Momentum and CUinsight announced the next episode of their free webinar series, "Facilities Corner".· Episode two titled, "Driving Profitability through Effective Network Optimization Strategies", will be presented by Diana Ketza of Pitney Bowes. This 45 minute webinar will discuss how network optimization allows financial institutions to place branches in appropriate markets to maximize their opportunity to attract customers, build relationships, and generate sales. Learn how an effective network optimization strategy will result in immediate improvements to your bottom line and will help drive long-term profitability.
Date: October 13th
Time: 12noon EST (11am CST)
Click here to register
Sunday, October 2, 2011
Friday, August 19, 2011
Momentum to Host Breakout Session at NWCUA 2011 Convention
To help credit unions in their effort to maximize their workforce, the Northwest Credit Union Association (NWCUA) 2011 Convention and Annual Business Meeting will feature a break-out session specific to this topic. Led by Bob Saunders and Greg Barrett of Momentum, “Changing Workspaces for the Changing Workforce” will address generational diversity in the workplace as well as providing strategies specific to the needs of credit unions.
Monday, August 8, 2011
Momentum Teams Up with CUinsight.com to Create Monthly Webinar Series
Momentum recently collaborated with CUinsight.com, a leading online resource for the credit union industry to launch a monthly webinar series titled, “Facilities Corner”. The series will provide insights, trends and best practices on topics such as branch network optimization, strategic growth planning, and interior branch design and merchandising.
Scheduled to begin on Wednesday, September 14th, each 30-minute episode of “Facilities Corner” will feature a guest appearance by an industry expert or credit union executive with intimate experience and knowledge of the given topic.
“Now more than ever, credit union management teams need tools for measuring the return on investment from their capital expenditures on facilities”, said Greg Barrett, VP of Client Services for Momentum. “By bringing together industry thought leaders for this webinar series, we hope to provide helpful information for addressing various facilities related demands”, Barrett added.
“We are excited about teaming up with Momentum to offer our credit union community this type of content”, said Randy Smith, Publisher/Managing Editor of CUinsight.com. “This series aligns very well with our mission of being a valuable resource of information for the credit union community”.
Tuesday, July 19, 2011
Trust: The Most Critical Element of Collaboration
In nearly every workplace in every industry, productivity and success require some form of collaboration. Today's technology now makes it possible to collaborate with teams of all sizes, departments, and geographic locations. However, even with these new technologies, the currency that makes it work is trust.
In a recent blog post by Larry Prusak ("The One Thing That Makes Collaboration Work") for the Harvard Business Review, he does an excellent job in describing the things a leader must do to develop trust in an organization:
1. Promote trustworthy people
2. Work with your own employees
3. Publicize the costs of distrust
4. Give people a reason beyond their pay to come to work
5. Reduce pay inequality
These are critical factors to consider when planning collaborative workspace, whether it is a new facility or a renovation of an existing space.
As Mr. Prusak put it, "Trust is the new gold. Equally valuable, but for too many companies and too many leaders not nearly so obviously worth the effort."
In a recent blog post by Larry Prusak ("The One Thing That Makes Collaboration Work") for the Harvard Business Review, he does an excellent job in describing the things a leader must do to develop trust in an organization:
1. Promote trustworthy people
2. Work with your own employees
3. Publicize the costs of distrust
4. Give people a reason beyond their pay to come to work
5. Reduce pay inequality
These are critical factors to consider when planning collaborative workspace, whether it is a new facility or a renovation of an existing space.
As Mr. Prusak put it, "Trust is the new gold. Equally valuable, but for too many companies and too many leaders not nearly so obviously worth the effort."
Tuesday, June 28, 2011
Planning an Adaptable Workplace
In our previous articles we detailed several workplace factors that every Credit Union should consider, and how each of those factors can affect the overall performance and productivity of their organization. We also described the ever-changing economic and demographic environment that serves as a backdrop to every decision a Credit Union makes about its workplace. With all of that in mind, it is imperative that Credit Unions develop workplace strategies that are adaptable to change over time. The expansion and contraction of the financial industry, driven by economic factors, mergers and acquisitions, and regulatory issues are putting stress on the capacities of Credit Union workplaces all over the country. Consequently, their overall flexibility is being challenged by frequent reorganization and change. Work environments that are not flexible and adaptable to changes in the organization, create frustration for Credit Unions striving to achieve their key business objectives. As Credit Unions face uncertainties around fluctuations in workforce size, adaptable workspaces have become more essential than ever, and the workplace must adapt to change as quickly as any other aspect of their business. In addition to enabling employees, processes and technologies to work together more effectively, adaptable workplaces must achieve greater sustainable results when responding to changes.
The Adaptable Workplace Defined
An adaptable workplace generally possesses the following two properties:
Important Elements of an Adaptable Workplace
Adaptable workplaces are fully integrated with all building systems to provide the high-performance capabilities required by the ebbs and flows of business demands. In addition, the workplace must be orchestrated with specific performance criteria related to the operational efficiency of the building. To achieve this, Credit Unions need to look at the workplace as a network (or “neighborhood”) of highly integrated performance systems. Within that network, the key elements of an adaptable workplace deliver the optimal air quality, thermal control, connectivity, lighting, and interior spaces with significant impact from and upon the building shell. As such, individual workspaces, if they are intended to support an adaptable work environment, should no longer be considered in isolation. Momentum recommends that Credit Unions look beyond the traditional “office building” mentality and approach the design of the workplace as a “neighborhood”. Each occupant and their department in the neighborhood has unique needs and work styles that need to be accommodated in the overall workplace strategies.
Workplace adaptability poses many challenges, but there are several common mistakes that Momentum routinely observes in Credit Union facilities. A lowest-cost mindset. Conscious and rigorous attention to first cost is critical but, by ignoring the implications of life-cycle costing and the impact of building systems on total workplace performance, Credit Unions risk spending more in operating expenses and productivity losses. Achieving justifiable and cost-effective solutions should be the objective.
References
The Adaptable Workplace Defined
An adaptable workplace generally possesses the following two properties:
- It supports quick conversion of a workspace’s micro-environment into open, partially-open, and closed environments as required by a knowledge worker at a given time.
- It allows multi-functional activities (i.e. individual work (composing), two person discussion (collaboration), or team work (presenting) within the same workspace, without disturbing the workers in the adjoining workspaces.
- The adaptable workplace must adjust rapidly with minimal interruption.
- Reconfigurations and/or renovations must be executed easily.
- The space should perform economically, with minimal initial cost or operating expense.
- The space must perform with minimal waste of resources.
Important Elements of an Adaptable Workplace
Adaptable workplaces are fully integrated with all building systems to provide the high-performance capabilities required by the ebbs and flows of business demands. In addition, the workplace must be orchestrated with specific performance criteria related to the operational efficiency of the building. To achieve this, Credit Unions need to look at the workplace as a network (or “neighborhood”) of highly integrated performance systems. Within that network, the key elements of an adaptable workplace deliver the optimal air quality, thermal control, connectivity, lighting, and interior spaces with significant impact from and upon the building shell. As such, individual workspaces, if they are intended to support an adaptable work environment, should no longer be considered in isolation. Momentum recommends that Credit Unions look beyond the traditional “office building” mentality and approach the design of the workplace as a “neighborhood”. Each occupant and their department in the neighborhood has unique needs and work styles that need to be accommodated in the overall workplace strategies.
- Thermal comfort. In an adaptable workplace, thermal control systems provide enhanced individualized control to respond to various demands for heating and cooling. Using synchronization and digital management, an adaptable workplace utilizes a matrix of zonal distribution and controls to provide adjustable thermal control at a reasonable operating cost.
- Air quality. Air quality systems address the concerns of employee health, safety and comfort by providing filtration, ventilation and humidity control. Frequent reconfigurations and/or renovations challenge the adaptability of fixed, conventional systems.
- Connectivity. Connectivity for voice, data and power systems can generate the greatest stress to the adaptability of a knowledge-based workplace. To be adaptable, facilities must provide wireless and wired options with access to the infrastructure that is not disruptive to ongoing workplace operations.
- Interior spaces. Interior workspaces have undergone a gradual shift toward manufactured components that provide the greatest opportunity for achieving workplace adaptability. Modular workspace systems can encourage collaboration and support greater flexibility, while providing for ergonomic comfort, a key contributor to minimizing work related injuries.
- Lighting. Lighting in an adaptable workplace should be flexible for both individual and group tasks. Rather than a standardized lighting system, which is typically focused on minimizing initial cost, the high-performance integrated facility, should employ a system of affordable and cost-effective zonal distribution and controls. Sustainable designs take advantage of providing access to natural light to as much as 90% of the occupants. The natural lighting sources are then integrated with the general ambient lighting to maximize energy efficiency and enhance the qualitative aspects of the workplace.
Workplace adaptability poses many challenges, but there are several common mistakes that Momentum routinely observes in Credit Union facilities. A lowest-cost mindset. Conscious and rigorous attention to first cost is critical but, by ignoring the implications of life-cycle costing and the impact of building systems on total workplace performance, Credit Unions risk spending more in operating expenses and productivity losses. Achieving justifiable and cost-effective solutions should be the objective.
- Ignoring qualitative issues. No one benefits from an investment in open-office flexibility if acoustical issues disrupt the work process, or if the lighting is a glaring sea of fluorescent monotony. Qualitative issues are perhaps the most undefined challenges facing the adaptable workplace because they affect people’s performance and must therefore confront subjective responses. Justifying resources to satisfy qualitative demands is nearly impossible after the fact.
- Conventional thinking. Outdated assumptions continue to associate adaptability — incorrectly — with ease of movement through an open office. This type of thinking disregards the measurable value of building a workplace that can respond to changing demands driven by people, technology and work processes because the dominant assumption is that such value cannot be measured.
References
- Building Owners and Managers Association (BOMA) International Foundation. “Integrated Systems: Increasing Building and Workplace Performance.”
- Barber, Christine. “Brave New Workplace.” Facilities Design & Management.
- Fisk, W. J. & Rosenfeld, A. Estimates of improved productivity and health form better indoor environments. Indoor Air, 7, 158–172.
- “It’s a Matter of Balance: New Understandings of Open Plan Acoustics.” Herman Miller, Inc.
- Morrow, Wayne. “Personal Environments and Productivity in the Intelligent Building.” Intelligent Building Institute Intellibuild.
Monday, June 20, 2011
Measuring and Benchmarking Your Workspace
Credit Unions of all sizes routinely apply measurements and benchmarking techniques to a wide range of business activities. In doing so, one of the biggest challenges Credit Unions face is monitoring and measuring all outcomes—both the intended results and the unintended consequences—of any given change. However, the strategic measurement of an organization’s physical space is frequently left out of the equation. By developing and implementing a systemic approach to workplace measurement, businesses can better track and assess both the anticipated and unanticipated results of change. Once developed and implemented, measures and benchmarks should add value and improve results by aligning directly with the Credit Union’s short and long range goals.
Because holistic thinking is not always applied to workplace measurements, facility changes can produce unintended consequences. Two examples include:
- A move to cut real estate costs may save hundreds of dollars in the short term, and also have the unintended consequence of costing thousands of dollars in increased turnover and absenteeism.
- A shift to a more open environment may save hundreds of dollars in reconfiguration costs, and also have the unintended benefit of speeding product development time.
In an old-line factory, the worker was part of a predictable, repetitive production process and the goal of management was to neutralize worker differences in an effort to achieve consistent performance. Workers accomplished clearly defined tasks. If one person quit, a replacement was quickly found, and given the exact same tasks. Opinions were not sought, individuality was not encouraged, and conformity was highly valued.
During that time, measuring performance was easy: quantity, quality, and speed of work were all assessed in direct correlation to product volumes, defects, and production times. In the same way, it was simple to track and assess the effects of physical changes to the workplace. If changes decelerated production, they were bad. If changes improved production, they were good.
In today’s economic environment of knowledge workers, the role of each worker in the organization is much more dynamic and significant. The individual’s contribution defines his or her value to the organization and the goal of management is to stimulate more robust performance in an effort to achieve improved business results. Because highly valued knowledge workers are difficult or impossible to replace, retention of employees has become critical to a Credit Union’s success. Furthermore, as we outlined in our previous articles, the demographics of the workforce present new challenges and opportunities for Credit Union leaders.
Given these changes, measuring the performance of knowledge workers is much more qualitative than the straight forward assessment of old-time factory workers. Measurements are often tied to overall business results, such as profitability, market share, and customer satisfaction.
Assessing the performance of knowledge workers is an important, but challenging component of workplace measurement. Knowledge workers often depend on the ability to collaborate with other workers to analyze problems, create original solutions and produce results. These collaborative teams may require mobility and flexibility to accomplish a wide variety of duties. As a result, the workplace can have a huge impact on the quality and pace of their work.
Intangible Considerations
It should be noted that some of the most important assets to a Credit Union are intangible, and therefore invisible. With that in mind, the most important of these invisible assets to a Credit Union is its ability to collaborate. The decision that an employee makes to share an idea or to spend the extra hour helping out a fellow employee usually means the difference between "average" and "great." So, how do you measure the invisible? And, if the Credit Union cannot measure it, how can it manage it? Although these items do not show up on a balance sheet, it does not mean they aren’t real or cannot be measured.
Over the last few years, a concept called social network analysis (SNA) has emerged as a influential new way for managers to see the patterns of interaction. This includes information sharing, problem-solving, coaching, and mentoring, and they make up the less visible, often informal side of a Credit Union. By asking simple survey questions online and identifying the people with whom they most frequently interact, SNA makes it possible to understand the interactive networks that underlie or exist in parallel to the formal organization charts and process diagrams. Continuous surveys can reveal changes in networks or in patterns of collaboration, which makes it possible to assess whether interventions such as reorganization or targeted efforts to improve collaboration actually have their desired impact.
Therefore, in developing workplace measurement systems, Credit Union leaders should also incorporate measures for intangible factors in the workplace. By doing so, the organization will better identify its most critical intangible assets, how those assets are being cultivated, and what changes need to made to improve them.
Approaches to Workplace Measurement
While there are numerous workplace factors that a Credit Union can measure, the best practice is to use multiple factors in combination. One should also bear in mind that new measures continue to evolve that can aid the Credit Union in tracking the role that the workplace plays in:
- Enabling new ways for people in organizations to work
- Valuing the individual
- Shifting or reinforcing culture and image
- Implementing new technology
- Facilitating simpler, faster change
- Achieving financial objectives—how workplace changes help achieve the organization’s goals
- Effectiveness. The degree to which the workplace accomplishes what it set out to accomplish.
- Efficiency. The degree to which the workplace accomplishes its goals with a defined set of resources.
- Quality. The degree to which the workplace conforms to requirements, specifications, or expectations.
- Profitability. The relationship between total revenues and total costs.
- Productivity. The relationship between quantities of outputs from a workplace and quantities of inputs into that same workplace.
- Work Life Quality. The way employees in a workplace respond to sociotechnical aspects of that environment.
- Innovation. The degree to which creativity is applied to develop more functional products and services.
It’s important to realize that the physical space of the workplace can have a strong impact throughout the organization, both internally and externally. Therefore, as a Credit Union is developing a plan and tracking its results, it must address three sets of questions:
- What does the Credit Union want to accomplish? How will it measure success?
- How is the Credit Union going to accomplish it? How will it assess its process?
- How can space help? How will the Credit Union measure its impact?
Planning/Assessment
- Review the Credit Union’s mission, goals, and values.
- Define relevant strategic initiatives and elements.
- Confirm goals for the functional departments that will occupy workspace.
- Define objectives for workspace.
- Design workspace.
- Establish measurement team.
- Develop measures and targets.
- Communicate measures and assess feedback.
- Assign responsibility to measure and document.
- Communicate measurement results to the organization.
- Review results for progress.
- Evaluate changes/improvement in workspace and measurement system.
Several key factors significantly impact the development and implementation of workplace measurements: establishing agreed-upon priorities, tailoring measurements to needs, and gaining employee support. As a Credit Union’s needs change, reassessing and refining the measurement system is important for long-term success. Below are some considerations and ideas for developing and implementing a workplace measurement system.
Focus measurements on the Credit Union’s top priorities. Directly relate measurements to achieving the Credit Union’s goals. Revise or eliminate measures that are no longer meaningful to organizational goals.
Realize that measures are context dependent. A measurement that is appropriate for a particular situation may not provide the desired impact or have any meaning in a different setting. Customize measures to the activity and to the Credit Union’s goals.
Involve employees. The team that will develop, deploy, and manage the measurement system needs to include employees at various levels of the organization. Measurement systems devised by “experts” and imposed on an organization are likely to be rejected and ineffective.
Leverage employee involvement in measurement processes to refine the goals, metrics, data collection, and improvement opportunities. Employee involvement in developing, implementing, and reviewing phases of the measurement process builds:
- Knowledge of work activities.
- Buy-in on measurement goals and processes.
- Knowledge or measurement techniques.
- Ownership in developing and implementing improvements.
Understand the underlying objective. The ultimate goal is to improve the Credit Union’s performance in a particular aspect or activity. As the activity improves, evaluate and revise the measurement. To achieve continuous improvement, integrate the process for developing and implementing improvements into the measurement system.
Final Thoughts
Credit Unions of all sizes are constantly making decisions about their workplace, both tangible and intangible in nature. As such, leadership teams need to understand the various ways in which their workspace decisions affect employees and their productivity. There are several measurement models for analyzing employees’ relation to the workplace environment, not only to differentiate between the influences of different buildings, task types, and organizational culture, but also to develop tools and techniques to measure different aspects of the workspace itself. The results of these models can then be applied to wide range of workspace decisions that will have lasting effects on the Credit Union.
- Christopher, W.F., and Thor, C.G., (Eds.). Handbook for Productivity Measurement and Improvement. Portland, OR: Productivity Press, 1993.
- Davenport, T.H., Jarvenpaa, S.L., and Beers, M.C. “Improving Knowledge Work Processes.” Sloan Management Review. Summer, 1996: 53-65.
- Kopelman, R.E. Technology and the Transformation of White-collar Work. Hillsdale, NJ: Lawrence
- Erlbaum Associates Publishers, 1987.
- Landauer, T.K. The Trouble with Computers. Cambridge, MA: The MIT Press, 1995.
- Senge, P.M. The Fifth Discipline. New York: Doubleday/Currency, 1990.
- Sink, D.S. Productivity Management: Planning, Measurement and Evaluation, Control and Improvement. New York: John Wiley & Sons, 1985.
- Steelcase Inc. Eliminating Barriers to Communications: Hitachi America, Ltd. Case Study (S10452). Grand Rapids, MI: Steelcase Inc., 1997
Thursday, June 16, 2011
Evaluating Short and Long Term Occupancy Options
Intro
As Credit Unions strive to find and maintain a balance between increased productivity and cost containment, it is imperative that they maintain operations facilities that are capable of supporting their business objectives. As such, the organization must avoid pitfalls such as overinvestment in facilities, excessive occupancy costs or choosing workspace design that lacks long-term flexibility. For a Credit Union to be able to make the right strategic decisions, it must consider the full range of occupancy options. Ultimately, Credit Unions need to integrate their business plans with their plan for both the short-term and long-term acquisition and disposition of their facilities.
In our previous articles, we took a closer look at some of the key components that form the heart and soul of a Credit Union; its people. In this article we outline several important considerations and strategies for addressing a Credit Union’s physical space needs, now and in the future.
What Is Strategic Facilities Planning?
Strategic facilities planning provides a framework for better decision-making by connecting organizational goals and strategies with real estate, design and capital development policies and programs. Because strategic facilities planning is a proactive tool, it will help with anticipating change and in determining the best course of action, in responding to ever evolving workspace needs.
The strategic facilities planning (SFP) process integrates a Credit Union’s business plan with its plan for the short-term and long-term use of facilities. When approaching the SFP process, here are four key points to consider:
The Benefits of Strategic Facilities Planning
As noted earlier, in today’s economic environment, it is even more imperative that the right facilities ---- in terms of size, cost and location ---- be available to support an organization’s business objectives. There are two types of benefits derived from the SFP process. The more obvious benefits are the acquisition of data and the development of a system for reacting to longer-term facilities needs. Regardless of the size of your Credit Union, an SFP will help you to:
A typical Credit Union may sometimes have five to eight occupancy strategies that could serve to support its overall business goals. Each of these strategies varies in terms of how it will support the business, brand, flexibility, efficiency, productivity, and its ultimate cost. Below are some of the common occupancy options.
Remodeling an existing building. This can often be an excellent way to save money, sometimes allowing for a quick occupancy solution, but this plan should be carefully considered when conducting an analysis. Momentum has found that too often, a Credit Union will purchase an existing building without having an underlying strategic facilities plan in place. The result is that it becomes unclear on how the building can impact the organization’s operations and efficiency. Depending on facility’s envelope and mechanical/electrical infrastructure and its ability to support the Credit Union’s business goals, the final cost can sometimes approach the cost of developing a new facility.
Building a new facility. This is quite often an attractive option and brings with it many advantages. Not only does it provide a modern building and technologies, but it can provide a healthier work environment and operate with efficiencies that can reduce costs. In addition, a newly developed facility can increase the strength of a Credit Union’s brand image, while projecting stability and community commitment. Clearly the planning, designing, and building of a new facility is not a small undertaking and the process should include consultation with a firm that can provide expertise and guidance throughout the process.
Renovating and expanding existing facilities. Depending on the Credit Union’s short-term and long-term business objectives, and its existing facilities, renovation and expansion can be a viable option. Certain efficiencies may be possible by making minor changes and updates to an existing facility, but strong consideration needs to be given to the lifespan those updates can afford the organization. If renovations will only accommodate an organization’s growth for two to three years, there will be little return on investment.
Leasing new or existing facilities. Leasing can be the least expensive alternative in the early years of occupancy, but becomes increasingly expensive over time. Projections of occupancy costs over 10, 15 and 20 years will generally show that leasing can cost millions more than ownership. Another disadvantage is that leasing does not offer an opportunity to profit from the sale of a facility, which would typically serve to fund the next cycle of facilities needs.
A Credit Union’s decision on an occupancy strategy will clearly have a very significant and long lasting effect on its overall efficiency and success. As such, it is imperative that the Credit Union fully understands all of the variables related to the cost of leasing, owning, building, or renovating.
Evaluating Current Facilities Operations
Credit Unions must understand and embrace the fact that strategic facilities planning (SFP) is an ongoing process. Once developed, the plan needs to be routinely revisited and measured, in order to confirm when adjustments need to be made. In effect, our starting point will change each time we update the plan. The process for evaluating existing facilities operations should involve six key areas:
How Much Space Do You Need?
While it seems to be a simple question, the actual process of determining the amount of space needed for a new facility is quite complex and involved. Building or leasing too much space can hamper cash flow with an excessive rent payment and under-utilized space. Alternatively, too little space can result in limitations throughout the Credit Union’s business operations. This may result in the need to relocate or prematurely expand a facility, which is a very expensive exercise.
The overriding goal is to make sure that the Credit Union’s new space not only meets its functional requirements, but remains adaptable, and projects an image of long term success, commitment, and community involvement.
Projecting Space Requirements
The ability to anticipate change is one of the most valuable benefits of strategic facilities planning. By projecting space needs, an organization can ensure that space will be available to accommodate staff growth, or space can be disposed of in a cost-effective manner when downsizing. A strategic facilities plan includes staff and area forecasts for each major functional group or department. The team needs to look at three time frames: short-term (one to two years), mid-range (three to four years) and long-range (five to ten years).
Long-range plans provide a context for general financial forecasting and major real estate decisions. Mid-range plans identify needs to begin relocation, consolidation, renovation and new construction projects.
Short-term plans define detailed implementation of specific projects and their budgets. Space forecasts are most often accomplished with the use of financial facility space standards. For long-range forecasts, square footage projections per full time employee (FTE) may be used instead of the more detailed space standards approach.
Standards programs define a set of relationships between organizational structure, people and the type and amount of workspace they occupy. The use of universal space standards is a very common practice with proven benefits:
Approach
Typically, the first step for determining a Credit Union’s space needs is to establish a baseline using existing facilities as a benchmark. Based on the current and expected asset growth of the entire Credit Union, calculations can be performed and then graphically plotted to represent future needs over 10, 15, and 20 years (Figure 1).
In addition, departmental space needs should be determined, based on the overall growth projections of the Credit Union. This is accomplished through comprehensive surveys, discussions with department managers, and interviews with principal leadership, in order to ascertain the short and long term space needs per functional department (Figure 2).
Key Measurements to Consider
There are a series of metrics, which are invaluable for analyzing the efficiency of any Credit Union workspace, looking at both existing and planned spaces. These metrics form the yardstick by which you will need to measure the potential workspaces and departmental layouts. These projections take the form of a series of ratios, with the most common ratios listed here.
Gross Density Ratio. One ratio which is very helpful is to determine your current Usable Square Feet (USF) per person ratio. While this will give you a general idea of the density of your existing space, if you are considering a significantly larger or smaller office, extrapolations using this ratio can be misleading, as not all rooms or spaces grow or shrink proportionally. For example, the amount of space dedicated to support areas and rooms, such as server rooms or copy/mail areas is not usually directly proportional to the number of private offices or open workstations. Additionally if you plan to adjust the office-to-open workstation ratio in the new office, this will change the gross density ratio. Typically this ratio ranges from 225 USF/person (and lower) for densely planned, larger, all workstation offices and up to 350 USF/person for smaller, private office areas with frequent in-office member/coworker meetings.
Enclosed to Open Ratio. This is the number of staff in private or enclosed offices compared to those in systems furniture or open workstations. Enclosed offices take up more space on a per person basis, so this ratio can have a direct impact on total space required. It also will have a big impact on the corporate culture and it can affect how a Credit Union is perceived in the marketplace, by both members, staff and potential candidates for hire. As we discussed in previous articles, both enclosed and open spaces can be appropriate for Credit Unions and depend on many factors within the organization. Security, communication between staff, levels of hierarchy in management and other cultural factors all play a role in the definition of this ratio.
Conference Room Ratio. The ratio between the number of staff served by each conference room is another key metric for programming a space requirement. Credit Unions operating in predominantly open office environments tend to need more rooms for private meetings between staff, both for small, personal meetings as well as for large team or group meetings. This ratio can range from one conference room to 10 employees in an all open office environment, to one conference room per 20 employees in a private office-rich environment.
Circulation Factors. The natural inclination in calculating space needs is to simply list all the spaces needed, along with their respective sizes and arrive at a total square footage requirement. However, additional space should be allocated to account for hallways, restrooms, elevators, stair towers and other circulation paths within the Credit Union’s space. This can vary dramatically depending on how efficient a layout that can be accomplished within a given building footprint.
For example, the dimension between the outside wall of the building and the interior building core rooms (toilet rooms, elevator shafts, etc.) should allow for space to give access to one or more rooms on each side of the hallway. A low dimension here will likely mean only one side of the hallway (referred to as “single loaded”) will serve the rooms, and the circulation factor in this type of area will be higher. Where this dimension is adequate to serve rooms on either side of the hallway (or “double loaded”) this area is more efficient and will have a lower circulation factor. Usually for early planning purposes this factor is established at 25-35 % of the room/workstation area. Once again, the enclosed office/workstation ratio will affect this number. Your space planner needs to understand the unique factors that differentiate a Credit Union’s needs from that of a traditional office workplace.
Sizing the Rooms. This is where a space planner needs to begin listing the numbers of staff and their respective spaces. The size of the spaces naturally will affect the overall building square footage, so extreme care must be taken in order to size the rooms appropriately for the given activity.
Private Offices. As discussed above, the number of offices will be directly related to the degree to which a Credit Union’s space is determined to open versus closed. An office area of 20'x15' can easily accommodate a senior executive desk, credenza, a conference table for 4 people and lounge seating for 2-3. This size is not uncommon for the CEO’s office in small to mid-sized Credit Union.
An office of 15'x15' can include an executive desk and credenza, a conference table for 3-4 people and either a bookshelf or a small sofa for 2-3. This size is what we normally recommend for vice-presidents of mid-sized organizations.
The 10'x15' office is very prevalent these days and can fit a mid-manager’s desk with return, two guest chairs and a bookshelf. Some offices at the smaller end of the spectrum are 10'x12' or an even smaller 10'x10'. At this size, a standard size desk and return are possible along with two guest chairs.
Conference Rooms. The appropriate size for a conference room depends on a multitude of factors (i.e., privacy, maximum group size, typical group size, frequency of use, video and teleconference requirements); however if you allocate 20-25 USF per seat in the early planning stages, you will be allowing sufficient space which can then be fined-tuned in the SFP, and in the subsequent design phase
On-site Training. Credit Unions that are dedicated to keeping their organization current in terms of advances in technology are typically committed to the ongoing training of their staff. Therefore their space program will include a need for dedicated, in-house training rooms. If you plan on utilizing tablet arm type seating allow 20 USF per person. If your training involves staff seated at tables with computer monitors, allow 50-60 USF per person. AV systems, white boards and conferencing capabilities are treated as if one were in a classroom environment.
The Action Plan
When developing facilities plans, Credit Unions should accept the fact that change in the workplace is inevitable. A sound strategic facilities plan is incredibly valuable when it acknowledges the probability that target space projections will change, and a solid plan identifies a reasonable range of alternative possibilities.
Strategic facilities planning is not a “one-size-fits-all” exercise, as each Credit Union has unique goals, employees, communities, leadership and member bases. However, these general guidelines provide a good framework for reference:
References
• Aliotta, J. and Carlson, S. “When Is It Time to Relocate?” FacilitiesNet.
• Day, L. L. ‘‘Facilities’ Role in Strategic Planning,’’ Industrial Development.
• Fennie, Jr. F. “Space Planning: How Much Space Do You Really Need?” The Space Place.
• Helou, P. A Guide to Strategic Facilities Planning.
• Mount, S. K. ‘‘Strategic Facilities Planning as a Component of the Business Plan,’’ Industrial Development.
• Pittman, R. H. ‘‘Integration of Real Estate into Corporate Strategy: a Progress Report,’’ Industrial Development.
As Credit Unions strive to find and maintain a balance between increased productivity and cost containment, it is imperative that they maintain operations facilities that are capable of supporting their business objectives. As such, the organization must avoid pitfalls such as overinvestment in facilities, excessive occupancy costs or choosing workspace design that lacks long-term flexibility. For a Credit Union to be able to make the right strategic decisions, it must consider the full range of occupancy options. Ultimately, Credit Unions need to integrate their business plans with their plan for both the short-term and long-term acquisition and disposition of their facilities.
In our previous articles, we took a closer look at some of the key components that form the heart and soul of a Credit Union; its people. In this article we outline several important considerations and strategies for addressing a Credit Union’s physical space needs, now and in the future.
What Is Strategic Facilities Planning?
Strategic facilities planning provides a framework for better decision-making by connecting organizational goals and strategies with real estate, design and capital development policies and programs. Because strategic facilities planning is a proactive tool, it will help with anticipating change and in determining the best course of action, in responding to ever evolving workspace needs.
The strategic facilities planning (SFP) process integrates a Credit Union’s business plan with its plan for the short-term and long-term use of facilities. When approaching the SFP process, here are four key points to consider:
- Facility planning not only stems from, but also must contribute to, the development of corporate strategic plans related to marketing, finance, organizational, human resources and operational issues.
- Senior management must be actively involved setting policy, reviewing findings and making facilities decisions.
- The Credit Union’s business plan and historical performance data are invaluable sources of information to the long-range facilities planner.
- The workspace plan must be tested against, and integrated into the Credit Union’s business plan in order to be accurately identified as a Strategic Facilities Plan.
The Benefits of Strategic Facilities Planning
As noted earlier, in today’s economic environment, it is even more imperative that the right facilities ---- in terms of size, cost and location ---- be available to support an organization’s business objectives. There are two types of benefits derived from the SFP process. The more obvious benefits are the acquisition of data and the development of a system for reacting to longer-term facilities needs. Regardless of the size of your Credit Union, an SFP will help you to:
- Correlate and integrate business and facility planning.
- Position facilities to complement and enhance financial performance.
- Establish proactive management practices which will ensure the development of facilities which are appropriately sized, budget oriented and delivered in a timely manner.
- Avoid unwarranted investment in facilities and operating costs.
A typical Credit Union may sometimes have five to eight occupancy strategies that could serve to support its overall business goals. Each of these strategies varies in terms of how it will support the business, brand, flexibility, efficiency, productivity, and its ultimate cost. Below are some of the common occupancy options.
Remodeling an existing building. This can often be an excellent way to save money, sometimes allowing for a quick occupancy solution, but this plan should be carefully considered when conducting an analysis. Momentum has found that too often, a Credit Union will purchase an existing building without having an underlying strategic facilities plan in place. The result is that it becomes unclear on how the building can impact the organization’s operations and efficiency. Depending on facility’s envelope and mechanical/electrical infrastructure and its ability to support the Credit Union’s business goals, the final cost can sometimes approach the cost of developing a new facility.
Building a new facility. This is quite often an attractive option and brings with it many advantages. Not only does it provide a modern building and technologies, but it can provide a healthier work environment and operate with efficiencies that can reduce costs. In addition, a newly developed facility can increase the strength of a Credit Union’s brand image, while projecting stability and community commitment. Clearly the planning, designing, and building of a new facility is not a small undertaking and the process should include consultation with a firm that can provide expertise and guidance throughout the process.
Renovating and expanding existing facilities. Depending on the Credit Union’s short-term and long-term business objectives, and its existing facilities, renovation and expansion can be a viable option. Certain efficiencies may be possible by making minor changes and updates to an existing facility, but strong consideration needs to be given to the lifespan those updates can afford the organization. If renovations will only accommodate an organization’s growth for two to three years, there will be little return on investment.
Leasing new or existing facilities. Leasing can be the least expensive alternative in the early years of occupancy, but becomes increasingly expensive over time. Projections of occupancy costs over 10, 15 and 20 years will generally show that leasing can cost millions more than ownership. Another disadvantage is that leasing does not offer an opportunity to profit from the sale of a facility, which would typically serve to fund the next cycle of facilities needs.
A Credit Union’s decision on an occupancy strategy will clearly have a very significant and long lasting effect on its overall efficiency and success. As such, it is imperative that the Credit Union fully understands all of the variables related to the cost of leasing, owning, building, or renovating.
Evaluating Current Facilities Operations
Credit Unions must understand and embrace the fact that strategic facilities planning (SFP) is an ongoing process. Once developed, the plan needs to be routinely revisited and measured, in order to confirm when adjustments need to be made. In effect, our starting point will change each time we update the plan. The process for evaluating existing facilities operations should involve six key areas:
- Real estate assets
- Individual sites
- Building conditions
- Work space conditions
- Facilities operating costs
- Facilities management function
How Much Space Do You Need?
While it seems to be a simple question, the actual process of determining the amount of space needed for a new facility is quite complex and involved. Building or leasing too much space can hamper cash flow with an excessive rent payment and under-utilized space. Alternatively, too little space can result in limitations throughout the Credit Union’s business operations. This may result in the need to relocate or prematurely expand a facility, which is a very expensive exercise.
The overriding goal is to make sure that the Credit Union’s new space not only meets its functional requirements, but remains adaptable, and projects an image of long term success, commitment, and community involvement.
Projecting Space Requirements
The ability to anticipate change is one of the most valuable benefits of strategic facilities planning. By projecting space needs, an organization can ensure that space will be available to accommodate staff growth, or space can be disposed of in a cost-effective manner when downsizing. A strategic facilities plan includes staff and area forecasts for each major functional group or department. The team needs to look at three time frames: short-term (one to two years), mid-range (three to four years) and long-range (five to ten years).
Long-range plans provide a context for general financial forecasting and major real estate decisions. Mid-range plans identify needs to begin relocation, consolidation, renovation and new construction projects.
Short-term plans define detailed implementation of specific projects and their budgets. Space forecasts are most often accomplished with the use of financial facility space standards. For long-range forecasts, square footage projections per full time employee (FTE) may be used instead of the more detailed space standards approach.
Standards programs define a set of relationships between organizational structure, people and the type and amount of workspace they occupy. The use of universal space standards is a very common practice with proven benefits:
- Increased facilities performance and responsiveness to user requirements.
- Controlled or reduced costs.
- Functional and equitable office assignments.
Approach
Typically, the first step for determining a Credit Union’s space needs is to establish a baseline using existing facilities as a benchmark. Based on the current and expected asset growth of the entire Credit Union, calculations can be performed and then graphically plotted to represent future needs over 10, 15, and 20 years (Figure 1).
In addition, departmental space needs should be determined, based on the overall growth projections of the Credit Union. This is accomplished through comprehensive surveys, discussions with department managers, and interviews with principal leadership, in order to ascertain the short and long term space needs per functional department (Figure 2).
Key Measurements to Consider
There are a series of metrics, which are invaluable for analyzing the efficiency of any Credit Union workspace, looking at both existing and planned spaces. These metrics form the yardstick by which you will need to measure the potential workspaces and departmental layouts. These projections take the form of a series of ratios, with the most common ratios listed here.
Gross Density Ratio. One ratio which is very helpful is to determine your current Usable Square Feet (USF) per person ratio. While this will give you a general idea of the density of your existing space, if you are considering a significantly larger or smaller office, extrapolations using this ratio can be misleading, as not all rooms or spaces grow or shrink proportionally. For example, the amount of space dedicated to support areas and rooms, such as server rooms or copy/mail areas is not usually directly proportional to the number of private offices or open workstations. Additionally if you plan to adjust the office-to-open workstation ratio in the new office, this will change the gross density ratio. Typically this ratio ranges from 225 USF/person (and lower) for densely planned, larger, all workstation offices and up to 350 USF/person for smaller, private office areas with frequent in-office member/coworker meetings.
Enclosed to Open Ratio. This is the number of staff in private or enclosed offices compared to those in systems furniture or open workstations. Enclosed offices take up more space on a per person basis, so this ratio can have a direct impact on total space required. It also will have a big impact on the corporate culture and it can affect how a Credit Union is perceived in the marketplace, by both members, staff and potential candidates for hire. As we discussed in previous articles, both enclosed and open spaces can be appropriate for Credit Unions and depend on many factors within the organization. Security, communication between staff, levels of hierarchy in management and other cultural factors all play a role in the definition of this ratio.
Conference Room Ratio. The ratio between the number of staff served by each conference room is another key metric for programming a space requirement. Credit Unions operating in predominantly open office environments tend to need more rooms for private meetings between staff, both for small, personal meetings as well as for large team or group meetings. This ratio can range from one conference room to 10 employees in an all open office environment, to one conference room per 20 employees in a private office-rich environment.
Circulation Factors. The natural inclination in calculating space needs is to simply list all the spaces needed, along with their respective sizes and arrive at a total square footage requirement. However, additional space should be allocated to account for hallways, restrooms, elevators, stair towers and other circulation paths within the Credit Union’s space. This can vary dramatically depending on how efficient a layout that can be accomplished within a given building footprint.
For example, the dimension between the outside wall of the building and the interior building core rooms (toilet rooms, elevator shafts, etc.) should allow for space to give access to one or more rooms on each side of the hallway. A low dimension here will likely mean only one side of the hallway (referred to as “single loaded”) will serve the rooms, and the circulation factor in this type of area will be higher. Where this dimension is adequate to serve rooms on either side of the hallway (or “double loaded”) this area is more efficient and will have a lower circulation factor. Usually for early planning purposes this factor is established at 25-35 % of the room/workstation area. Once again, the enclosed office/workstation ratio will affect this number. Your space planner needs to understand the unique factors that differentiate a Credit Union’s needs from that of a traditional office workplace.
Sizing the Rooms. This is where a space planner needs to begin listing the numbers of staff and their respective spaces. The size of the spaces naturally will affect the overall building square footage, so extreme care must be taken in order to size the rooms appropriately for the given activity.
Private Offices. As discussed above, the number of offices will be directly related to the degree to which a Credit Union’s space is determined to open versus closed. An office area of 20'x15' can easily accommodate a senior executive desk, credenza, a conference table for 4 people and lounge seating for 2-3. This size is not uncommon for the CEO’s office in small to mid-sized Credit Union.
An office of 15'x15' can include an executive desk and credenza, a conference table for 3-4 people and either a bookshelf or a small sofa for 2-3. This size is what we normally recommend for vice-presidents of mid-sized organizations.
The 10'x15' office is very prevalent these days and can fit a mid-manager’s desk with return, two guest chairs and a bookshelf. Some offices at the smaller end of the spectrum are 10'x12' or an even smaller 10'x10'. At this size, a standard size desk and return are possible along with two guest chairs.
Conference Rooms. The appropriate size for a conference room depends on a multitude of factors (i.e., privacy, maximum group size, typical group size, frequency of use, video and teleconference requirements); however if you allocate 20-25 USF per seat in the early planning stages, you will be allowing sufficient space which can then be fined-tuned in the SFP, and in the subsequent design phase
On-site Training. Credit Unions that are dedicated to keeping their organization current in terms of advances in technology are typically committed to the ongoing training of their staff. Therefore their space program will include a need for dedicated, in-house training rooms. If you plan on utilizing tablet arm type seating allow 20 USF per person. If your training involves staff seated at tables with computer monitors, allow 50-60 USF per person. AV systems, white boards and conferencing capabilities are treated as if one were in a classroom environment.
The Action Plan
When developing facilities plans, Credit Unions should accept the fact that change in the workplace is inevitable. A sound strategic facilities plan is incredibly valuable when it acknowledges the probability that target space projections will change, and a solid plan identifies a reasonable range of alternative possibilities.
Strategic facilities planning is not a “one-size-fits-all” exercise, as each Credit Union has unique goals, employees, communities, leadership and member bases. However, these general guidelines provide a good framework for reference:
- Identify the gaps between current conditions and future facilities requirements.
- Evaluate in each situation, how existing facilities do not satisfy internal and external business requirements.
- Identify general, long-range strategies to improve facilities performance.
- Test several alternative "macro" strategies and select the best plan; the long-range plan.
- Refine the macro plan into a more specific construction, phasing and financial plan—the mid-range plan.
- Update the plan as needs and conditions change.
- Develop implementation plans, including timetables, for specific projects called for in the long and mid-range plans-- the short-term plan.
References
• Aliotta, J. and Carlson, S. “When Is It Time to Relocate?” FacilitiesNet.
• Day, L. L. ‘‘Facilities’ Role in Strategic Planning,’’ Industrial Development.
• Fennie, Jr. F. “Space Planning: How Much Space Do You Really Need?” The Space Place.
• Helou, P. A Guide to Strategic Facilities Planning.
• Mount, S. K. ‘‘Strategic Facilities Planning as a Component of the Business Plan,’’ Industrial Development.
• Pittman, R. H. ‘‘Integration of Real Estate into Corporate Strategy: a Progress Report,’’ Industrial Development.
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