All labor-intensive industries now face similar challenges: labor shortages, managing a multi-generational skill supply with various expectations as well as a more green and social agenda. To what extent do we see the linkage between the financial impact and a sustainable way of working for all employees across the value chain?

“In a sense, it comes down to be lean, seen and green but never mean.”  – Ulf Gullstedt, CEO Avista

 Most cleaning, FM and healthcare organizations are decentralized by design. It is believed to be a more practical, tactical and people-dependent way to make ends meet. However, in larger organizations with low digitization this creates a gap in productivity and social sustainability, which in turn makes them sub-optimized to follow best-practices.

 Restrained budgets caused by contracts that are based on inaccurate outdated data and with limited real-time operational insight, make a game that is hard to win for all players. These types of decentralized set ups often result in what we consider to be the worst case scenario: “us versus them relationships”. We see this type of relationship develop when both buyer and seller do not provide adequate digital support. This often results in disputes, fines and litigation that ultimately make everyone involved a loser.

 Another result of highly decentralized teams within an non-digitized organization is that there are seldom incentives for any team to share or enforce best practices. This is because there is no managerial personnel overseeing the various teams or even knows what to look for if they did. What is acceptable is a faraway cry from what could be: profitability and social sustainability.

 Labor intensive industries today also face labor shortages with high sick-leave and turnover levels. A result of is relatively low pay and work schedules that are not optimized for full time pay. There is also a generation of employees that is retiring and needs replacement making these industries increasingly dependent on labor from other countries, many of whom see these jobs as entry jobs.

The bottom line is this: combined, these factors impact continuity, predictability and, in the end, quality of delivery. Low quality leads to fines and low profit. Non-optimized schedules result in a far from full time job; feeding job insecurity. “Who & How” schedules for the people doing the work do not align with the “When & What” related to the objectives to be accomplished. This leads to conflicts, lack of transparency and contracts that are wrong by design.

 Fair Play = mitigated risks and leveraged opportunities

We have discussed creating what we call ‘Fair Play’ to drive fair pay for years. This is simply (and critically) done by optimizing how the client requirements are met by the service provider using updated real-time data.

 Closing 2022 we reflected on our twenty plus years experiences working with these industries. The challenges and consequently the yet-to-reap potential is huge. We continue to claim: Non-digital organizations or business units must get started to digitize its operations fully and integrate as well as share selected operational data with partners and clients.

 Our point of view is that all under-spend on IT. The cleaning industry in Sweden has a turnaround at 66 BSEK per year. With an IT cost at 1,5 % (normal for a service industry) that would equal a market with an IT budget of close to 500 million SEK. That is not even close to the status today. The majority of organizations have not even started to digitize. No wonder this industry is not sustainable. No one has the right tools to play the game. It is a lose-lose game considering what is possible. It won’t get better if you don’t catch up. You are expected to be even more lean (since you must), green and not mean (Fair play).

When all players win without anyone else losing 

Avista’s tag line “intelligent human logistics” applies to daily and repetitive games, with known parameters that change all the time, as it is in labor-intensive industries. For all players to “win” all must know who does what, where, when and how.

There are primarily four players

• one pays for the game(the customer): cost/benefits for any given scope
• one coordinates the game(the delivering partner): scope, do-ability and cost of playing
• one evaluates the game(the customer): value given quality, compliance 
• one plays it (the worker): decent schedule, fair play, fair pay

 Naturally each player primarily monitors “their” key parameters since they win “different things”. At the end of the day, the game is over. Next day a new game starts over. Each player looks at the different parameters. The game ends every day. We learn from how we played the game yesterday when we play the same game next day, to win. Together.

When math defines a winning game for cleaning / FM / health care 

What is described above is mathematically coined a “finite game”. The entire field of game theory is based on finite games. A game that ends like a football game … or, say, a cleaning contract.

“In a finite game there will always be a scenario where each player can maximize its benefit without anyone else losing” - Nobel Prize Laureate John Nash

 For this to happen, each player must understand when and how the other player wins as well as have the same information as all the other players. It comes down to transparency.

 To conclude, in order to optimize a finite game - like daily operations in cleaning services, facility management, health care – at any given day, for all of us being winners without anyone being a loser - each player must share its data and objectives openly.

To be practical our clients must digitize their information and processes as well as share relevant data in real time. It’s not enough that some play manually, stick it on whiteboards, while other players are digital. Some deliver too much at too high cost and yet still no one is happy and cannot (is able to) complain in time to learn and improve.

This last scenario is very typical in big companies who clean for themselves. They may have some processes digital, the ‘who and when’, but not the ‘how and what’. And so paradoxically they have better control if they outsourced.

Avista covers the current game plan with integrated pieces of the evolving functional puzzle with a proven end-to-end digital solution. This one piece that brings it all together is the Avista Operating Center where the same data is visible for all parties. We are best practice, and we are proud of it.

2022 was something special and the future looks exciting
 
2022 was an exceptional year for Avista in regards of customer impact, growth and our service portfolio product evolution. We are proud to have been able to implement practices and initiatives that benefit all three stakeholders in our business: the buyer, the delivering party and the end client (the user): We proudly claim we have a unique end-to-end operational capability for all players in our industry. We are open to inspire anyone interested.

 We are blessed to work with all the big players in our geography: Our trusted brand has evolved over 20 years. We have met and tested our hypotheses and solutions with “everyone” in our industry. Thank you all. We are ready to increase our business impact with you. Naturally, we are grateful for all our clients’ continued trust and loyalty as we strive to keep our company a top-notch best practice institution.

 2024 - Cometh European Social Responsibility Standards (ESRS) S1 and S2
  
There is a clear linkage between workforce planning and task operations and social sustainability. This is an area you will need to dig into and clean up your backyard, if needed. We are talking about a material impact on the bottom line. The well-being of the key resources in a resource-intensive industry has an impact on the bottom line. If no one wants to work with you, they won’t buy from you either.

 Just the fact that this industry faces skill shortages means it has material impact. Some companies say no to business since they can’t deliver. It’s not only about money. It’s also about quality.

 As you may be aware, the EU has put in place a series of sustainability reporting standards (ESRS) which will take effect from 2024 onwards based on a new Directive CSRD in November 2022.

This will impact all larger companies across the European Union. It will impact all our clients knowing the challenges they face in the coming years with capacity to delivery issues, high attrition, challenge to hire and onboard with fair pay.

 Avista’s ‘Fair Play drives Fair Pay’ agenda clearly underlines how important a responsible business is. We have worked hard to explain how to drive sustainable operations to meet coming reporting standards from an intelligent human logistics perspective. We serve you to establish Fair Play.