The European Union Could Benefit from More FM Unity

by Dave Wilson

To an American, the mission may seem clear: implement a Facilities Management Strategy in Europe. But for those faced with the prospect of managing in Europe for the first time, often the false assumption is made that the Europe of today is a homogeneous entity. Despite the theoretical ease of international operations that came with the creation of the European Union, the risks of trying to apply a single Facilities Management (FM) (or indeed any) solution across different territories is still considerable. Europe can be a challenging environment for multinational corporations, but at the same time it’s a fulfilling arena for facility managers, provided the strategy is correct.

Leaving stereotypes behind

It begins with checking preconceived notions at the door. It’s true we live in a global village but our information may be derived from unreliable sources. Although Americans and Europeans know each other in general terms from TV, movies, books and music, this “knowledge” is often based on nothing more than stereotypes, a dangerous foundation for decision-making and relationships. Consider, for example, two different views of Europe:

The negative: Europe is old and bound by tradition. It’s architecturally complex and difficult to navigate the structures. It’s divided, with too many currencies and countries. Europe is expensive, over-regulated and poor at service. The continent is densely populated—although it’s about the same size as the U.S., there are over 700 million Europeans. And it’s polluted, especially in the east and the industrial west.

The positive: Europe is new and exciting: there is fantastic innovation taking place. Europe has united with a large integrated single market, and its workforce is chock full of skilled, multi-lingual individuals who are highly educated. Europeans are environmentally aware, positive and forward looking.

So the question is which Europe you want to work with—the good or the bad? Because your attitude and approach can be critical, negative expectations can be self-fulfilling, and so can positive ones.

What’s considered “Europe”?

It’s important to understand what we mean when we say Europe, because there are two common uses. Continental Europe is the area from Iceland in the west to the Ural Mountains in the east, and from the Mediterranean Sea in the south to the tip of Norway in the north. This Europe has a population of around 705 million people, and 40 countries.

The second sense of “Europe” is the European Union (EU), the political and economic collaboration of 27 countries. The EU is not a federal entity like the U.S., which may be a major misconception many Americans have. The EU’s population is around 460 million and it is the world’s second largest economy after the U.S.

Intricacies of the European market

Europe is an extremely complex market to master, despite the best efforts of the EU to create a single forum for goods and services. There are many different multi-national organizations that involve countries inside and outside the EU in often bewildering combinations. Take currency as an example: although the EU has a “single” currency (the Euro, € ) only 12 of the EU states (the Eurozone) have adopted it at this stage. The UK, Denmark and Sweden all kept their own currencies, and the 10 countries that joined the EU in 2004 all have their own, so there are 14 currencies in the EU. In total there are 27 currencies across Europe. Add to this complexity of language differences, trade and border control agreements, national and regional cultures and five time zones, you begin to see why Europe may not be so simple to work in.

Yet U.S. based executives seem to have consistent and repeated problems understanding this. I’ve actually heard one senior U.S. manager say: “If we can have one approach from Seattle to Washington, why the hell can’t we get one approach from Dublin to Warsaw?”

This attitude does both Americans and Europeans a disservice; it makes one group appear insensitive and the other, obstructive. Our expectations can get in the way of our success if we are not careful. A single homogeneous solution to facilities issues is not desirable, let alone achievable, in my view. If that surprises you, then consider your main corporate aim: is it conformity, or performance? While these may not be wholly incompatible, surely enhanced productivity is what we most want. So why do we allow an obsession with creating a single consistent approach interfere with that aim, especially in an environment where consistency is very difficult to achieve?

Pitfalls of homogeneity

What makes homogeneity a challenging target is not especially surprising, although the complexity of the issues may be worse than anticipated. These include:

• Language barriers
• National cultural differences
• National pride, leading to anti-globalization
• Workplace legislation and enforcement
• Labor market and social legislation variations
• Tax and currency variations
• Variable local labor markets and salary levels
• Variable supply markets
  

We should avoid the trap of “ironing out” differences as our main objective. Focusing on obtaining common standards in FM can be entirely the wrong thing to do, because it assumes that delivering commonality is more important than delivering performance improvements. So, to repeat: I believe that consistency is less important than productivity in our workplaces, and we should focus on that first.

Bumps in the road to expect

To compound the problems you face there isn’t a unified facilities management market in Europe. Every country is in a different state of preparedness, with varied:

• Economic conditions
• Legislation
• Supplier capabilities
• Training programs and education in place
• Standards of education
• Experiences
• Customer and client expectations
  

At site level, however, problems will quite often be very similar. Although you may find well-managed properties in major cities, overall European FM operations will seem like stepping back 10 years. Common problems include:

• Large numbers of suppliers being used (I found up to 78 at one small site in Switzerland), with almost no concept of bundling services together to reduce supplier numbers
• Contracts made on standard supplier terms, rather than customers terms
• Automatic annual price increases
• Contracts with automatic annual renewals
• Very little in the way of challenge to the supply chain on service standards
• Very long-term supplier relationships
• No concept of risk sharing with the supply chain
• No service specifications or SLAs
• No service measurement or reporting
• No clear internal budgets
• No sharing of systems and experiences between locations
• Lack of team working
• Little or no formal management training
• No professional procurement processes
  

Of course there will be exceptions, but overall, when you factor in the effects of the above failings costs can be far too high. I’ve encountered situations where costs were over 25 percent above the norm without any real reason other than poor management.

Tactics for change management

The challenge you face is educating people about the benefits of what FM can deliver, before you can begin a program of change. And because the contractual position may be so inflexible, change could easily take over 18 months to even begin taking effect because of the inability to terminate contracts.
 
So how can you succeed in change managing your FM operations? First, accept that you need to find appropriate local solutions, rather than the FM marketplace. You have to apply custom models to accommodate different markets, expectations and abilities of various countries. For example:

• In Spain there is barely even a national cleaning supplier, let alone a management company. Outside Barcelona and Madrid, there is (at the moment) no effective means of delivering facility management because of the lack of client understanding and the absence of a supply chain that understands the concepts we take for granted.
• In France, there is a strong cultural preference for internal management combining administrative functions with FM—they don’t call it FM, it’s SG. Although there are some “multi-service” suppliers and a good understanding among project managers, there isn’t a generally accepted conception of FM as we understand it.
• In the Nordics, the good understanding of the options is mitigated by the limitations of geography and economic scale, with many facility managers “in-house” simply because it is the only viable solution.

The pan-national solution

In my view, even the larger pan-European FM suppliers don’t have a real capability in every territory, and they tend to follow their customers into new territories, which is risky for you as a client. Multi-nationals may not be able to provide effective support, especially if you have operations outside mainstream economic areas. If that’s the case, you have to adjust your strategy accordingly rather than try to force the market to fit. You have to take time to understand the strengths of each option in each location. So, although a pan-national route looks attractive and manageable, it won’t deliver service and cost improvements unless there’s a strong foundation. I don’t believe that it is suitable for most businesses at the moment, whether they are based in the U.S. or the EU. Attempting to force a single solution may look and feel neat, but it is unlikely to deliver the savings and performance improvements you need.

About the author: Dave Wilson, CFM, is a Director of Macro, a UK based facility management business. He has worked extensively in Europe with companies like Reuters, WPP Group and Cable & Wireless. He is a Board member of EuroFM, a member of the BIFM Council and chairs the IFMA UK/BIFM International SIG. He is a member of IFMA and the Facility Management Consultant’s Council. He can be contacted at dwilson@mac-ro.co.uk