24 BOMA MAGAZINE NOVEMBER | DECEMBER 2013

DESIGNED TO BE

EFFECTIVEBY PHIL MOBLEY

Building owners and managers have long battled against commoditization. It is easy for them to imagine, or even remember, a version of this hypothetical tenant soliloquy: We just

need someplace to do our work. It’s just office space, after all. If you can’t provide it to us for the right price here, we’ll find someone who can. Any seasoned real estate professional knows that the traditional response touts some combination of a particular building’s location, amenities and service offerings that distinguishes it in the marketplace. Design has always been part of the equation, and a growing body of research suggests that “design” is becoming less about getting more people in less space for the least cost possible and more about something else. That something else is effectiveness, which is devilishly hard to define and even harder to measure. For the real estate industry, the good news about the emphasis on effectiveness is that the commoditization fight is over. Whether it has been “won,” however, is a different question. For an occupier focused on effectiveness, the speech above may now go more like this: Our office space is a key cog in our unique value proposition. If you can’t provide an optimally effective work environment for us, we’ll find someone who can.

WORKPLACE TRANSFORMATIONFrom the occupier’s perspective, the phrase “workplace transformation” encompasses the shift from a real estate strategy—based on efficiency metrics (like cost per square foot and square feet per worker)—toward one that, at its roots, is about employees doing their work better. Jones Lang LaSalle’s “Global Corporate Real Estate Trends 2013” study calls workplace transformation “the key for corporate real estate to unlock worker productivity and optimize portfolios,” noting that the pressure is on corporate real estate teams to deliver more than cost savings to an organization. The net effect on occupancy and rental rates is still a big unknown. In February 2012, CoreNet Global reported that average office space per employee dropped from 225 square feet in 2010 to 176 in 2012. And, according to BOMA International’s “2013 Global Tenant Survey,” about one out of seven tenants (14 percent) expects further compression. On the other hand, one out of 10 (10 percent) is looking to increase the ratio, while another quarter (24 percent) are unsure. Add those up, and they still represent less than the majority (52 percent) who do not plan to adjust their efficiency ratios, but, nevertheless, may be transforming their space. There is no one solution for space providers. “Transformation means a lot of things to a lot of people,” says Robert A. Peck, director of Consulting for the Southeast Region at the architectural firm Gensler. According to Peck, the recession created some urgency for

space efficiency. Online, digital information technology enabled space densification, particularly for tenants that executed a move. What is happening now, though, while related, is recognizably different. “What we’re seeing is a second phase: How can people be more productive?” notes Peck.

COLLABORATION AND FOCUSDr. Tracy Brower is director of Performance Environments at Herman Miller, an office furniture supplier. She is not alone in believing that collaboration is a major factor in increasing worker productivity. “One thing we’re seeing with our customers is that the cognitive complexity of their work has increased so significantly that no one person has all the necessary information,” she says. Therefore, collaboration is the natural progression of the knowledge sector, and it demands new and different kinds of space. The challenge for the real estate industry at large is that one size does not fit all—even within the same tenant organization. It can be very difficult to design the right mix of collaborative space for a given occupier. If there is one area of consistency in the workplace transformation trend, however, it is a movement toward visibility. “If we’re sitting where we cannot see people, we tend to forget about them,” says Gensler’s Peck. “In an open environment, it’s harder to forget. So you can facilitate collaboration without forcing it.” Another common theme is increased acceptance—and even encouragement—of purely social interactions

DESIGNED TO BE

EFFECTIVEThe Nature of Work and the Workplace

THE “FINAL REPORT” FROM THE CRE&FM Futures Forum, put out last year by Zurich Insurance Group, identified several trends likely to affect the nature of work and the workplace of the future:

• Theworkplacewillcontinueatransitiontobeingasocialhubthatis the physical manifestation of desired cultural and brand values, as well as a place of production.

• “Theoffice”willremaintheprimaryplacetodevelopandmaintaincollaborativerelationships,butsuchofficeswillincreasinglybeusedformeetings,ratherthanasacollectionofworkspacesforindividuals.

• Knowledge-basedbusinesseswillbetheonesthatprovidetheautonomyandtheenablingtoolsforworkerstodecidewhen,howand where their work is accomplished collectively and individually, on and off company premises.

• Ratherthanthelegacyapproachtospace,basedonroleorfunc-tion,businesseswillincreasinglyconsolidateworkplaceconceptsaroundactivities-basedand/orcompetencies-basedworkmodels.

Access the entire report at BOMA.org.

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26 BOMA MAGAZINE NOVEMBER | DECEMBER 2013

VARIETY AND FLEXIBILITYThere is an implication here that may be uncomfortable, both to corporate real estate executives and to the property managers who serve them: The emerging workplace needs a number of different settings that give employees choices as to where and how they work. Building in flexibility is never easy. In the real estate world, “flexible” space often equates to “more” space, which means corporate real estate executives may not achieve the efficiency ratios they might hope for. So, are the benefits worth this cost? “The really key thing is that the space be accountable to the organization,” says Brower. If workplace transformation means more flexibility for workers, then it also needs to help workers be more effective. There is evidence that it does. At Gensler, employees have ultimately proven more satisfied when their space is redesigned to give them more choice. Says Peck, “Most firms do this every 10 years or so, whereas we have the advantage of doing it dozens of times a year [in order to] introduce new ideas to them.” People may not like the changes at first (particularly those who may have lost some personal space or privacy), but Gensler’s “Workplace Performance Index,” an ongoing survey of the firm’s clients, shows that, after an adjustment period, employees say they are more productive in the new space. Measuring just the right blend of workflow and innovation in the knowledge-sector workforce has always been a clouded proposition. What is clear, however, is that the design of the space itself is now being asked to contribute to this kind of effectiveness. Location and amenities are no longer enough to distinguish a building. For that matter, neither are things like environmental sustainability and health and hygiene features, which are quickly becoming must-haves for leading tenants. No longer is a building simply a place for the team to meet to do its work. Rather, it has now become, in a very real sense, part of the team itself. The optimal office space must now be designed to be effective. B

ABOUT THE AUTHOR: Phil Mobley has been actively involved with BOMA International since his work as vice president at Kingsley Associates. His work with BOMA has included co-leadership of the Experience Exchange Report® (EER) and conducting research for the “Global Tenant Survey.” He can be reached at philmobley@gmail.com.

among employees. “We have clients implementing coffee bars or drink stations,” notes Brower, “and people are getting up, making coffee and talking about the social, which very quickly shifts into talking about the business.” Brower’s company, Herman Miller, is taking collaborative design to the next level with its redesign of the Mars Drinks headquarters in West Chester, Pa. The campus—which already boasts an open floor plan—will now be a place of education as well. Mars Drinks has been studying how tenant amenities, such as hot beverage systems placed in a collaborative environment, impact employee satisfaction and creativity. The education element of this redesigned space interweaves class curriculum with real-world examples. “With the new design, we actually will have a balcony that overlooks the collaborative work environment,” explains Mars Drinks Vice President of Business Development Frank LaRusso. “You can go into a classroom, learn about the impact of our product and then come out and see it happening live.” (For more on how hot beverage stations impact collaboration, see sidebar on opposite page.) Companies must take care that their office space is also conducive to individual work. Gensler’s “2013 U.S. Workplace Survey” found that knowledge-sector businesses spend a majority of their time (54 percent) in the “focus” mode, up from 48 percent in 2008. And, even as more firms have sought to increase collaboration, the amount of time actually spent in “collaboration” mode has gone down to 24 percent, from 30 percent in 2008. What might account for this? Peck thinks part of the answer is that, while emphasizing collaboration, firms have failed to provide enough of the right kind of focus space their people need. “Some people thrive in an environment that is buzzing [to perform their focus work], but many others need an area free from distraction,” says Peck. “If the traditional office didn’t have enough collaborative space other than large conference rooms, the other extreme can be a problem as well.” Brower would agree that simply throwing more meeting space at the collaboration issue is not the best way to make employees effective. “Our research suggests that 70 percent of collaboration actually happens at individual workstations,” she says. Rather than scheduling a meeting room to discuss ideas, employees will go directly to the place where they know their desired collaborator will be: that individual’s workstation. “That is a ‘threshold’ moment. We converse and make decisions, and that’s where most collaboration goes on,” she further explains.

BOMA MAGAZINE 27

HENRY: Thecommercialrealestateindustryisfocusedoncreatingthetenantofficesofthefuture.TalkabouttheresearchyouconductedwithMcKinseythatshowstheimportanceofcol-laboration and social interaction in the workplace.

FRANK: Thepremiseoftheresearchwedidwasthatanengagedemployeeisgoingtobeamoreproductiveone.Welooked at the connectivity, or lack thereof, between different depart-ments.WesawdepartmentsstartingtoconnectmoreafterweintroducedaMarsDrinksbeveragesystemwherestaffgottogetherinformally.Wefound54percentofrespondentssaidthechancetomeetandinteractwithcolleaguesresultedinsignificantlyhigherconnectivity,withcommentslike,“ImetsixnewpeopleIdidnotknowbefore.”Thehigheremployeeinteractionlevelsshowedthepoweroftheofficeenvironmentwhentheextendedteamiscol-laboratingandthatemployeesrespondpositivelywhencompaniesinvestintheirwell-beingwithsimplethingslikeacoffeemaker.

HENRY: I think there is a terrific power in informal collabora-tion;itsetsthestageforamorecreativeenvironment.

FRANK:Ithasawater-coolereffect.Itstartsoutasaconver-sationthatmaynothaveanythingtodowithwork,butthenitevolves into one. I was just at the Great Place to Work® Confer-ence,wherethetop50companieswerehonored.Atanopenforum, I asked a question about the top areas to improve on, andoneofthetopareaswasfosteringcollaborationatwork.Thisisthefoundationofeverythingwe’redoinghere.Marshasbeenanopen-officeenvironmentsincethe1960s.BecomingaGreatPlacetoWorkisabighonorintheUnitedStates,butit’salsoaglobalmovement,andwe’vewonthatrecognitioninsev-eralcountriesaroundtheworld.Whatitcomesdowntois:We’reall associates; no one has a private office; and you can walk rightuptoanyoneatanytime.

HENRY:Lookingattheglobe,whatisyourtargetandwhereareyoulookingtoexpandyourbusiness?

FRANK:Whenyoulookatourmissionstatementinourhead-quartersbuilding—”Deliveringthebest-tastinghassle-freedrinksyou’llevergetintheoffice.”—theimageaboveitisacornucopiaofbuildingsincitiesaroundtheworld.Alotoftimes,we’lllookatthemuralandsay,“Thoseareourcustomers.”And,I’llsay,“Thosearebuildings;thetenantsinthebuildingsareourcustomers.”

HENRY:YouwereoneofthemainsponsorsofBOMA’s“GlobalTenantStudy.”Whatweresomeofthekeytakeawaysfromthatstudy?

FRANK:First,IthoughtitwasagreatexampleofwhataCor-nerstonePartnercanachievewithBOMA.Wewereabletoaddsomequestionsaroundtheareaofamenities,includingasub-categoryaboutamenitiesaroundbreakroomareaswithcoffeemachinesandtheimpactontenantsatisfaction.Wefoundthatthetopamenitiesimpactingtenantsatisfactionarenothavingtheimpacttheycouldhave,suchasgymsandparkingfacilities.They’reinalotoftheseoffices,butwhyaren’ttheymovingtheneedleasmuch?Theanswerisbecausethey’rebecomingcom-modities,andthequalityisbecomingaverage.MyquestiontoKingsleyAssociates,theresearchersthatworkedonthestudy,was:“Ifweimprovedthequality,varietyandexcitementoftheseamenities,wouldthathaveanimpactontenantsatisfaction?”Theanswerwas,yes.Youcanmakeanimpactwithyourbreakroom if you make it special.

In addition, the study showed that shared space also proved to bemoreprevalentthanpeoplethought—themobileworkplaceisnotusurpingit.We’realsousingthesustainabilitydatathatcameoutofthestudy.Twooutofthreetenantssaiditwasimportant to work in a sustainable space.

HENRY:Speakingofsustainability,that’ssomethingthatisverymuchincorporatedintoyourbusinesspractices.Whatdoyouseeasthenextstepintheevolutionofsustainabilityintheofficeenvironment?

FRANK: Mars Drinks, and our parent company, Mars, Incor-porated,putalotofenergyintosustainabilityresearchanddevelopment. And, we hope that our sustainable choices help theofficesweservetoreachsimilargoals.Forexample,bytheendofthisyear,100percentofourcoffeewillbesourcedfromfarmsthathavebeencertifiedbyorganizationslikeRainforestAllianceandUTZCertified.Ourhotbeveragemachinesreduceenergyby40to60percent,comparedtoothercommercialcof-fee machines. Energyalwaysis at the top of thelistofthingspeople are con-cerned about.

Thenextstepbringsthe“office”intothe community throughcollabo-ration.Theareawherewefeltwecanhavethemostengagementofemployeesandtenantsisaroundrecyclingandcommunityactivities.IjoinedtheSustainabilityCommitteewithBOMA/PhiladelphiaandwelookedforawaytoconnecttotheupcomingGreen-buildevent(Nov.20-22,2013)inPhiladelphia,workingwiththeDelawareValleyGreenBuildingCouncil.Wefocusedonalegacyprograminvolvingachildren’splayground—theSmithMemorialPlaygroundandPublicWorkshop.Theplayground’sGreenbuildlegacyprojectisdesignedbychildrenforchildrenoutofrecy-cledmaterials.WefoundawaytoinstructaCorporateSocialResponsibilitycourseatDrexelUniversityandusethiscoursetotaketherecycledmaterials(likeourMarsDrinksfreshpacks)outofbuildingsinPhiladelphiaandconvertthosematerialsusingTerraCycleintoplasticusedintheplayground.AlongwithBOMA/Philadelphia,wearealsoworkingwithPricewaterhouseCoopers’greenteamontheprojecttoaddressrecyclingissuesandcreate a community outreach attachedtothepark.Wewillbeholdinganeventwithlocalpropertymanagersandtheirtenantstosharewiththemhowthey can do it, too.

Whenyouconnecttoyourcommunity,you’reinawholeotherstratosphere.

Learn more at www.marsdrinks.com.

BOMA President Henry Chamber-lain (pictured, right) caught up with Mars Drinks Vice Presi-dent of Business Development Frank LaRusso (pictured, left) to talk about the effect of col-laborative space on creative work envi-ronments … and how a cup of “Joe” can go a long way.

From Coffee to Collaboration

This park bench at the Smith Memorial Playground in Phila-delphia is made from Mars Drinks coffee freshpacks using TerraCycle.