“Workplace strategy” has become a high-profile part of the conversation around business, talent and the broader economy—a conversation often driven by headlines focused on “place” (think cool, alternative office environments and talent-grabbing amenities). And understandably so. These modern workplaces are featured on TV shows and style blogs, and are helping redefine the traditional view of a cubicle-filled workplace. However, while being wowed by these undeniably cool office environments, we can overlook the “work” and “strategy” ingredients that comprise the concept of workplace strategy.
The right starting point is business strategy—understanding an organization’s “plan to win” in the marketplace.
But for the executives who manage workplace environments for some of the largest and most successful companies in the world, they arrive at “place” only after they have also thoughtfully considered the other ingredients of the term—“work” and “strategy.” This discipline comes from the fact that those in the C-suite are expecting great outcomes from the workplace investments they are making.
For example, in CBRE’s inaugural Americas Occupier Survey, 57 percent of the 229 executives surveyed identified employee attraction and retention as the most important driver behind their company’s workplace strategy. Meanwhile, 85 percent said that they had used space restructuring to impact cost in the past year.
In short, workplace strategy has to deliver on multiple objectives.
“Today’s corporate real estate executive must balance new workforce desires with a realistic workplace strategy that brings talent and expense management into simultaneous focus,” according to the report. So even if the “place” grabs all the headlines, a disciplined approach is required to balance multiple objectives and deliver the exceptional outcomes C-suites are demanding.
The right starting point is business strategy—understanding an organization’s “plan to win” in the marketplace. These plans evolve constantly, and real estate executives must translate them into more specific questions that real estate can solve. Consider two examples:
- New global operating model. A financial services company announced that it would rethink its global operating model to reduce cost and improve efficiency. First, work would move away from higher-cost locations. Also, specific functional activities would be consolidated into “centers of excellence” to drive higher productivity. Workplace strategy therefore had to uncover which markets and sites would become centers of excellence. Then it could address how each center would accommodate the added headcount and what kind of space would be needed to make workers in each center productive.
- Capturing synergies across businesses. Many companies are moving from a decentralized “holding company” structure to a model where the corporate center aggressively extracts synergies across business units. This causes sophisticated real estate groups to ask how to consolidate facilities across business units in key markets. It can also trigger a rethink of the workplace design in newly consolidated facilities, with an emphasis on creating a shared culture, encouraging cross-business collaboration or accommodating very different work requirements.
Translating business needs into the right workplace solutions is important work. Even if corporate real estate executives are not responding to a new shift in their business, the best among them are never developing workplace strategy in a vacuum. They are always working through a variety of real estate and business strategy filters and questions, as illustrated in the figure below.
Some of these questions can have more than one answer. For example, many leading companies are opting for hybrid spaces that afford 10 or more distinct working environments—some open, some private—in the same facility. This allows workers to choose the type of space that works for them, based on the type of work they are doing at different points throughout the day. The flexible nature of these environments mean that the company’s workload—and workforce—can expand and contract without requiring precise predictions about who needs what size of office at which corner of the floor on a moment’s notice.
One organization’s plan to win will not be another’s. Flexible, activity-based work environments may be just the ticket for one company, while well-appointed, traditional offices may still be the winning formula for another. But whatever the answer, the important point is that workplace strategy never starts with the debate about open plan vs. traditional, or amenity-rich vs. barebones, or CBD vs. suburb, or how many square feet per person. What matters is each company’s unique strategy, its plan to win, and how that plan translates into the approach to talent, market presence and workplace environments.
22 December 2015 by Daniel Rosen