What is workplace strategy, and why is it so important to the future of every business?
By Graham Lauren, director, Shiro Architects.
For an emergent discipline with such obvious importance for the commercial property industry, Wikipedia is strangely almost silent on the subject of workplace strategy. It defines it as, “the dynamic alignment of an organization’s work patterns with the work environment to enable peak performance and reduce costs.”
Those close to it will understand that in workplace strategy, and its present near working synonym of “activity based working” (ABW), we may hold the keys to the future of work itself. With this also go the fortunes of a great many powerful property owners and occupiers. ABW is an area in which Robin Brinkman, associate director office leasing at agents Knight Frank, suggests Australia pretty much leads the world.
In a previous piece for The Urban Developer, I pointed to the prospect that with smart companies becoming smarter in the way they do things, and with the backdrop of technology automating a number of office jobs out of the workforce, the upshot seems likely to be a diminution in the demand for commercial office space.
At that time, my interviewees remained, on balance, optimistic about the prospects. But present signals present a paradox.
On the one hand, the Sydney Morning Herald wrote on February 19 that demand for CBD office space has never been stronger, predicting rent rises in the Sydney and Melbourne markets soon. It cites DEXUS Property, GPT Group and Investa Office Fund, who it reports between them own more than 90 per cent of the national office stock, as saying the office market is at or near record low vacancy levels, inevitably pushing up the cost of occupancy for corporate Australia.
Yet on the other, recent anecdotal evidence given to me by Simon Hunt, managing director, office leasing, at Colliers International in Sydney, suggests that my forecast already held the germs of truth, and that spaceshrinkage in big tenant leases was already happening.
Hunt says, “We discuss this a lot.
“The bigger tenants are becoming smaller. They are moving from A to B, and a lot of the big legal and accounting firms are taking 10-15 per cent less space.”
Optimistically, he says, “You could say that they could be coming out of pretty inefficient space, or that they are going into very efficient space with great core designs, all of that, but I think it’s a combination of a lot of things.
“I don’t think that density levels can get any tighter, but we’ve seen a huge amount of startup businesses, two to three people that then grow to 15-20.
“There are brand new players, such as WeWork and different models, Liquid Space, third spaces, flexible spaces, membership spaces, and you can spill out into those areas. Therefore tenants are saying, I might not need all the meeting space on this floor … so I might take a little less space.”
The upside, he says, is that, “Occupiers might be getting smaller, but there are more tenants, just coming up in Australia. There are more businesses now.”
Despite the space and working efficiencies claimed by some, not all implementations of activity based working work seamlessly. In my own experience of working in 2013 at the Commonwealth Bank of Australia headquarters at Sydney’s Darling Harbour, too many bodies were crammed into too tight a space.
Marcus Hanlon, general manager of commercial property giant ISPT, says that in his former role as head of facilities at National Australia Bank, his own implementation of flexible working in its Melbourne headquarters building was a victim of its own success. Because it was the more attractive place to work of the bank’s local facilities, 5500 people were found to be occupying a space designed for 4800.
Stuart Munro, head of workplace strategy at Colliers International, says he hears of several such high-profile activity-based workplaces that suffer from not having enough workstations, including those in the property industry itself. He says that all of these places have adopted, “newer ways of working but, like any businesses that grow and change, they haven’t really planned for that.”
Hardly alone in this pursuit, our business, Shiro Architects, is researching the development of activity based working and workplace strategy, with its emphasis being on understanding how to create a better brief for the future occupants of commercial space.
As in all matters related to technology, as it marries ever more closely the design of space with new ways of working, and new people doing it, the rule here appears to be garbage in, garbage out. That is, as the cornerstone of workplace strategy, briefing must be tightly geared to what an organisation actually aims to achieve, using methods appropriate to an emerging discipline.
In the spotty track record of implementing new forms of flexible working, we want to identify examples that point to lessons that must be learned when specifying new workplaces. And we want to track the obstacles to progress experienced by those needing to make the switch, and especially those in non property-centric businesses. One of Australia’s dying breed of motor manufacturers provides just such an example.
In the new form of working’s nascent state, there are many rich and informative opinions, as in large measure, the pressures on owners are driven by trends toward increasingly flexible workspaces, none of which are going away.
An acerbic commentator on the subject of flexible working, Marcus Hanlon says, “I ask the question, is the workforce going to be more flexible and more mobile in three years based on today?
“That’s a no-brainer, but then you look ahead to six years or nine years, and then you have to start thinking, what does that mean to my business?”
These are precisely the pressures we aim to track in the coming series of articles on this increasingly multidimensional phenomenon we know as activity based working, and in its management through workplace strategy.
Graham Lauren is a director of Shiro Architects and is leading its workplace research for a book themed “beyond activity based working”. It addresses among other things the challenges to owners, investors, developers and occupiers of commercial office space in adapting to a rapidly evolving workplace and economy.