How Workplace Strategy Can Prepare Your

Zurich North America

HOW WORKPLACE STRATEGY CAN PREPARE YOUR ORGANIZATION FOR THE FUTURE As organizations evolve to meet the future of work, your workplace strategy can directly influence your employer brand, company culture and the bottom line.

SWAPNA SATHYAN, DIRECTOR OF WORKPLACE STRATEGY CONSULTING, CANNONDESIGN

In today’s hyper-competitive business climate, successful Developing an effective strategy requires insight into the unique companies can no longer view strategic workplace design as a structural, cultural and aspirational goals of an organization. luxury. Companies planning to achieve growth, talent retention, Impactful workplace design cannot be based on the plethora of financial and other key business goals should align their prevailing opinions on workplace strategy and design. A quick workplace strategy to their overall business objectives. Google search of “workplace design” returns over 275,000 The Future of Work - defined by the trifecta of People, results in under half a second and there are countless stories Process and Place - is characterized by a shifting workplace, posted each year debating the merits of elements such as open technology advancements and other forces influencing the vs. closed offices. It’s not uncommon to read a story from a nature of work and driving workplace preferences. A successful publication about why open-plan offices don’t work and then a workplace strategy is critical for companies to stay competitive month later read another story about how they can work great and position themselves for future success. from the same source. Most of these opinions and stories are simply noise. While Workplaces are Changing, Here’s Why: there may be data, facts and insight to glean from some of the commentary, the reality is any piece that argues that one style There are five forces currently forcing workplace of workplace design is better than another severely misses the evolution, including: point: every organization requires a custom workplace strategy. Evolution of Work No organization is exactly like any other. The type of work a Projections from the Bureau of Labor Statistics reveal company conducts, the talent it seeks to recruit, the culture it manufacturing jobs will continue to shrink in the decade embodies and the goals it pursues - these are all different for ahead while technology and software development will see 1 every organization. Designing a successful workplace does continued growth. We now live in a predominantly ideas-based not begin with square feet or building materials. It begins with economy, where people are paid to think, innovate, brainstorm understanding your organization’s vision and mission, and then and breakthrough. This economy necessitates increased strategically creating a place where these can thrive. teaming and collaboration across multiple groups, functions and roles within an organization. The workforce composition, ways of working, technology, talent practices and consumer landscape are all constantly Our workplaces have been slow to accommodate this change. evolving. This means creating a successful workplace isn’t a Designed primarily for independent work with rows of high- singular, siloed transaction, it’s an ongoing commitment to walled cubicles, these traditional spaces are not able to support understanding the confluence of factors that impact workplace workers aiming to deliver in today’s knowledge economy. design, and how changes in the workplace can influence Companies that fail to support workers new modes of working different aspects of enterprise performance and culture. risk loss of talent and irrelevance. A comprehensive workplace strategy is dependent on Buried in today’s noisy debate about open vs. closed offices bringing together input from real estate, talent, technology, is the reality that companies need to change their workplaces finance and the business. to accommodate today’s new modes of work. This could mean To help organizations develop a baseline understanding of new types of spaces like enclaves and communal hubs or new these factors and influencers, we have summarized some strategies like free-address workplaces that allow employees the disruptors, tools, and impacts that stand out in the world of freedom to select spaces based on activities and work styles. workplace strategy. There’s no simple formula - but the changing realities of work demand change in workplace strategy and design.

Growing Talent Shortages Our economy currently faces some of the largest talent shortages in recent history. According to a study of 42,300 employers, 46% of US companies reported difficulties filling jobs due to lack of available talent.2

In a world where talent is scarce, companies must use every resource to help attract, recruit and retain its best employees. This competition is fueling increased investment in the Most workplaces fail to workplace as a differentiator. The workplaces that best support account for efficient space employees’ work styles and activity needs while providing choices to suit individual preferences can bolster retention. utilization. On average, space Not only is the cost of recruiting and replacing employees significant, but losing key talent impacts business continuity in a typical workplace sits and results in lost productivity. empty 40-60% of the time.

Average utilization based on CannonDesign observation studies conducted at more than 50 workplaces across North America and globally.

2 | University of Utah Lassonde Studios

Robots & Automation A McKinsey Global Institute study released in late 2017 suggested anywhere from 400 to 800 million of today’s jobs could be automated by 2030; and, robots already fill manufacturing plants and shipping warehouses, and have even begun to deliver goods in hotels and take on more personalized tasks.3, 4 The advent of automation is a sea change event for the In the US alone, between workforce. Companies should prepare for technology advancements that will influence every type of work that 39 and 73 million jobs stand happens today. Employees will be able to hand off some simpler to be automated by 2030 – tasks to robots and augment others with artificial intelligence.

Business leaders should seek to understand where these nearly 1/3 of the total workforce. efficiencies will occur and how they can design spaces and Fortune Magazine policies to reflect changes in processes. Organizations should also recognize that while transactional tasks are automated, there will be an elevated need for collaborative, multi- disciplinary work.

New Generations in the Workforce Independent Contractors, Freelancers and Remote Working New generations constantly enter our workforce. Just as Another factor for companies to consider is the emergence every generation before them, these new waves of employees of independent workers and the gig economy. Per the U.S. can bring different expectations and motivations than Government Accountability Office 65 million Americans will their predecessors. For starters, studies reveal Millennials be temps, freelancers or independent contractors by 2020 and Generation Z are by and large more entrepreneurial, which translates to nearly 50% of the overall workforce.6 eager to collaborate and seek more than financial rewards And, those still employed full time are spending more time in the workplace.5 working from home. The same research indicates the average employee performs a third of their work from home, and about A need to meet these shifting preferences is another core 22% of employees routinely work from home. That number driver for workplace change. Companies must recalibrate their rises to 36% when considering employees holding a Bachelors’ spaces to empower multi-generational workplace success, degree or higher. which can entail a delicate balancing act requiring thoughtful strategy that caters to both the efficiency of scale and the These shifts require strategic thinking around real estate demand for personalization. allocation. Companies must understand the composition of their employee base and how much time they spend in the office as opposed to working from home or traveling. Failing to understand this can lead companies to build too much space or mis-allocate real estate that leads to lost efficiency and diminished profit.

4 | Everything is Changing, What Can Companies Do?

While there is no one-size-fits-all solution or silver bullet Two leading examples of leveraging data to measure design for companies to follow as they build successful workplace performance include: strategies, a systematic, data-driven approach will enable • Zurich North America executed an innovative workplace companies to identify and evaluate targeted solutions before pilot program to engage employees in the design of its making large capital investments in their future workplace. new North American HQ. The effort resulted in a 30% Consider these actions as a first step towards designing your increase in employee satisfaction with the new workplace workplace of the future: that was 23% points above the industry benchmark. The Define the Sphere of Influence effort also drove a 50% increase in team interaction and It is critical for an organization’s leaders to understand the many stronger employee preferences related to workplace different factors workplace strategy can influence. For example, flexibility, sustainability and wellness. workplace design can influence financials through optimization • The University of Utah’s Lassonde Studios - a breakthrough of the real estate portfolio, talent acquisition via enhancement entrepreneurial education building - has helped quadruple of the employer brand, retention by way of flexible work policies the number of student-led startups on campus in just two and business productivity in terms of optimized workflows. years. The innovative buildings connects students from Aligning organizational leaders on the comprehensive all disciplines in a 24/7 environment to live, learn and workplace objectives can help companies be bolder and launch companies. achieve greater impact. The future demands effective workplaces that are regularly Here are some elements that fall under the Workplace sphere monitored, measured, recalibrated and re-evaluated as of influence: organizations strive for elite performance and experiences.

• Space Utilization • Workforce Patterns Engage Employees and Align Leadership • Employee Experience • Technology Investments Every company must understand and align on their employees’

• Employee Productivity • Organizational Culture current realities and the business goals for the future before they can develop a successful strategy. Without this foundational • Employee Engagement • Consumer Experience knowledge, companies are ill-equipped to define the where, • Talent Acquisition • Sustainability what and how of their workplace. Workplace strategies are built and Retention to help companies achieve their organization goals and any ambiguity or misalignment could lead to inefficient decision Invest in Data and Measurement making and potential roadblocks. Organizations with articulated Data is an incredible advantage today’s companies have at goals can ensure every workplace decision they make is in line their disposal. Companies can use analytics to develop a robust with their broader long-term objectives. workplace strategy and workplace standards. CannonDesign’s strategy consulting group has developed proprietary processes Establishing a baseline around the needs, wants and hopes and research tools that utilize qualitative and quantitative data for future workplace investment requires input and buy-in to drive insights into the unique needs of an organization. from the end users – leadership, employees and consumers. Visualizing these insights on interactive dashboards will provide Through individual meetings, focus groups, town hall sessions, company leaders an understanding of what drives the design surveys, workplace simulations and other prevalent feedback and efficacy of their future workplace. communication tools, companies should engage stakeholders regularly before finalizing and implementing workplace changes. Data can help companies understand how employees are Reliable two-way feedback loops will reinforce the validity and working, their organizational networks and adjacencies, strength of both the design itself and its adoption. space utilization rates, demographic preferences and how satisfied different groups are with the workplace. With these baselines, companies can set measurable targets for workplace strategy investments and hence better evaluate success throughout the transition.

Marry Policy with Workplace Design Strategy Shape Behaviors and Influence Culture Once an organization has a thorough understanding its people, While it is widely acknowledged that organizational change business goals and the changes it hopes to realize via workplace management is vital to any transformation, many companies are strategy, it must also consider how that would relate to existing still guilty of relegating it to the back burner until later in the company policies. One of the leading tripwires for successful process. This is especially true in real estate, where design and implementation is a disconnect between workplace strategy transition activities stretch over large periods of time. Engaging and technology or talent policies. the organization sooner rather than later helps companies reap the benefits of their investments and results in higher For instance, with the increase in desk sharing and co-working, employee satisfaction and productivity. Employees require time companies are having to evaluate their flexibility and mobility and coaching to adopt new behaviors that respond to a new policies. This in turn must be coordinated with investments workplace’s benefits and advantages. For example, a company that may need to be made for mobile technology and security may open a new office with leading-edge technology that policies that address concerns associated with the use of eliminates the need for paper filing. However, until employees mobile devices. A related example may include exploring understand the new tools and feel comfortable using them, how performance management metrics may need to change paper may still fill the office. from traditional time-based utilization metrics to an outcomes- based measure. Many organizations use a new workplace to shape and redefine their company culture. These transformations require a deep To accommodate new ways of working, companies will need to insight into current behaviors and drivers of desired behaviors. revisit some of their work practices like scheduling of meeting An informed, data-driven culture transformation relies on rooms, use of collaboration tools or digitization. They will coordinated interventions that address change holistically. need to develop relevant guidelines that help their employees understand and adopt new protocols. Any policy, process or Investing in change management can accelerate this learning practice changes will need to be accompanied by programs curve. Successful change management programs should begin to change behaviors and the organization culture to ensure early and encompass cultural and behavioral change in addition successful implementation. to employee engagement and training.

About the Author Swapna Sathyan leads the Workplace Strategy Consulting practice at CannonDesign. With her expertise in architecture, human capital consulting and References change management, she advises clients 1. Bureau of Labor Statistics. Projections overview and highlights, 2016-26. Retrieved on shaping and maximizing the value of from: https://www.bls.gov/opub/mlr/2017/article/projections-overview-and- organization transformations. highlights-2016-26.htm [email protected] 2. ManpowerGroup (Oct. 2016). In Your Own Backyard: With 46% of U.S. Employers Reporting Talent Shortages, More Companies Than Ever are Choosing to Upskill linkedin.com/in/swapnasathyan Their Existing Workforce. Retrieved from: https://www.manpowergroup.com/wps/ wcm/connect/652de20c-dc4e-4f4d-a5a5-44192d981a96/USTalentShortageSurvey- PressRelease.pdf?MOD=AJPERES& About CannonDesign 3. Meyer, D. (Nov. 2017). Robots May Steal As Many As 800 Million Jobs in the Next 13 Years. Fortune. Retrieved from: http://fortune.com/2017/11/29/robots-automation- CannonDesign is an integrated, global design firm replace-jobs-mckinsey-report-800-million/ that unites a dynamic team of strategists, futurists, 4. Delaware North (March 2017. Delaware North introduces ‘Wellbot’ robot butler at The researchers, architects, engineers and industry Westin Buffalo. Retrieved from: http://media.delawarenorth.com/delaware-north- specialists, driven by a singular goal — to help companies/news/the-westin-buffalo-introduces-wellbot-robot-butler.htm solve our client’s and society’s greatest challenges. 5. Millennial Branding (September 2014). Millennial Branding and Randstand US Release First Worldwide Study Comparing Gen Y and Gen Z Workplace Expectations. Millennial Branding. Retrieved from: http://millennialbranding.com/2014/geny-genz- global-workplace-expectations-study/ Contact Information 6. U.S. Government Accountability Office (April 2015). Contingent Workforce: Size, Characteristics, Earnings, and Benefits. Retrieved from: https://www.gao.gov/ For more information please visit assets/670/669899.pdf cannondesign.com.

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