Kevin Schlueter, co-founder of Proxymity, believes that a comany’s workspaces must be thought about as an integral part of business strategy, not as an afterthought.
Gensler indicators of high performing companies
• 23%: More time spent collaborating than at average companies.
• 185%: Top-performing companies rate socializing be this much more critical than do average companies.
• 50%: The three-year annual average profit growth is nearly this much higher at companies with a high score than at companies with a low score on the Gensler Workplace Performance Index scale.
• 80: Work Performance Index for top-performing companies, compared with a Work Performance Index of 64 for average companies.
Note: The Gensler 2008 Workplace Survey differentiates between “average companies” and “top-performing companies.” The definition for a top-performing company is one that has “higher profits, better employee engagement and stronger market and brand position.”
Andy Flynn saw the culture shift start to happen on
In 2008, the threat of flooding forced his Flynn Wright staff out of its Riverpoint office. The advertising agency temporarily moved in with a client that had a call center – a space with low walls and “person next to person next to person,” Flynn said.
“We ended up being almost on top of each other, and it just turned out to be a really neat experience for us,” said Flynn, president and CEO of the company. “And we didn’t miss a beat in our business.”
The flood never came, and the staff moved back into its old space, a setting heavily defined by private offices. A few employees decided to take the doors off their offices and create an “island” of doors laid on a shipping crate to serve as an impromptu working and meeting space.
The message was clear: People wanted to work differently.
Flynn Wright isn’t the only company in Des Moines to come to that conclusion. Most recently, The Des Moines Register and Principal Financial Group Inc. announced new property plans that put a large emphasis on an open environment that promotes collaboration.
Property, not real estate
Flynn Wright worked with a local company, Proxymity, LLC to find and design a new space across the street from the John and Mary Pappajohn Sculpture Park. The floor plan and office environment are decidedly different from those at the old location: an open environment, more natural light, fewer offices and more space for employees to work together without having to retreat to a conference room.
Proxymity helps businesses think about how their physical property fits into their overall vision for the company. One of the mantras of the four-person company is that businesses should think in terms of property, not real estate.
Businesses think strategically about people, technology and operations, and often have C-level positions in charge of those areas. Property often gets pushed to the side.
“We believe that property is the next frontier in business strategy – much like we’ve worked on human resources and people over the years, and technology,” said Kevin Schlueter, co-founder of Proxymity. “We’re saying that property has to be looked at in the context with all of these (other business strategies), and sometimes it gets pushed out to the side.”
Instead of looking at real estate as a space that happens to house your business, Schlueter said, think about what your business needs to accomplish, and how its property will help achieve that goal.
Functionality is a large component of that, and more businesses are thinking about how their office space affects the bottom line.
The Register and Principal, like Flynn Wright, are looking to make their office spaces more collaborative: fewer cubicles and closed-door offices, more shared spaces in which employees can meet, both naturally and purposefully, and the technology to allow them to move around within the office.
It’s a shift in culture for some companies, but it can also be a workforce attraction and retention tool for others. Another Proxymity co-founder, John Garvey, tells the story of one company Proxymity met with whose CEO complained about losing good workers as they were entering their 30s and 40s, in large part because of an unattractive work environment. He points to another study that says workers prefer an iPad at work rather than a raise.
If this sounds like a fad, Proxymity points to numbers that back it up. According to the Gensler 2008 Workplace Survey, top-performing companies – those with higher profits, better employee engagement and stronger market and brand positions – have significantly better work environments than what are deemed to be average companies. Though the survey is a few years old, Proxymity considers the responses to be valid today.
“You have to put money into property,” Garvey said. “And that’s where that return comes from.”
Elements of the changing office
Collaboration is a word that gets thrown out a lot when companies talk about what they want in a space.
That was the No. 1 guiding principle for The Des Moines Register’s search for a new space, which is what Publisher Laura Hollingsworth believes the company found in its soon-to-be home at Capital Square.
Why collaboration? In the past, “we were truly a manufacturing company, manufacturing a product that was then delivered,” she said. “Today, that is very different. We are in a knowledge economy with knowledge workers.”
Ralph Eucher, Principal’s executive vice president, largely echoed those sentiments. Principal has unveiled plans for a $238.5 million renovation of the buildings on its campus to be phased in over the next eight to 10 years.
Eucher points out that the financial services giant has gone from being more of a transaction-based company to a knowledge-based company. In the past, “someone brought you a stack of work to do, and said, ‘when you need more, please let me know,’” Eucher says. “Today, I think for us it’s much more about teams of people in investment or management ... who do need to collaborate with to do a lot more things in project format.”
That line of thinking is becoming more prevalent, say the members of Proxymity. Though workers at the Register, Principal and Flynn Wright still have their own personal workspaces, for the most part, things are trending in the direction of a completely open office where workers will frequently rearrange their spaces to fit the needs of the current team they’re working with.
That’s not to say the cubicle is dead. There is still a need for focused, nose-to-the-grindstone work which requires minimal interruption. But in some organizations, the days of of a private office as a status symbol are gone.
“I think the size of the offices, office as a status symbol, is changing,” said Proxymity’s Garvey. “Your individual space as related to your status in the organization, that is dying. So it has much more to do with your job function now than it does with your status.”
Three companies stories of change
Out with the old ...
Flynn Wright’s old space was dominated by offices. “You could walk through the office during a busy day and you might not see people,” said John Garvey, co-founder of Proxymity, which advised Flynn Wright creating its new space.
... In with the new
The new space in the Western Gateway provides two key elements that the company was looking for:
One, the location is important. Flynn Wright wanted to give itself visibility in the community. Locating in an up-and-coming area accomplished that goal, said Andy Flynn, president and CEO.
Two, the space had to be open. The main work area is set up so “everyone can see everybody,” Flynn said. The space also emphasizes areas and “islands” where people can work together, and sitting areas where employees can work on laptops.
Even the offices that surround the main floor have all glass walls and doors.
The space is designed to let in a lot of natural sunlight, and the lights inside the building adjust to the amount of sunlight streaming in, an element that Flynn emphasized.
Photo above: Flynn Wright’s space includes large islands for employees to use as shared workspaces, and all the offices have glass walls. Photo submitted by Clark Colby
The Des Moines Register
Out with the old ...
In the Register’s current location, a 97-year-old, 13-story building at 715 Locust St., departments are structured by floor, so it’s harder for employees to physically meet or interact. Publisher Laura Hollingsworth notes that she can go to her office on the eighth floor and not see another employee all day if she chooses. “I have to literally go looking,” she said.
... In with the new
The new 65,000-square-foot space is all on one floor at Capital Square. That, Hollingsworth says, will allow for communication among employees. It will also contain natural areas for people to gather and work away from their desks.
About 75 of the 640 or so employees in the space will be mobile – mostly reporters and salespeople. Hollingsworth is careful to point out that being a mobile worker at the Register doesn’t mean setting up a home office as much as it means being out in the community, meeting with sources and clients. The office will be designed to have one desk for every three mobile workers for when they need to use the space.
“You look at our office at any time of day, particularly with our reporters and salespeople, and hopefully most of those spaces are empty,” Hollingsworth said. “So why continue to pay that overhead when you can find a ratio that works?”
Principal Financial Group Inc.
Out with the old ...
Principal’s current buildings, for the most part, are traditional offices spaces, with tall cubicles. That reflects the company’s old model of being more transaction-based.
... In with the new
One of the most-talked-about elements of Principal’s renovation plans is having open kitchenettes for employees, in what Ralph Eucher, executive vice president, refers to as “the more informal bistro atmosphere.”
“It’s not different than watching what people do today with Wi-Fi when they are sitting in a Panera Bread,” he said.
It’s key to make the office feel more informal. Employees still will have cubicles, but they will have a lot of freedom to move around the office.
Photo above: Principal renderings show what the company’s future kitchenette space will look like.
The team at Proxymity is adamant about the front-end work that should go into designing a new space. They recommend taking at least two years to strategize, rather than waiting until a lease is up and scrambling. Principal, for example, knew five or six years ago that it wanted different kind of environment. Eighteen months ago, it started to plan it more intensively.
Flexibility for the future
Businesses need to be able to adjust for the future and should plan for that. That includes setting up physical walls and furniture in a way that they can easily be moved around if need be.
It’s hard to put an exact dollar amount on how much money businesses can save by re-forming their office spaces. But Principal’s Ralph Eucher puts it this way: “If you can’t attract and retain talent with what you have in the workspace, you’re going to have a real issue doing all the things you’ve said you are going to do to the board in your 10-year forecast. ... If you didn’t do it, I don’t know how you achieve the targets that you set.”