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Useful Tools – Pareto and the 80:20 Principle
“We couldn’t get our heads out of the trench for long enough to see which way the bullets were coming from”. The speaker was one of the many people I worked with; in my younger days, almost all of my male colleagues had been in the armed services. I thought that the expression was wonderful and much better than not seeing the wood for the trees. Over the years that I have been at work it has been very apt because, so often, people are fire fighting the small stuff so much that they can’t work on the things that would deal with the cause of all that small stuff.
My colleague’s problem would have been solved by what we call in management speak the helicopter view, but it is one of the reasons why the military always like to capture the high ground; they can see what is going on and that makes it so much easier to manage.
In business we have that dreadful expression “If you can’t measure it, you can’t manage it”. I say dreadful, because I’ve heard it parroted so many times by people who want to spend so much time measuring and pondering over the results that they rarely ever get round to managing anything, but the expression is true. The trick in making it work is in what we mean by measuring.
If you are under constant fire you don’t have enough time to do the job properly let alone start producing all sorts of statistics, but measurement doesn’t always have to be so formal. Try this as an example: Walk into one of the working areas at your firm and just stand to one side for two or three minutes. What do you see and hear? Is it quiet and calm, or are people looking harassed with ‘phones ringing and high levels of noise? Is it tidy or is there stuff piled all over the place?
What you have just done is measure with your eyes and ears and you will have formed a pretty accurate assessment of that team. This may well be one that you would not have got from their numbers, because the performance statistics may well show that the chaotic team are hitting their targets, but observation is every bit as powerful a measurement tool as the graphs that come off the computer: There is nothing wrong with measuring by rule of thumb.
If you are a young manager wanting to make things work better then start by using those eyes and ears that you got as standard equipment when you came into the world. Even when you are under terrific pressure there will be information that you can use to help you. You will know where your biggest problem area is, so think a bit about why. Pareto’s 80:20 principle suggests that 80% of your problems come from 20% of what you do, so try putting that to work. Say you are getting 10 calls a day from Finance about invoice queries. If you can put that one thing right that could mean those 10 calls stop, and then you suddenly have that time free to look at another problem. You won’t solve every one, but if you can start to give yourself time to stick your head up and have a look around you are on the way to gaining control.
And if your boss is into formal measurement, just tell them that you are working to the Pareto principle, the 80:20 rule. Pareto is a probability distribution, but also works as a rule of thumb.
It’s 2062. Or is it?
For the third and final part of our holiday humour trilogy we move from the past to the future. Content after his New Year dinner and with a couple of glasses of claret on board, ThatConsultantBloke (TCB) is half asleep on the sofa doing his emails when he inadvertently clicks on a link and his video messaging software kicks into life. A silhouetted figure appears on his VDU;
TCB: Er, hello?
Other Person (OP) You are through to the Global Institute of Business Infrastructure Management, how may we help?
TCB: I’m not sure. I clicked on a link in my email about speaking at your conference.
OP: Yes, I see now. You were very active in the old Facilities Management arena and we were looking for someone to give our members some idea of just how much progress we have made, but also to see if there were lessons that we could learn from history.
TCB: I’m not sure I follow you. I am still very active in FM.
OP: Perhaps you are, but you are in 2012 and we are in 2062. That is why you may have problems seeing me as you will be on an old version of Windows.
TCB: So you are 50 years ahead! My goodness! So how do you guys work with the likes of BIFM and IFMA?
OP: These were absorbed long since and the GIBIM was formed from them.
TCB: So you don’t call what we do FM any more then?
OP: No. No-one really understood what FM was about and, in any case, Facilities was not a good expression. Did you not have a saying “Can I use your Facilities” as a euphemism for the toilet? What credibility could we expect naming a profession after a lavatory?
TCB: (laughing) Well, the architects always used to say “Here come the janitors” whenever we arrived at a meeting!
OP: Architects! They have learned their place in the scheme of things now. They do what they are told and we have few problems with them these days.
TCB: So how do things work in FM, sorry, BIM now?
OP: It was recognised that managing the business infrastructure, or what you called Facilities, was crucial to business success and that business in general was not competent to be in control of the infrastructure; that was a job for the professionals. Standards were therefore agreed that would be enforced and business could use. GIBIM are responsible for providing those standards worldwide.
TCB: So how does that work with the clients then? How do they choose the supplier?
OP: They don’t. They are allowed to use what they qualify for according to their business and their meeting the relevant KPIs. Let me explain: If you are starting a new business you produce your business plan and apply locally to have the plan approved. If your business plan meets the standards then you will be allowed to start up when suitable premises are available. If you succeed and maintain a profitable business and meet all of your BIM KPIs then you can continue indefinitely, but you must keep above the relegation zone. If you fall into that area then you will lose your place to a new business. On the other hand, if your business is very successful and you want to grow, then you compete for promotion to larger or better premises from a business in a higher division that has performed poorly and has been relegated.
TCB: So business is only allowed to run as long as they meet these KPIs?
OP: That’s right. It came out of what you will know as HSE. The idea of a Competent Person threw into light the fact that few business people were competent to be responsible for what you called Facilities, especially in terms of environmental concerns. The logical step was to reverse the relationship and have competent people running the business infrastructure along lines that were efficient and contributed positively to the environment and then to allow business to use that infrastructure, but only if their performance was good enough. It was probably the only good thing that came out of the nonsense that you call HSE.
TCB: But HSE isn’t a nonsense! Well, some of it is a bit over the top, but it’s important stuff.
OP: Some of the basic principles are correct, but the culture of litigation that it allowed was ridiculous. People have to take responsibility for their own actions. In our world, if you have an accident at work where you are to blame you take the consequences.
TCB: So what are these KPIs?
OP: Some are related to general business performance in the relevant field; they have to make profit for example, but in relation to us they have to behave as a responsible client.
TCB: What does that mean?
OP: Well for a start they treat the premises and the BIM people that operate them with respect. They will be scored down on issues like damaging the building in any way, abusing BIM employees, failing to observe BIM rules on use of the building and so on.
TCB: (sounding puzzled) So BIM rules would be things like access control and meeting rooms?
OP: Exactly! Failure to display your building pass would be a contravention, as would failure to turn up when you have a meeting room or desk booked. And environmental non compliances carry heavy penalty scores; using the wrong recycling box, not turning a device off and so on. Safety failures also are heavily penalised; say you hurt your back lifting something. You will have been given lifting and handling training as a matter of course, so if you do it wrong and hurt yourself, your salary will be docked by the cost of replacing you. Your employer will fail their KPIs as well.
TCB: Isn’t that unfair under your rules to penalise the employer for the employee’s error?
OP: I see what you mean, but they have to be penalised for employing an idiot. It teaches them to be more careful about who they take on.
TCB: So if the clients can’t choose their suppliers, how does the supply side work now?
OP: The supply side is still competitive in that the people who work in it compete for the jobs. There is a pool of suppliers who provide the services in each country. They take a fixed fee per square metre for supplying and running the services, but they run as not for profit concerns as a public service. There are only the required number of jobs to provide the services though, and competition to win them is strong as they are well paid and much sought after. BIM is a well respected profession these days.
TCB: And this is global now?
OP: Well not quite. The EU started it and the Americans and Japan fell in step because they had to. Pretty much all of the old Commonwealth came on board with the UK and then others get drawn in because it’s where the world trades now; if you’re out you’re out, and that means that no people or goods can move from or to the Alliance countries from outside the Alliance.
TCB: So what about some of the countries that were causing environmental concerns?
OP: Well there were some issues about fencing them off, but then sport entered the picture and exclusion was easy.
TCB: Sport?
OP: Oh yes. The major soccer playing EU nations realised that excluding Brazil from the Alliance meant that they would not be able to play in the World Cup, and once that happened then the athletics people realised that they could have some of the serial Olympic winners banned and that was that. There was even a move to have the Yanks chucked back out at one time, but that was never going to happen.
TCB: So what about the Euro Zone crisis?
OP: Well that was easily solved. We just looked back to the colonial model and when a country got bailed out it was basically bought, so Germany and the UK pretty much own most of the EU between them now. The pound and the mark have parity and all of the EU uses one or the other.
TCB: You mentioned architects?
OP: Yes, well the old days of building monstrosities that took months to turn into workable buildings have long gone. Now we have standards for buildings in each usage type and only a certain number of each are built in different sizes in each area so that there is none of the old nonsense of oversupply; we just have what we need. Building stock is changed as and when necessary, but new build has to be to the standard. The only variation is in the external cladding, and here some flexibility is allowed, but only within limits; King Charles saw to that by Royal Decree in the UK and other countries followed suit.
TCB: King Charles? You mean…
OP: Yes, he’s still with us. Just. Now about your fee for speaking at our conference: For a half hour slot we would be happy to offer you…
Mrs TCB looks down at the slumbering figure and gently lifts the laptop off him. “I do wish he wouldn’t snore so loudly” she complains to the watching cat….
It’s about 1150BC, and an FM in darkest Wessex has just taken a call
It’s about 1150BC, and an FM in darkest Wessex has just taken a call from an Egyptian pal he met at the recent FM conference. In the best traditions of the wonderful Bob Newhart, we can only hear one end of the conversation:
Hey Jabari, when did you get back?
Four months? Took me nearly that. Too bad the Romans haven’t started their road building programme yet eh? So how’s that pyramid project going?
Just started. So how big is this thing?
Wow! That’s going to take a lot of labour.
OK, so you can get plenty of people in from overseas? You must have a great benefits, healthcare and welfare package down there to bring them in, right?
Slaves! Can you do that?
You do it all the time? OK, so if that’s how it is. I guess you don’t have a socialist government then? Say, Jabari, how do you do with accidents working with stone?
About 10% of the workforce? How many of those are serious?
That’s just the fatalities! Ouch! Good job liability lawyers haven’t been thought of yet. So, tell me, how do you get involved as an FM while the place is being built?
Trying to head off hand over problems? Yes, we get them too, and FMs do spend a lot of time trying to make new buildings work. Who’s your architect on this one?
No, I wouldn’t know him. How many of these jobs has he done?
This is his first! Why not go for someone with experience?
You kill them at the end of the job? I know I’ve felt like murdering one or two myself, but you must have been pretty dissatisfied right?
Client policy, eh? Rather you than me. I wouldn’t want to be failing my KPIs down your way!
Right. So how long are you going to be using this building when they hand it over?
All eternity? Goodness! Now I’m into future proofing, but this is in a different league. Sooner or later someone will invent stuff we can’t even imagine, so you might want leave some sort of access, and maybe carve some instructions into the stone to say what you’ve done?
OK, well, look: this pyramid shape, it’s not great in terms of user friendliness you know? Over here we’re still strong on the roundhouse for now, but what you need are vertical walls, right? But stick with the pointy roof on top; believe me you do not want to go with a flat roof. So your square shape with walls would give you a great useable space.
Yes, we’re still on open plan, but we have this great new concept; you have interior walls to break up that space, and then you can separate the masters from the animals and the workers.
You already do that? How does that work for you?
OK, so you call them chambers. So how are your occupancy numbers on these pyramids with chambers?
That’s terrible! With that floor plan, even as a pyramid, you need to be getting a lot more people in than that. I know! This some sort of scam to keep the rates down right?
Oh! It’s a tomb for the king! Yes, I get it, so you’re thinking security. We just pile tons on earth on ours so no one can dig through fast enough to not get spotted, but if you’re all sand down there I see why you need so much stone.
Talking about stone buildings, I told you we’re trying to build some over here? Well, I managed to get a couple of big piles of decent stones assembled down in Wessex ready for when we get some demand. Funny thing though, you remember that craze for crop circles we talked about at conference?
That’s right. Well, some crazies got into our storage yards and spread all the stones out into circles and patterns!
No, I’m not joking. They even hoisted some of the damn things up and stood them on top of each other. Goodness knows how, but those Celts are strong lads, especially when they’ve been on the mead.
No, it’ll cost a fortune to tidy it all up again, so I’m going to leave them as they are and just take the odd stone when I need it. Mind you, there’s some religious group want to rent one of the sites for a festival.
Good point! I’ll put a clause in about no sacrifices. They make such a bloody mess.
Your money’s running out? OK Jabari. Good talking to you. Maybe see you again next conference.
great customer service starts from the top
Customer service has been prominent in my thoughts this week, especially as I have experienced some really good service, together with someone trying to put right something that had gone wrong.
Many years ago I came up with something that I called the Ghent Agenda, named in honour of some really good service I had experienced from hotel people first in Brussels and then in Ghent. It was a blueprint for our facilities management team to raise our game, and it did make a difference, but it is how you make these things happen that intrigues me.
It is the leader that sets the tone for the way their team will work, and various old and new adages describe this; setting the tone, leading by example, walking the talk and so on, and these are, like all such sayings, very true. More so than many realise, because the way a leader acts and behaves will have a huge influence on their team (very much in the way that children are influenced by their parents).
It is all very well to try and influence your team towards providing a high level of service, but how do you yourself behave? Is the example that you set one that you would like your team to follow as they deal with your customers? For example, how do you treat people? You may be good with your team, but how about others?
My premise here is that leading by example, or whatever we want to call it, comes from setting a personal standard first. If you truly want to be a role model then you have to become that model and apply the standard. There is a wonderful quote attributed to Sir Laurence Olivier during the making of the 1976 film Marathon Man. Dustin Hoffman’s character had to portray levels of exhaustion commensurate with having being awake for 24 hours or so, and kept himself up to experience the effects. When Olivier asked him what he was doing Hoffman explained his need for accuracy in portrayal, only for the former to suggest “Why not try acting, dear boy, it’s much easier”.
And that is the issue, acting is much easier, but leadership is not acting. If all you are portraying to your team is an act then you will be found out at some point, so you do need to live the role.
If your team here you tell them about the importance of giving good customer service, of treating people with respect, but then see you behave poorly towards others then how can they truly believe in the message when the person delivering it lets them down? And if you do not strive to apply the standards to yourself in everything that you do, are you not applying double standards?
We can’t be perfect. We are, after all, only human, but if we are going to try to achieve the highest standards then we have to raise our game. A record of continuous success does not come without constantly pushing yourself and your team, and that is what the better leaders do, and they push themselves hardest.
If you want to be that great role model for your people then try to apply the highest levels of behaviour in everything that you do; be polite and show respect to others, regardless of who they are. If you treat the ticket collector on the train or the barista in the coffee shop the way you want your people to treat your customers then you are setting the right tone for them. Lead from the front.
future proof your projects; spend now to save later
When we are up against it on funding we look to cut back on project spend. That is a natural course of action and can usually be effective, at least in terms of meeting the short term objective, but therein lays a problem; short term thinking is nearly always costly in the long term.
There is an old saying about never putting off until tomorrow what you should do today, and that is very relevant in the world of facilities maintenance; you run a fine line between fiscal prudence and neglect. I wrote recently about a building that we took over where we had to take two of the three lifts out of service immediately because they had serious problems resulting from cutting back on regular maintenance.
Another area of cutting back is on specifications, where reducing the scope can reduce the cost proportionately, at least for that project, but somewhere down the road things will bite you. Another example from my vault on this one is where we had to renew the ceilings in a building because of asbestos removal. As we started to take the grid down we had a serious collapse; every time there had been a cabling change the wires had been cut at each end and the cable left up there because “it was cheaper”. Cheaper than doing the job properly that is, but we made a few quid on all the scrap mind you.
That particular project got me thinking. It was early in my time of having, what we called at the time, building maintenance under my control. On being told that we had to put in new cabling about every 18 months for some project or other, and knowing that there was a plethora of projects in the pipeline, I asked for additional cable runs and pulls to be installed as we put the new ceiling up. It cost about 10% extra on the original project budget and I had to find that from somewhere, but over the next 8 years that I was involved with that building we added extra cable capacity for a fraction of what it had been costing us and with almost no disruption.
That is a small example of what I came to call future proofing projects, and we applied the principle across everything that we did. What did we have to do and how could we make our lives easier downstream? How much to put in twice the capacity; three times the capacity? Make a judgement call on it. Refurbishing accommodation is always a golden opportunity to look to the future and spend a little more than you need to in order to save money in the coming years.
Where you can save money without too much risk is to reduce demand, or consumption, and this is where you can also contribute to environmental targets as well as cost savings and this is something that you should be doing as routine, but then you need a big number you normally a choice; either you nibble away at everything and take a bit off or you take a deep breath and cancel a project (or two) to give you the right number.
I would always go for that latter option to give me the headroom that I need, but making sure that it included enough cash to do some future proofing. And because future proofing means that some of the things that you be asked to look at next year or the year after can be easily accommodated you can look good when you say “no problem”.
does your meeting space facilitate good decisions
Meetings are a fact of modern business life; they are one of the catalysts that help move business forward by getting people together sparking ideas, planning strategy and similar dynamic activity, or at least they should be, but all too often they are nothing more than a waste of everyone’s time.
Some of the reasons for meetings failing are in poor planning, preparation, chairing and team issues, but what I want to look at here is the room itself because that is something that facilities teams can influence and make a bigger contribution to business success that we might realise.
Often meeting space is fitted in around the office as best as we can rather than consciously designed and I’ve seen some horrors over the years. As an example, let me first set the scene: We were bidding to win the outsourcing of a service for an international business. On offer was a 3 year deal with options for extension, but the basic contract was worth around £5m. We were invited to present for 40 minutes plus 20 for questions, told we could bring 4 people and use an SVGA presenter. All pretty standard for such a session and we turned up prepared and rehearsed.
We were taken up to the room on an upper floor and on the corner of the building. As the door opened we could see that it was long and narrow. Three tables were end to end down the middle with 6 chairs either side and one at each end, and 11 of these were occupied. The door was in one of the short walls and one long wall and short wall opposite the door were windows through which the low winter sun streamed.
So basic maths will show that there weren’t enough seats, and common sense will tell you that we couldn’t project onto the door with any degree of success and to project on to the one possible wall meant that half the people would have to turn around and, in any case, the sunlight would wash out the slides.
As Bid Director I had covered for not being able to run the presentation; it’s always a risk, so you prepare for it. I’m also used to standing to present, so standing against the door for the hour that we were there was not really an issue even if it was unusual. As for the outcome, well, we got into the final two, so we did OK in difficult circumstances, but what was the point in making use of such a room for the buying team? The people facing the windows were covering their eyes a lot of the time to avoid being blinded and the solar gain was making the room like a sweatbox. We were only there for an hour, but they had five presentations to sit through and debate on, and I would question the quality of the decision making under such conditions of discomfort.
This is an extreme case, but I’ve encountered poor facilities in many offices and hotels that I have visited over the years. The point is that meetings are about human interaction, so having the right sort of space for people to interact in is crucial to making meetings successful. As FMs we can look at providing spaces that can be used flexibly and provide an environment in which people can be productive and contribute.
Decent meeting space is an investment, but it costs about the same to do it right as to do it wrong, so it’s well worth looking at if you can.
Showing courage when the chips are down delivers trust
Engendering the trust of your people is crucial to leadership and, without it, they will not follow for long, but it is also a key factor for those that the leader will be answerable to, for most business leaders are, themselves, answerable to a board, shareholder and investors amongst others. Each of these groups will have different agendas and serving each requires a division of loyalty that, in turn, is an area where many leaders fail.
What you need to be able to do is to do what is right. That is what is right to achieve the objective that you are expected to deliver.
Your people will have had this explained to them as you have sold them on what they need to do and when they need to do it by. You will have explained the importance of that deliverable and, if you have done your job well enough, they will have bought into it. They will trust you to be right but, more importantly, they will trust you to protect them from interference in their efforts to succeed.
Every business will have a way of working that may not be something that a functional or divisional leader can influence. We tend to call these things office politics and they are a fact of life for most of us. Now a leader needs to be on top of these things and be able to ensure that they are able to fight their team’s corner, but this is something that not all leaders are good at.
It is so easy to lose sight of what is right for the organisation when office politics come into play. Good leaders know when to fight these battles and when not to. They know what their priorities are and how to juggle these against their resources. They know what they have to do when things get tough; to make the right call every time.
There will be times when they have to go to their people and explain that the rules have changed and what was the goal is no longer so. They understand that they need to be truthful with their people because that is what will retain their trust.
Equally, those above the leader will need to trust the person that they have placed in a position of responsibility. There will be times when they have their own hard decisions to take and require the leaders of their businesses to deliver. This is another potential pitfall for the leader; when pressed to deliver something from above that could threaten their people, how do they call it?
Take someone with a long term project to deliver, but who is then faced with a requirement to cut headcount. This is a time for hard truths: You have to be able to look at the overall position and make the right call. Now that might be to accept the cuts, knowing that it will mean failing your project objectives, but in the knowledge that there is no other way that will work for the business. In that case there will be a hard sell to your team, but explaining the what and why and making sure that people understand is the right thing to do.
On the other hand you might dig your heels in and fight to show that there is another way to those above you. This might be a personal risk, but it is a better risk to go with what is right than to fold when to do so is wrong.
Showing courage when the chips are down delivers trust.
How resilient is your supply chain? It’s only as good as its people.
Supply chain resilience is a bit of a favourite theme for me. Being Swindon based I am very conscious of our local car plant where we turn out fine Honda models for folks to enjoy. Now Honda suffered with events in Japan a while back and short term working was a fact of life, not just at the plant, but for the sub component suppliers, logistics businesses and several others locally who feed to lines.
Recently things were looking brighter and, with a new model due out, Honda went back on to an 11 day fortnight to catch up and that pulled the supply chain along with them. All looked bright, but then another tsunami rolled across the Pacific waters and the resulting flooding in Thailand knocked out the supply of electronic components. Last week was down three day working instead of six, and next week looks like three half days instead of five full ones.
I bang on here about it being the people that count in business because, bottom line, without people nothing much will happen. Now most of the people affected by the events at Honda are on some form of flexible working package that helps to smooth out these sorts of fluctuations and so there is some resilience even if it does lead to an element of disgruntlement; catch up often means working for no extra pay (or that is how it is perceived) and the disruption to families can be considerable.
But there is also an element of these working groups that is sourced from the agency pool. Here there is a different impact in that no work means no pay. Now if you have some agency people trained up and working effectively to contribute their part of the supply chain, telling them that they are only wanted for three half days next week is a hard hit and, if they can get five days somewhere else, they are going to take it. And you might not get them back.
When we are making purchasing decisions on the companies that we will engage as part of our supply chains we look at all sorts of factors to determine their resilience; financial, technology, physical resource, quality, process, standards, the list goes on, but the crucial part of holding things together often rests with a small group of people who turn in and ply their trade as a form of mercenary band. Labour for hire, sometimes of questionable quality, but there is a hard core of grafters in any town and these are the backbone of the local labour pool.
It is often on these small groups that the real resilience of a supply chain will hang. Management and process are all very well as is investment in plant and facilities, but if you can’t keep a good team of people together you will have a problem. Sure you can plug the gap with other bodies, but it is experience on the job that glues everything together. Getting someone new up to speed takes time and effort. Just throwing bodies at a problem rarely solves it.
So next time that you are looking at the strategic supply chain, take the trouble to walk the floor of your supply partners and look at the people. Take the time to talk to some of the recruitment agencies about the local labour market. Find out where that supplier sits in the local pecking order of employers. Do they get the best or the dregs?
Because at the end of the day it is the people that matter: Never forget that.
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