Facility Solutions: Key Themes for 2019

To align your occupancy strategies with your business agility plan, you must embrace change by regularly asking critical questions about how your facilities are responding to planned and unplanned events. As a former facility manager for two national banks and consultant to many credit unions and banks, I offer a series of questions you can ask yourself to help prepare for the new year. 

Branch Occupancy

• How do your five- and seven-year strategies align with your business plan? What if the business goals are not reached and you have over-customized your network? What if you merge with another credit union? Have you prepared ways to shift direction for each possible scenario? Who is influencing your location planning and what are their motives? Are you in a position to offer alternative strategies?
• What is driving branch design in terms of size, style and vibe, technology offerings, and staff culture? Is there a short-term strategy that requires early lease termination or selling a building? Are you waiting for the end of lease terms or subletting/buying out for immediate cost reduction? 
• Has the method of branch profitability analysis changed? If yes, how does this impact your branching strategy over the next five years? If no, should it change? Is it better to own or lease based on your current or projected financial strategy?
• Do you have a VP/customer experience engaged in location, design and technology integration decisions?
• Which leases are terminating in the next 18 months? You need at least nine months to find and develop a new leased location and at least 18 months to buil a new freestanding branch. If you are planning to develop a new branch business model and prototype, add four to six months.
• Rather than close a branch, can you sell it and its assets to another institution?

Headquarters Occupancy

• Is it better to lease or own your headquarters in today’s and tomorrow’s markets? Have you recently run occupancy numbers out 20 years to understand the financial impact of your occupancy strategy? Should you sell your building to your CUSO and lease it back?
• How do your facilities provide the desired employee work environment and amenities so you can attract and retain the best employees? How would telecommuting impact your occupancy? Do all departments need to be in the same building? If not, how far can they be separated? What are the pros and cons, including the impact on your culture?
• Is the headquarters properly located for the long term? Could the headquarters function more effectively if located in another city with better access to regional transportation and where the most desirable staff want to live? Does the location of your headquarters matter in terms of your long-range strategy? If you are relocating your headquarters, will it be in a market with a strong leasing opportunities, in case you need to lease space to others or sell?
• What happens to your headquarters if you merge with another credit union or make a significant shift toward outsourcing? What are all the potential business scenarios and what are the corresponding facility actions?

Consultants

• Are your current consultants right for the future? If you are developing a new branch business model, does your local architect or design/build contractor have proven national level expertise? Can your consultants bring new business and design ideas to the process that will really work? Can your consultants bring national perspective to impact negotiations with local officials, potentially lowering the cost paid by the credit union?
• Is consulting for security equipment and systems included in the purchase price? Does your consultant understand if existing and new proposals are accurate?
• How are your consultants paid? Have you considered paying them based on a percentage of the savings they find you in the first year?
• Do your architects and engineers carry erros and omissions insurance and liability insurance? Do you have current confirmation of insurance for each consultant?   

Emergency Preparedness

• Do you need to update your emergency preparedness plan? Should this include ways for people to work from home in a disaster? Are your facilities in locations that are susceptible to flooding or fires? Do you want to include services to help employees’ families as well?

The purpose of sharing this short list of questions is to remind us that change is a part of our everyday experience and we must constantly reassess our current situation and make modifications for the future. The holiday season is often a time for personal reflection. Let’s use some of this time to understand our occupancy situation today, what might happen in the future and what we need to do to prepare. 

Happy Holidays!cues icon

Paul Seibert, CMC, is an independent facilities and real estate consultant under Paul Seibert Consulting, Seattle.