An introduction to strategic facilities planning

An introduction to strategic facilities planning

Glagola, John R


For many corporations and organizations, the first reaction to any perceived facilities need is to hire an architect or a design-build contractor. However, the design skills that architects offer are only one factor in creating wise, cost-effective, and long-term facilities solutions. Design and construction are expensive acts of execution; major expenses-and major mistakes-can be avoided by starting with the most fundamental steps of planning and following them in sequence, making certain that all of the right questions are asked. More often than not, the needs and answers that initially seem obvious often miss the real opportunities. In actuality, a corporations needs for facilities begin long before they actually consider constructing new buildings, and in fact are driven by the corporation’s specific, unique business needs. Strategic facilities planning can address these needs. This discipline, comprised of planners and architects dedicated to delivering customized sets of applicable processes and methodologies, has grown at many firms to include the input of social scientists, MBA graduates, real estate experts, and data managers. When successfully undertaken, strategic facilities planning designs are integrated, comprehensive, transparent processes and introduce each discipline of specialized expertise at the appropriate moment, and position corporations to better develop, produce, and deliver their products, whatever and wherever they may be.

Effective strategic facilities planning methods align the business needs of a corporation with its physical needs, thus working to ensure that a corporation’s facilities actively strive to support the company’s business mission, rather than hinder their goals. These plans are also flexible and living documents, appropriate and applicable to both immediate and long-term facilities goals. They address overlapping needs and potential shared capacities, and are by definition proactive. An effective strategic facilities plan includes data and recommendations to guide companies through relocations, consolidations, downsizing, mergers and acquisitions, new construction and renovations, site and facility selection, and contractual real estate decisions. In short, they are a vital and often under-used tool available to today’s business leaders seeking to better manage and grow their companies.


Facilities planning recognizes that every business plan decision has a direct impact on a corporation’s real estate assets and needs. The mission of the plan, therefore, is to develop an implementable, adaptable real estate plan based upon the specific and unique considerations of the individual business. This mission is accomplished by a step-by-step process of understanding, analysis, planning, and acting.

Planners begin to develop the strategic facilities plan by understanding the needs of the client’s business, building on whatever internal analysis an institution has already completed itself or with other consultants, and define the corporation’s short-, mid-, and long-term goals, considering the range of their products and services, and learning about their goals, limitations, and opportunities. The work planners do for a client is entirely dependent upon these specific needs, and should address both strategic and long-range planning, and, conversely, the evaluation of current facilities and the conceptualization, planning, and implementation of new facilities, depending on their requirements. Most commonly, strategic plans provide a combination and range of services, as required by the client to maximize the value of their assets. The team considers such factors as the current position of the business and its current real estate asset base, its overall direction and the projects currently underway within the company, how the business may change, and how those changes may affect the real estate needs of the corporation.

Once these questions are answered, the planners and designers can then take a business-driven approach to analyzing the company’s facilities that sets tangible goals and planned targets. Often, corporations take a cost-driven approach to their facilities, which although quick to implement and often cost-effective, is nevertheless lacking in vision, fails to address the actual delivery of the business’s goods and/or services, and has only a moderate long-term impact on improving the overall performance of the business as a whole. In contrast, a business-driven approach, despite necessitating a more deliberate time frame, delivers a clear vision for the future, earns employee support, and strengthens the business competitively and enhances performance. Using this approach, the planners study the real estate assets the corporation currently holds using gathered data, modeling tools, and scenario alternatives. This data often includes lease and ownership data, building assessments, square footages, space utilization standards, and location characteristics.

Following these steps, the team explores the various business goals of each unit in the business, and integrates these goals into the facility plan portfolio. This defines future space and real estate needs based on overall corporate goals, starting with anticipated services, expected staffing changes, and potential new technologies. The team uses these needs to predict future headcounts, demographics, space utilization, maintenance, and capital and operating costs.

Once a clear definition of the business’s situation has been established, the planners and designers begin to consider how to balance current facility needs with long-term needs and issues. These needs and issues may include workforce demographics, manufacturing processes, structure organization, community and government relationships and requirements, market position, and capacity rates and volumes. All of these forces combine to define the individual elements of the strategic facilities plan.

The final product of this process is not an inflexible document, but an insight into how different decisions will affect the client’s return on investment, cash flow, debt load, and work processes. The plan is a single, living document that reports its findings and makes concise recommendations for implementing the results of the plan within a realistic time frame.


A specific example of an effective strategic plan involves work undertaken for one of the Big Three American Automakers. This company, burdened with a codified and unresponsive hierarchical structure, used a strategic facilities plan to spark change throughout the company. Management identified their operational goals as optimizing workflow, especially within particular product development groups, increasing creative teamwork throughout the organization, achieving the highest possible return-on-net-assets (RONA), and the implementation of common systems and processes to foster maximum efficiency and speed.

The project team partnered with the client’s strategic facilities planning team to establish an ongoing strategic facilities planning activity directed at reaching these goals. The team’s work included:

* A situation analysis that identifies available base data on current space use and building conditions, facilities costs, and related financial accounting and planning processes and facilities planning and management systems, procedures, and staff organization.

* Identification of key influences on the corporation’s business, such as product times to market, brand identity, employee satisfaction, RONA, and how facilities link with these business issues.

* Long-range business and facilities strategic visioning, including evaluation of alternative location scenarios based on business needs, regional demographics, costs, identity, labor, community, and other drivers.

* Development of common definitions and metrics for space measurement and creation of a graphic and numeric database of information comprised of existing space use by type and business unit.

* Calculation of actual space used by function and space utilization efficiency.

* Strategic oversight of development of new workplace standards.

* Site framework master planning for several sites in several cities.

Based upon these recommendations, the company divested in certain real estate assets while they chose to invest more heavily in others. Perhaps the greatest advantage in this particular case was that the company was able to consolidate various and diverse work groups in greater concentrations, facilitating communication and interaction among the different groups, and greatly reducing the “fiefdom” mentality that had existed in the farflung and inflexible facilities arrangement.

Ultimately, the plan resulted in smarter engineering and a more streamlined corporation. The plan also helped the company with such bottom-line factors as managing structural costs, eliminating facilities redundancies, and creating facility adjacencies.

Work continues towards aligning the company’s facilities strategies with its facilities planning. Perhaps most significant to the client are the benefits incurred from bringing together their diverse business units to discuss strategic facilities issues and macroprograms. These sessions have become a forum for interchange of business planning ideas to move the company’s future vision forward.

In today’s business environment, change is the only constant: new channels, competitors, and business models are emerging, the balance of power is invariably shifting toward customers, and the pace of business is accelerating exponentially. Amidst this turbulence, companies need strategies for their real estate assets that will help them simultaneously manage their growth and provide for the present. Strategic facilities planning, by aligning a business’s real estate assets with its corporate mission, can help today’s corporations maximize agility, increase their return on investment, and ultimately help position the company to better compete and deliver its products and services, regardless of its business.REI

by John R. Glagola


John R. Glagola, AIA, is director of strategic planning services with Kling Lindquist, an integrated architecture, engineering, and interior design firm, where he leads their strategic planning efforts. Glagola has lectured and written on various aspects of corporate real estate and has also worked in architecture and real estate development and has acted as consultant to a number of international corporations. (E-mail:

Copyright American Society of Real Estate Counselors Spring 2002

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