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Balogun: Multi-billion Naira Buildings Rot as Investors Don’t Value Facility Management

Balogun: Multi-billion Naira Buildings Rot as Investors Don’t Value Facility Management

The Managing Director/CEO of GPFI Group, an international facility management company with roots in Nigeria, tells Bennett Oghifo that most people spare no expense to construct very expensive buildings in Nigeria but do not see value in budgeting for their maintenance. He also discusses the journey of merging the company, challenges, and the road ahead for Africa’s facility management industry and the role of GPFI in it

How do you manage to do business in a market renowned with a poor maintenance culture? We see billions of Naira or even sometimes dollars going into infrastructure in Nigeria. And people say give it 10 years or 20 years. How has GPFI been able to cope with this reality in the market?

I would answer your question with two perspectives. One of the things I was doing in those days was to understand how government buildings, how people build, and what their approach to managing is. The fact that I had experience managing across industries, retail banking, and airports gave me a very broad understanding of the challenges that we can find with organisations we’re managing their properties. One of the things we did differently, which I always find is the challenge that people don’t manage their facilities not because they don’t want to manage but because they don’t see the value in managing their facility. And that’s the sense that I’ve brought into the company that the people understand the value that they we get long term on investing in maintenance or facility management, they won’t not say no to it. Second is that you also have to develop people who can deliver. So, one thing is to say we want to do it. The second is, where is to provide the competence? And we saw that at the beginning, to lead the company to start focusing on developing people. We worked to develop a programme. Eventually, the University of Lagos started doing a programme facility management which I got involved in. We also developed our own internship programme and technical training. We employed people at technical schools to develop for the industry. The company now does this as a social intervention project to develop people. So those are the two main perspectives. We find a situation where people need to see the value. If you just say spend money, then why would I need to spend money, but you show them the value? Again, they spend the money, they will, you know, sign up for it. One of the things also that which is a third perspective. I think about five years ago, we had an industry session where the Minister of Works said something very correct. The challenge is not that there is no maintenance culture or maintenance economy. It is that people don’t value people in our industry, if they are not well positioned and treated well. I did some research on exactly what he said and I can say that is true. Second is that if people don’t see opportunity in the industry. And that’s the mentality, we’re trying to also, you know, change that we need to create an opportunity for people to be in the industry and see the need to be in the industry. That’s what we are driving at the association and at the national level to ensure that we have a standard, both for the work we do and for the people that do the work. You cannot be a technician and be earning N30,000 monthly. There’s no way you can survive. Or you cannot be a manager in the facilities management industry and be earning N80,000 a month. Because the average cost of a facility management training today is $1,500. How do you save for that?. So, these are the things that we’re trying to do from our perspective, as an organisation and as an individual.

So how have you navigated as a business? 

We focused on engaging clients to see them see value. We focus on the people in the industry to create a larger market. We focus on developing people, both internally as an organisation and also supporting the industry, through institutions and creating our own training programme that we feel we help the industry to get to the level and focus on awareness and creating the market. The interest is not only for us to have business as a company, but it’s to create an industry that all of us can continue to grow. As something that has been repeated itself in our conversation has been around people, people, people, people, people at the board level, people at the clients level and people within. 

It is the 11th year anniversary of the GPFI group’s merger into a leading facility management company. Where is GPFI coming from and where is it today?

Yeah, it’s been quite a journey. Reflecting on how we started, where we started, and the journey so far, Glory to God. I was telling my kids three days ago that this is a wonderful experience. This is also a milestone. One of my Directors said three months ago that starting a company 15 years and transforming into this level is not a joke. So, we have some sort of small background. My orientation and interests as a young man have always been in engineering. I’d always want to do things that I can use my head and hands together with. That led to engineering. My idea for engineering initially was working on aviation. Focusing on airplane development and management. However at that time, Nigeria was not ripe for knowledge in that area. Also, at the time I finished my degree, Nigeria had been removed from many multilateral agencies because of the Abacha government. So, I had to choose mechanical engineering because it was very broad. They call mechanical engineering the mother of all engineering. I had the opportunity of working in the automobile industry which I saw as a sister field to automotive engineering. My entry into facility management was at Mr Biggs where I did two jobs. One as a project manager and the other as a facility manager. At the same time, I was doing my MBA at the Lagos Business School. This was when Tony Elumelu of UBA visited to give a lecture. He was then the MD of United Bank of Africa. In the process of our engagement after the lecture, we exchanged numbers and he invited me over one day asking me to come and join the bank. Eventually I did. At that time, they were transforming the head office of UBA to a world class building for a monster bank, a pan-African bank with the head office in Lagos. His intention was that our head office should represent what we represent as a bank. It was very exciting in all the journeys and transformative, with challenges and opportunities to learn new things. However, all the while the idea of entrepreneurship remained keen on me because of my MBA. Before then I’ve set up two other companies. One was in automobile repairs. The other was in procurement and logistics. I also worked at the Murtala Mohammed Airport terminal as a facility manager. During our final MBA project, part of the requirement was to do a new company or re-activate an existing company. The company will have to be run. We were lucky to have Dr Doyin Salami. Our first meeting took place at Mr Biggs where four of us who were interested in the concept met to discuss how we can see this through. That was 2006 when we finished our MBA. And then we registered the company in 2007 Domme Facility Management. After the company was set up for a year, I had to leave paid employment to focus fully on the business – bringing the experience and expertise from working over the years. The vision from day one was to become a global company. That’s our objective. We don’t want to be a fringe player. We want to be a major player. So all along as we were developing the company, we were also seeing what was going on abroad, globally to see the companies we can profile our business plan on. When we were developing our profile, our model company was WSPFM in Nigeria, which was the first indigenous facility management company. We were also looking at ISS headquartered in London. We were looking at other expanding companies, and engaged companies in France and the UK just to have conversations on expectations and what the industry looked like in order to position ourselves for future opportunities.

What led to the merger of the company? What were some of the key moments that have defined the success of your company since the merger?

We started effectively in 2008 and had a couple of projects. In 2011, I was personally approached by WSP to become the MD of the company. I told the board then that I couldn’t leave Domme to take a job. So there was a proposal to merge and Domme became part of WSP. Agreements were signed in 2012 and both companies became one. At that time, the company had two different models for their business. We had to bring an integrated model into the business. At the same time, the industry was changing and there were consolidations. Africa had only two strong FM companies at that time, both in South Africa. The idea for us then was to position ourselves to become a major player in Africa. We wanted to become a leading player on the continent for anyone coming from outside Africa. We started developing processes, we went for ISO process, developing people, because those are the things that we believe will help us and also ensuring that we’re connecting with our clients because when you connect with clients, you get better because client can give you feedback, can give you objective reviews to say these are the areas to improve on what to do. So that’s how the journey started.

Mergers & Acquisitions are infamous for performing below expectations and relatively rare in sub-Saharan Africa. What were the challenges and how did you overcome them?

I think basically the only challenge, which I won’t really want to call a challenge, was integrating the two company cultures. One company was more people-driven, the other was more contract-driven. So it was just bringing the two together and making them work and one of the things we did was to first study the culture of the two organisations. We know where we are coming from, I was coming as the MD from Domme, so I was transiting my team into who we are at a time and we had two people who had to resign because of the fact that where we are coming, they feel that the structure, we’re bringing, they felt they would not be able to fall into it which is expected. And the conversations were not acrimonious. After some time, everybody started getting back into that new orientation. We also had the opportunity of having a very good board in the new company, who understands and who are experienced, and who had also handled similar projects. So, they gave us an opportunity to manage the business, supported us and supported the process. Clients from both sides didn’t feel any different about the evolution of the company. There were no issues. I remember, even post-merger when we’re doing the change of name, we did a scenario planning, to detail the worst case scenario which was presented to the board. It was thought that clients will go away for not knowing the company but clients stayed. These included major clients such as GE and Citi. Nothing happened, nothing changed. And then of the process, and because people feel that the people who are delivering, that’s the matter, not the name that they’re using to deliver. And you can see that we’re a learning organisation, a focused organisation. So basically, those are the things that we saw as major issues. You’re going to always have people, your ability to manage them matters. One of the key things that also was very important for us was that at that time there was a balance of remuneration between the two organisations. The junior staff in Domme were earning more than the junior staff in WSP. The senior staff in WSP were earning more than the senior staff in Domme. We needed to bring everybody to the same level, as I said, a lot of grumbling, which is normal, but after several conversations, we were able to let everybody realise that as one organisation, we cannot operate disparity. Remuneration for everybody has to be at the same level. And eventually were able to overcome that.

What is GPFI’s approach to talent management and employee development?

So, as early as 2008, we saw that as a challenge, and I’m a student of UAC. One of the things UAC taught us was on developing your money. As early as 2008, we created an internship programme, to help people come into our industry, to our company, we train them, because we’re hiring and having problems, why not let them come three months, six months, we train them. They see our processes, our system, they develop and improve. We had an arrangement with the university of Ibadan to send us 4th year students for training. Because the idea is that if you develop as many people as possible, you’re creating a pool of talent. We got involved with the University of Lagos because of the same thing. Since 2009, lecturing the Master’s programme. We get graduates from that class to do internships and they can become employees. The other thing is that at GPFI, everyone must have a career plan developed personally with the help of the company. Where do you see yourself? What skills do you require? What job roles do you want to do that will help you to get where you want to do? Where do we see opportunities that we can support you, where you see opportunity will help you find ways to build? Three years ago, we signed up with a US-based company on the international certification programme for FM based on the ISO standard ProFM credential. We are the representatives for Africa, practically every manager in GPFI who’s managing any of our contracts is ProFM certified. The first set of three people was free and instead of them paying the full amount, the company subsidises and also allows them to pay because we also want them to own the credentials because their credentials. We did that not only in Nigeria but also across the countries we operate. I had a conversation with one of our clients in Cameroon, and the manager on one of their projects just finished the certification. And the client said he has improved by taking that training. It took him about 6-7 months. The Guy feels a different person, the knowledge he has now better positions him to do better at his job. So that’s what we’ve been doing, support, encourage, and provide the avenue for you to develop.

How is technology transforming the facility management industry and how is GPFI leveraging it?

Technology has always been in FM, it’s only becoming more in demand. We have had computer-aided facility management as far back as 2003, even in Nigeria as far back as 2006. I started talking about computer-aided facility management when I was in UBA. It’s been existing all the way back but it has advanced. The use of technologies today is beyond just getting data. Even to manage the building, we now use technology to get data. Because you use data to manage the building. Before, we just used it only to understand. But today we use data to manage the building. How many people visit your office, how many visit the restroom, what kind of temperature is in your office, what’s the air quality? Was it low? A whole lot of things are happening with technology today. You can sit in your office in Lagos and be managing an office in Dubai. You can see everything that is going on in the building, the temperature of the AC in the office, you can see everyone in the office, and see everything that is going on. Technology is enabling a lot. Use of space also. COVID turned offices to hotels, which we now call office hoteling. Now you can book desks and spaces, not just buildings. So, technology is playing a major, major role in FM today. Even in the real estate sector, Proptech has become huge. Information, data utilisation, and how you use that data to manage people, cost and space.

How has the facility management industry in Africa changed since the inception of your company, and what trends do you see emerging in the near future?

Two things, basically, I would say have changed. There are . clients required and there are more expectations basically. When there are more clients, that means there are more opportunities out there. More people are aware that we need to FM. COVID also helped us. People actually thought that COVID was going to shut us down. COVID actually projected FM higher. And on the side, when people have more expectations, when there is more demand, training, knowledge becomes important. For a client, he knows what to expect. In the past, it was like doing him a favour 10-15 years ago. Today he has expectations. He signs an SLA with you. He has expectations, because he knows what he needs. He holds you responsible for what you’re doing. So those are the opportunities, but also there is demand. Increase in demand for performance par excellence, in delivery of results. This is not just in Africa but across markets globally. And as everything is changing in the market, it is also affecting the expectation, affecting the demand as it changes every day. FM has become like technology. Expectations are changing, requirements are changing. With COVID space utilization changed and everything about FM also changed.

There has been an emphasis on pan-African trade. Most times, this is seen around goods. For GPFI as a service business, what opportunities are driving your growth across the continent?

Let me tell you a story. I was in Kenya recently where one of our strategies is to build partnerships, which we also see as an opportunity to build local competence. I was staying at PARK INN by Radisson where I stood at the topmost floor with our Country Director. I showed him the surrounding buildings and asked what do you see? He said buildings. I told him not just buildings, but opportunities. This also repeated itself when I was at the University of Nairobi where I spoke to Masters students at a seminar. So, in it they had construction managers, project managers, and property managers. So, I asked them about their understanding of a building and how long a building lasts. For the development of a building, the construction and project management team will likely spend four years at a maximum. The property team leases and then may be out. Then, the facility management team comes in and can stay as long as the lifetime of the building. So, it was the same question I asked the Director that I asked them. These are opportunities across markets. The second thing is that when we did training across East Africa; Zambia, Kenya, Rwanda, the focus was to create awareness on these opportunities. It was a free training fully sponsored by a company. Our partners there, invite people, some of the guys we trained in Zambia today now work for us in Zambia. We did half-day training just to create awareness on opportunities in space. Because this your career is an opportunity. Because the challenge is that people don’t know what is available until they are told. They would think there’s no economy and there is no business there even though it is right in front of them. Everywhere, there is a building that needs to be managed as an opportunity to create a business around it. Even if it is to supply them consumables or cleaning services. And every major city in Africa has international hotels, international banks, international conference centres, international airports, as well as resorts. They have world-class hospitals, they have universities, they have schools, government buildings, private schools, places of worship, these are opportunities. And this is what we preach, we go around telling people that everywhere you stand, just look out your window and everything you see around are opportunities. A strategy where we develop the local team, local economy, local people, empower them and support them to be part of the business. It is not like selling a franchise, but bringing people to own part of the business. And that’s what we’re doing. Because we see that, and it’s working. We are in 10 countries with the idea of expanding more. We are not exporting people from Lagos, paying all the costs to transport them, and settle them in countries. But finding people who can be excited about FM and see the opportunities. The company wants to be a catalyst. We don’t want to create a company for only the benefit of the current shareholders. We want to create a company that across the continent, and the markets where we operate. People can associate themselves with us as a shareholder partner, supplier, or employee. You want to associate because you’re benefiting from your association with the company, you are ready to work with a company to grow beyond what it is. That is our objective.

How does your company prioritise sustainability and environmental responsibility in its operations?

As a company we’re in the forefront, actually. We are in an industry that contributes more than 40% of greenhouse emissions. So, we are aware. We are in industries that contribute a lot of resources. We have focus on helping our clients to make their building more efficient, more sustainable, and more green. As part of this, three years ago, we signed with the UN Global Compact, which is an organisation of private sector companies focused on supporting the implementation of SDGs. And our focus was on the water mandate, how do you reduce the consumption of water for processing and internal use. Recently, we signed with the World Economic forum. We are actually one of the six companies globally which signed a commitment to reduce greenhouse emissions by 50% by 2030 with our clients. The idea for us is to go with our clients to identify the areas where we have an impact on the environment, how to reduce our carbon emissions from power. Some of these we have done as far back as 2014. With regards to energy optimization in a building, we want to re-emphasize and take it beyond that. Part of the idea for sustainability is not just reduction. It’s also focused on elimination where possible. Some of the things we are also focusing on as a business today is in the area of waste elimination. We are currently working with GBCI to promote TRUE total resource use efficiency in buildings where we will find ways to increase reuse, recycle, and eliminate waste. Were also signed with GPCI to promote EDGE which is an IFC franchise. IFC is implementing TRUE though partners such as GPCI which we are partnering with to promote EDGE; a green beauty certification, which is customizable to countries. For those things we are doing on our own as an organisation, For instance, since 2012, we’ve been doing recycling in office. All our offices. Yes, absolutely. Well, we want to we want to model what we preach. We had a client conversation in 2018. And to buttress what I am saying about selling value. They had lights all over the place. Okay, we’re going to test, we used our money to buy the lights, installed various offices, left the original light switch to remove the connection of those lines. After using our lights, they called us to come and implement. So, these are part of the things we are doing to ensure and drive sustainability. Ensuring that the environment where we operate and as a business is, it is our mission to operate sustainably and provide services driven by sustainable practices.

Africa has a young population with unemployment still a key challenge, how can the facility management industry help to stem the tide?

The real estate sector is the biggest in employment creation. For example, let’s take a building. To build a house, you have a whole lot of people required. From the person building to the person creating the block, roofing sheet, air conditioning and many more. Multiply each building by a thousand. That tells you the amount of people you can put into employment through the years. And when the building is finished and you hand it over to the facility manager who employs cleaners, technicians, and suppliers of building resources. So, it is the biggest. Because within two years, you can build a 2000 units estate and you can create more than 15,000 to 200,000 employment through that project, because there are auxiliary services that go into real estate. The real estate sector is also a key indicator of the health of an economy. If Government doesn’t have money to do infrastructure development, there’s no, there’s no job. And when there is no job, the economy suffers.

What are the short and long-term plans for GPFI?

We had always done our plan in three years. And what we do every time is to validate every year. So, we do a three-year major plan. And do a one year review. If there are minor changes, we change. During COVID we had to dust off everything we were doing and recreate a new strategy on how to deliver service. We had to go back to our clients to tell them we are reducing X, Y, Z a month from this contract, so that we can operate efficiently and support you at this difficult time. Some of them indicated that they were surprised and can carry the cost. And those are part of the things we do. We are always very forward thinking. We are also always anticipating changes in the industry. There are a lot of things from 2012 to date, there are a couple of things that have changed in the industry that we had predicted and we were ready for. The consolidation of the markets, the expansion of the market, the growth and focus on Africa for international organisations were all what we saw ahead and made us start positioning ourselves to be ready for those changes that are standards in FM. We got involved in the process, started developing our team to be ready to be able to operate at the level that standard required apart from the general quality standard. We are also in the industry where we’re influencing changes in the industry both in Nigeria and outside and even at the African level. And in terms of the markets where we operate, we want our business focus to continue to grow across the continent. Our objective has not changed. We want to be the go-to company for real estate services in Africa. And everything we’re doing today is working towards that. We are making progress; we are not there yet. We are also considering in the very near future, to start looking at other markets outside Africa, not because we want to just play in those markets, but we also see it as an opportunity for people who want to do business in Africa to have connections with us. And see that we can operate at the level that is expected. We are already thinking of exploring markets that give us that position. We continue to have engaging conversations with our clients to know what they are thinking in the near future. I always like to give an example, at my first international conference in Dubai in 2008, I had a client and an FM vendor come present at the seminar, where both talked about how they start their engagement as early as 5 years before the development of a property in a country for the FM Vendor to start thinking about how to manage the facility. This is how we want to work with our clients. We already do this with some of our clients.

In your own view, do you see Africa as a country?

Africa is different, but single in terms of the common aspiration that brings our nations together as one. Not because our cultures are the same. Not because our languages are the same but we have that shared aspiration. And you find out that when you go outside Africa, you come across an African, they will take you like a brother. And that already tells you that everybody sees themselves as one. It doesn’t matter where you come from, every country that I visited when I started this, exploring and prospecting, the way I’m received has encouraged us to do business in those countries.

What’s your favourite city in an African country to visit?

Cape Town. It is like a city built in the middle of nowhere, where all the madness around it does not affect it and it’s insulated. You can walk around the city, you can go down, you can go to places, exciting places within the city. In it are areas where in one place you have resorts, ship yards, schools and hotels. It’s a city that stands out for me.

Which African country has the best jollof rice?

Laughs. Jollof rice depends on how you prepare it. You can prepare jollof rice in Ghana and it doesn’t taste nice. Typically, Nigella jollof rice always stands out when it is well prepared. When it is well prepared in the true sense of Jollof rice.

How do you relax?

I love movies. I also love football, especially with the way managers organise their teams. Look at the case of Manchester United which is doing better now. It is because the board has given full control to the manager. Manchester City is succeeding because nobody disturbs the coach. This is the same in business. I also play Squash. I am a member of the Ikoyi club. I also have Table Tennis in the house and love to play football with my kids.

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