Tough talk

“Get up, get to it, do a good job.” Ten experts on how FM can build resilience in times of crisis. By Jo Sutherland, MD, Magenta Associates

In January 2023, the UK enjoyed headlines such as – “The UK recession will be almost as deep as that of Russia”, “UK faces worst and longest recession in G7” and “Third of world economy will be in recession this year”.

Happy New Year, indeed.

But it’s not all doom and gloom. In fact, there are as many opportunities as challenges. So, how can firms within the built environment build resilience? I interviewed 10 experts – those who were working in the industry when the last recession hit – to find out.

WHAT HAPPENED TO THE BUILT ENVIRONMENT SECTOR BACK IN 2008?

Antony Law, CCO, Churchill Group: FM works in cycles. Back then, TFM really came to the fore, probably because the prerogative at that time was cost savings, and there was the assumption that consolidating services would save money. In addition, investment in technology became a business priority. The recession helped charge FM into investing into solutions that would in turn deliver more value over time. That’s when the FM business model really came into its own.

Andy Topp, Director, Corps Security: From a security perspective, there was a huge cost pressure on contracts and a real need to look at operations closely to identify where savings could be made with an existing portfolio. Winning new business became a race to the bottom in certain scenarios. Some of the larger players capitalised due to market conditions and the opportunities that came with it. That’s perhaps why there was a flurry of acquisitions following the last recession – that’s when we began to see lots of different constructs of service delivery and more amalgamation of services, in particular within the FM space.

Mark Tyson, Head of Property Operations, LGIM: The first downturn forced the big guys to do proper partnerships that could stand the test of time. It wasn’t just procurement driving down costs, it was about the customer working with suppliers as part of a strategic partnership to deliver real value.

WHAT DO YOU THINK WILL HAPPEN THIS TIME AROUND?

Simon Murphy, NED, DMA Group: We’re in a much different place. For a start, we don’t have the big financial problems we had last time because banks have been cautious ever since and haven’t been aggressively lending. Although everything seems pretty gloomy at the moment, I actually don’t think we’re set to endure a particularly bad recession, especially if you look at it from a nominal growth perspective.

Lucy Jeynes, MD, Larch Consulting: Organisations are looking carefully at their occupancy levels, and mapping their lease break clauses. We would expect to see organisations reducing their overall space/property footprints, and reconfiguring what is there to focus more on collaboration spaces, as people are tending to do their focused individual working at home now. There is a crisis in the rail network, with price increases, strikes and service failures. The daily commute is less attractive than ever, which also impacts on occupancy in cities. You’d think there would be more of a rise in neighbourhood co-working spaces (a common model in Europe) – but we’re not seeing it taking off.

Rachel Basha-Franklin, Principal Director, Basha-Franklin: There are more interesting projects out there, a duty to deliver sustainable buildings and better environments to support human health and wellbeing. The whole conversation about the built environment accelerated in the right direction and I don’t think that momentum will stop.

HOW CAN FIRMS WITHIN THE BUILT ENVIRONMENT DELIVER MORE VALUE?

Jeremy Campbell, Executive Director, EMCOR UK: If we think about value as a combination of cost, quality service, customer experience, sustainability, people engagement and wellbeing, then facilities has the potential to deliver so much more than it is today. I think we’ll see more focus on supporting the superstars the industry employs, cultural change, carbon neutrality, nailing the basics, and going above and beyond to improve the experience. Technology will play a key part in this.

Rachel Houghton, MD, Business Moves Group: Value comes from being agile and working as a tight-knit team to ensure there’s a real understanding of industry challenges, not to mention a timely and emotionally intelligent level of responsiveness. Ultimately, though, those firms with an eagerness and a willingness to change the shape of what good looks like – including how they look after their people – will be the ones to deliver more innovation and value.

WHAT LESSONS DID WE LEARN BACK IN 2008 THAT WE CAN APPLY TO 2023? AND WHO WILL BE THE WINNERS THIS TIME AROUND?

Andrew Wood, CEO, DMA Group: For me, the lesson is that cash is king. I think the winners will be those who manage to get technology into the heart of their business. But it’s two pronged, and you can’t just present technology to your customers without the human touch. Human customer service is what clients want.

Alistair Craig, MD, Anabas: I think the companies that commit to delivering value, that really care about each and every one of their clients, that strive to be the best, and that know what they are about and what they stand for will thrive. Recession is just a technical phrase. You get up, you get to it, and you do a good job. You’ll live or die by that.

CONCLUSION

With every challenge, there’s an opportunity. That was certainly the case in 2008 and the shockwave years that followed. The consensus is the last financial crisis helped to pave a better way of doing things. Fifteen years later and perhaps we have another chance to redefine and further bolster FM’s value.