When Service Becomes Strategy

Transcript

Narrator: Welcome to the Talking IFM podcast, where we explore the diverse and evolving world of IFM. Together with industry experts, we examine different aspects of the profession, understand how they support organizations, discuss the challenges we face, and discover what the future holds for the IFM industry.

Idit: Hello everyone, and welcome to another episode of our podcast. I'm Idit Shani, VP of Strategy & Business Development at Electra FM. Today, we're discussing one of the most significant transformations in the FM industry: the shift from service as an operational function to service as a strategic asset.

Today, service is no longer just an operational response or a supporting function. It has become an integral part of how organizations create user experiences, maintain operational continuity, strengthen business performance, and generate long term value.

To discuss this topic, I’m joined today by our Group CEO, Daniel Milo. Daniel, it’s great to have you with us.

Daniel: It’s a pleasure to be here. Thank you for having me.

Idit: We're delighted to have you. If you had to point to a single moment in time, when did you realize that service is more than just service?

Daniel: There wasn’t one specific moment. Rather, it was a gradual realization driven by increasing competition. As a leading FM corporation in the Israeli market, you understand that simply meeting your SLA commitments is no longer enough. You need to deliver the next level of value.

When you look at leading FM corporations around the world, you see they have undergone a similar transformation in recent years. It is no longer sufficient to provide a portfolio of services. You need to create an experience.

Today’s FM client is primarily looking for value creation. If you fail to create value, you simply won’t remain competitive. That’s the real change that has taken place over the last three to four years.

Idit: So essentially, this represents a different way of looking at service. Not the traditional, basic service model we’ve been accustomed to, but service as a strategic tool. Something that can fundamentally change how facility management companies operate in practice.

Daniel: Today, delivering basic Facility Management services is a necessary condition, but it is no longer sufficient. All the traditional services still exist. We’re talking about dozens of service categories in various forms.

However, simply providing a service and ensuring that a facility operates properly does not make you a market leader.

To become a market leader, you must create something for the client that differentiates you from other service providers and IFM providers. That’s the key distinction, and it’s exactly where we are focusing our efforts today.

Idit: From the client’s perspective, then, this creates a kind of ecosystem or platform that fully integrates and synchronizes all the services provided by a single partner, ultimately creating what we might call "service as an experience."

Daniel: Exactly. It happens on several levels.

First, there’s service as an experience.

Second, service itself becomes a product, not merely a collection of services managed by someone who consolidates them and sends a single invoice. That was the FM model of a decade ago.

Today, the client experiences a complete service environment and interacts with a single point of contact who drives operational efficiency, manages problem solving, and coordinates all the players within the ecosystem.

That’s the major shift taking place across the industry.

Idit: So ultimately, service is no longer just a supporting layer. It becomes a holistic value layer.

Daniel: Absolutely.

The IFM manager at a client site, whether it’s a facility, manufacturing plant, or government organization, is a strategic partner to the client.

They identify operational needs, experiential needs, and even human resource related needs. Across all these disciplines, they must be involved in professional decision making and recommendations from the very earliest stages of a project.

In fact, IFM becomes part of the process before the building even exists.

When envisioning a project like Beyond, for example, you need to ask from the outset what kind of experience and services you want to create inside the building. A single IFM organization, or a dedicated IFM manager, makes all of that accessible and achievable for the client.

Idit: You mentioned IFM, and that ties directly into some of the new operating models we’re seeing emerge.

Daniel: It does. The models themselves are evolving as well.

In Israel, the level of implementation sophistication is still somewhat limited, but it’s clear that we can no longer rely solely on traditional contractor based models such as cost plus or all inclusive agreements.

Modern models create a balance between the client’s needs and the FM provider’s ability to deliver added value. As a result, the FM company begins to be viewed as a strategic partner rather than simply a contractor.

Idit: It’s not just a journey of cost reduction. It’s about how the overall experience is ultimately perceived.

Daniel: Cost reduction is always at the heart of every client’s priorities and concerns, regardless of how large or financially strong the organization may be. It is a natural part of commercial operations.

However, even significant cost savings will not be enough if the company is unable to deliver a comprehensive IFM vision that encompasses experience, functionality, initiative, innovation, and technology.

If these elements are not embedded within the cost reduction strategy, then cost reduction alone simply will not be sufficient.

Daniel: The value of properly maintaining a facility is reflected on multiple levels.

From a physical standpoint, the building is better maintained and performs more effectively. And when I say building, I’m referring to any type of facility. It could be a manufacturing plant, a highway, a tunnel, or any other type of asset.

First and foremost, there is the facility’s overall integrity and functionality. Once the ecosystem is fully synchronized, the facility operates far more effectively.

The second aspect is the ability it gives the facility manager to manage the asset on behalf of the client in a more efficient and effective manner. It allows them to maintain control over the key processes taking place within the facility while minimizing costs and reducing operational disruptions.

The third element, which we’ve already discussed several times, is the experience itself.

Ultimately, it comes down to the employee, the end user, who suddenly becomes a central part of the equation. How much does the end user enjoy being in the facility? How often are they exposed to experiences that are engaging, relevant, exciting, or emotionally meaningful?

There is tremendous value in that emotional dimension.

In the past, a Facility Manager was responsible primarily for the physical assets.

Idit: Responsible for the hard metrics. Whether SLA targets were met, whether someone arrived on time, and whether service commitments were fulfilled.

Daniel: Exactly. Today, Facility Management is connected to people, to those who work in the building and those who visit it.

The goal is to provide solutions and experiences that make people want to stay. We want someone leaving a building managed by Electra FM to say, "Wow, you can really feel that this building is different."

Idit: Exactly. As you said, it’s about emotion and perception. I’m not necessarily measuring it in financial terms, but rather as a different type of value. An experiential and emotional value. It’s something entirely different.

Daniel: Value exists on multiple levels.

Some of it is certainly financial. When a Facility Manager delivers excellent service and creates an outstanding experience for occupants and visitors, facility occupancy increases. In office buildings, demand rises. A positive parking experience encourages more people to use the facility.

In such cases, the facility’s NOI is directly impacted.

Idit: In other words, asset value enhancement.

Daniel: Exactly. It’s asset enhancement in its purest form.

Another layer is human value enhancement. Creating an environment that encourages people to return to the office by providing services such as fitness centers, classes, community activities, and wellness programs.

As a result, the likelihood of employees choosing to work from the office increases significantly. When employees return to the workplace, they create levels of collaboration that simply do not happen when everyone is working remotely.

That creates a different kind of win-win scenario, one that is probably much harder to quantify numerically.

Idit: I imagine there are quite a few challenges that arise when introducing this approach to our clients. In your opinion, what is the most significant challenge in making this transition?

Daniel: The transition begins with the people we choose to lead it.

We need to select individuals with a completely different set of capabilities. In the past, our facilities were typically managed by professionals we called a house manager or a maintenance manager.

Idit: A completely different definition of the role, and a completely different approach to service delivery.

Daniel: Today, we call this person a Facility Manager or Facility Coordinator. Suddenly, they are responsible for all the elements we’ve discussed, the elements that surround and enhance the service itself, not just ensuring that the service is delivered, whether it’s cleaning, security, or basic facility operations.

Idit: Which means they also need to undergo a shift in mindset, not just our clients. The challenge is really about perception.

Daniel: Exactly. It starts with how we recruit them. When we're looking for the next Facility Manager, we're hiring based on completely different criteria than we would have ten years ago, or even five years ago.

It continues with the way we onboard and train them after they join the organization, and it extends to their ongoing professional development and mentoring. The profile and skill set required for managers in modern facilities, particularly at our core client sites, are fundamentally different from what they used to be.

Idit: And there’s also a need to take the client on a journey of changing perceptions, because some clients are still operating according to traditional FM methodologies.

Daniel: That’s actually the most complex challenge.

Not every client readily embraces the transition of a service provider into a more strategic role, and not everyone adapts easily to the managerial changes that come with it.

Only clients who aspire to be modern and aligned with today's workplace expectations and the global FM market will make that leap together with us. You cannot force a client to embark on this journey.

We invest significant effort in familiarizing our clients with these ideas. The leading organizations are already there. Others will follow once they see that it works.

Idit: You mentioned modern facilities and more advanced, technology driven management approaches. How do AI and technology support this new level of service?

Daniel: First and foremost, operational efficiency requires analyzing enormous amounts of data.

We're talking about dashboards, spreadsheets, and various software platforms available on the market today. The human brain simply cannot process the complexity of a modern facility, one that contains dozens of systems and thousands of daily service activities.

There are countless anomalies and variables, and someone has to make sense of all that information. Traditionally, a maintenance manager and an experienced facility manager would do this using spreadsheets, reports, and relatively basic software tools.

The future of FM is already here, and we're actively using it.

Artificial Intelligence supports critical decision making within buildings and enables predictive capabilities. That is why it must be embedded within modern facility operations.

The second major area is prediction.

A large mixed use building in Israel may accommodate between five thousand and ten thousand people every day. So many activities and events take place within these environments that if we can predict patterns and behaviors in advance, we can prevent failures and deliver a significantly better service experience.

Today, technology enables predictive maintenance across many different applications where AI is being implemented.

The system identifies anomalies and provides recommendations to decision makers, helping them manage the building in real time or prepare for the future, whether that's tomorrow, the next 24 hours, next week, or next month.

The world of prediction, and particularly the connection between prediction and AI, has become a central pillar of modern Facility Management.

Idit: It’s absolutely essential. From my perspective, what you're describing positions the service provider as a truly proactive organization. By leveraging predictive maintenance tools and forecasting capabilities, you're always a few steps ahead of the client. You're bringing insights to them before issues arise and establishing yourself as a proactive partner. That’s a critical part of the entire IFM philosophy.

Daniel: With AI, it's even possible to predict environmental conditions within a 50 story building.

In a specific area of the building, by combining large amounts of incoming information with a relatively small number of sensors, the building can essentially manage itself and prepare for the next workday. It understands what's likely to happen because it learns from experience.

In many ways, it becomes a learning building.

Idit: We’ve talked about partnership. From your perspective, what does a true partnership between an FM provider and a client look like today?

Daniel: The key indicator is trust.

How much does the client trust you?

If a client trusts your recommendations, trusts your judgment, and implements the solutions you propose, that's when a genuine partnership exists.

We have relationships like this with many of our clients, where the partnership becomes more than just a concept. It becomes something tangible and actionable.

At the same time, there are clients who remain more distant from our IFM approach and continue to view the relationship through a traditional supplier client lens.

Idit: The old style relationship.

Daniel: Exactly.

A relationship where governance and oversight are designed primarily to catch the supplier making mistakes, rather than working together to identify opportunities for improvement.

Idit: Instead of going on a journey together as partners.

Daniel: Precisely.

Those are essentially the two types of relationships we see with clients today. We have both.

What’s encouraging is that the number of clients who operate from a position of trust continues to grow, because our clients themselves are evolving.

Idit: Absolutely.

It's impossible to ignore the dynamic and uncertain environment we live in today. Where does FM service fit into extreme situations and crisis scenarios?

Daniel: Many of our clients, particularly sensitive organizations such as defense, manufacturing, and financial institutions, operate in environments where data and operations cannot be put at risk.

Each of these organizations is highly skilled at its core business. They know how to do their jobs exceptionally well.

However, many organizations do not necessarily know how to protect their facilities and operational infrastructure.

That’s where the FM company comes in.

We build an additional layer around the client, a layer focused primarily on operational continuity.

Idit: A layer of stability.

Daniel: Exactly.

That layer of stability is built on two key foundations.

The first is comprehensive operational continuity planning, which we provide as an IFM company. Every client receives a continuity plan tailored specifically to its facility or site.

Idit: Tailored to their needs, their risks, and the actions required for different emergency scenarios, including procedures, drills, and response protocols.

Daniel: Correct.

And of course, these plans are regularly practiced.

We conduct drills much like the military or other emergency organizations. We simulate crisis scenarios so that clients feel secure and know they are in good hands.

Whether the event involves missile attacks, a tsunami, or an earthquake, we know how to deliver service, and the client knows exactly what actions to take in coordination with us.

But even that is not enough.

To truly create operational continuity, you must first train your people and instill in them the mindset that, during an emergency, one of their highest priorities is showing up at the client's site and providing support.

In many cases, that commitment comes even before personal considerations.

Idit: Immediate response comes first.

Daniel: Exactly.

Knowing that the FM company will be on site during a crisis, even when there is personal risk involved, is a tremendous source of pride for us.

During COVID 19 and throughout every security related event since October 7, not a single one of our employees abandoned their role or stepped away from their commitment during what were often highly dramatic situations.

More than 70 of our facilities have been impacted over the last three years, and our employees have consistently been on the front line.

Some have even crossed into Syria, Lebanon, and Gaza as part of their efforts to support critical operations and ensure service continuity.

Idit: That’s remarkable, and it proves that you are a true partner, especially when it matters most during times of crisis.

Daniel: During times of crisis, everything I mentioned earlier comes into play. The plans, the people, the training, and the preparation.

But there is another layer, one that you, Idit, are responsible for.

It’s the layer where strategy engages directly with clients, reassures them, and says: "We want to proactively update you. Yes, two ceilings may have collapsed, but the IFM team is on site, everything is operational, power is available, nobody has been injured, we are addressing the situation, implementing contingency plans, and the building will be fully operational again within an hour."

Idit: Continuous communication is incredibly important, especially when working with global partners who often perceive events differently from afar. What we see here is not always what they see overseas, and vice versa.

When you provide transparency and create the sense of security and stability we've been discussing, it becomes an essential process.

Daniel: Exactly. That’s the final layer.

In real time, you provide communication that is continuous, informative, reliable, and reassuring for the client.

Idit: As we wrap up, what advice would you give to another CEO who wants to transform service into a strategic asset within their organization?

Daniel: I’ll give you my second piece of advice, because the first would obviously be to come and learn from us.

Idit: Which is absolutely possible, by the way. We have programs for that.

Daniel: We certainly do. We have some excellent programs. Podcasts are just one small part of them.

But if I had to give one key piece of advice to anyone who wants to master this profession, it would be this: listen deeply to what your client is truly looking for.

The solution you provide to one client, including the service experience, operational excellence, and cost optimization, may have absolutely no relevance to the client next door.

Without alignment, you're essentially forcing someone toward a solution that doesn't fit their needs.

The moment you provide a client with a solution that does not align with their requirements, their culture, or the experience they are trying to create, your chances of success decline significantly.

When there is alignment, the opposite is true.

Idit: In other words, it starts with the voice of the customer. First, listen and understand the client's needs before introducing the added value you can bring.

To summarize, service is no longer just service. Its impact is reflected in the experience it creates, the value it delivers, and its ability to ensure operational continuity even during extreme situations and times of crisis.

This is where Electra FM is redefining the way organizations think about operations and user experience.

Thank you very much, Daniel Milo, for joining us today.

Daniel: Thank you for having me. It was a pleasure.

Narrator: You have been listening to the Talking IFM podcast.

We hope this conversation has enriched your knowledge and inspired your pursuit of excellence, professionalism, and innovation.

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