This article from Convene cofounder Chris Kelly originally appeared on the Forbes Real Estate Council.
The most significant innovations of the last century have a couple of common elements: They solved simple problems in the lives of everyday people, and almost nobody recognized that these problems needed to be solved.
Legend has it that Henry Ford said, “If I had asked people what they wanted, they would have said faster horses.” Modern transportation, internet you can take with you, the ability to easily connect with someone on the other side of the planet—no one really wanted these things before they were invented. But soon after these innovations became widely available, people could not imagine life without them. Chances are, you never knew you needed a smartphone. But now, imagine giving it up for a day and being without directions in your pocket or the answer to any question at your fingertips. There’s simply no going back.
But despite such large shifts, one daily environment has remained stubbornly unchanged for decades: the office.
Despite a tight labor market putting pressure on employers to attract talent, the vast majority of the corporate workforce still works in dull, cubicle-laden office buildings, designed solely for space efficiency and with no regard for human-centered design. Yet we know environments can have a profound impact on our mental health and work output, and we know that experience matters more and more for the next generation of leaders. The office of today is not very conducive to the innovative thinking needed to create the products of tomorrow.
As the cofounder of a workplace hospitality platform, I’ve consistently heard from the 250,000 people who walk through our doors each year that they want their own offices to look and feel more like the ones shared and alternative workspaces provide on a short-term basis, replete with more flexibility, choice, and experience in their office environment.
That means that we need to forget “office” and start thinking in terms of “workplace”—a mindset shift that will help commercial real estate professionals understand the trends that will challenge our industry’s most fundamental assumptions in the coming years.
Form Factor Shift
Our economy has shifted from manufacturing to innovation-based, but the dominant design of most office buildings is still modeled on yesterday’s assembly line, where workflow was linear, corporate structures were hierarchical and productivity and efficiency were prized above all else. But the nature of work has changed. The primary role of the workplace used to be to create physical proximity between people because that was the only way work got done. Technology has now mitigated the need for proximity, and the new purpose of the workplace is to attract, retain and inspire the best and brightest talent. The modern office will start to look and feel more like a college campus, where employees choose their work environment according to the work that needs to be done.
The Empathetic Building
You’ve heard this before: In the future, every building will be a smart building. But so what? The real benefit of a smart building is that technology can help it evolve into an empathetic building—one that not only makes life a little easier for all, but that anticipates and responds to the needs of tenants as individuals. Your building should recognize you as soon as you walk through the door, know what floor you work on and what you like to eat for breakfast. Ride-sharing apps know who and where you are as soon as you open the app. I believe your office building should too.
For companies looking to hire knowledge workers—of any age, who use and value the kinds of technological and workplace innovations that foster innovation and productivity—there’s a market demand for flexible and amenity-driven workplaces. Think buildings with healthy cafes, lunchtime classes, lounge areas, flexible meeting spaces, etc. What talent wants is what tenants need is what landlords must provide.
At Convene’s flagship property, 101 Greenwich, amenities foster innovation and productivity.
Workplace Design as an Organization’s Body Language
Workplace design communicates something very specific about a business to every employee, customer, vendor and business partner who walks through the door. Companies like Apple and Google have mastered the art of using workplace design as a strategic tool to drive growth, productivity and employee retention. For those of us in the commercial real estate industry, there’s a tremendous opportunity in helping companies of all sizes reap the benefits of great workplace design. A company with 20 employees should have access to the same amenities that a Fortune 500 firm offers.
New Roles for Heads of Real Estate
All of the above amounts to an enormous change in the primary role of commercial real estate professionals. Real estate is no longer a commodity to be negotiated solely on price. Real estate, which has traditionally been one of the biggest expenses in an organization’s P&L, is often the least optimized for experience. Better workplace experiences (design, amenities, services and technology) ultimately create happier employees, happier customers and happier shareholders, thus becoming a return on investment enabler. That means that the head of real estate should become the Chief Workplace Conductor, orchestrating workplace environments and experiences that maximize employee productivity and engagement.