Dr. Tracy Brower, Director of Performance Environments , Herman Miller (Q3 / Summer 2013)
Using data to inform decision-making is good business, which may be why it’s done. In fact, 62 percent of real estate and facility leaders prefer to make important decisions based on quantitative data, according to a study by Herman Miller’s Performance Environments division. There are good reasons for increased reliance on data for decision-making, one being that quantitative data is at our fingertips and we can leverage it more easily than ever before. The risks associated with our decisions are also greater, making data increasingly imperative. As challenges become more complex, solutions become more global, and the market becomes more competitive, data provides real estate and facility managers with critical inputs for problem-solving.
Data-driven decision-making affords a measure of control and the opportunity to evaluate the process. It also demonstrates return on investment and informs improvements. Data is a tool for learning (the only way we can get better is to have a handle on today’s performance) and also for collaboration. It provides a means to establish understanding of where we are and what we need to get to where we want or need to be. And it’s a reason for celebration when it proves accomplishment and success. But before you uncork the champagne, start with the essentials: gathering, analyzing, and interpreting the data.
Interpreting Numbers and Nuance
Perception doesn’t match reality, and that makes quantitative data about the work environment especially important. When you ask how often people use their workspaces, they generally report 70 to 80 percent usage. But the results of quantitative studies prove otherwise; usage is actually only about 40 percent for individual open offices, 20 percent for private offices, and less than 50 percent for conference rooms. Further, analog methods typically point to utilization 30 to 40 percent greater than sensor-based studies, missing significant opportunities to optimize the work environment.
Accurate utilization data empowers us to make better use of spaces and real estate footprints, and also make spaces work better for people. The workplace’s impact on its occupants is rarely neutral — it either supports satisfaction and performance or it detracts from them. Additionally, new technology tools and the new norms for mobility make it possible for people to “opt out” of environments that don’t suit them, resulting in lack of engagement and lost opportunities for collaboration and innovation. Ultimately, the workplace and the real estate portfolio are tools that real estate and facility leaders can — and should — use strategically to positively affect and influence their people and their businesses.
Qualitative data also benefits the decision-making process. Focus groups, surveys, ethnography, and interviews provide additional windows to reality by capturing the nuances behind the quantitative data. They offer an understanding about not only what is occurring, but also why it is occurring.
Balancing the Tangible with the Intangible
Our studies of real estate and facility leaders also reveal the value of both tangible and intangible metrics. Tangible metrics — such as costs, utilization, or energy performance — are easy to see, count, and assess. Intangibles — such as knowledge sharing, organizational culture, or network connectedness — are outcomes that are more difficult to quantify. The trend is toward an increasing desire to capture the intangible, though a strategic mix of both is most valuable — matching the needs of individual organizational cultures and the decisions to be made.
When using tangible and intangible metrics to create a business case for change, start with these steps:
- Clearly identify the business drivers you want to affect and the vision you want to achieve.
- Measure the current state of the space and build scenarios to create financial models, identifying the risks and benefits of each option.
- Give consideration to the resources necessary for each outcome and plan for how you will measure the successful achievement of the goals you established up front.
- Consider how the space can be used to its maximum value and how it can support people and their work. To what extent does the space support the way work is happening today and the way work will be changing?
- Identify your target ranges for efficiencies, costs, space utilization, employee satisfaction, productivity, and effectiveness.
Data has a cost, and too much data can overwhelm and create confusion. The most important element of data-driven decision-making is the sense we make of the data. When we turn information into insight — and take action that positively impacts our businesses — we are effective in harnessing data and its true value.