to communicate this message?

The rise and rise of the procurement function is both good and bad news. A more structured, objective, professional approach which levels the playing field is to everyone’s benefit in the long run, even if it mucks up carefully nurtured relationships in the short-term. We can sit in the office bad-mouthing the procurement person’s lack of understanding of the value that FM can bring – or we can get out there and organise ourselves more effectively so that our sector can powerfully articulate its benefits and the important role it plays in business and the economy. One of my personal frustrations is that we still don’t have a voice as an industry, and this is costing us dearly at the moment. 

While procurement departments think FM is a commodity, this encourages a polarisation similar to that which we saw in the construction industry in the 1980s: secure the contract at a minimal or unprofitable level, then make the margin via extras and variations. This leverage fundamentally undermines the value proposition of facilities services as distinct from construction. When a building is being constructed it can get sorted out after the completion, whereas facilities services are continuous in nature - making this approach very damaging to our service and thence our reputation. As tenders drive narrower margins, and the increasingly detailed level of specification restricts contractor ability to vary the service delivery, overall contract performance is placed under considerable strain. 

Although it may be seen as a somewhat controversial point, it could be suggested that the last attribute a contractor would like to see in a client, or the client’s advisory team, is intelligence and in-depth knowledge. It limits the extent to which post-contract margins can be achieved in this world of increasing sub zero-profit bidding procurement programmes. 

How to be an intelligent client
The secret is not about knowing all the answers. It’s about knowing the right questions. This is why our academic clients are often the most ‘intelligent’ when considering their FM services – they don’t presuppose they know the answers, as their day-job encourages them to consider many viewpoints, to be curious, to be open to new ideas. In addition, they don’t expect to solve major problems on their own – they expect that complex problems will be tackled by a team of brains with differing knowledge, experience and perspectives.  The majority of discoveries about DNA were made by teams – from around the world – rather than individuals, and indeed most innovation is founded on team rather than individual effort in every walk of life.

What sort of questions might our hypothetical intelligent client ask?

• What will our organisation need to do to ensure it is sustainable in the future? And how would Estates & FM best facilitate, support and enable this?
• What do we need to do to get from here to there? Can we plot the steps along the way?
• What is our culture? What do we value, how do we like to work? What kind of relationships do we like to have?
• Can we define our desired requirements, outputs and outcomes (the ‘what’) without being prescriptive about the way this might be delivered (the ‘how’)? Can we articulate this?

The most common problems our most intelligent, questioning, thoughtful clients face before they start working with us often fall into one of five areas: 

• Being able to pinpoint and define a problem but being unsure about the right solution.
• Feeling confused about cost, price and value; and where to find each of these.
• Finding that a contractual relationship has become difficult – and wanting to improve it but not being sure how (the consultant as a contract marriage-guidance mediator).
• Knowing exactly what is required but not being able to translate this into specifications, service levels, KPIs and the complicated language of FM contracting.
• Confusing the ‘what’ with the ‘how’ of FM. 

The consultants who will help you the most are not people who sweep in with immediate recommendations (although they can do that if you want a short, sharp piece of advice). The value comes when they explore the questions with you, helping you to find the answers that are right for your own organisation, sharing their knowledge of other organisations like and unlike yours, their experience, expertise and specialisms along the way. 

Knowing how to approach, to explore, and to address these questions is the identifying characteristic of the intelligent client.

Michael Cant is CEO of Larch Consulting. He was the inaugural winner of the PFM Lifetime Achievement in FM Award in 2009.

He has been recently awarded an Honorary Fellowship from Glyndwr University for his services to the University and the Estates and Facilities Management sector, where he served as Chair of the Board of Governors.