The COVID-19 pandemic has led firms all over the world to reassess their actual property—how a lot of it to have, how you can use it, and the way a lot to spend on it. Fortune 50 firms alone occupy 2.6 billion sq. toes of actual property,
and a few of it sat largely empty for lengthy stretches through the pandemic. At occasions within the extended work-from-home experiment, the media, workers, and even firm leaders puzzled whether or not massive numbers of workplaces had been crucial in any respect.
We preserve that strategically situated workplaces which are constructed for function and built-in into company methods, cultures, and working fashions are extra necessary than ever. We additionally strongly imagine that firms ought to stop viewing actual property as a mere price middle and as an alternative strategy and configure it as a supply of aggressive benefit.
Strategically situated workplaces which are constructed for function and built-in into company methods, cultures, and working fashions are extra necessary than ever.
The appropriate strategy to actual property may help firms not solely to grapple with the common challenges arising within the pandemic’s wake but in addition to realize their company objectives. Marrying technique to actual property requires a deep evaluation of an organization’s wants, in addition to information to tell selections. These selections are greatest managed by prime strategic thinkers guided by the CEO—a departure from the best way firms have historically made real-estate selections.
We examined three firms that aligned their approaches to actual property with their company methods and addressed frequent themes ensuing from the pandemic. These organizations at the moment are positioning themselves for achievement by utilizing their bodily footprint as a aggressive edge. We additionally recognized three steps firms can take to transition their actual property from a price middle
to a supply of assist for his or her bigger objectives. Corporations that act now to rethink their approaches will place themselves most efficiently for the longer term.
The next examples showcase firms that leveraged actual property to compete extra successfully. Every firm thought deeply about some frequent questions: the aim of the office within the hybrid period, in addition to the proper stability between freedom and adaptability, on the one hand, and connection and collaboration on the opposite. They aspired to create workplaces and insurance policies that may assist appeal to and retain expertise—for instance, extra sustainable commutes, facilities to assist the well-being and engagement of workers, and designs that may encourage group work and contentment.
Every firm began from a special level of departure: one picked a brand new location to construct a central workplace from scratch, one other repurposed present workplaces it leased earlier than the pandemic, and a 3rd redesigned an present headquarters and upgraded the know-how linking it to satellite tv for pc areas. This selection demonstrates the vary of choices for reinvention, even in instances the place long-term leases could seem like a constraint.
A European digital agency: Designing a studio to compete for expertise and consumer work
IncepTech, a Budapest-based digital agency based in 2014, makes a speciality of constructing digital merchandise for shoppers. It had a transparent technique: in a good labor marketplace for software program engineers, the agency needed to draw the type of expertise that might simply get jobs on the world’s prime know-how companies.
IncepTech additionally needed an area that may assist it transfer away from competing for consumer work by way of conventional written undertaking proposals. As a substitute, it hoped shoppers would come to the workplace, focus on their wants, and instantly get assist fixing issues. Within the spring of 2020—simply because the pandemic was unfolding—the corporate started designing a fit-for-purpose software-engineering studio, adorned by plentiful inexperienced foliage, with large-pane home windows for ample pure mild.
Marrying technique to actual property requires a deep evaluation of an organization’s wants, in addition to information to tell selections.
By the tip of 2020, IncepTech Studio had been accomplished. It was situated in a newly hip space of Budapest, on the banks of the Danube, a location that gives lovely views and walkability to eating places, providers, and different firms. Minimalist white or light-colored furnishings and clear room partitions create a way of openness. The area is designed in order that engineers can stare into the space and suppose clearly, surrounded by mild and greenery. Assembly rooms are appropriate for hybrid work, with sensible cameras, digital whiteboards, and glass partitions for higher visibility.
The studio was supposed to point out workers that workplaces could be enriching environments. A soundproofed music room—stocked with an electrical drum set, a keyboard, guitars, microphones, and a pc to provide digital music—is open to workers for spontaneous jam periods. The corporate hosts get-togethers with employees and exterior professionals as soon as a month and is planning yoga and meditation occasions for workers.
IncepTech stories that its workplaces have been essential in constructing its staff to roughly 75 full-time workers in a scorching marketplace for tech expertise. Though a small agency, it has competed successfully towards massive international software program firms and integrators. (In February 2022, McKinsey acquired the corporate.)
Staff aren’t required to come back to the workplace. Groups are available in when crucial, notably for intensive brainstorming periods or last-mile undertaking sprints. The studio has additionally helped usher in consumer work, firm executives say: the area gives an attraction level that makes shoppers wish to work from it, and the assembly rooms make it straightforward to incorporate off-site collaborators.
A know-how firm: ‘Digital first’ with a real-estate answer to bolster teamwork
Earlier than the COVID-19-pandemic, roughly 2,700 workers of the know-how firm Dropbox labored full-time out of one in all its workplaces primarily in San Francisco, Seattle, Austin, New York,
or Dublin. When the pandemic started, the corporate carried out distant work, leaving these areas empty.
Dropbox rapidly realized that many workers had been each extremely productive and happy with distant work, and within the fall of 2020 declared itself a “digital first” firm. The problem was to present workers the flexibleness they craved whereas preserving a way of human connection, sustaining the corporate’s long-term well being and mission, and retaining a studying mindset.
Dropbox tailor-made its real-estate answer to those objectives. As a substitute of abandoning all of its workplace area, it transformed a few of its former workplaces into Dropbox Studios used for collaborative work, staff occasions, and coaching. It optimized the present areas for collaboration by eradicating most desks and creating convention rooms with versatile wall techniques and movable furnishings in order that areas can enhance or shrink relying on want. In some instances, Dropbox lower the quantity of sq. footage it leases. In Dublin, it moved to a brand new location constructed from the bottom up for collaborative experiences. The brand new area features a café, the place workers can join and recharge over free espressos and cappuccinos, and immersive know-how for videoconferencing, supposed to degree the taking part in discipline between on-site and distant individuals.
Dropbox Studios opened its doorways to workers in mid-March 2022, so the idea is basically untested. The corporate is dedicated to adjusting the sport plan, relying on how its wants as a virtual-first agency evolve. “Human connection is a foundational a part of our technique, and studios play an necessary position in facilitating that,” mentioned Terry Wiener, head of digital first for engineering, product, and design at Dropbox. “We’re enthusiastic about what we’ll be taught within the months and years forward.”
A biotechnology big: Actual property that permits quick breakthroughs and ongoing innovation
Gilead Sciences, a world chief in biopharma, started to suppose deeply a few modernized real-estate plan earlier than the COVID-19 pandemic. Its Foster Metropolis, California, headquarters—the central node of its grasp plan—had seen the corporate by way of many years of pioneering science. Nonetheless, many rivals had been transferring to a special mannequin: the invention, analysis, improvement, and manufacturing of a single drug routinely occur in several elements of the world. Towards a rising drumbeat of distant work, Gilead wanted a real-estate technique to extend connection and collaboration, velocity up the switch of know-how, and appeal to the most effective scientists. However how greatest to place one of many world’s largest research-anchored HQ campuses?
After a collection of analytical workshops, Gilead determined to buck the development and double down on its HQ. As a substitute of promoting or leasing off elements of it, the corporate invested in a redesign. The campus imaginative and prescient referred to as for the labs and buildings to “observe the molecule,” so the invention, analysis, improvement, scaling up, and manufacturing groups work in areas that movement from one to the subsequent. To advertise a way of natural connection, Gilead created inspirational areas, together with a state-of-the-art, 65,000-square-foot well-being middle with a fitness center, meditation areas, and mental- and physical-health assets. The corporate additionally added a cutting-edge laboratory and analysis infrastructure and accelerated its digital-engineering transformation by including course of
information techniques that permit labs join with each other seamlessly.
Each HQ area is being digitally enabled in order that workers can immediately videoconference with collaborators elsewhere. Immersion rooms have a number of high-definition screens and one-touch teleconferencing know-how, so customers really feel as if their colleagues had been in the identical bodily surroundings. Labs at headquarters and all over the world are including distant techniques to assist scientists monitor experiments from wherever, in addition to augmented-reality glasses and screens in order that remotely situated individuals really feel as in the event that they had been standing within the lab.
Focusing Gilead’s real-estate technique on scientific effectivity somewhat than operational economics served the corporate effectively through the pandemic. When COVID-19 hit, Joydeep Ganguly, senior vp of company operations, and his staff engineered and delivered a Biosafety Degree 3 (BSL-3) laboratory on the primary campus in solely 4 weeks, so Gilead’s scientists may work with the virus safely. Amid unprecedented urgency to create medication, the progressive campus and laboratory techniques performed an necessary position in attracting essential expertise to the corporate.
“Too many operations methods focus solely on near-term price imperatives,” mentioned Ganguly. “Whereas that is necessary, there may be far higher worth to having the operations-footprint imaginative and prescient serve a higher position by catalyzing innovation, participating and attracting expertise, and enabling company ambitions.” The corporate will proceed to put money into its headquarters, to evolve the “flash lab” design, and to put money into next-level collaboration know-how. “At Gilead, we proceed to imagine our grasp plan will catalyze the collective brilliance of our colleagues and function a magnet for prime scientific minds,” Ganguly mentioned.
Step one in growing actual property as a aggressive benefit is for leaders to find out the company metrics and aims they wish to obtain. Subsequent, they have to determine the moments that matter for workers, suppliers, and prospects to realize these metrics and aims. Actual property must be a multidisciplinary difficulty linked on to company technique, so the third step is to arrange a steering committee to evaluate the present real-estate footprint and be sure that it aligns with company aims and the moments that matter.
Decide company aims and metrics
The riddle that firms should remedy is which moments of togetherness with different workers, suppliers, or prospects truly enhance outcomes.
Earlier than the pandemic, the commonest goal of real-estate coverage was merely to scale back absolute prices or prices per worker. After COVID-19, if the objective of an organization stays to scale back the price of its actual property, it might probably merely have its employees work at home, the place many workers are fairly comfortable. Nonetheless, for some firms, a completely distant workforce could not at all times yield the most effective productiveness, connectivity, variety and inclusion, innovation, loyalty, or apprenticeship outcomes.
Actual property can deal with many aims. They embrace accelerating innovation, upskilling the workforce, advancing digital and technological transformations, stimulating collaboration, creating an optimum hybrid mannequin, diversifying expertise, and getting nearer to prospects. A corporation’s actual property ought to outcome from its technique and working mannequin.
To set a baseline, organizations can begin by figuring out and measuring an important metrics throughout several types of actual property. To find out how a lot workplace area an organization wants, for instance, key metrics may embrace how workers really feel about their firm, gross sales per salesperson, throughput, errors and omissions, and greenhouse-gas emissions. Then firms can experiment with completely different options, run pilots, and select optimum options primarily based on
the metrics.
Establish the moments that matter
In a world the place many workers can work remotely, the riddle that firms should remedy is which moments of togetherness with different workers, suppliers, or prospects truly enhance outcomes. The moments that matter depend on having the proper individuals engaged on the proper issues on the proper occasions—and in the proper locations.
However few organizations know which moments matter most. They may embrace onboarding new hires, apprenticeship relationships, brainstorming conferences, difficult conversations, experiences that foster social cohesion, resolving buyer complaints, promoting to prospects, or unplanned collaboration. The placement, measurement, and design of the office ought to all assist essentially the most pressing necessities for togetherness.
Arrange a steering committee
Historically, real-estate selections have been made by a real-estate staff that usually stories to a chief procurement or operations officer. A very powerful selections are escalated to the CFO.
However immediately’s real-estate staff has new obligations, specifically: making the present footprint in line with company aims and the moments that matter. This requires a special set of determination makers. The CEO can set the real-estate agenda, supported by the chief human-resources officer (CHRO), the CIO, the CFO, and the pinnacle of actual property. Specialists from all these domains may help make actual property a supply of aggressive benefit.
Within the wake of the pandemic, historic precedent or cultural or trade norms mustn’t form real-estate selections. Right now, an organization’s bigger objectives should function the information. CEOs and govt groups know what makes firms profitable and are greatest positioned to create a bodily surroundings to match. Merging an organization’s strategy to actual property with its technique is a change in the best way issues have been accomplished and a brand new duty. It’s additionally a once-in-a-generation alternative to behave boldly and emerge from the pandemic stronger and extra aggressive than ever.
Photographs used on this article had been supplied by Dropbox, Gilead Sciences, and IncepTech. The picture of the Dropbox café in Dublin is courtesy of Donal Murphy and Inside Architects.