What's Eating FM Budgets at the Height of Negative Disruption? Causes of Black Swan Events

Negative disruption is the most applied term surrounding black swan events in facilities management. It involves the adverse circumstances that inhibit workflows and building performance when something terrible happens. It’s a vague prospect, but the concept of a black swan is vague as well. Black swan events are immensely unpredictable and cause massive disruptions to businesses, and during such disruptions, maintaining control over anything, much less the FM budget, can feel overwhelming. As a result, facility managers need to know the causes of negative disruptions, why negative disruptions contribute to the highest costs, and how to keep FM budgets under control during times of grave uncertainty. 

The Challenges of Managing Black Swan Events and Their Causes

The challenges of managing black swan events depend largely on their causes. For instance, a black swan event involving a catastrophic hurricane’s landfall might require emergency generators, floor remediation, and more. Meanwhile, the most prevalent black swan today—the COVID-19 crisis—is forcing companies to radically change their operating policies. 

That’s the crux of modern facilities management amid black swan events. There isn’t a way to know what to do until the real event unfolds, and the problem is greater for black swan events that have never occurred before or at least within recent history.

The simple truth is that any disaster or event could transform into a black swan with zero warning. 

Maintaining Control Over FM Budgets During Negative Disruption Is Critical to Recovery

Steps taken to contain the effects of black swan events will impact FM budgets. However, a value-driven FM operation can help mitigate losses, explains CIO.com. In fact, value-driven operations include “a conscious change in perspective that involves every stakeholder in the effort to add value and innovation to the ecosystem, and the convergence of the right tools and technology that can empower facilities in achieving optimal performance.” Control over the budget through technology and resource management also helps to avoid overspending and determine what the best course of action will be.

 For instance, stores operating with a limited capacity may have the luxury of using fewer lights, running the HVAC system for shorter periods, and more.

How to Keep Your Budget Under Control During Black Swan Events With Planning

It’s impossible to plan for every black swan event. However, black swan events tend to share characteristics, such as being weather-, health-, economic-, or damage- or default-related. Thus, FM managers can take these steps to improve planning for the causes of such events:

  • Start tracking facility management and maintenance data, benchmarking facilities maintenance costs along the way. This information carries value by helping companies understand interactions between occupants and prevent controllable black swan events, such as those involving the weather or a defective asset.
  • Implement an automated notification and communications system. As explained by Buildings.com, “notification and communication during an emergency require more than automated text messages and phone calls. If you have people living on-site, remember that many of them may silence their phones at night. Know how you'll sound the alarm and when.”
  • Use a CMMS to handle work order requests remotely. During disruption, your team will likely be deployed across multiple locations. The CMMS eliminates the physical trips and enables remote management. 
  • Conduct a comprehensive risk assessment for any possible cause of black swan events, as well as creating emergency plans for health, weather, economic, and damage induced events. Focus on finding the exact number of physical staff needed and how to keep them safe. 
  • Use data to make better supply purchasing decisions. Since black swans almost always carry a health risk aspect, such as the pathogens in flood waters or the risk of personal injury, the team should have a strong stock of PPE that’s already built into FM budgets and preparedness strategies. PERIOD. 
  • Avoid hasty decisions. Failure to consider all impacts of a decision will only add to total cost of ownership. Rely on data when making any decision.

Reap the Benefits of a Nationwide Disaster Response and Recovery Partner

The next black swan event is around the corner, and depending on the size of your company, your response can literally save or cost lives. That’s aside from the financial setbacks incurred from failure to maintain supply stock or running assets when working with limited capacity. Instead of risking everything in the hopes that the event doesn’t cause as much physical or fiscal damage, ensure your organization has access to the resources and tools needed to rapidly evolve management needs during such events with a facilities management services partnership.

Eric Crabb

Eric Crabb