Business agility is no longer a luxury, it is critical to survival
Speed and cost are now equally important and are now determining the shape of real estate portfolios
Alignment between workplace and purpose is a key tool in managing agility
Modern businesses strive to move forward in the face of strong headwinds such as unprecedented digital change and new open business models. They also face new challenges in terms of access to talent, particularly talent that is able to find new value in innovative ways. These headwinds were felt throughout our research process, emphasising the need for agility in the workplace and from those supporting it.
Founder and executive chairman of the World Economic Forum, Klaus Schwab, said, ‘It isn’t the biggest fish eating the smaller fish anymore, but the fastest fish that wins.’ Andrew Liveris, CEO of The Dow Chemical Company, puts it slightly differently: ‘All innovation has become short cycle; long cycle is a luxury companies can’t afford. Speed is survival.’
The average tenure of a Fortune 500 CEO is 4.6 years, reports Forbes. Business agility is no longer a luxury; it is critical for survival. According to PwC’s Annual Global CEO Survey for 2015, the restless pursuit of ‘what’s new’ has meant that 51% of CEOs planned to enter into new strategic alliances or joint ventures in 2015. Changes in corporate structure such as mergers and acquisitions put pressure on the workplace industry to deliver an agile work environment that allows businesses to jump on opportunities faster.
Lease lengths, International Financial Reporting Standards (IFRS) accounting regulations, office supply and divestment strategies have created lag times and inflexibility that contradict the shorter cycle of business today. ‘If yesterday’s workplace strategy focused on moves and changes, today’s has to juggle supply and demand. With it there has been an elevation [for workplace professionals] in scope, line of sight of P&L, and ability to see workplace as part of a portfolio of solutions,’ says Julian Griffith, sales director, EMEA, at Condeco.
Speed and cost are now equally important and are now determining the shape of real estate portfolios. These portfolios now comprise a core space on longer leases supplemented with flexible space on short leases and co-working space. This portfolio shape enables businesses to handle peaks and troughs with headcount and navigate longer term supply and demand in the wider marketplace.
Agility and social cohesion
Fast-growth businesses consistently demonstrate that business agility is contingent on a socially cohesive organisation. Human beings are social animals and work is a social institution.
Long-term relationships (whether networking, friendships or even marriages) are often formed at work. In the best workplaces employers recognise that their staff want to forge these relationships and that company allegiance can be built or strengthened from such things. In short, collaboration is contingent on social infrastructure.
This is backed up by research from Gallup, which identified 12 dimensions of a healthy workplace. One of the key dimensions was the presence of a best friend at work. The study showed that employees who reported having a best friend at work were 21% more likely to report that at work ‘they have the opportunity to do what they do best every day’.
Every business is a technology business
Almost all successful businesses rely on technology in some way. Employers are competing for people who deliver value in new ways. A ubiquitous talent platform transferrable to any organisation, whether start-up, scale-up or established, gives a significant competitive advantage. Even where tech is not part of the service offer, it plays a crucial role in customer service, supply chain, HR management and promotion. Retail is a great example of a sector with a fundamentally different business model, synonymous with tech.
However, just because a company needs technologists does not mean it needs an office space like Google; it needs to serve the needs of the people working there. The workplace needs to scale up and down with a degree of flexibility that traditional space planning approaches cannot accommodate and provide the core basics well. Our data consistently shows that those needs have more to do with ease of use and ability to accommodate choice than it does Alpine gondola meeting pods and slides, however impressive they look in glossy design magazines.
Paradoxically, businesses cannot rely on tech as a differentiator. While technology is the enabler of any workplace, it is not the differentiator between the average office and the high-performing office. However, tech is absolutely essential to activities such as collaboration. Leesman data shows that the outcome of collaboration is the differentiator between average and high-performing workplaces. Agility requires work spaces to be fit for both collaborative and insular thinking.
Executives from companies such as Salesforce, PokerStars and Thomsons Online Benefits keep workplace, tech and people in step with one another, properly integrated and adaptable.
The higher purpose
The Review found that Leesman’s high performers and the high-growth companies both demonstrate transformation through purpose. An effective alignment between workplace and purpose is not in itself new, but it emerged as a key tool in managing agility. Purpose helps people to believe they can emerge from the turbulence as winners.
Looking back at workplace theory, in the 1950s psychologist Frederick Herzberg proposed that people who felt good about their jobs were more motivated. For many, his motivation-hygiene theory still forms the basis of good workplace practice. Global construction company Lendlease has a mantra of sending people home each day ‘healthier and happier’ than they arrived. ‘We don’t have a holy grail,’ says its head of workplace and wellbeing, Duncan Young. ‘I’m an evidence-based strategist. Health is related to engagement and productivity.’ Workers wear accelerometers to determine their sitting time and inactivity. There are organisational interventions such as walking and standing meetings. ‘The workplace is very important for overall health,’ says Young, ‘but the interventions you have are equally important. The World Health Organisation says we spend a third of our lives at work so it’s the best place to fight poor health.’
The industry will not provide unconventional solutions on a plate. Business leaders need to create and negotiate alternative provision models that suit their needs
Lendlease also uses behavioural economics techniques such as ensuring workers walk past bowls of fruit and providing discretionary healthy food. But there is always room for improvement, says Young. ‘The physical workplace provides an enormous opportunity for organisational change.’
Lendlease says that it incorporates the importance of overall health into its workplaces. ‘We have short, sharp meetings less than 30 minutes and we do them standing,’ says Young. ‘We encourage active commuting with end-of-trip facilities and secure bike parking, showers and lockers and sometimes even towels. We can’t create any more hours in the day so we maximise the time we’ve got.’
Companies that are authentic in their own dealings tend to attract a more engaged workforce. A good workplace removes the barriers that stop people working effectively and sends a powerful message to people that they are valued. That, in turn, fosters engagement.
The consumerisation of tech
Tech also brings instant gratification syndrome. It has made us fickle and impatient in our expectations of the tools we have been given to do our jobs. The workplace needs to move fast and flexibly enough to stay relevant and capture the imagination of current and future employees. The consumerisation of tech has made a difference. Tech and workplace go hand in hand, yet in many offices the technology disappoints. Many companies cited the need for faster tech upgrade cycles, or allowing workers to bring their own devices. Many talked about the importance of video conferencing, which is backed up by the Leesman data, as video conference facilities improved Leesman + buildings’ scores by 21.7 percentage points). They also talked of the need to properly accommodate freelance and dispersed workers.
Modern businesses need to be agile to surviv