Office utilisation management

Best Practice in Office Utilisation Episode 2: Who should be involved?

Office utilisation: Who should be involved in managing real estate decisions?

We hope the previous chapter makes the case for a team approach to maximising the value of office space. Clearly, that means bringing together people with different skill-sets and experience to pool their ideas and know-how. To ensure that any diverse group of people work together well, it’s a good idea to set out roles and responsibilities, and that is certainly true when embarking on a corporate change programme. Your office real estate is such an important asset, altering how you use it – or even deciding to divest yourself of some of it – can have a very significant impact, both on the bottom line and on other critical efficiency and productivity measures.

For that reason, key management must be fully involved at the highest level across the C-Suite. Here then is our guide to the roles and responsibilities for each director. We also look at how those roles and responsibilities will change in response to the global technological and cultural influences shaping tomorrow’s corporations.

Our belief is that there is a triangle that symbolises the traditional and emerging roles of the C-Suite in office real estate management. Its three corners are finance (still hugely important, of course, hence its position at the top) but now underpinned by HR and IT.

Having said that, we begin not at the top of the triangle but with the person at the top of the tree.

CEO

It is only natural, you might think, for the CEO not only to have ultimate responsibility for office real estate but also to take a keen interest in its management (office utilisation), and yet it is remarkable how many organisations let important strategic office utilisation decisions slip down the delegation ladder.

Seeing the big picture

Why does such an important asset as a corporation’s office real estate get short shrift at the top level? Is it that Chief Executive Officers and Managing Directors are unaware of the scale of wasted space and the potential cost savings? Perhaps so, but even if the CEO has read that 30 per cent of office space is wasted, he or she may perform a quick calculation and decide to focus on other priorities. That erroneous calculation goes like this. If real estate only accounts for, say, 25 per cent of your overhead, cutting costs there by a third only equates to total saving on overheads of around eight per cent.

This approach is flawed for several reasons. Firstly, the 30 per cent figure for office utilisation occupancy that is widely accepted across the industry may seem dramatic – so much so that many corporations find it hard to believe – but in reality, it is actually quite modest. We know from experience with hundreds of corporations worldwide that far larger amounts of space can often be freed up by intelligent application of flexible working backed by effective technology. In fact, savings of 60 per cent or even more are possible.

Read our views on why firms need to make sense of their space in CCR magazine

Secondly, the other 75 per cent of a corporations’ assets are going to take a lot more time and energy to reduce. After all, they have had the CEOs’ and CFOs’ almost completely undivided attention for years, if not decades, with many costs honed to the bone through successive economic downturns. In other words, the potential costs savings from reorganising your office real estate are going to be much easier to realise than anything you can achieve by cutting costs elsewhere. This is especially true as there is now a strong body of evidence against which you can benchmark your own office utilisation. Add to that the opportunity to use specialist expertise and space monitoring technology, and there has never been a better time to review your office space use.

Thirdly, and most importantly, restructuring your office space presents opportunities beyond the obvious cost savings on leases and rates or the potential to free up capital by divesting yourself of part of the asset. As we have said before, effective flexible working has the potential to make the organisation more agile, invigorate employees, attract high-calibre recruits, increase productivity and – when tied to smart building technology – to reduce energy and other building management costs.

When it comes to driving and managing change, it is time for the CEO to take the helm

A significant reason that CEOs do not grasp the nettle is that real estate is one part of the business that might be expected to take care of itself. After all, practically every corporation that has a significant investment in office space will employ a real estate/facilities management (FM) team, whether internally or outsourced or both.

Admittedly, leaving the day-to-day running of your office space to the people who have it in their job description is a completely justifiable piece of hands-off delegation. However, when it comes to driving and managing change, it is time for the CEO to take the helm. Yet even getting the opportunity to do so can require the CEO to be more proactive in this area of the business than hitherto. He or she may also have to overcome institutional intransigence to move the corporation towards a better, different way of managing office real estate.

For one thing, it is possible the real estate manager may not want the CEO to be involved in any review of office utilisation because he or she doesn’t understand or can’t explain the implications of flexible working. Another reason the FM team may try to shield the CEO from the issue is that – like many over-worked managers in other roles – they fear being saddled with a new set of responsibilities for themselves or their team without additional staff resources.

People have busy day jobs. Few people want to be the leader or driver for something that can look like a daunting new initiative. Neither do they want to rattle cages by bringing ideas up the ladder.

So the CEO needs to be aware of the potential benefits of investigating and implementing flexible working. He or she must be committed to direct budget to the process, including bringing in experts to apply their specialist know-how and technology as well as increasing organisational capacity to meet the challenge.

CFO

The C-Suite executive who is most likely by far to be in charge of an office utilisation review has almost exclusively been the Financial Director, at least until now. There are now signs that this is beginning to change, as you’ll see in our other roles and responsibilities sections. Nonetheless, for now and foreseeable future, the FD still has responsibility for the organisation’s real estate/FM team, so reviewing any significant change in the way the asset is managed will certainly form part of his or her remit.

As you would expect with the job title, the FD is someone who appreciates the direct financial drivers, so the potential for cost savings can certainly be expected to pique his or her interest. The FD should indeed see it as one of his or her key responsibilities to properly manage any real estate asset or liability. The FD’s cooperation will also be required to make available budget to survey how the company is using its real estate and to design and implement a change programme, as well as installing technology to manage the new working system into the future.

Opportunities to impact positively on a company’s finances can be nuanced

Of course, cost savings – however obvious they may be – can’t always immediately be realised where there is a long-term lease or for whatever reason, you find yourself stuck with a particular real estate asset. Even so, the opportunities to impact positively on a company’s finances are sometimes more nuanced than the obvious ones of terminating a lease or selling a building.

As an example, we worked with a major insurance company as it was intending to move premises. At some point, the management made the decision to cancel the proposed move and to stay put to save on the costs involved with the relocation. That could have been that, but instead the company decided to create a budget to reorganise its current premises, and to bring in our know-how and technology to ‘sweat’ the existing asset.

Another less obvious cost saving is to be found in the satellite office. The exponential rise of co-working spaces in big cities on both sides of the pond and elsewhere has given organisations an easy ‘out’ when they feel they are running short of space, but it’s not ideal. The whole idea of having people physically in the same space is so that they can work collaboratively and interact face-to-face with other teams and management. So, rather than put ten new people into a co-working space or a small office in a separate building, look to flexible working to find a way to absorb those people into your existing space. A fast-track four-week survey of your current office will immediately highlight how that can be done as well as pointing you to many of the other benefits that flexible working has to offer.

Head of Real Estate/FM

Like any game-changing new concept, a major office utilisation review could be regarded as disruptive. Flexible working has already begun to transform the office real estate market, and for people in office management roles, it could revolutionise job descriptions.

For heads of real estate and facilities managers, the changing workplace might well be viewed as an opportunity or a threat. For those with the opportunity mindset, it’s a chance to align their roles with mission critical processes and vogue themes, hugely increasing their visibility at the top level. Flexible working is in many ways a product of the digital transformation of business. Likewise, smart buildings are one manifestation of another big business issue. The move towards ever greater energy efficiency has come mostly in response to governmental and consumer pressure but also as a conscious decision by some corporations to gain a competitive and reputation advantage. Taking on a new kind of job spec that has these big issues at its heart will make the real estate manager’s role much more strategic.

An exciting opportunity for real estate managers and FMs willing to embrace change

For those real estate managers and FMs willing to embrace change, new ideas about office utilisation are an exciting opportunity for career development. For others, the future may be about managing the physical space that’s left once the smart aspects of real estate have migrated to someone else’s job description.

We completely understand that just maintaining the status quo means work is already hard enough for many real estate managers/FMs, without venturing into pastures new. However, we urge you to make the case for additional resources, internal and external, to move your organisation forward. We all need to overcome that natural fear of change and to take responsibility. It’s our great hope that people in real estate roles see the rise of flexible working, together with all the associated technology around smart buildings, as their chance to shine.

CIOs (and beyond)

All the factors we have looked at regarding office utilisation so far are leading to a trend that we are just beginning to see with CIOs becoming increasingly involved in real estate decisions and change management. As technology and buildings become more intertwined, we expect that trend to continue and, ultimately, to see a new management role combining the CIO’s building-related responsibilities with those of the Head of Real Estate.

Digital transformation has given people the freedom to work flexibly with access to the cloud and distributed telephony. This has had a massive effect on real estate. People demanding the opportunity to work flexibly is a powerful driver for change. Now, the technology has evolved to a stage that companies can respond to that demand. This is why we are seeing traditional one-person, one-desk set-ups replaced with collaborative spaces because when people have the opportunity to work alone anywhere, having a place to work together is the real justification for investment in real estate. That’s why we come to the office.

HR

The Human Resources Director and others in the HR team will come to be much more involved in real estate management than they typically are today. Much in the way that the technology-related aspects of real estate bring the CIO to the table, so the people-related aspects should make HR a much more integral part of the office utilisation and management process.

You may be surprised to learn that this is not already the case, but our experience is that having an HR director or senior person properly involved is the exception rather than the rule with most corporations still relying on their real estate team under the directorship of the FD to manage their office space.

Meanwhile, with flexible working on the rise, HR finds itself getting to grips with new issues, such as managing remote working, including how to manage safe working practices at home or in external locations such as cafes or the member lounges of professional organisations. How do we ensure we look after staff welfare when people are in the office less frequently and therefore harder to monitor? How can we keep up to speed with how new ways of working such as fluid teams? How are other organisations adapting their offices to provide different kinds of collaborative spaces. How is the idea of agile working evolving, and how can we make the correct decisions about what will work best in our organisation’s space and cultural environment?

We strongly believe HR should be closely involved in real estate decisions

These questions are too important to be side-lined while someone else makes decisions about a new office layout.

Apart from working from home and the casual use of external space, HR should also keep its eye on satellite offices. As mentioned in the Financial Director section of this chapter, this is an area that is often neglected by companies in our experience. Satellite offices – whether in co-working environments or traditional office space – should be monitored just as vigilantly as your core real estate.

Instead of being seen as a way to devolve responsibility to the co-work or office provider, they should be considered part of the organisation’s own real estate and managed as such. That ought to include installing desk sensors linked to the corporate real estate database so that you can monitor usage. That will demonstrate to staff that you have them covered, and a small number of desk sensors in your satellite space will be inexpensive as you’ll benefit from economies of scale because of the numbers of sensors in your core office space.

We strongly believe that HR should be closely involved in real estate decisions. Too often, HR Directors and their teams have been seen as a potential obstacle to real estate rationalisation by raising challenging questions about the working environment that those traditionally responsible for real estate decisions would prefer not to tackle.

Bringing HR into the mix is an absolutely crucial step in breaking down the silo mentality and bringing genuinely joined-up thinking to the business of office real estate management.

For HR, transforming office real estate should be seen as a well-being opportunity. It is up to HR Directors and their teams with the backing of the CEO to take more control of how it all works in the interest of the business and its people.

The bottom line

In conclusion, big office real estate decisions shouldn’t be made by a single department. It’s crucial to involve all concerned to minimise the risk of getting it wrong and maximise the opportunities presented by new ways of working.

The future of proptech in the UK – MIPIM roadshow London report

What’s the future of proptech in the UK? At the MIPIM Proptech Europe roadshow, that’s the question on the agenda. We’re at WeWork Waterloo to hear views on that subject from a panel of proptech companies and Simon Allison from the London Mayor’s office. And as long as we’re in a co-working space, it’s worth highlighting one of the soundbites from the evening which is that London leads the world by a mile on co-working, at least in terms of penetration.

The general consensus is that proptech has come of age. Next year, 2020, will be the year of adoption. It’s only three years ago when bright start-ups couldn’t get a look-in with the corporate purse holders but today the tech agenda is so prominent among corporates, they have senior people whose remit is not to say no to pitches from those bright young things. And there are more proptech/tech insiders in corporates now – a new generation with a different outlook.

What’s next?

So what’s next in proptech in the UK?

Simon Allison, representing the Mayor of London, says the capital’s commitment to tech won’t change even if and when there is a change of Mayor. Energy efficiency is a huge driver for proptech, he reckons. It makes sense.

He sees take-up happening now among corporates buying into the technology that may deliver smart buildings. There have been early adopters, of course, but after a slow start, Simon says almost everyone of a certain size in London is in the proptech game now.

Crunch time

The crunch for SMEs is to make things easier for corporates. Provide core value, and your technology will be adopted. You need to think like corporates think, rather than barging in and predicting you’re going to change the world.

The panel see London, Hong Kong and Shanghai on a par when it comes to proptech adoption and market opportunities, but when it comes to proptech companies, one city is (gold-paved) streets ahead. London has more of them than the next two contenders, New York and San Francisco, combined.

So back to the future. Long term, cities are thinking less about winning big bids like The Olympics and more about adapting to climate and demographic change. And there is something about changing attitudes. Most of us think of real estate in terms of buying and selling property rather than experiencing it. Yet the new generation is focused on experiences. So how do we turn real estate into a service? How can proptech enable wellbeing, physical and mental?

Disruptive

Think of buildings as platforms with the human at the centre. Why? Well, what do you provide to your customers if not your people?

As with many disruptive ideas, there are philosophical questions. If your technology lets people manage their environment, to what extent should you trust them to make the right decision? If you truly have their and your best interests at heart, is there a case for you overruling their input at some point?

Much of the talk in HR and management is of soft issues such as wellbeing. But turn that around for a moment. If you focus on optimising rent per square foot – really optimising it taking into account all the factors – you’ll get increased productivity and wellbeing as a side effect.

Not perfect yet

Nothing is perfect, though, and an audience member highlights the lack of innovation in property and FM contracts, something that routinely confounds the successful deployment of technology. This can be because of archaic contracts with outsourced FM companies who have neither the interest nor the desire to take on a tech product. Similar stresses on in-house real estate managers, struggling to manage their day-to-day responsibilities, make it likely that new initiatives will not necessarily be greeted with unbridled enthusiasm.

It’s a huge problem, one of our speakers confesses. It’s why tech companies are struggling to get their products into thousands of buildings. No two buildings are the same, even ones in the same portfolio, so each potential instance of a tech roll-out meets different attitudes and challenges. It’s crucial with joint in-house/outsourced operations that both sides are incentivised to embrace new opportunities.

All that said, 2020 is a different year for the proptech world, one where its ideas and technologies are better able than ever to make it onto the top of the corporate agenda and beyond into deployment.

 

#MIPIMPropTechEU @MIPIMPropTech

 

 

Seeing the Big Picture: Best Practice in Office Utilisation Episode One

In this first instalment of our new series on Best Practice in Office Utilisation, we highlight the importance of adopting a business-wide approach to unlock the new world of flexible working

If you work in a large corporation, the chances are your office real estate is your single biggest overhead after your staff. It’s also quite likely that you have one team responsible for your workforce and an entirely separate one for your building management. That is not ideal because, of course, people and places are closely intertwined. Corporations will never get the best out of their people nor make the most of their real estate assets if they don’t look at their organisations in the round. That is why when it comes to reviewing how you use your office real estate, the first step is to see the big picture. It’s number one on our list of best practice in office utilisation for a reason.

There are several reasons why a real estate review might come up. An organisation may be expanding and feel that it needs more space or vice versa. It might be opening in a new location or downsizing one. Perhaps someone has decided that the existing premises need a revamp, or gloomy economic predictions may have put real estate costs on the FD’s agenda. All of these are to a greater or lesser extent linked to the bottom line, and there is no getting away from the fact that Grade A offices are big ticket items. Our 2018 study ‘Wasted Space’ revealed that major organisations in the UK were collectively wasting £10 billion in under-utilised office real estate.

People first

Yet one of the biggest current drivers for corporations carrying out real estate reviews has less to do with money and everything to do with people. It is, of course, flexible working. The benefits of flexible, or agile, working have been the subject of thousands of column inches and broadcast hours in workplace and business media. More and more corporations seeing the potential to make space savings. Having worked with more than 100 organisations worldwide, we’ve seen that the scale of those savings can be quite astonishing: 30 per cent or even more is typical. As our report into the subject showed, those savings could be turned into monetary advantage.

However, many of our customers have done things differently and used the data we collect for them to reimagine their workspaces. That’s because the way we work is changing, and people want to work in places that are adapted to new ways of working. In order to recruit and retain the best people, corporations are realising they have to satisfy the demand of a new, agile generation of workers. We have seen customers switching to flexible working to move away from the one-person-one-desk-and-a-shared-meeting-room norm, giving room to introduce new breakout areas for informal team chats and even franchised coffee shops.

Mission critical

It seems fair to say that responding to the new world of work should be mission critical for any major corporation. After all, flexible or agile working are undoubtedly hot topics in business, and the related area of smart buildings is also hitting the headlines. These new approaches to office and people management offer bottom-line benefits in recruitment, retention, productivity and efficient use of space. Yet many organisations are failing to unlock the potential, and this is especially true for large, well-resourced corporations who stand to gain the most. Too often it seems that a big picture either isn’t in the frame or doesn’t have the drive from the top behind it to make it happen. We see it manifested in organisations failing to get to grips with flexible working or opting for low-cost real estate reviews that give unreliable data to managers with blinkered ideas. Why does this happen?

The challenge is that implementing this kind of cultural change takes a business-wide approach. Without it, corporations will fail to implement flexible working properly and will miss out on the advent of smart buildings.

That means senior management needs to champion a holistic approach to reorganising the workplace. It shouldn’t be just the preserve of the real estate or FM team. It needs to be communicated across the whole business. HR should be fully involved to help to create an improved environment. IT has a crucial role to play.

Driving change

So, management should be driving change. After all, the benefits are going to help you to deliver on corporate objectives, such as improved efficiency and better recruitment and retention. To make it happen will take more than delegating responsibility to a single team. We need to bring teams together on an enterprise-wide mission.

Advances in smart buildings add new emphasis to the need for a well-rounded approach to workplace design. We now have the technology, not only to enable flexible working but also to monitor and control the environment as never before, right down to the individual desk level. As smart buildings gain traction, it’s crucial that teams work together to reap the rewards, looking beyond energy savings and towards creating a better, more productive work environment, one that contributes to employees’ health and wellbeing.

By monitoring the office environment and how and when it is being used, we can create adaptable workplaces that address all users’ needs, from physical comfort and wellbeing to how the environment supports them to do their job effectively.

Wellbeing

At Abintra, we are seeing an increasing number of enquiries from customers wanting to overhaul their working environments. That’s because employee wellbeing is rising up the corporate agenda.

Recruitment and retention are massive priorities for major corporations, and this is leading to more and more of them reviewing their working environments.

Unfortunately, many are making mistakes by failing to bring teams together to implement change. It’s also vitally important to involve the workforce in the process.

There is no doubt that corporations have space to play with. A recently-published Abintra report reveals that large office-based firms with 250 or more employees in England and Wales are together spending more than £10 billion on under-used Grade A office space.

Flexible working

Abintra pioneered workplace utilisation technology more than a decade ago and has since advised more than 100 corporations worldwide to monitor office usage and redesign workspaces. We know it can be done.

It all relates to organisations valuing their number one asset, their people, and leveraging their second biggest overhead, their workplace, to develop environments that address these key factors.

In London alone, the cost of office space being under-utilised is more than £4 billion annually, the report concludes, with large firms in other regions collectively squandering billions more.

Big employers with large office spaces are likely to benefit the most by addressing the issue and switching to flexible working strategies such as desk sharing. They can use Abintra’s workplace monitoring systems and our specialist consultancy expertise to typically find an extra 30 per cent or more of space.

However, we don’t expect the findings to stimulate a rush to smaller premises. Of course, it’s possible to take the data and decide to downsize and save money, but most businesses choose to use their newly-discovered space to enhance the workplace, for example by introducing new agile working areas, such as in-house coffee shops and informal meeting spaces. These have proven benefits for productivity as well as recruitment and retention, so being able to accommodate them without having to take on extra space is a huge advantage.

Real estate decisions

Clearly, information about the amount of space a business actually needs in a given location is critical for planning future real estate decisions. It can also be deployed by risk managers to ensure sufficient space is available to keep mission critical operations running if there is a disaster within a building or at another nearby company location.

The report reveals that large office-based firms with 250 or more employees in England and Wales are together spending £10,158 million on unnecessary total occupancy costs – that’s rent, rate and associated costs of running a workspace and related office functions.

What’s more, the issue is probably on an even bigger scale than the report’s conclusions, since our calculations are based on modest estimates of the amount of space saving possible and the number of people who work in offices.

Footnote: Businesses blow billions on wasted office space

Big businesses in England and Wales are squandering £10 billion a year by failing to get to grips with under-used office space, as our study shows.

The report ‘Wasted Space: The colossal cost of under-used office real estate’ draws together data from our work with more than 100 corporations worldwide with figures from government and the property industry to put hard numbers on the issue for the first time.

Download the report free

Introducing Surveys – the fast way to monitor your office space

How long will it take you to find out if you’re using your office space efficiently? Book one of our fast-track workplace surveys, and you’ll have all the answers at your fingertips in just four weeks.

Booking your four-week study is a great first step towards introducing flexible working, or making your existing office layouts even more agile.

Our experts will install the sensors and link them wirelessly to our award-winning software. We’ll help you to interpret the data, and we’ll advise on new workplace strategies in line with your corporate goals.

You’ll discover for the first time exactly how much desk space is going to waste and how often those over-booked meeting rooms are really being used. The results are often genuinely astonishing with typical potential space savings of 30 per cent or even more.

Knowing how your office real estate is actually used can translate into lower overheads, and it also gives you the option to create more agile working environments, which are valued by employees. So realigning your workspace can make a real contribution to recruitment and retention.

Abintra always involves your people from the outset in any space utilisation study so that they come along on the journey. It’s all about making better spaces that support you and your people to deliver your business objectives.

The starting point is knowing where you are now, and that’s where Abintra adds value. Unlike some alternative methods, our Wisenet system delivers ultra-accurate data that can be studied over any timeframe and filtered by any parameter of your choice. Most importantly, with Wisenet, you know you can rely on the results.

Join major corporations worldwide who trust Abintra’s industry-leading expertise for unrivalled insight into office real estate. Our pioneering WiseNet sensor technology sets the industry benchmark for utilisation and environmental monitoring.

To find out more, click here or to arrange an appointment, please use the Contact link below or call David Maddison in the UK on 07384 464284.

You’re just four weeks away from finding how you’re using your office real estate and how to adapt for the future.

Experienced business development professional joins

David Maddison

International workplace flexibility specialist Abintra has appointed experienced business development professional David Maddison as senior sales consultant EME.

In a career spanning more than three decades, David has worked in the airline, transport and IT sectors. He will be responsible for European and Middle East sales at Abintra, which works with major corporations worldwide to optimise use of their office space.

David said: “I was attracted by Abintra’s ethos, and I see many exciting opportunities with blue chip customers for its fantastic consultancy services and technology.”

He will be based at the London headquarters of Abintra, which also has offices in Boston, US.

Most recently, David was director of global merchandising at Guestlogix, the leading supplier of EPoS solutions to airline and rail companies. He was previously international sales manager at BAA Airport Express Alliance and prior to that, commercial director for Flight Directors, Gatwick.

Married with two grown up children, he lives in East Sussex and enjoys golf.