The future landscape of flexibility
By Despina Katsikakis
Edition 9 – December 2017 Pages 08-15
Tags: office design • facilities management • human resources
Over the last 10 years, technology has given us the choice of where and how to access information. Being connected anywhere has enabled a shift from work as ‘somewhere you go’ to work as ‘something you do’ anytime, anyplace.
While this new engagement with work increases flexibility, it also brings increased working hours and information overload as people are lost in their devices, 24/7, with little awareness of their surrounding environment. The results in the workplace are people who are both disengaged and distracted. Gallup (2013) reports that 70 per cent of American workers, are ‘not engaged’, and are just going through the motions of working or are ‘actively disengaged’, hate going to their work and undermine their companies with their attitude.
These figures are consistent with data from the UK and even more extreme figures in the developing world.
While not yet effectively implemented as the norm, the arguments in favour of more flexible working practices are powerful and are here to stay. In the UK, Thompson and Truch (2013) estimate the value of productive hours gained to be at least £6.9 billion and workstation savings of at least £1.1 billion, as flexible ways of working enable office buildings to be used more intensively with workspace being used on a shared, as-needed basis. Findings consistently suggest that workers also gain a better work-life balance, are more productive, can concentrate better and experience reduced stress and commuting times, when they have choice of where and when to work.
One of the usual arguments against offering people greater autonomy over where and how they work is a lack of control and consequent lack of effort from employees. New evidence by the German Institute for Economic Research (Beckmann et al., 2015) suggests what actually happens is the opposite. When employers relinquish control, people actually work more. People who enjoy autonomy on average put in an extra seven hours each week and are more committed to their employer.
In this new, increasingly paradoxical world, helping companies to design the infrastructure to support and enable engagement in the workplace is at the core of helping them to be productive. The current focus of work is on supporting knowledge workers. The core of knowledge work is non-routine problem-solving which requires an integrated approach that includes spatial, technological and managerial issues. Even though technology enables a great deal of knowledge work to be performed anywhere and anytime, the role of the office is still very relevant but it needs to be redefined.
New ways of supplying, leasing and servicing the workplace are needed. Assuming an overall reduction in space requirements for office users, given intermittent patterns of occupancy and increased sharing of space over time, landlords can plan for less real estate to be better used.
This densification approach can be used as part of a wider strategy to make workspaces more valuable and command higher rents by finding new ways of adding value for tenants by providing shared spaces beyond the office that they lease to be used as alternative places to work. This allows the landlord to make more of the real estate asset. By providing flexibility to tenants and activating the shared spaces to create a vibrant community that people want to be a part of, the building itself becomes a destination. Such an offer will both attract new tenants and also retain them beyond the normal lease period as it can support their changing business requirements and offer them access to a unique ecosystem of talent.
What we design today will be our future heritage. It must be a sustainable and resilient resource that stands the test of time. ‘Long life, loose fit, low energy’ should be the guiding principle. A minimum life expectancy of 60 years is not unreasonable for new buildings but they should be flexible to accommodate a variety of uses over that time. The dynamic changes enabled by technology add another dimension to time, that of the day-to-day and hour-by-hour change of settings for work. People regularly report that freedom and choice matter most; they feel better when they are in a flexible space that they can change to meet their work needs, mood, or inspiration at the moment.
What if a building was designed for continuous adaptability? Space could be adapted for business shifts in ‘real time’, to be continually re-aligned with the core business objectives. And if space was able to be continually informed with real-time metrics? True sustainability in terms of workspace was able to be directly measured not only as environmental, but also financial, productive, cultural and market competitive?
All these scenarios have a consistent theme; they are dynamic and fluid, much like the use of space in cities. Recent models of the workplace, such as distributed working, hoteling, teleworking, agile working, etc., are dynamic in principle but primarily are intended to maximise efficiency and cannot deliver real flexibility unless they embrace a wider real estate context.
Developers and landlords need to start thinking of their buildings as vibrant communities and create a new approach to provide optimum (and timeless) versatility and adaptability for new ways of working by shifting traditional ownership and lease constraints to pay as you go, and providing the workplace as a service.
The working environment can either stimulate and sustain people’s engagement and energy or dampen and drain it. For it to be a positive experience that adds value, it must meet a series of basic human needs: our need to renew our physical energy; our need to feel valued; our need to focus and be creative; our need to connect with others in a range of ways.
We perform at our best when we move, spend time outside getting daylight, and alternate between different physical, emotional, mental and spiritual states. The combination of open plan office design and email has shattered people’s capacity to focus on deep work due to constant interruption, distraction and lack of freedom and choice. We have come to see multitasking as an essential skill when in fact it destroys our productivity. The lack of places to work without interruption means that we further reinforce a culture of intermittent thinking that tends toward the narrow, short-term and superficial. As we work more continuously, the natural breaks we took in the past have been replaced with constant access to mobile email, increasing our need for intentional high quality renewal.
Technology-induced stress and a lack of meaning in everyday work creep into most workplaces. Brigid Schulte (2014) states that, on average, initial enthusiasm for the job fades after six months when the majority of employees feel overwhelmed and disconnected from their management team and its vision. In her book, How to Work, Love and Play When No One Has the Time, she looks at the stress caused by a culture that glorifies constant busy-ness and encourages organisations to implement policies that promote a ‘digital detox’ and true vacations in order to liberate people from the ‘ideal worker’ paradigm.
To cope with the intensity of work today we need more access to quiet spaces to concentrate, think and recharge, as well as access to flexible spaces for meeting, collaborating and socialising. We should change positions and spaces and stand up more often and ask ourselves if it’s really necessary to do all of our tasks sitting in a chair.
The World Green Building Council (2014) reports overwhelming evidence that a range of office design factors – from air quality and lighting, to views of nature and interior layout – can significantly impact the well-being and productivity of staff.
Attracting the best and brightest staff to your organisation and fostering a happy and healthy workforce can be significantly impacted by the quality of the working environment. The workplace can affect the physiological and psychological performance of people, so it is necessary to work with the users to co-design places that energise, encourage social interaction and collaboration, enhance personal control and provide services and events to manage the blurring of working and living to improve the quality of life.
Work is inherently a social endeavour. The focus of large companies is centred on people, so creating places that provide for the well-being of people at work is critical for business success. David Rock (2009) says, ‘social interactions are delicious things to the brain’ and that is why we are drawn to them, but he also stresses that:
Productivity is ultimately about choice and autonomy and if we give people the opportunity to move between different spaces to focus when they need, to collaborate when they need and to have great social interactions, we are giving them what they really need at work. These elements of community and mutual support are inherent in the shared workplace culture. Co-working spaces can provide an extremely nurturing context for start-up companies, and while initially were much more prevalent in technology companies, they have now spread across all sectors of economic activity.
Successful co-working environments curate authentic experiences; ubiquitous Wi-Fi, great coffee, healthy food and services, alongside networking events, and demand for them is exploding. In 2011, there were only 1000 coworking spaces worldwide, with a dominant presence in Europe and the USA. The latest survey by CoWorking Europe Conference (2015) demonstrates that four years later, there are almost 7,800 coworking spaces. The forecasts suggest that their growth is unstoppable: by 2018 there will be 37,000 coworking spaces spread across all continents and there will be over 2.5 million professionals who buy membership in a coworking space.
In the City of London, Ramidus (2014) found that around 70 per cent of serviced office space is occupied by SMEs and predicted that the market for serviced offices could grow by 77 per cent by 2025. Potential for growth exists, based on three principal sources of demand.
First, there is strong and sustained growth in the number of small, often technology-enabled, knowledge-based, businesses in London. Second, corporate occupiers are becoming accustomed to supporting their core property needs with flexible on-demand space. Third, small businesses that are occupying secondary properties in conventional leases will likely opt for a different approach, spurred by a diminishing supply of small and short-term office space in the conventional leasing market and by the need for better employee engagement.
In New York City, there have been almost 500 tech start-ups in coworking spaces, incubators and accelerator sites (Bowles and Giles, 2012) but the value of the phenomenon has now been recognised in many finance and media businesses worldwide, with many of the defining characteristics of coworking spaces being adopted in corporate environments, such as an emphasis on collaborative rather than individual working and a range of spaces to support innovation.
These internationally established, ‘third-space’ workplaces vary in terms of scale, variety of settings and even where they lie on the leisure-work continuum, but they share certain layout characteristics, including zones dedicated to concentrated working, touchdown work areas for collaborative working and short duration visits, formal and informal meeting rooms and areas, a café and other social spaces and business support spaces, including reprographics and technology support. Such is the dominance of this new work style that it can now be met in a range of forms. Some coworking spaces have leisure and social activities at their core, much like private members’ clubs such as Soho House, the Hospital and the SocietyM business club in CitizenM hotels. Others have workspace at their core but also offer social and leisure facilities, such as Dryland Business Members’ Club in London’s Kensington High Street.
The workspace-as-service model means that there is no economic bar to blurring the boundaries, allowing us to rethink space, work and the city. This new blurring of boundaries of space, time and use has served to increase rather than relax the pressure on work settings to perform. The only constant is dynamic change. We can safely say that the office environment will no longer be made up of rows of desks but of a rich variety of settings and curated events which will blur the boundary between personal, shared and public spaces to support organisational innovation.
The nature of corporations is changing so they will be more agile and reliant on dispersed talent networks and open source innovation and, as such, the nature of employment is changing and less likely to provide lifelong careers and job security. Intuit (2008) reckon that more than 80 per cent of corporations are planning to increase their use of flexible workforce in the coming years. In the USA, 45 per cent of workers are already described as contingent, and 33 per cent of the UK workforce is currently described as independent or freelance and this proportion is projected to be 40 per cent by 2020. This trend is now spreading to other regions as it aligns with the desire of new workers not to work for a company, but instead to be a part of a community.
We live in an economic context that is constantly and rapidly changing and the way we work is central to that change. Economic growth used to mean more jobs but that is no longer the case. Rotman (2013) estimates that output can now grow overall, with no increase in employment. Since 2000, output in the USA has grown faster than employment, suggesting that technology already is destroying more jobs than it creates. Schiller (2014) estimates that the robotics and 3D printing revolutions could accelerate this trend still further, as the comparatively low entry costs for these disruptive technologies make them widely accessible to everyone, including developing economies. Losing occupations does not necessarily mean losing jobs in the conventional sense – just changing what people do. A growing proportion of jobs in the future will require creative intelligence, social intelligence and the ability to leverage artificial intelligence.
The Future of Work Conference (Birnbaum et al., 2014) proposed that physical and reasoning tasks are increasingly being done by machines alongside people, enabling people to work on more strategic things rather than look at spreadsheets. Through the ‘creative destruction’ of technology, a lot of jobs will disappear (particularly for middle management) and a lot of new jobs we cannot yet imagine will be created. The growth in new jobs will occur as much through crowdsourced freelancers as within the bounds of the corporation.
Birnbaum et al. (2014) state: “As machine learning progresses at a rapid pace, top executives will be called on to create the innovative new organisational forms needed to crowdsource the far-flung human talent that’s coming online around the globe. Those executives will have to emphasise their creative abilities, their leadership skills and their strategic thinking”.
As the war for talent increasingly happens outside the traditional organisational boundaries, the implications are huge. New organisational forms will develop that overlay the responsiveness of start-ups through the nimbleness of network structures with the execution efficiency of a traditional hierarchy.
PWC (2014) forecasts that organisations will avoid hierarchy and opt for flexible, flat and fluid organisational structures. They will have a network of relationships with third-party research centres, innovation firms and universities through which they will fund and source new products and process ideas. They will use mechanisms such as idea-sourcing platforms, challenge contests and seeding of venture funds and incubators to bring a constant flow of opportunities on stream. This is validated by Ramidus’s (2015) research in the City of London, where differences between sectors are now seen to be eroding as corporations focus on technology work and become reliant on dispersed talent networks and open source innovation.
To facilitate this transformation, the employee-employer relationship is changing from how much value can be extracted from workers to how much can be instilled in them. The benefits of tapping the full range of people’s knowledge and talents may be obvious, yet it is surprising that so few companies have done so. Elite universities and hospitals, Goldman Sachs and McKinsey have all been adding value to valuable people for a very long time. Google and Apple are more recent examples. They do this in myriad ways – by providing networks, creative interaction with peers, stretch assignments, training and association with a brand that confers elite status on employees and collaborators.
Connections can lead to new learning. Companies should create environments – both physical and virtual – that help employees to develop new connections and also to strengthen their existing relationships, as it is now well proven that traditional work environments of rows of desks are obsolete in this kind of working. To support effective connections it is essential to create workplace environments that foster serendipitous encounters. Many firms already build their workplace environments with the common areas strategically positioned to allow workers to ‘bump into each other’. These types of environments should also be developed in virtual settings. While some companies try to ban access to social media to manage distractions, Waber et al. (2014) estimate that social media has the potential to save companies $1.3 trillion, largely owing to improvements in intra-office collaboration. It is clear that the experience of work needs to be understood and curated inside and outside corporate office space, in both the physical and virtual realms.
The office workplace evolved to support the uninterrupted flow of paper processing, where the main aim was efficiency. As the process of work has changed to focus more on the value of knowledge and the production of ideas, we have become confused about the purpose of the office. In order to successfully create and share knowledge and to innovate, we need to bring the focus of the workplace back to people.
Corporate management teams are increasingly recognising the importance of putting people’s needs at the core of their workplace strategy. Piet van Schijndel, a member of the Board of Directors of Rabobank Nederland, says: “I predict that over the next ten years, one of the biggest problems we will face is how to get good people to join our company. If you have something to offer where people can balance their work and their home life in a modern way which suits those people, then that would naturally be a way for our company to attract people”.
After several years of development Rabobank Nederland, the banking arm of the largest financial services provider in the Netherlands, Rabobank Group, rolled out an organisational and technical infrastructure that allows employees to connect to one another from practically anywhere while still meeting the stringent encryption standards that banking systems require. With no fixed offices or rigid job descriptions, Rabobank’s employees are responsible for the results of their work, but they are free to choose how, where, when and with whom to carry it out.
This approach requires managers to place an extraordinary amount of trust in their people, and it demands that employees become more entrepreneurial and collaborative. The business environment of the future needs to trust people and technology and provide flexibility and choice for employees to connect with complementary skills across a network, to work together on challenges, to learn fast, unlock their passion and improve performance.
Such an environment helps people feel energised and connected to the organisation and attracts, inspires and retains talent as well as redefines our definition of places for work. In Duffy’s (2008) ‘networked office’, complexity underpins the next stage of real estate evolution; the moment when knowledge work, supported by promiscuous networked information technology, has eroded all the spatial and temporal conventions of twentieth-century work of all kinds.
The speed of technological progress, such as the popularity of the ‘Internet of Things’, will have a huge impact on the way we work over the next ten years. Information technology helps us to reimagine space as well as connectivity – it seems to minimise the significance of the synchronicity and colocation of conventional office buildings, while it augments the importance of other aspects of place: physical transport and access, virtual and social connectivity.
Flexible working is therefore not placeless: virtual work and physical place are transforming each other and reinforcing the value of certain places as the hubs of both physical and virtual networks. This apparently counter-intuitive view is widely proposed by economists and theorists: Edward Glaeser, for example, in The Triumph of the City (2011), argues that the role of the city as the most effective way of transferring knowledge has in fact been reinforced by the rise in technological connectivity – ‘urban proximity’ being a key factor in concentrating, clustering and incubating talent.
• What if – our workplace actively supported our life at work?
• What if – we had a say in the way we work and could make a difference?
• What if – we felt a genuine connection to our community of colleagues?
Connectivity and access to knowledge are the defining features of contemporary business and society and are helping to redefine how and where work is accomplished. By embracing the sociability of where work happens, we can enable people to connect with other like-minded people at inspiring spaces and events – to collide, collaborate and co-create value for themselves, their business and their community.
Healthy employees are significant factors in a healthy bottom line but our entire approach to the workplace requires transformation. Our current well-being paradigm is stuck measuring the cost of various degrees of illness rather than calculating the value of higher levels of wellness and proactively enabling us to thrive. It is not a simple solution; a gym, or a standing desk, but it is an ongoing process that requires an integrated approach by leadership, space, technology and policies to deliver change. Huffington (2014) introduced well-being as the much-needed Third Metric of Success. She makes the point, that there is no work-life balance. We have only one life and a company culture that does not expect employees to be wired and responsive 24/7 needs to become the norm to make our workplaces truly sustainable. BCO’s (2014) research estimates that more than a third of participants accuse their employer of not valuing their well-being at all. The report comes up with three starting points to help employers create a culture of well-being: care; control; and collaboration. The study found that nine out of ten workers feel their well-being diminishes if they do not have control over their day-to-day activities. In addition, they want the flexibility and control to mix collaboration with colleagues with quiet moments of concentration to help them get ‘in the zone’. Nine out of ten workers claim that working ‘in the zone’ helps them perform better as well as feel better.
However, currently over three-quarters of people feel they are hampered by a noisy open-plan environment and a further quarter are frustrated by a lack of privacy, while more than two thirds would like to see relaxation areas in their workplace. Companies can meet this need for control by offering employees flexibility and choice in how and where they work and trusting them to decide their own working patterns.
Our places of work are always communicating corporate values and culture as well as enabling certain behaviours. It is clear that the office environment can play a key role in supporting our well-being goals by mediating the way we undertake the daily required tasks and activities. People work best when they can move freely between quiet and more social spaces and have choices.
In addition, nine out of ten employees believe that support from colleagues enhances their well-being and makes them more productive. However, building a collaborative environment as flexible, and as remote working grows, means companies need to embrace connectivity to ensure that employees have the tools to work, discuss and innovate together no matter where they are. Contrary to many schools of thought, the survey reveals that virtual connectivity actually contributes to well-being according to more than half of the workers surveyed.
When deciding on the most appropriate space – including physical and virtual ‘places’ – in which to carry out a work activity, a variety of factors must be taken into account but it all starts with personal awareness of what you need to do, how you feel and having the choice of where to do it. When space is designed with people and purpose in mind and has a clear narrative, it can make our life at work more meaningful. It can help make us more aware of what we are doing and who we are ‘being’ at work; to more meaningfully connect with others, to share knowledge and ideas, to concentrate and focus, to activate our mind and body, to connect with nature, to recharge our energy and to inspire ourselves and others to thrive.
As the war for talent intensifies, employees are behaving more like customers; being choosy about who they work for and looking for organisations that convey authentic culture and values in their workplace. Everywhere we look there is now a demand for genuine, authentic experiences. From craft beer, artisan cheeses and locally sourced products, to mindfulness meditation, we are constantly looking for ways to increase our awareness and to reconnect with our humanity, with nature and with a sense of purpose.
We need to bring more humanity into the workplace and provide environments with a new purpose – environments that delight, stimulate, energise and connect us with each other.
Disconnection from community and limited time with family are common stress factors for people in many large cities, that currently rely on commuting, forcing people to travel to the centre every day to work. In London, the ‘average’ commute time is 74.2 minutes and the population of the city of London increases by 56 per cent during a normal working day. Leveraging work delocalisation, changes to transport methods and business structures to generate diversified multi-centres, in which coworking spaces become neighbourhood services, thus reducing commute times and car usage will improve not only the work-life balance of millions of people but also will improve local communities and the growth of local economies. Corporations are starting to embrace this by using coworking spaces close to where people live to cut down commute times, access innovative talent through the coworking ecosystem and benefit from ‘spaceless growth’ – maximising flexibility while minimising fixed costs.
The workplace is now a hub for bringing colleagues together. It has become a ‘high-tech coffee shop’, where networked individuals meet, share, collaborate and develop ideas, strategies and solutions. As such, the workplace is increasingly being designed and managed less as a static backdrop to routine solitary work, and more as a ‘flexible’, ‘hotel-style’ facility that provides a high level of service and experience to its demanding ‘guests’.
While we now have four generations at work they are all aligned on their expectations of choice and flexibility, greater transparency, more teamwork and more amenities to support authentic sociability, knowledge, convenience and well-being (Ramidus, 2015).
Puybaraud and Kristensen (2015), looking to 2040, propose a compelling future:
• choice-based restructured patterns of work; personal choice dictates working patterns;
• access to wide range of coworking facilities less than 20 miles away from home;
• mixed facilities in one single location creating a community environment;
• access to a workplace is a reward and provides outstanding experience for users;
• all facilities are multipurpose, mixing different activities (work, leisure, entertainment, sport, medical centres . . .);
• wellness is at the core of our way of living, moving from wearable to implantable;
• service delivery is people-centric and technology-focused to enhance the user experience.
It is easy to see how real estate portfolios will increasingly become a dispersed network of workplaces; social and adaptive working environments, empowering users and teams across different work contexts and collaboration modes. Our own workplace will be a menu of coworking environments that leverage our social networks and support our personal needs and aspirations day to day and hour by hour.
This context poses some clear directives for the design, leasing and servicing of buildings:
• Space is used as a key medium for expressing corporate culture and values.
• Design and leasing for continuous adaptability and diverse usage and patterns.
• Interiors are loose-fit and focused on activity-based settings for factors such as collaboration, creativity and contemplation.
• Shared spaces are used as a means to facilitate collaboration and community.
• Amenities and service provision, to support life at work (food, well-being, learning, convenience, etc.).
• Technology interfaces, that are intuitive and seamless to improve the user experience.
• Events are curated and managed to create memorable experiences and to attract talent.
• The public realm is permeable and designed to reinforce a sense of community and connection to the city.
The design and management of buildings are much less about the ‘hardware’ of work – the desks, the partitions, technology, electricity, and so on, and much more about the ‘software’ of work – the cultural, social and value systems of the organisations. A focus on the ‘aspirational’ aspects of the workplace: empowering workers to do their best work. The challenge will be breaking down the corporate services silos to integrate workplace and resource planning and focus on creating people-centric experiencesW&P
About the Authors
Despina is an industry leader with an international reputation for thought leadership and innovation on the future of work and the impact of the workplace on organisational transformation and business performance. Established through long term client relationships and over 35 year experience of leading innovation, research and implementation of transformative business environments and exemplary real estate developments worldwide, including pioneering the role of workplace consultancy with global corporations and real estate developers. Despina is now International Partner &
Head of Occupier Business Performance Cushman & Wakefield.
This feature is based on a chapter from the third edition of Creating the Productive Workplace, published in December 2017
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…While not yet effectively implemented as the norm, the arguments in favour of more flexible working practices are powerful and here to stay…
…Attracting the best and brightest staff to your organisation and fostering a happy and healthy workforce can be significantly impacted by the quality of the working environment…
…Successful co-working environments curate authentic experiences; ubiquitous Wi-Fi, great coffee, healthy food and services, alongside networking events, and demand for them is exploding…
Images: Simon Heath