The office was designed to satisfy the needs of a large group of stakeholders: employees, managers, senior executives, clients, and external partners. But when you try to design something that satisfies everyone, it’s very hard to delight anyone.
This wasn’t a problem until we were all confronted with the question of whether we really need a physical office. As the pandemic made working from home a necessity for millions, the answer came back: We could get along without the physical office, and no single group was getting enough value from the office to make them say anything but “meh.”
Many companies found that they were just as productive with their employees working from home. But behind that number was an ugly truth: The blurring of lines between home and work, combined with the fear of losing your job, made employees work more. According to a 2020 KPMG report, 83 percent of workers said the demands of their jobs increased with the pandemic.
The productivity of pandemic work is a mirage. Working more hours has a cost: employee burnout and lower employee retention. This is not a durable competitive advantage for any company; in an age with high workforce mobility, it’s a recipe for disaster.
Putting employees first
If a company could increase the productivity of its employees according to the employee’s standard, then that would be a durable and valuable competitive advantage.
So the future of work depends on business leaders developing a maniacal focus on providing value to the employee. This requires a big shift in thinking, but not an unfamiliar one. There are plenty of organizations that find success by prioritizing value for a single constituency. These are B2C businesses—like your favorite clothing retailer or a restaurant. Their most important stakeholder is the consumer, and so they build (and rebuild) strategies to meet the specific needs of their customers.
Imagine what the office would look like if employees were treated like consumers, if CEOs built their workplace strategies to meet their employees’ needs, and adjusted them as employee preferences evolve.
Flexible space providers already help CEOs do this. These are real estate companies that rent a variety of workspaces for shorter-term lease periods. Many provide customizable options for tenants to allow for more agility and the option to scale up or down over time. There are also savings to be had: Across industries, enterprise companies spend twice the capital expenditure that flexible service providers spend to create offices.
“Flexible workspace is an incredibly powerful tool for employers looking to nimbly respond to the needs of their employees on a much more personal level,” says Ashley Hohmann, project executive at WeWork. “The realities of traditional development don’t offer the ability to rapidly bend and flex into new strategies as easily, or at such low risk.”
People really like having the freedom to choose their work environment. In fact, 75 percent of employees would be willing to give up at least one benefit or perk—including healthcare coverage, cash bonuses, and paid time off—for the freedom to choose their work environment. By dictating your employee’s office usage strategy, it makes it much harder to know if they like the space you have provided or are just following the rules. This cuts off your best and most rapid feedback loop for improvement.
The more you know about what your people want, the more you will know about what to provide and, almost more importantly, what to cut. Better understanding will lead to less cost and more impact. So give people choices. These may include coworking options, different types of space, or flexibility on where and when they work. A flexible space provider like WeWork is helping companies do this every day.
Treating employees as consumers
To adjust to the employee-as-consumer approach, leaders must focus on a small number of metrics. They must be measured consistently—daily and weekly, not quarterly. In standard workplace strategy, leaders often measure many metrics deeply, but only during the set timeframe of a workplace strategy project. The downside of this standard measurement approach is that results are only understood in one context: for the time you held the study. This means that companies cannot do a “difference in difference” study, which is essentially taking advantage of variation between locations and groups to understand how changes in the context affect the outcomes.
Contrast this with flexible space providers, who often measure fewer metrics—like customer retention rate, net promoter score, and utilization—but do so all the time. They can thereby retrieve a consistent stream of market feedback to base their real estate strategy on.
WeWork performed a “back to the office survey” of its employees, like most big companies have done, but with a twist: It ran a survey every two weeks, and it included three consistent questions. The most important of these was “How many days do you think you will use the office in the long run?” This allowed WeWork to look at how that answer changed over time, between countries, as the local levels of COVID-19 ebbed and flowed, and how the response changed when a person had visited the office in the previous week. This consistency provided a considerably more advanced understanding of how many employees will return to the office than most corporate occupiers have achieved. Continuous measurement enables acting on the next principle.
Experiment to get it right
Become a workplace scientist: experiment! While many companies have conducted one or even two workplace pilots, they are usually very limited and lack a control group. To run a demand-driven office, experimentation needs to be at the core of what we do. Corporate occupiers have historically set out a new global workplace standard once a decade.
Compare that to the rapid development and redevelopment of the flexible provider products. WeWork products are developed in response to market demands, then are refined based on insights from corporate occupiers. “This feedback loop creates a partnership that allows us to continuously iterate on our product and ensure that we are providing companies the solutions they need, to respond to the changing needs of their workforce,” says Hohmann.
Companies typically tell us the reason for not experimenting is cost. They think it’s too expensive. Here’s a tech startup truism: If you think that experimenting is expensive, you should see the cost of not experimenting. Not only have flexible space providers demonstrated that you can experiment with the office, but flexible space itself makes it easy to experiment with myriad real estate variables (market, location, size, layout, and more).
The office is the best place to begin to unlock the links between team structure, communication style, environment, and creativity. A prerequisite of understanding that connection is to have people go to the office, work, collaborate, and meet in unstructured ways.
Throughout COVID-19, we have seen that people are far more resilient to changes in the working environment than we had previously believed. If you allow employees to tell you what they want, then you can experiment and discover the things they truly value. A client once told me that the workplace was “too important to experiment on.” But we must study and experiment with it precisely because it’s that important.
Marshall O’Moore is the head of Agile Advisory. He has over nine years of experience in the real estate industry, holds a BA in economics and statistics from University of Michigan, and is one of the youngest people ever to speak at the World Economic Forum. In addition to his work with clients, O’Moore also spearheads a number of analytics initiatives, which develop innovative solutions to a variety of key occupier challenges, including market prediction, labor analytics, real estate option valuation, portfolio optimization, and more.
Anjie Zheng is managing editor at WeWork.