Article I wrote for JLL at the beginning of 2022 (Link)
The hybrid work concept of the future is consistently defined by the corporate strategy. Innovative strength, emotional commitment and return on investment play the main roles here. However, there is no "one size fits all" solution. Every company would therefore do well to decide on a concept that suits its individual culture, activities and goals.
The needs of tomorrow
These days, CEOs of global companies up and down the country are talking about hybrid working and how important it is to correctly interpret and then implement the new way of working for their own success. This was not yet the case at the end of 2019. It is clear that the pandemic has caused rigid structures, mindsets and processes to be vehemently broken down. Leading companies are specifically using this as an opportunity to adapt their corporate strategy and ultimately benefit from this opening up. Corporate culture plays a key role here, and nothing shapes it as much as the working environment.
However, it is essential that companies consider the impact of hybrid working. Studies by JLL, such as the Worker Preferences Barometer (2021) or the Human Experience Report (2020), show that in future it will be common practice for most companies to allow employees to work remotely (i.e. not from their usual office location) for an average of two days.
How much office space is actually needed can therefore only be defined once it has been clarified which activities are (or should be) carried out in the office in the first place. To answer this question, it is first necessary to understand which strategic goals a company can achieve with the right workplace strategy. Most projects focus on three objectives in which workplaces play a key role:
1. increase innovative strength
The ability to innovate is the guarantee for future market success (and continued existence) and is currently undergoing major change. Increasing digitalisation makes it possible to automate repetitive tasks. As a result, these tasks are increasingly no longer part of employees' job specifications. Over the next few years, we will therefore see a "de-industrialisation" of the office.
Over the last 200 years, the office has learned to break down holistic processes, to have the individual pieces performed over and over again by a service provider and to become more and more efficient in the process. This has had a direct impact on physical office design. The best example of this is the famous cubicles or the long rows of desks in open-plan offices, but now algorithms and artificial intelligence are increasingly taking over such tasks.
What remains is the human superpower: our creativity. And the opportunity to transform this into promising innovations through co-creation, agile methodologies and serendipity. However, this does not happen in a solitary office or during concentrated work alone. The human brain only develops new ideas when it takes in hundreds of fragments of ideas, either randomly or specifically, and finds the time to process this information in peace and quiet.
Innovative workplace concepts create space for ideas
An innovative company promotes collaboration, community building, exchange and open communication in its offices and designs the spaces accordingly. In addition, a modern company specifically supports remote working and regenerative working. The challenge, however, is that most companies are already on the approach and now have to decide quickly which airport they want to head for. The "Hybrid Working Progression" model clearly demonstrates this: Depending on the future strategy, the current status quo and the corporate initiatives launched or just pending, companies can fly to different airports. The model makes a rough distinction between five stages of progression: from the traditional "New Ways of Working" (practically standard before the pandemic) to the fluid office (innovation-focused concept) to the virtual office, in which people mainly work together digitally and in "open source communities". A profound strategy assessment will show which progression level is appropriate in each case, which can then be translated into the right experience definition.
2. strengthen emotional attachment
Even before the pandemic, one of the main concerns of many CEOs was finding the best talent and competing against competitors in the recruitment process. This has now intensified and will become even more central to every corporate strategy in the future. After all, only those who hire the most talented people and manage to retain them will be able to take on the role of a pioneer. And today's people are looking for a place where they can develop and grow freely in flexible workplace models. Companies are therefore looking for the right positioning as an "employer of choice", because the current generation is shaping the working world of the future with its differentiated view of the world and performance.
Connecting rooms
A company's premises can create the right atmosphere for this. If a company is already gearing its room typologies towards innovation, the necessary elements for sustainable loyalty can also be incorporated.
Of course, people are at the heart of every successful workplace concept. Nevertheless, most existing concepts still attach too little importance to the human factor. The "New Ways of Working" concept, which has been rolled out globally since 2010, also initially followed a human-centered design. However, it then often focused primarily on cost considerations and was still too much subject to the old, process-based patterns from times before digitalization. As we have seen in the press over the last two years, this is currently changing. Diversity, i.e. consciously integrating a multicultural, multi-faceted workforce, should be a matter of course for every innovative company, as it brings equally multi-layered added value.
Regenerative working models
The topic of well-being is also of great importance and even goes one step further: with regenerative workplace concepts. The JLL study "Regenerative Workplace" shows that during the pandemic, people were able to strengthen their body and mind while working from home. In the post-pandemic period, it will be important to transfer these positive elements to the office so that people not only feel safe and socially embedded there, but can also prosper personally (and for the benefit of the company). This can be achieved through appropriate interior design, active workforce management and the right skills. If a company offers such a regenerative working model, it will be able to attract the desired talent effortlessly.
Sustainable, social, ecological
It's not just employees who are taking a more critical look at their employers, customers and shareholders are also consuming and investing more consciously: what about sustainability and social responsibility? What production processes do we use, what goods do we manufacture, what services do we offer - and are these in harmony with the sustainable continued existence of our planet?
Consequently, the company must offer employees, customers, society and shareholders a kind of "social contract": an agreement that goes far beyond money and monetary benefits. This is a shared promise that connects emotionally. This also includes the meaning and purpose of a company and its individual contribution to environmental protection and the social component. A striking example is a company that offers technologies for environmental protection versus another company that offers products that are generally regarded as harmful to the environment. The former will have less difficulty finding young and sustainably-minded talent. In addition, intrinsic drive and motivation are greater when actions serve a higher purpose. In the office, this can be ensured by skillfully developing the entire employee experience and embedding your own brand and value model in it in a well-targeted manner.
The aim should be for employees and other stakeholders to talk about the company premises with pride and recognition. If you want to achieve the best possible effect, employees should no longer be mere beneficiaries, but also active shapers of the new work culture - because they are the most important part of it. And they are increasingly being looked after by an "office manager", a person who specifically looks after the well-being and functioning of an office community. Today, this is often still the task of the line manager, although this role requires different skills and objectives.
3. ensure profitability
Wenn es um eine Investition geht, gilt stets: sie muss rentabel sein, ansonsten wäre sie nicht nachhaltig. Dies trifft ebenfalls auf ein Büro als Teil eines hybriden Arbeitsplatzkonzeptes zu: Wenn die Umsetzung nicht mehr einbringt, als sie kostet, macht das geplante Konzept keinen Sinn. Allerdings ändern und erweitern sich auf beiden Seiten dieser Gleichung die Terme: Der Wert der Innovation über den Raum lässt sich für eine Unternehmung bereits sehr präzise berechnen und definieren. Auch sind die Opportunitätskosten insbesondere bei Retention und Akquisition plötzlich angestiegen.
On the other hand, working today requires a great deal of agility; not only in terms of corporate culture and working methods, but also in the use of company premises. A smartly designed, sustainable office can avoid unplanned, direct depreciation or unexpected follow-up expenses and thus protect the investment and ongoing expenditure in the long term. This will play an important role in future business cases. And only those companies that understand how to correctly assess the added value of hybrid workplace concepts in financial terms will be able to grow sustainably and achieve their goals.
What must a company do now?
The big challenge is that the "new normal" is a constantly moving target and is likely to remain so. For this reason, it is advisable to develop your own hybrid work concept and to link it much more closely with your own corporate strategy and the operational management of people, space and technology. Specifically, this starts with a holistic assessment and the translation of the corporate strategy into a target culture, which can be developed through a precise "human experience design". Once this experience has been defined, the services to be provided are derived from it. Once the requirements for a workplace strategy have been defined, work begins on the individual serving workplace functions - such as the cafeteria and break room, hybrid meeting rooms, agile studios and many more. And at the very end, it's all about the final design, which supports the experience with an emotional interior design and makes it tangible.
Change-Management
The concept is in place, the rooms are inviting and perfectly tailored to the needs of a modern workforce. Employees should now be empowered to adapt to the new conditions and exploit their full potential. The aim is to get the workforce used to the new way of working so that they can actually take advantage of all the benefits. Consistent change management and the subsequent constant monitoring and adaptation of the workplace concept are essential for this. Modern working is no longer a "change the business" process that leads to "run the business". Rather, it is a "Constantly evolve the business" initiative.
Fazit
The future hybrid working concept is consistently defined by the corporate strategy. Innovative strength, emotional attachment and return on investment play the main roles here. Companies will benefit from an accelerated technical and social transformation after the pandemic. Dwindling silos and hierarchical structures will make work more agile and materialize in space. Companies will take advantage of remote working and make more conscious use of newly discovered performance-enhancing elements during the pandemic. The consequences will be multidisciplinary office clubs with plenty of space for fluid working and co-creation. The values and purpose of the brand, as well as community building, will also be manifested there. The company is pursuing the goal of attracting and promoting the best employees and deploying them in such a way as to increase innovative strength. Over the next two years, many companies will invest time and resources to find the right airport, i.e. to define and then implement their ideal workplace concept and portfolio strategy. At the same time, investors and portfolio holders of office properties should think about how and which hybrid working requirements they should proactively offer.
Marco Huber for JLL; 11.2.2022
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