NUKe THE SALES OFFICE

Transcription

1 NUKe THE SALES OFFICE HOW TO INCREASE SALES REVENUE A Cushman & Wakefield Publication 2013

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3 NUKe THE SALES OFFICE OUR CLIENTS ARE OUR COMMITMENT Founded in 1917 in New York City, Cushman & Wakefield (C&W) is the world s largest privately-held commercial real estate services firm, with approximately 15,000 employees operating from 253 offices in 60 countries and six continents. What makes Cushman & Wakefield the preferred choice? It s simple. Our success and longevity are built on a simple philosophy which guides everything we do and has made us the world s preferred real estate services provider for the last 100 years our clients come first. Every aspect of our platform has been honed to achieve value on behalf of our clients. With a commitment to global collaboration, consistency and creativity, we provide customised services and solutions that see beyond the brick and mortar of each real estate transaction. Whether you are a tenant, landlord, investor, or developer, a global company or a small business, Cushman & Wakefield provides solutions that fit your strategic, operational, and financial goals. OUR SERVICES We provide services across the real estate continuum, advising, implementing, transacting, and managing on behalf of owners, occupiers, investors, and developers through every stage of the real estate process. These services are consistent in every office around the world. Whether you re in Miami or Moscow, Cushman & Wakefield offers the same resources, same intelligence, uses the same processes, and the same platform. OUR GLOBAL REACH Our professionals have in-depth expertise in more than 200 local marketplaces. But we understand that having offices around the world is only part of the story. Cushman & Wakefield takes the extra step we have put standards and processes in place that ensure collaboration and sharing of intelligence across borders. OUR PEOPLE To ensure creative thinking, we recruit talented professionals from all backgrounds not just real estate including management consulting, finance, engineering, tax, legal, and systems management. Our people come to the table with entrenched networks and relationships that enhance their ability to make the deal, optimize the engagement, and maximize results. OUR RESULTS Our partnership with our clients goes beyond the deal to support your core objectives. We demonstrate how your real estate holdings can be harnessed to improve productivity and profitability, optimize asset value, strengthen branding, and sharpen your competitive edge. CUSHMAN & WAKEFIELD 3

4 introduction The workplace as we know it is dramatically changing. The nature of work, shifting workforce demographics, increased competition, financial pressures, technological innovation and a greater focus on sustainability, all mean that the traditional workplace set up is becoming increasingly unsuitable. Third Space: defined as space outside of the home or office that can be rented, reserved or claimed to be used as an alternative place of work. Third space is now a key ingredient in the workplace strategy adopted by organisations across the world. Can this flexible working practice help organisations to change the traditional workplace set up? Can third space be linked to the success of those teams or individuals utilising this alternative place of work? This briefing note explores the idea of sales teams utilising third space and how this flexible working practice can help organisations to not only achieve significant cost savings through the reduction in fixed space, but also increase the revenue generated by these teams. In the first section, the topic of workplace is explored. Historically, the workplace was seen as the building in which employees carried out work, however the emphasis is now on how the workplace supports and meets the needs of employees. The concept of the workplace has developed significantly since this change in emphasis and on the next page, we explore the changing workplace and the factors currently driving change people, technology, financial pressures and sustainability. Third space is now a key ingredient in the workplace strategy adopted by organisations across the world 4

5 THE changing WORKPLACE what is happening and why? NUKe THE SALES OFFICE The growth of the service-based knowledge economy, globalisation, greater customer demand for new product/service offerings and increased responsiveness, is forcing organisations to continually restructure, push decision making down into local markets, innovate and collaborate across borders. Traditional employer-employee relationships are being replaced with a complex network of employees, suppliers, contractors, customers and partners working together to effect change; moving away from command and control, hierarchichal management styles. Spaces and places will be more important and an essential component of the overall workplace mix. Just as one device is no longer appropriate in the changing world of work, so is the concept of a single place or space to work. Coupled with the latest technology, enabling fast and constant connectivity to the World Wide Web 24/7, untethering employees from their workstations, work is fast becoming something you do, rather than somewhere you go. This has resulted in organisations requiring both physical and virtual workspaces that support the new workplace reality. PEOPLE who is working For the first time in history we have four generations in the workplace, each with unique characteristics and expectations. With fewer younger people to replace those retiring, organisations will need to deliver on employee expectations in order to retain and remain competitive amid the coming shortage of workers. TECHNOLOGY how and where people work This changing workplace is now better supported by fast and constant connectivity to the World Wide Web, new technology, devices and applications, which collectively are untethering employees from their workstations. However, such advancements in technology and means of communicating with colleagues and clients, now allows for work to be undertaken from anywhere in the world and at any time. This enables the distributed organisation model, illustrated below, to become a reality. FINANCIAL pressures Operating costs With relentless pressure to deliver greater value to shareholders, organisations are looking at new financial models to continually reduce operating costs. This is evidenced in the growing trend to outsource non-core functions, offshore to lower cost or remote locations and procure services on a contractual basis to meet short-term needs. Costs at all levels are being examined and either reduced, removed or made more flexible including salaries, travel and real estate. DISTRIBUTED DECISION MAKING agility, competitiveness SUSTAINABILITY the impact on the environment Sustainability is becoming an important consideration at multiple levels of an organisation, who are questioning where, when and how their employees work. Sustainability, from the viewpoint of an organisation, is considered at 3 levels with workplace related goals attached. The effect on society triple bottom line reporting, compliance with environmental regulations and the need to place less pressure on city infrastructure The effect on the organisation reducing emissions, energy and waste, and positioning of the brand to increase awareness amongst investors and customers as an environmentally and socially responsible organisation The effect on employees reducing the carbon footprint of employees for example, through reduced commuting and business travel, and catering to the expectations of an environmentallyconscious workforce. DISTRIBUTED PLACE mobility DISTRIBUTED ORGANISATION DISTRIBUTED RESPONSIBILITY outsourcing, contracting DISTRIBUTED WORK HOURS collaboration DISTRIBUTED GEOGRAPHIES offshoring, globalisation CUSHMAN & WAKEFIELD 5

6 THE NEW WORKPLACE what does it look and feel like? There is a strong discourse from leading business schools that creating the right culture within an organisation is more powerful than corporate strategy. Creating a sense of community is key in the new workplace, as is encouraging employees to operate in a collaborative manner. In order to attract and retain the best talent, organisations need to achieve both of these things. workplace settings Organisations have traditionally provided a single place to work in the office the desk with a computer and telephone, with variations on the size of desks or space allowance relative to hierarchy rather than activity. Innovative and forward thinking organisations are, however, redesigning the workplace set-up to better support employees in different activities or work modes, and provide a multitude of workplace settings both in and outside of the office. alternative places of work The world of work is transcending beyond the traditional office to alternative workplaces outside of the office with clients, at home or in third spaces including business clubs, coworking facilities or cafés. People are also working as they travel on trains and planes, or between journeys in airport lounges and hotel lobbies. Even within the traditional office, generous areas for socialising or working over coffee or a meal are seen as vital, not only from an employee well-being perspective, but also to increase the chances of serendipity occurring and new innovative ideas being generated. employee performance in the workplace The mantra that work is not a place but an activity has been advocated for decades. This has driven a migration away from the presenteeism style of management, that focuses on attendance at the office as a measure of performance. Employees are now managed by objectives and as long as they achieve these objectives, it does not matter where the work is carried out. The challenge that now exists is an even greater need for HR, IT and corporate real estate strategies and policies to complement one another to support the new workplace. Characteristics of the new workplace More focus on output rather than presence in the office More collaboration and distributed team working More employee choice More dynamism in how work is undertaken More environmentally friendly ways of working 6

7 THIRD SPACE NUKe THE SALES OFFICE what is it? Third space or third place is the term used to describe places outside of the home (the first space) or the office (the second space), that can be reserved, rented or simply claimed for a finite period of time in which to undertake work. Third space can incorporate a whole host of locations including: coffee shops libraries serviced offices specialist business centres/lounges client offices business lounges at railway stations and airports business lounges at service stations collaboration hubs coworking spaces. Typically, third space for organisations that have embraced the new workplace, is a key component in the mix of work spaces and places on offer. As more and more organisations adopt new and flexible ways of working, workspace in particular third space, is becoming just another ondemand service, adopting many of the characteristics more typical of software. As the market for third space has grown and gained credibility amongst organisations, the offering has been further developed to become more widespread and sophisticated to meet this growing demand. Reportedly, the global third space market has an annual turnover of approximately $6 billion and represents some 80 million square feet of office space. what are the benefits? Third space provides flex for organisations that need to be as agile as possible by: de-risking real estate reducing property occupancy costs increasing trust and empowerment amongst the workforce which can lead to improved productivity and increased revenue helping to combat the feeling of employee social isolation a risk of increased remote home working providing a haven from the distractions faced when working from home or on the go. CUSHMAN & WAKEFIELD 7

8 THIRD SPACE AND SALES OFFICES why is third space particularly relevant for Sales teams? Third space is typically utilised by organisations seeking new, more flexible workplace options. Third space is most applicable to remote sales teams, whose headcount tends to fluctuate, require limited office support and finally, should be spending optimum time out on the road visiting and selling to clients. Using flexible on-demand third space facilities, allows sales team employees to come and go in accordance with their schedule and access third space facilities only when necessary rather than securing long-term contracts with high fixed costs for traditional office space. THE benefits for sales teams using third space Typically, sales employees are required to divide their time between the office and visiting clients. Headcount for sales teams often fluctuates more than any other business unit, yet they utilise the same fixed office space. Traditional leases typically require organisations to sign up for space that meets their maximum requirement, which of course incurs fixed costs and long-term contractual agreements. Fluctuations in the sales team headcount therefore results in vacant workstations and wasted overhead costs. Although the unit cost of a desk is typically higher when comparing the standard leased office model to a serviced office model, you are nonetheless replacing a fixed long-term agreement with a variable pay on-demand cost. By reducing fixed real estate costs and expenses, savings of around 40% of current OPEX can be achieved. CASE STUDY: YELL group (NOW CALLED hibü) Owing to declining usage by sales employees, which had dropped to less than 10 visits per day on average, Yell closed all of its 19 sales offices in the UK. Historically, Yell had provided employees with office space, however recognised that the average person now undertakes office work either in the home or in the car both forms of third space. However, cost savings are not the biggest benefit. The biggest benefit is the increase in sales volume and revenue that often comes hand in hand with the implementation of a flexible working strategy and use of third space for sales teams. Use of third space actually encourages sales employees to visit clients more frequently, as they know that wherever they travel, there will always be a third space option or facility nearby whether a coffee shop, a business club or airport lounge for example. This removes the restriction that fixed office space places on a sales employee s can instead be accessed anywhere and at any time via 3G enabled devices or wi-fi connections, documents printed in business clubs or serviced offices, or quiet time spent working on administrative duties in business lounges. Examples of organisations that have utilised third space for their sales teams include: General Motors (US) In June 2009, the US arm of General Motors (GM) filed for Chapter 11 Bankruptcy reorganisation. As part of the restructuring process, GM closed sales offices across the US in an attempt to motivate sales teams to spend more time selling. In Q1 2013, General Motors posted for the third year running an annual revenue increase of 9%. Zurich Insurance (Sinapore) Zurich Insurance in Singapore has adopted dynamic and flexible working practices. By doing so, the sales teams have been measured as spending 18% more time with clients and not in the office. This has been a supporting factor in the 22% growth in sales revenue that was reported during Reasons for the usage decline: More time was actually being spent outside of the office selling to clients Less meetings, more conference calls which could be undertaken remotely Mobile phones/3g enabled work to be undertaken anywhere and at any time. Yell didn t need to encourage their sales employees to utilise third space and spend more time with clients, however this resulted in wasted overhead costs. THE THIRD SPACE SALES OFFICE STRATEGY C&W s Global Business Consulting team has undertaken various sales office strategy reviews for clients, helping them to develop a model that not only saves money, but also enhances revenue. Our methodology is based on challenging the existing office footprint and addresses the following questions: Define the sales culture that needs to be supported should the sales team be spending more time with customers or in the office? Are existing sales offices in the right location? Cost effective? Provide easy access to clients? Are the sales offices sized appropriately? Are they creating a comfortable place of work for sales employees? Or a highly energised base for sales employees to drop into, in between meetings? Do you need a sales office? or instead, could one or more of the following working practices be utilised? serviced offices to facilitate sales meetings home working to facilitate sales reporting and administrative duties serviced office club cards to enable sales employees to work and conduct meetings whilst travelling the latest and/or reliable technology to enable employees to work from anywhere at any time Yell subsequently migrated to a model that offered on-demand access to business clubs for its sales employees, for when office space was required, as well as allowing employees to work from home. Through doing so, Yell has achieved considerable real estate cost savings. 8

9 NUKe THE SALES OFFICE third space provides organisations with many benefits: 1. Increased sales revenue 2. Reduced operating costs/expenses 3. Improved data security 4. More time spent with clients 5. More sustainable third space helps to achieve environmental goals for both organisations and employees 6. Prevents social isolation a risk of working from home, by working alongside other third-spacers Builds trust and empowerment amongst employees 8. Fast and constant connectivity to the World Wide Web, enabling use of the latest technology to stay in touch with colleagues and clients THIRD-SPACERS WORK SPACEs OF TODAY CORPORATE OFFICE ALTERNATIVE OFFICES HOME TRANSIT COMMUNITY client sites satellite offices serviced offices business centres taxis/company cars airport lounges hotels railway lounges service station lounges coffee shops libraries business clubs CUSHMAN & WAKEFIELD 9

10 YOUR ORGANISATION How to identify the ideal balance Every organisation is different and will require a bespoke workplace solution based on your sector, product/ service offering, locations and culture. C&W s Global Business Consulting team has the experience and tried and tested methodology, to help you establish the right balance between fixed office space vs. third space. C&W has undertaken sales office strategy reviews for various clients. An overview of the process followed is detailed below. Engagement with senior stakeholders in the sales and marketing functions to understand the drivers and barriers for change Development of global policies for flexible working taking into account varying legislation and the Works Council Constitution Act Online surveys distributed to employees to profile and understand the propensity for change Portfolio analysis combining the aforementioned elements to formulate a new demand profile. Each office is then categorised as: 1. No change already optimal 2. Reduce in size and sub-let space 3. Relocate and reduce in size 4. Close and migrate to third space solutions companies already employing third space strategies When you realise that Regus alone, claim to work with more than half of the Fortune 500 listed businesses, you start to see that the use of third space is now becoming the norm rather than the exception. Companies that have already adopted flexible working practices, including the use of third space include: Yell Group (now called hibü group) HP IBM Nokia Nortel General Motors (US) CONCLUSION In the current economic climate, with most organisations focussing on reducing costs and improving efficiency, more and more companies are now becoming open to the idea of a sales office and third space strategy. When corporate real estate executives realise that by implementing such a strategy, they can not only reduce costs across their organisation, but also have a tangible impact on sales revenues, the only question left to ask is can we really afford not to review this concept and implement a sales office and third space strategy? As demand for third space continues to increase, the coverage and range of solutions provided by third space is also increasing. Accompanying improvements to technology, will also ease the process of locating and booking such facilities. Recent innovations in the third space market include: The increased availability of internet access on aircraft Coffee Shop-Office Hybrids Service Station flexible working hubs: serviced office provider Regus has launched the world s first city-wide network of flexible working hubs within 70 Shell service stations across Berlin. C&W predict that demand for third space facilities will continue to grow and options for the placement of third space facilities will increase and become more imaginative particularly with the advancements in technology. This will lead to a greater utilisation of third space and organisations seeing this flexible working practice as an essential component of the overall workplace and corporate real estate strategy. When you realise that Regus alone, claim to work with more than half of the Fortune 500 listed businesses, you start to see that the use of third space is now becoming the norm rather than the exception 10

11 NEXT STEPS NUKE THE SALES OFFICE Every organisation is different and will require a bespoke solution for their workplace. C&W s Global Business Consulting team can help to establish the right workplace strategy for your organisation. would like us to review, we can help you to navigate through the process of deciding on space for your organisation. Neil Mclocklin Partner Global Business Consulting EMEA Neil.Mclocklin@eur.cushwake.com +44 (0) Debra Moritz Executive Managing Director Global Business Consulting Head of U.S. Business Consulting +1 (312) Debra.Moritz@cushwake.com Jeffrey D. Lessard Managing Director Global Business Consulting Office Platform Solutions Lead +1 (603) jeffrey.lessard@cushwake.com DISCLAIMER CUSHMAN & WAKEFIELD 11

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