World of Work
Alan Mackay - June 10
There is no doubt that all the moving parts of a business are relative to each other. Companies spend millions of dollars making their business more efficient only to realize that they are playing an elaborate game of whack-a-mole. Simply making one part of your business more efficient helps but the business is still only as strong as the weakest part. For many organizations, the workplace is one of the weakest parts, a tough part to fix given the missing link between the rapidly changing needs of people and businesses and the timelines of the real estate world.
Is data the key to solving the workplace continuum?
We are seeing businesses with a digital thread running through them like Amazon making big strides in connecting all parts of their business to each other, and it is paying back in the form of profitability and growth. There are seamless connections between customers, procurement finance distribution supply chain and customer relations the result of which is delighted customers who are better serviced in shorted time frames, with high quality products, and at lower prices. This means loyalty. More loyal customers means more sellers want to play and so it grows and grows. Yet in the world of work this continuum appears to be broken. The workplace environment is highly complex with many moving parts. It is not just about the tangible things like form & function it goes way beyond those ideals, the workplace needs to reflect the intangible things like a company’s purpose. It needs to connect people to each other, to a culture, to a mission and to values. While the world of work is trying to change and is change rapidly, yet the workplace remains governed by rules and ways of operating that no longer fit with the wants and needs of today’s workforce.
COVID - The catalyst of accelerated change
There is no doubt that the cost COVID in human life has been unbelievably tragic. The economic costs will be felt for years, the physiological costs likely much longer. However, the workplace was changing long before COVID-19 hit, the current crisis has just accelerated the change. Specifically, it has accelerated the focus on the people side of the RE equation. It has proved that people want and need multiple types of environments to be the best that they can. From a company’s perspective it has accelerated the demand for flexibility and agility. So, what can RE learn from the like of Einstein and Amazon? Einstein provided us with a framework for physics that equally works for a business. Amazon and other digital companies are proving that a connected business is an efficient business. Sort of! Certainly, space and time need to be relative to each other. Not only are those two factors dynamic but they live in a larger continuum with many more moving parts. The question is can we make the math work to solve the RE equation in theory and in practice?
Is The Physical Work Environment Equation Solvable?
The biggest cost for most businesses, and the biggest untapped return is also the most difficult part, people and performance. Huge investments are being made to solve the people equation in business. Real estate and the evolving workplace also needs a new solution. What is needed is the right working environments so that people can perform, at their best. This is not a new concept, the office has evolved from private offices, cubicles with tall walls and grim colors through the lowering of the walls. We focused on lighting, different colors for different teams, helping people be more effective. The evolution spread further to open tech enabled spaces and on to super campuses with gourmet food and drinks. Opening the door to pets, bikes, sports. Yet the humanization of the workplace is much more than foosball and Kombucha. It is about intense listening learning and changing behaviors. It is about understanding psychology, roles, task, interactions and the connectivity between people, processes, and technology. If you layer in the blurring of lifestyle and workstyle, the need for continual innovation and collaboration the equation looks unsolvable. Taking all these factors into account and redesigning spaces is only part of the solution. We need to work out how all factors fit together. How they can become connected in a smooth continuum. The next era of business will be about how we close the gaps between all of the parts of a business and the people that work within it.
The Corporate Campus is Dead! Long Live the Corporate Campus
One of the key more recent innovations in the humanization of the workplace has been the rise of the corporate campus. Although the corporate campus is not a new concept, AT&T created their first one in 1942, one only needs to look at some of the most successful, profitable companies of the 21st century to see how the campus has become hugely human centric. Havens of collaboration, community, and innovation they are amenity rich environments that nurture relationships and learning. They provide the physical and technology environments where our people create sparks, sparks that lead to explosions of creativity and innovation. These campuses are rich in hospitality, providing access to all the products and services to remove distractions and help deal with the challenges of day to day life. All the time connecting people with the organization, creating a culture, and aligning teams with the company’s mission. Much has been written about generational changes, there are many generalizations and stereotypes, yet Millennials and Gen Z need a connection to a cause, to a purpose in their work or they will simply move on. Not only do these campuses provide an amazing truly human environment for business and people to thrive, for large companies they also make financial and rational sense. Allowing for greater density without the feeling of being crowded, making the provision of technology, security, confidentiality, and operational support easier and more efficient. Yet even these super campuses do not meet all our needs, even they do not provide people with all they need to be their best. The wasted time commuting combined with always on technology lead to a lack of harmony between work and life, disconnecting us from family and friends. Having all teams in one place adds to security and health risks, if one team is impacted all teams are. Talented people are living throughout the world and yet the campus demands centralization with the resulting increase in costs of living and length of commute which causes further hidden costs for businesses. The insular nature of campuses where we travel on a company bus to a campus to a bus back home should make us also question whether they are indeed the ideal environment for innovation and creativity. It should make us question their real performance impact as a stand-alone solution. Further, they are only efficient and cost effective for the very largest companies and the time to build them, create them does not support explosive growth or agility. So how can real estate solve this. How can the workplace allow people to do and be their best, encourage performance and growth, ensure deep connections between teams and with the organization? Provide amenities, flexibility, hospitality so people can focus on what is important for their team, their business, their mission. All this needs to happen without increasing cost and be available in a turnkey solution for businesses and teams of all sizes. Today’s corporate workplace is being re-thought, they still need to be havens of collaboration, community, and innovation amenity rich environments, that nurture relationships, learning, create the spark, explosion of creativity and innovation. These workplaces need to connect people with organization, culture, coworkers company’s mission, provide hospitality and services but they need to be in the same location. The traditional idea of a corporate campus was centered around a single location. Today it needs to be centered around people and where they want to live and work.
Dispersed - The "New Normal" That Isn't New
Discussions around the dispersed, distributed workforce have been brought to the fore by the recent mass work from home experiment. The concept is not, however, new. While many of us have had the flexibility to work from home, coffee shops, cars, trains, airports for many years, many of the most forward-looking companies spent the last 2 years focusing on their distributed workforce programs. Indeed, we at Werqwise have been hosting remote offices for some of these firms, large and small, since we opened in 2018. We have recently all seen the benefits of the dispersed workforce, our challenge is adapting to this new normal and formalizing it on a large scale, Shifting balance away from super-campuses and offices without losing the benefits and without a large increase in employee turnover. The balance between working at the corporate campus, the office near home, coffee shop, while on the move and at home is different for each company team and person. There is no doubt that working from home leads to productivity boosts for many people as we spend less time commuting and have fewer interruptions but this productivity increase is short lived in many roles given the lack of those unplanned, unintended interactions. And this is without even considering the mental health impact. before COVID-19 30% of working Americans suffered from stress related illnesses, how much is this going to increase? Careful consideration does, of course, also need to be given to confidentiality and security of proprietary information, equipment, and processes yet there is much more we need to consider. How do we hand a product off from one life cycle to the next, how do we work in a coffee shop without power, with limited internet and surround by ever changing people?
Many of us suffer from Zoom fatigue, a feeling of disconnection from the rest of our team and the impact that has on our sense of job security and miss the feedback, learning and growth that naturally happens when we are around others. While the psychological impact can be enormous, we must not forget the physical impact. The aches and pains of not having our ergonomic chair, the health impact of missing the sit stand desk, walk to the office or walking meetings. As a business engaging people and ensuring the deep connection with the company culture and brand is hard when people are in the same location, it becomes exponentially more difficult to build teams, loyalty, focus on a core purpose and a sense of being in it together when people are dispersed. Business is a human endeavor and as human beings we crave belonging and social interaction; working remotely, and in particular, from home, has a huge impact on us all. The largest organizations will, of course, find ways to deal with these problems but what about everyone else. Unless we are huge, we simply do not have the financial, operational and technology resources to solve the problem from even the simple perspective of our physical workplace, our real estate. We cannot however afford not to solve the problem. If you get it right then it can lead to explosive growth but that in itself breaks the physical workplace model because real estate is long term and explosive growth is, by definition, explosive, rapidly changing, in real time. It demands flexibility from the workplace to fit in to the business continuum. How does thinking, behavior, process and traditional norms need to change for real estate to be a contributor our currency of high performance?
The Currency of High Performance - How Must Real Estate Respond?
Current thinking in real estate is not adding to the currency of high performance and in many cases, it is a negative contributor. The addition to the long term lease caused by long standing views of the value of buildings coupled with the conditions under which financial institutions are willing to finance those buildings have largely stopped the industry from changing in a meaningful way for 100 years. It is a huge industry, $2.7 trillion in America alone so is hard to change but it needs to. The growing void between the demands of ever-changing business, social and human environments, and the current needs of landlords developers and their financial backers needs to be closed. Flexibility and adaptability are now core business requirements. Businesses need to make decisions in real time. Flexible workspace operators were created to solve this problem, but most build a fixed, generic product that tries and fails to offer a one-size fits all solution. The flexible workspace industry was founded to solve the problems of the dispersed workforce and provide businesses with flexibility, turnkey solutions, it should be connecting the different parts of the business continuum like a glue.
Many operators however fail to listen any more than traditional real estate and are too internally focused to provide anything more than lip service to humanizing the workplace. Sure, you can get flexibility on term, meet interesting people, share ideas and work in a cool space but these are the basic factors they should not be the end point of the solution. While it is easy to find an office close to where your people live the support for confidentiality and security is often limited or prohibitively expensive. For a workplace to be effective it needs to connect people with the culture, purpose, brand, and overall mission of each business not that of the flexible workspace operator. For the world of real estate to connect with the changing world of work we need a new solution. We need a new breed of workplace operator providing for all the needs of companies and people now and in the future. Providing the missing link that allows for amenity rich, hospitality rich environments, designed to connect people with their company culture, brand, mission and team, with the flexibility to be turnkey and built to be able to rapidly change.
The future of the workplace is dispersed, a hub and spoke model. It meets the needs of business and people with real flexibility. It is diverse, physically, and psychologically, safe. It is rich in amenities, hospitality, and services. It is engaging, collaborative and provides all the conditions for the spark of innovation and creativity to lead to explosions. It allows workstyle to fit into lifestyle. It is time for a new real estate solution, one that quickly and flexibly customizes spaces for each unique company and team. A solution that meets business requirements for flexibility, agility, confidentiality, and engagement that removes distractions yet encourages the spark that comes from unintended, unplanned interactions. A solution that ultimately unlocks the secret to high performance in the changing world of work with all above existing in a seamlessly connected continuum.