SOLUTIONS FOR THE BUILT ENVIRONMENT FACILITY MANAGEMENT
WORKPLACE HEALTH
How mBraining can help you make better decisions
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SUSTAINABILITY New environment-friendly flooring technologies ACCOUNTING How to avoid becoming a zombie company
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PROPERTY Are your properties at risk from non-compliance
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CLEANING | OH+S | STORAGE | GREEN BUILDING | FLOORING | LIGHTING | ENERGY EFFICIENCY | SECURITY | FITOUT | HEATING + COOLING | FIRE SAFETY
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20 | Property feature
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ince the Commonwealth Work Health
Typically, architects, consulting engineers, builders and trades
and Safety Act came into force in 2012,
spend an average three years designing, coordinating and
there have been major reviews of facility
constructing a building. After achieving practical completion,
management practices relating to new and
the defects liability period begins and the builders move on
existing buildings and how the application
to the next project. The construction industry does not fully
of new legislation, technologies, risk management and
understand what the facility manager, who has to run this
organisational reporting requirements will affect properties.
building for the next 20-plus years, needs. Today, facility managers are becoming more responsible and
Discussions over several years regarding the two allied industries – construction and facility management – exposed
therefore they are demanding better information with which
deficiencies in one and a lack of direct connection between the
to run a facility effectively. They need builders, architects and
two. The need to improve and connect one industry to another,
engineers to provide superior information about the facilities
together with the likely mandating of BIM management, is now
they are building. Why? Simply it comes down to financial
even more compelling.
implications. If the facility manager is not managing the risks of the insurer, then higher insurance premiums will ensue.
Currently, the construction industry market is serviced
Therefore, all facility mangers must ask these questions:
by individual trades and builders who are contractually required to deliver ‘as-built’ construction documents called
l Can the property be managed efficiently? And will there
Operations and Maintenance (O&M) manuals whenever a new
be an effective systems maintenance/service schedule
building (facility) is constructed, completed and handed to a
delivered for the building at practical completion?
property owner.
l Can the as-built documentation be used as a financial
After practical completion and the conclusion of the defects
management schedule or a legal compliance brief for the
liability period (DLP) the final handover of the O&M manual
owner?
occurs before the parties walk away and the owner of the new
l Will the as-built documentation be suitable as a taxation
facility is left to manage the operation for the duration of its
dossier for the owner’s chief financial officer?
commercial life. For the past 35 years, the construction industry
l Will the as-built documentation reduce the operating costs
has been delivering O&M manuals this way, but this current
of the building?
industry practice no longer meets today’s commercial needs or
l Will the as-built documentation support Work Health and
mandatory obligations, leaving property owners at risk.
Safety (WH&S) risk management plans for all stakeholders?
Despite builders’ best efforts, according to several Australian
l Will the as-built documentation contribute to good capital
state government public works departments, 80 percent of
expenditure management in the format that is provided to
project O&M manuals are still not complete even two years
the facility owner and operator?
after practical completion.
The short answer to all these questions is, no.
The build history (as-built documentation) delivered in the
The construction industry’s current practice of supplying
form of O&M manuals contains the data that is required to
paper O&M manuals in four-ring binders is archaic. The
create facility management service delivery plans. The way the
traditional O&M manuals information assembled is irrelevant
builder is directed contractually to collect, collate, format and
for today’s regulations and, due to the sheer volume of data
deliver the data has a direct influence on the integrity of the
collected, rifling through piles and piles of paper is not an
‘as-built’ documentation to the property owner.
efficient way to access vital information.
Why is the building industry still specifying O&M manuals?
Is the quality in as-built O&M manuals causing non-compliance?
The current construction industry practices for O&M manuals are no longer acceptable, as they are fragmented, conflicting
DESIGN AND CONSTRUCTION
FACILITY MANAGEMENT
3 YEARS
30 YEARS OR MORE
and poorly connected from one phase of a project to the next. To find a solution and begin to change the current practices regarding the delivery and content of project O&M manuals, we need to ask ourselves: l What is the O&M manual really used for and who will
ultimately use it? l Who specified the required O&M manual?
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PRACTICAL COMPLETION
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YEAR 11+
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RICHARD GAPPER of OandMs suggests some basic yet important questions all facility managers must raise in order to efficiently manage their facility.
YEAR 0
l Who delivers the O&M manual and what problems arise
from it? l When should the O&M manual be delivered? l What is wrong with the current O&M manual?
Sadly, the current practices for delivering O&M manuals is nothing more than a recorded history of the project build
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26 | FINANCE
How to avoid becoming a zombie company
L
ike the traditional walking dead, ‘zombie
able to repay interest on outstanding debts. However, if the
companies’ wander aimlessly and unsteadily,
company is incapable of paying down the actual debt to an
not quite alive, but still moving. The term 'zombie companies' has become more common, as low interest rates let otherwise
agreed timeline, then it may already be a zombie. 3. Putting a hold on growth. Generally, zombie companies aren’t able to invest in new businesses or hire new staff.
struggling companies battle on. In the past, many of these
When organisations need to put a prolonged stop to growth
underperforming organisations managed to slip under the
and expansion, especially if the market conditions are
radar, escaping insolvency by virtue of the fact that financiers were unlikely to enforce their security and the companies were therefore able to meet their basic obligations. In 2014, such companies were able to repay the interest on their debts, keeping financiers at bay, but they could not reduce the actual debt itself. This trend could continue well into 2015, since there is no expected increase in interest rates in the near
average, it can be a warning sign. 4. Failing to secure additional finance. When companies have reached the point where they are only covering interest and not paying off the actual debts, smart financiers and investors will become more hesitant to continue funding the business. 5. Extending creditor payment days. Companies that
When a company becomes a zombie, there are two options.
is unlikely to have adequate cash on hand, but can also mean
future. However, for these organisations to avoid going under in
consistently exceed suppliers’ trading terms and use the
The first is to try to save the company with an overhaul of
it is difficult to identify problems until it is too late. To avoid
the long-term, they must change course.
Australian Taxation Office (ATO) as a financier, by either
management practices and operational procedures. The second
this, organisations should put in place a clear reporting system
not forwarding on statutory liabilities or entering into
is to put an end to the cycle and shut the business. Either way,
that includes debt recovery policies and procedures. Cash
its resources are stretched thin, letting it meet immediate
repayment programs with the ATO, are providing indicators
a zombie company cannot be allowed to continue to wander
flow policies should be reviewed to ensure the business is
financial obligations, but providing no room for growth, debt
that they may already be among the walking dead.
aimlessly, as it has the potential to take others down with it.
maximising its potential for income.
but, unless its operating practices change dramatically, it is
Reading the signs of distress
companies need to watch for escalating costs, excessive
likely to become insolvent sooner or later, regardless of bailouts
While business managers should be aware of economic
downtime and maintenance programs that aren’t working.
or other support. This leads to losses for lenders and investors,
indicators when evaluating their business, they should not
To overcome production issues, companies must constantly
and can have a flow-on effect to the rest of the economy,
use them as the only source of information when determining
monitor output to ensure they are achieving the most from
resulting in higher unemployment, for example.
their level of exposure to risk and overall confidence. Different
available resources, and reducing waste and inefficiency.
indicators can have positive or negative effects depending on
When there is a lack of a well-defined and balanced
An organisation can be termed a ‘zombie company’ if
reduction or investment. It may look for bailouts or handouts
Production problems can also be a sign of distress and
Some companies need support or even a bailout because of extraordinary circumstances, while others simply need
the type of business or industry. For example, a high Australian
organisational structure, and there are no clear tactical plans or
a longer foundation period before they can start to turn a
dollar is good for importers, but not for exporters.
strategies, then the organisation may be in trouble. To combat
profit. But when an organisation consistently underperforms
Businesses should watch the key economic indicators,
this, businesses should prioritise planning, including putting
financially and is doing the bare minimum to meet its financial
including: the currency value at home and in the international
effective processes in place for succession planning, formal
obligations, it could be a sign that the business is about to reach
market, interest rates, whether big businesses are cutting major
business planning and performance management.
‘zombie’ status.
projects or staff, cash burn rates, changes in invoice payment
These are the five key signs that indicate a company may be
times and the stock market.
headed in this direction.
An economic downturn is not the only cause of business
1. Covering the bare minimum. Companies that can
failure or zombie-ism. The most important thing businesses
The business should also be flexible enough to respond to changing market conditions in a timely fashion, letting it maximise revenue opportunities. If the organisation has an unbalanced product range,
only cover the bare minimum, such as running costs and
can do is objectively assess their own business and whether
declining gross margins and unrealistic pricing policies, then it
interest-only repayments, may be headed for zombie status
it is showing signs of distress, and then take action before it is
will be vulnerable to the competition. It is also inadvisable for
if they can’t improve their position in a reasonable time-
too late.
organisations to rely too much on a few customers or industries
frame.
The most obvious sign of distress is if the organisation
2. Paying interest, but not the debt. After paying initial
has inadequate cash reserves to cover contingencies. Poor
costs such as rent and wages, companies should at least be
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cash flow control systems not only mean that the company
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for income; diversification can reduce risk. Businesses should keep a close eye on sales trends both within the business and in the broader industry. If sales are
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30 | WORKPLACE HEALTH
So important are these discoveries that there are dedicated
How to use mBraining to make great decisions
l values – processing what’s important to you and your
fields of medicine and research including neurocardiology
priorities (and its relationship to the emotional strength of
and neurogastroenterology.
your aspirations, dreams, desires etc), and
Utilising the practical methodologies of neurolinguistic
l relational effect – your felt connection with others (e.g.
programming, cognitive linguistics and behavioural
feelings of love/hate/indifference, compassion/uncaring,
modelling, Grant Soosalu and Marvin Oka have synthesised
like/dislike etc).
a wide range of research findings into an integrated approach. The findings are published in their book entitled mBraining –
Gut brain prime functions
Using your multiple brains to do cool stuff.
l core identity – a deep and visceral sense of core self,
MBraining is a new field of human development (developed by Soosalu and Oka), which suggests that everyone, particularly leaders or those making important decisions, will
Decision-making should not be left to the mind alone, it should be a cohesive result of thinking using all the three brains inside the human body – the head, the gut and the heart.
have far more success if they are able to practise accessing all the resources in their head, gut and also their heart. In doing this, they align their conscious and unconscious intuitive
and determining at the deepest levels what is ‘self’ versus ‘not-self’ l self-preservation – protection of self, safety, boundaries,
hungers and aversions, and l mobilisation – motility, impulse for action, gutsy courage
and the will to act.
abilities, and are able to harness that priceless wisdom within
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them. The mBraining research and behavioural modelling
Head brain prime functions
has shown that each of these three brains offers a unique
l cognitive perception – cognition, perception, pattern
intelligence, each with specific areas of competence: everal years ago, I was leading a large
out differently if you had made a better decision, or taken a
team of people who had a huge portfolio of
different action – that is, a decision made on ‘feeling right’ as
Heart brain prime functions
responsibilities, including managing key
well as meeting all of the standard ‘thinking’ criteria?
l emoting – emotional processing (e.g. anger, grief, hatred,
suppliers. During this time, we went out to tender for a supply contract that was worth
There’s a growing body of research on the importance and
recognition etc l thinking – reasoning, abstraction, analysis, synthesis,
joy, happiness etc)
meta-cognition etc, and l making meaning – semantic processing, languaging,
narrative, metaphor etc.
value of intuition or ‘following our gut feel’. This technique is
around $30 million and I made the decision to delegate this
particularly useful in decision-making and proves that using
tender process to several members of my highly qualified
our intuition – combined with our knowledge of a subject
and experienced team. As a result, they managed a thorough
– results in better, more powerful decisions than just using
and detailed process and came up with the recommendation
knowledge or ‘head thinking’ alone.
to change to a new supplier. Although I was happy that they had followed the correct process, I have to be honest – this
So what is intuition?
supplier just didn’t feel right to me.
There are numerous theories on intuition, many supporting
Even when the time came to sign the contact with the new
the concept that intuition is our unconscious mind, merely
supplier, I procrastinated for days and really didn’t want to
trying to pass information on to us. When doing this,
go ahead with it. However, unable to articulate a good reason
it provides access to far more accurate detail, than our
why I felt this way, I chose to override my gut feeling and went
conscious cognitive mind could ever do on its own.
ahead and signed the contact. As a result, the next two years of working with that supplier were a complete nightmare. Yes, technically the supplier could deliver and did everything they said they
Can you imagine how powerful it is to be able to access your intuition in order to gain more information to work with when taking action and making key decisions? Humans not only have brains, we have hearts, guts,
would – but, in reality, the fit between the two organisations
emotions, values, identities and strengths that make us who
didn’t work at all. The head-based decision process that was
we are. Therefore, in order to reach our highest potential, we
used to choose the supplier wasn’t enough to get the right
need to understand and utilise our whole self – not just our
outcome and my gut reaction was actually giving me much
thinking brain.
more accurate guidance. Have you ever made a decision or taken an action that,
How does this impact you?
despite following the correct process, or being logical, just
Think about those times when you are relating with your
didn’t feel right? Maybe you found it hard to put into words,
customers and stakeholders, when negotiating service levels
but you just felt something wasn’t quite right in your gut?
and contracts or when dealing with stressful crisis situations.
Did you go ahead and do it anyway, only to discover later
Can you imagine how powerful it would be to add the
on that things didn’t work out or had serious consequences?
knowledge of your intuition into these processes?
We are often told to ‘follow our gut’ but, in reality, how
Recent neuroscience findings support the concept that if
many of us do this? Have you ever wondered what would have
you want to become a true leader, then you need to use all
happened if you had actually listened to what your gut was
the intelligence available to you – not just the brain inside
telling you? Would the outcome have been more positive?
your head. Science has confirmed that we have at least three
Think back to how many situations may have turned
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‘brains’ – one each in our head, heart and gut.
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