Maximising your Business s Value through Workplace Strategy

Maximising your Business s Value through Workplace Strategy Executive Summary of the discussions at 20 Fenchurch Street June 18, 2015 1. Introduction Nick Cook, the Principal and Managing Director at Avison Young UK, opened the event by reminding attendees that the Property Directors Forum 1 is an exclusive community set up to provide a VOICE for Occupiers with premises in the UK and Europe, alert members about the changing environment of the commercial property market and work together to raise the profile and strategic importance of occupier property directors - without sales people or suppliers present. He pointed out that workplace changes in recent years are prompting the workplace strategy to become an embedded part of the Board s agenda. People require access to more flexible, collaborative spaces that cater for the changing needs of different generations, in order to deliver more business value. To prompt discussion on this topic, Nick introduced the two keynote speakers - Karl Warmbold, Director of Facilities & Property at DWF and Despina Katsikakis, Former Chairman at DEGW and a globally renowned expert on the impact of the built environment on business performance. Nick provided a brief overview of the sponsor of the event, Avison Young (www.avisonyoung.com), the world s fastest growing commercial real estate advisory firm which opened its first six offices in Europe last year. 2. Summary of presentation by Karl Warmbold Karl Warmbold, having delivered FM solutions for some of the UK s largest and most successful people businesses, understands what it takes to create a workplace that brings out the best in people to deliver business advantage. His presentation, Developing operational frameworks and environments to deliver business objectives, highlighted the following key points for consideration by occupiers: Engaging employees is vital - To be able to create a successful workplace environment all employees need to be engaged from the start of the process, through effective employee communication tactics, change support and expert external advice if required. This combination is most likely to deliver higher staff adoption, increased satisfaction and improve the attraction and retention of the best employees 1 The Forum now has over 120 active members of its LinkedIn Group (http://linkd.in/1nlrnfk) and over 230 who have attended events. Forum members manage over 60,000 properties, employ more than 2million people in the UK and have a combined revenue total of over 500bn per annum. 1

Flexible space that matches work needs is vital - While location can be important, having access to flexible space that matches the working needs of different types of employees is more important for an ever evolving organisation: Reconfigurable flexible spaces to fit the work needs, created through employee consultation and not by designers to ensure the right fit Highly collaborative and agile spaces, for more innovation opportunities and increased productivity, social events, networking and business meetings Efficient and imaginative use of technology to aid work on the go and less paper working for eco-friendly workplace Suitable location for attracting and retaining the best talent and keeping in touch with clients. If you would like more information about Karl Warmbold s presentation please contact Gail Wickes on 01494 540 010 gail.wickes@propertydirectorsforum.com 3. Summary of presentation by Despina Katsikakis Despina Katsikakis, a former Chairman of international consultancy DEGW, with over 30 years experience working with corporations at board level, guiding them on how to use their workplace to enhance behaviour and culture and align policies and processes to support innovation and organisational transformation, delivered the next presentation entitled: Using the workspace to deliver business value. The key points for occupier s consideration included: People now more important than cost - Business priorities are shifting from aggressive cost reduction tactics to attracting and retaining the best talent and having more flexibility and agility in the workplace to allow faster decision making, innovation and global collaboration Workplace strategy must tie back to key business outcomes - For the workplace strategy to work, it needs to support strategic business goals, while also optimising real estate performance Work should be seen as something we do and not somewhere we go - Technology enhancements, globalisation and access to more flexible working space are increasingly shifting the definition towards something we do - regardless of the physical location of the workplace. Culture and community over command and control - Workplace of today needs to reflect people attitudes and business imperatives People no longer join companies for life. Top priority for delivering a people-centric experience is providing them with convenience, comfort and a degree of control over their working environment. Companies need to make sure they capture and retain skills and institutional knowledge of older workforce as well as attract new talent People should be measured by performance and not by presence 2

Space under utilisation is a big opportunity - during a normal working day at the office, around 30% of desks are empty, while a further 15% of people are constantly moving around the building Commuting takes too long - 65% of employees want to work from home 1-2 days a week as the time spent on commuting could be spent on working. Working from home would mean a rise to 50% of empty desks for the average office Shared resources over individual space - The new mix of space types shows a reduction of individual space and increased focus on shared resources and collaboration (50% core space, 30% flexi space, 20% just-in-time space), bringing richer variety of work settings, blurring the boundaries between personal, shared and public spaces to support organisational innovation The city has become an office - The use of publicly available spaces such as coffee shops, libraries, hotels or airport lounges are increasingly popular and a planned part of space resource One size does not fit all - There is a need for diversity within a framework as people work in different ways, especially within multicultural and global organisations Wellbeing matters - Measuring people wellbeing is essential to an engaged workforce Metrics need to measure the 4 Es - Effective workplace productivity metrics measure behaviours and attitudes necessary for business success. Metrics should: Measure efficiency, effectiveness, engagement and environment and how these can deliver integrated business benefits through driving costs and carbon emission down, while rising engagement and productivity Cater for different stakeholders with different agendas Get the implementation right - The biggest challenge for delivering workplace transformation lies in the implementation stage. This requires clearly defined strategy that is continuously tested. Managing employee and management expectations through involvement is vital. Missing these steps will result in management resistance, misunderstanding, fear and lack of alignment between people, technology and the workplace. If you would like more information about Despina Katsikakis s presentation please contact Gail Wickes on 01494 540 010 gail.wickes@propertydirectorsforum.com 4. Round Table Discussions The discussion session was designed to help to see how Property Directors and their organisations are approaching the topics raised in the presentations. The Round Table Debates addressed a number of questions, concerning three main topics: 1) The people side of Workplace strategies; 2) Workplace and the business; and 3) Developing an effective Workplace Strategy. The main observations/conclusions from these discussions were recorded. 3

The people side of Workplace strategies The summary of the Round Table debates from Tables 1 and 4 were presented by Martin Ebsworth from Lloyds Pharmacy (1) and Glynne Anthony, formerly of XChanging (4). The main conclusions were as follows: Consideration needs to be given to different employee generations: Traditionalists are used to having private office space Baby Boomers have either experienced or driven significant changes and are therefore fairly flexible and accepting of more open plan workspaces The needs of Gen X and Y are thought to be beginning to merge. They see the workplace as what they do, not where they work. They are used to technology use from day one, connectivity and working on the move they expect work to provide the same or better technology as they have in their home life The quality of office space and access to local facilities outside the workplace has an impact on attracting and retaining the best staff, but it also depends on the following conditions: Location ie city vs regional Preference of an individual employee Motivation behind joining a company ie choosing a company or choosing a workplace The policy of non-owned desking it thought to be helpful in promoting collaborative working practices and can be effective for sharing information in an unstructured fashion but the following need to be considered: Different roles of employees within organisation, their requirements, attitude towards change, status issues etc How flexible the collaborative space really is if employees end up at the same hot-desk all the time Will the collaboration be project based rather than functional Whether organisations allow for other flexible working styles such as working from home, which frees up the use of assigned work desks Is there still enough face-to-face connectivity between employees who are allowed to move freely within and between offices The financial reality impacts what can be achieved which means that not all businesses can afford fixed desks and touch down spaces for everyone equally Workplace is an important factor when it comes to employee productivity and engagement, but it also comes down to: Culture and values of the organisation Having an environment that s conducive to working Having the workplace adapted for individual function, hence avoiding the one size fits all approach Having a suitable number of breakout areas where people can relax and have informal conversations can also produce a productive environment ie conversations over breakfast at work, business meetings in restaurants. 4

Workplace and the business The summary of the Round Table debates from Tables 2, 4 and 5 were presented by Graham Halkyard from Selsby Consulting (2), Glynne Anthony, formerly of XChanging (4) and Simon Carter from National Grid UK (5). The main conclusions were as follows: The importance and order of metrics used to measure the performance of a workplace strategy depends on who in the organisation is looking at them and who they are being produced for. Property Directors ranked them as follows: Employee engagement, satisfaction and retention metrics Productivity metrics Business agility metrics ROI Costs savings Traditional space and furniture metrics. The examples of specific metrics included hard metrics such as the absolute cost per square foot per person and employee engagement/wellbeing soft metrics such as employee attrition rates and absences, recruiting the best, HR policies, access to leisure facilities or workplace style There was a general agreement that the workplace should perform like a hotel where employees are treated as guests / customers that receive the services they need to be productive, however the following were noted: As different hotels have different standards, companies should ensure the delivery of the right service to fit its employees There are certain accreditation schemes to assure the hospitality and quality of office and services provided, which can help with keeping up with standards Workplace is very important in terms of conveying messages about the values and culture of an organisation as it gives the business a sense of identity: Businesses should ensure that these are continuously communicated to staff and customers Messages for customers can be more of an aspirational type while those for employees should be more practical Strategy can support these messages though a common business vision that identifies what the company is or aspires to be, what its key values or business drivers are These need to be practical not just aspirational so they are achievable Whether companies should have large HQ buildings or adopt smaller more agile working space depends on the following factors: Their purpose and type of organisation How and whether the space can be utilised fully and in an agile way How important it is for people to be able to have a mothership connection that a large HQ building can provide for many employees Traditionally, large HQ buildings are thought to help set the culture for the rest of the organisation The location of a HQ and other offices is also an important factor. 5

Developing an effective Workplace Strategy The summary of the Round Table debates from Tables 3 and 5 were presented by Nick Brook from Mills & Reeve (3) and Simon Carter from National Grid UK (5). The main conclusions were as follows: When developing a workplace strategy the priority for expected outcomes should depend on the sector the organisation operates in ie retail sector would be looking for the ability to respond quickly to changing market conditions while a consulting business will be interested in the ability to attract and retain the best talent The cost priority should always underpin all of the other outcomes In some cases it is a good idea to hire someone from outside who has the required expertise and can help with the strategy development process Workplace strategy is changing more rapidly than ever before and senior management needs to learn how to address the challenges that come with it: Lease periods are becoming much shorter Staff behaviour is increasingly influencing workplace strategy regardless of an organisation s polices eg BYOD Reducing office space, introducing more flexibility to the workplace to fit the requirements of today s employees There was a general agreement that workplace strategy needs to cater for the different needs of different generations of employee, but other factors were also mentioned: Differentiations between cultures, countries or city/rural locations Differentiations between working styles Money constraints can mean that property is not always the main priority for the business Workplace strategy should be constantly reviewed and evolve along with the company For organisations where brand is everything, the one size fits all approach could be acceptable ie supports the brand Workplace strategy should include the planned use of non-owned space such as coffee shops and other breakout areas Management should keep it in mind that flexible working can embrace a wide range of activities, such as: working from coffee shops, at the airport or on a train and rules for such should be clearly defined when developing a workplace strategy Management should also ensure that people are adequately equipped to be able to work away from their desks. In closing the event, Nick Cook recommended that that Property Directors Forum members might like to work together between the events to discuss these issues further and encouraged members to ask more questions on the Maximising Business s Value through Workplace Strategy topic. June 2015 6