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Organizational Design for Facility Departments – Functional or Integrated

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Org StructureI've been doing quite a few operational reviews and benchmarking exercises for facility clients recently. Something that keeps coming up is the optimal design of the facility management department's organization structure.

Through my career I've worked  in functional,  integrated and even matrix organizations. My facility clients are also a mix. In each approach, I saw the value as well as drawbacks. No single organizational structure has shown itself to be ideal. In fact, my view is that the people can be more important than the structure of any facility management department.

Lets look at each one separately:

Functional

This is usually in a larger organization where you have individuals looking after a specific facilities function. This could be space planning, furniture,  design and construction, preventive maintenance, custodial, grounds keeping, asset management, office moves, help desk and more.

What it does well is focus a particular knowledge base and skill set onto one of the many pieces of the facility management pie (I expand on this  pie' in my new book) that make up facilities. The risk is that the separate functional areas may not work well together and what I call "ownership" of the facilities may become blurred with no single person responsible other than a facilities professional at a senior level.

Integrated

This is usually in smaller organizations with small compact portfolios or single buildings, however can also be used for organizations with large geographically dispersed pockets of facilities.

It's where a single individual within the facilities department is responsible for a broad range of functional areas. They may still not be responsible for everything, such as some specialty or overall corporate functions like space planning, their responsibilities cover a broad range of activities required to manage facilities whether they are owned or leased. This integration brings along with it that sense of ownership I mentioned earlier.

What it does, however, is stretch the individual to deal with the full range of skills and capabilities. Sometimes, the needs of these separate competencies clash with each other were simply require a different kind of skill or mindset. This is particularly a problem where you manage both day-to-day operations and either strategic activities or something like project management.

Matrix

This can be the most complicated of the organizational structures. Usually used in larger organizations with a broad range and geography. The complication is that unlike either integrated or functional work structures, there is not always a clear and distinct line of reporting authority. There are some benefits such as maximizing the use of resources and the skill sets of your employees, however it is much more challenging to prioritize or to establish strong common objectives and standards.

The common example I've seen for this type of organization is a large facility management outsourcing company for centralized shared services group providing some of the support services to the operational delivery people assign to each contract. Not only were the professionals in the shared services group responsible to their boss, they were also directly responsible for service delivery to the business unit heads for each client group.

This type of relationship can also apply for an in house organization such as a large retail company, where individual stores are under the full financial and operational responsibility of the General Manager for the store and the facilities department essentially acts as a service provider.

Which is Best?

So the question becomes: which organizational structure is best? As I mentioned earlier, a lot of it does depend on the personnel you have in place and what kind of operational model they are either comfortable working in or are willing to support. If you are making personnel changes, now is the time to chose candidates with the right approach to your new model.

In some cases, a functional or matrix organization is very difficult for some people, who can't easily shift and manage priorities and are trying to establish their own silo where they have complete control, making it hard for groups to work together. In an integrated model, personalities are less important. However, with an integrated model, if you have multiple individuals performing all the same functions in different geographic areas or for different buildings, getting them to participate and coordinate standards and approaches can sometimes be challenging as well. In addition, each of the individuals managing integrated range of facilities functions may not be equally capable at all those specific functions and both hiring and retaining employees had these capabilities will be more difficult.

The other factor is quite simply the size of the portfolio and its geographic distribution. An integrated model works well either with a small organization or dispersed yet concentrated groupings of facilities. This model also reduces travel time for functional experts.It also depends on the size of the separate areas - you could have a mix of integrated and functional organization to make it work most effectively.

As mentioned earlier, a functional model does require a much stronger centralized management effort to ensure standards, training in competencies are equal. It may also require an approach that lends support to each of the individual facility managers in their weak areas. Rather than expecting them to be knowledgeable in each functional area. This is where those specific individuals, must be supported by senior facilities management leadership that understands how to manage within this type of organization.

For a large portfolio, a functional organization can work very well until your geography gets so large that the travel and span of control for each of these functionally based facilities professionals reduces efficiency. The same can be said for a matrix organization. If the size of the portfolio and the density of facilities is sufficient, you could use a functional model on a local basis as well.

So back to the question of whether a functional or integrated model is the best. Clearly, they each have advantages and disadvantages. In my view, the  most important factors in deciding which approach to take includes an assessment of your staff's capabilities, your team's ability to manage the model successfully and the nature of your facility portfolio, including size and geography. And as your company grows, your approach to managing the facilities has to adapt to the different needs.

That's why whenever I'm asked which model is best, the simple answer is "it depends." What's more important is that before you decide which model to implement or which to transition into as your organization grows, you need to fully understand the benefits, disadvantages and issues that each model provides. Then you should overlay that onto your needs and your organization through careful analysis and be flexible in how you apply your model - sometimes a mix works the best.


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