Is Your Real Estate Strategy Prepared For What's Next?
Questions to Consider and What to Do If You Don’t Have a Strategy in Place
The coronavirus crisis and social distancing are reshaping how we work on a global level. For some of us, our homes are now our offices. Even when it’s safe to return to the workplace, some will feel most productive completing solo tasks from home at least part of the time.
As such, the workplace may evolve to become the “central nervous system” of organizational culture and collaboration, offering people the flexibility and professional trust to find spaces that serve their needs best. While the office of tomorrow will look different for each company, the COVID-19 crisis presents a moment for all organizations to pause and ask key questions about their real estate strategy. Below are a series of nine questions to help determine the right pivot approach, if you have a strategy in place, as well as ideas on how to help adapt the workplace — not just in the short term, but for the long term as well. If you don’t yet have a strategy in place, we also outline steps to create one toward the end.
Re-Think Existing Real Estate Strategies
1. Is your real estate strategy aligned with your workplace strategy? Do you distinguish between the two? For many organizations, a real estate strategy might be more financially and macro-scale focused, while the workplace strategy might be more people and micro-scaled focused. These are both critical components to a robust plan for the future.
2. Has the pandemic shifted long-term business priorities for your organization that would also require changes to your real estate and workplace models?
Perhaps you are a healthcare organization that has both heroically supported our communities through one of the most difficult times in our history, and yet face significant financial headwinds. How might this moment shift thinking about your real estate strategy and portfolio? Do people need to work on campus all day, every day? Can organizational hierarchy in the assignment of real estate give way to creative models for allowing people to do their best work?
Or perhaps many members of your organization were already out of the office frequently, meeting with clients or executing client work. Will the realization and acceptance of video conferencing at scale actually keep people in the office more frequently?
Or perhaps the economic headwinds have slowed the growth projections of your company, and you are asking what’s next? How do you be smarter about real estate costs in the future?
3. Is your existing real estate strategy focused on financial metrics or on people metrics?
If financial metrics are your biggest driver, you might choose to take this moment to re-examine what and how you measure success. Newer, modern workplaces, particularly those that embrace a more flexible workplace, will have different metrics than traditional cost per SF or SF per person than previous environments.
If people metrics power your business, how can your workplace support dispersed teams and flexible work modes, while still maintaining (or increasing) your organizational culture? What are existing people metrics — net promoter scores, employee engagement survey results, etc. — telling you about workplace environments, or about your culture that a new workplace might address?
4. Do your HR team members have a work from home policy in place that aligns with your real estate strategy?
If not, what steps might you need to take to align them?
5. What is your organizational approach to seat sharing and/or hoteling?
If seat sharing is part of your strategy, how will you operationalize the needed resources to ensure the safety and cleanliness of the workplace?
If seat sharing is not a part of your strategy, how are you going to effectively manage workplace capital spending for a future where more people will work remotely, versus being at their desk 100% of the time (which was already the case for many organizations pre-COVID)?
6. What elements of your strategy were already working well, and have proven effective as you’ve responded to COVID-19?
Maybe you already embraced flexibility, or had begun making investments in video conferencing and virtual collaboration platforms. If so, you’ve likely been more successful than others at the transition.
7. What are key elements about your culture that you want your workplace to reinforce, and is the design of your current workplace doing that successfully?
Will it still be successful if you have a blended approach to working from home and working in the office?
Do you have the right mix of collaboration spaces, focus spaces and amenity spaces to support your culture in a more flexible work environment?
8. Have you reviewed upcoming leases to see if any shifts in strategy might be implemented immediately and generate near-term savings opportunities, versus which might be implemented on new projects moving forward?
Do you have any lease termination rights, or the opportunity to exercise an early termination option on part of the portfolio? Or perhaps you are in a position to negotiate an early extension with your landlord in return for concessions?
Having a committed team in place as a key part of your real estate strategy can help you answer the variety of questions and scenarios that will support the implementation of your new approach.
9. For projects currently in the design and construction pipeline, what shifts (if any) might you need to make to adapt to this new strategy?
If you are currently planning a 1:1 approach to seating, but your new strategy indicates that hoteling (at even a small ratio) might be a good fit, what redesign or renegotiation might need to happen to support that change?
Create a New Real Estate Strategy
Of course, the questions above are only relevant if you’re among the companies that already operate with a real estate strategy in place. If you don’t yet have a strategy, which would put you in good company as the majority do not, it’s not too late! Whether you are the CEO, the COO, a corporate real estate executive, or a leader in your organization, the development of a real estate strategy can: 1) Provide your organization with a clearer map for the future; 2) Better align your talented staff, the way they work and your organizational culture; and 3) Better project, manage and perhaps even reduce CapEx and OpEx real estate expenses for your organization. A win, win, win all around.
An integral step in developing a real estate strategy is establishing an effective workplace strategy, highlighted in the “congruence model” below. This model aligns multiple systems to create a holistic workplace experience and enhance human performance. Once you determine how your space will be utilized now and in the future — as well as how remote work policies and virtual collaboration tools will be deployed — your teams can make better decisions about their real estate needs.
Embrace Uncertainty to Adapt to the Future
No company could fully prepare for the difficulty of our current times. How we recover and go back to work (pre-vaccine) will continue to be debated, tested, and adapted as we learn more. The next 12-18 months will be filled with questions, uncertainties and unknowns — all of which will increase stressors on leaders and our workplaces.
Yet with a robust real estate strategy as your guide, organizational decisions about the future will become clearer. As optimists, we’re excited about workplaces that nurture employee health, connection and creativity, while also aligning design strategy with organizational strategy. Leading organizations will embrace this moment as one of the many inevitable, unknown disruptors to their best-laid strategic plans, and flex their organizational muscles to adapt for a new future.
How are you and your organization dealing with the coronavirus? We’d like to hear from you. Drop us a line at email@example.com.
Banner image courtesy Edmon Leong.