The following excerpt is from "Don't let Reactive Planning lead to your Exploitation", by William T. Adams, FAIA, published in the IFMA Journal, October 1989. Mr. Adams is the founder and president of Program Management.

Strategic Facility Plans Are Not Master Plans

Many names are used in reference to the different types of facility plans discussed by architects, interior designers, consultants and in-house managers. Distinctions between these different plans should be made to avoid confusion and clarify attributes of true strategic facility plans.

A Site Master Plan usually describes ultimate development objectives envisioned for one specific property, its associated building(s) and subsystems such as traffic and utilities. Expressed in terms of capacity limits, building configurations and other developmental guidelines, these physical plans are often documented with three-dimensional models and drawings.

The timing of interim development phases within a master plan as well as associated building types, sizes and configurations represent incremental projections of facility changes. As defined in a facility program, they also determine what changes will occur and when they will take place (e.g., growth, demolition). These are often termed Phasing Plans when identified in initial facility requirements studies and project plans when they have been authorized to proceed.

Complimentary Facility Occupancy Plans depict the use of individual buildings by floor and department, offering a "you are here" picture. Historic occupancy plans provide vital information concerning a company's facility operations. Designs for future occupancy plans (forecasts of "demand") superimposed on existing master plans (patterns of "supply") reflect a picture of asset utilization.

Most corporate property managers are responsible for more than one site or building, each with its own "master plan." As a result, a Corporate Portfolio or Facilities Master Plan represents each manager's overall property portfolio, its aggregate development capacity, potential long-term use and on-going occupancy cost.

Since business plans and facility requirements continually change, most of today's Facilities or Portfolio Master Plans are non-committal about each site's specific long-term building occupancies (by department). Instead, such plans focus on aggregate capacity and document the planned use of a company's existing facilities over time. They do this in terms of the projected need for general types of buildings (e.g., office, manufacturing, support and special purpose) and their locations.

In past years, facility managers, faced with unpredictable facility forecasts and questions of sufficiency, relied on a common practice: stockpiling property and master plans. This "supply side" approach to planning was more appropriate in eras of high-growth and inflation. This approach is less advisable in our current economy, which is experiencing less real growth and more emphasis on value. More accountability is being required of all assets, and many "land bank" inventories are being reassessed.

In this new environment, business and facility forecasting activities are also being pursued more carefully. Because of such changes, long-term facility forecasts in new growth industries now often exceed the limits of existing site resources. What's more, organizational changes and financial requirements outlined in business plans can make existing facilities expendable. This brings us back to the subject of Strategic Facilities Plans.

An SFP represents senior management's view of how current and future real estate and facility assets are to be deployed in order to reinforce business objective and planned operations.

Strategic facility actions outlined in an SFP reflect management's view of the priorities and trade-offs necessary to balance the internal competition for resources between labor, real estate (facilities) and operations -- plus its own view of future financial and organizational requirements.

In this context, Strategic Facility Plans can be best described by four characteristic attributes:

1. SFP's are Long Range

With planning horizons beyond the next project, sometimes three to five years, or longer, most existing real estate commitments become "variables." Leases can be vacated and even owned properties often can be profitability sold within such "lead times." As a result, needs expressed as financial and facility program requirements in an SFP can be used to pass judgment on the cost-effective benefits of existing facilities and to define the performance requirements necessary for any new property.

2. Business Plans are the Only Basis of an SFP

A company's true business future is not primarily designed to reinforce existing facilities or reflect past business operations. Only senior management's directives about the priority of business goals and assets can provide a basis for balancing the many competing individual objectives within a company. These directives may take the form of a formal business plan or informal position papers.

3. SFP's are Unusually Dynamic

As this planning process is reoccurring, "fundamentals" are more important than final physical form. The validity of future "snapshots" of master plans and occupancy plans, which are documented in SFPs, rely on may volatile business assumptions and the successful completion of many facility-related actions (e.g., sales, leases).

These fundamentals -- assumptions and actions -- are reviewed annually by many companies, often in the course of a quarterly review of "rolling" annual plans. With this schedule, managers can more easily remember previous assumptions about key variables. As a result, they remain aware how changes in those variables continue to affect the SFP. Even if business plans remain relatively constant other external factors such as the cost of capital often change, requiring basic facility strategies to be modified.

As a result, the SFP process is more important than the physical "master plan." This on-going SFP process continually redefines a company's property portfolio, real estate shopping or disposition list, own-lease policy and its attitude toward risk.

4. SFPs Offer the Greatest Benefits

This is because they are designed to influence company wide operations. A successful SFP can reinforce a company's ability to survive a downturn and avoid an acquisition. It can also allow the organization to enter new markets more easily. However significant, these results may seem difficult to quantify economically. On the other hand, specific new strategic actions within an SFP can be compared with the costs of maintaining a "status quo" facility ownership and management pattern.

As an SFP is developed, considerable care must be given in order to "balance" the many competing business-related actions sought by different management groups. To illustrate both valid goals and potential conflicts, this representative list of (strategic) real estate and facility actions is outlined (with requests listed by management group). Any one strategy selected will emphasize actions by some constituencies at the expense of others.

1. Facilities (Real Estate, Property, Facility Managers):

2. Labor (Employee Relations, Human Resource Managers):

3. Operations (Product, Service Group Managers):

4. Financial and Organizational (Senior Managers):

For a strategic facility plan to effectively include many of these typical conflicting objectives, senior management must either directly participate in this planning process or strongly support designated individuals or committees in this task.

The Act of Strategic Planning and Scenario Designs

Corporate SFP committee members face several major challenges in their work. First, management is increasingly uncomfortable with the accuracy of long-range facility forecasts. Secondly, the number of possible alternative facility actions sometimes seems endless. Finally, the task of individually evaluating the impact of each--and communicating complex trade-off issues to diverse groups within the company--can be overwhelming.

1. Develop or review facility forecasts, including space and adjacency requirements, which reflect the company's long-term business needs. These may be expressed as a range or as benchmark forecasts if accurate projections are unavailable.
2. Identify available strategic facility actions (including conflicting options). Agree upon criteria by which they will be measured. Typical actions are listed above. Representative criteria may include cost issues (capital or expense), accessibility, adaptability, etc.
3. Develop four to five scenario designs which accommodate the same forecast by emphasizing different sets of business objectives and facility actions. Basic alternatives accommodate the same forecast but emphasize different sets of business objectives and facility actions. Basic alternatives usually begin with a "business as usual" scenario.

   This status quo option is characterized by little change in business operations and fixed assets, plus improved productivity and greater utilization of existing facilities due to renovations and expansions.

   Additional scenarios are designed to reinforce critical attributes such as:

   	organization: consolidate or decentralize,
   	income or expenditure patterns,
   	ownership policies--lease/own mix and
   	timing--ASAP versus later.

   Next, the planning staff should size, schedule and assign cost values to collective actions in each scenario. Typically, annual values for only 25-30 variable factors need to be identified over the life of each scenario. This is in contrast to more detailed planning pro formas for single projects with more than 60 variables.

4. Evaluate scenarios by comparing quantitative costs and their qualitative features. Recommend one be further developed and adopted as a corporate SFP.

	Comprehensive planning concepts from the '40s and '50s,
	Participatory planning ideals from the '60s and
	Dynamic modeling and gaming theories from the '70s, reinforced by today's technologies and business lessons.

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