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Growth is on the agenda for most organisations, but in the middle of an enduring recession for many it is proving elusive with retrenchment and downsizing the key focus. Whether the organisation is expanding, contracting or striving to maintain the “status quo” its workspace should reflect actual need, operate at peak efficiency supporting the workforce and its workstyles in the most effective ways.

Many will see in their workplaces what JCI utilisation surveys have consistently shown in offices across the world – “almost half of every workplace empty, and two-thirds of all meeting rooms unoccupied“. Despite claims by occupiers that all space allocated is needed, clear evidence indicates that surplus capacity exists and this can often reveal significant  “spaceless growth” opportunities and bottom-line improvement across their estate.

“Spaceless growth” is usually associated with expanding organisations wishing to contain growth within the confines of an existing building to avoid new floor area acquisition. However as “spaceless growth” is about getting more from the same space, it equally applies to rationalising organisations needing to increase capacity in retained buildings to enable relocation out of buildings earmarked for disposal or lease end. Whatever the driver the time has come to focus on under-utilised, ineffective and unproductive space by unearthing the hidden opportunity in your portfolio.

The office is dynamic and gaps often appear in occupation due to normal business change in people resourcing, work reorganisation and team relocations. However, the ongoing development and dissemination of new technology and work culture over the last decade has “opened up” the office and enabled reduction in both the size of desking and quantity of paper filing that office operations now require.

So for sometime space planners have been developing more efficient use of space by squeezing the workstation footprint in open plan floor layouts to increase office capacity within the environmental and  regulatory limits of the building. Indeed the BCO (British Council of Offices) has followed this trend in their Specification Guide which recommends office design occupancy density levels at 8-13 sq m compared with the 12-17 sq m in the BCO Specification of 2005.

As many workplace consultants are pointing out work is an activity and for many this no longer means being tied to a desk or even an office. Telecommunications technology in recent years has enabled “agile working“, increasing the opportunity for “work anywhere” both within and remotely from base.  This in turn has identified through workstyle analysis a diminished need for individual allocated space with a consequent rise in third place working and shared facilities such as touchdown and hot desking.

So in todays technology-enabled offices there is now great potential to optimise space by growing capacity not only in terms of more workstations per square metre, but also more people per workstation. This largely untapped potential is why “spaceless growth” must be at the forefront of any corporate  property strategy.

There are many past examples of organisations in both private and public sectors that have moved from enclosed to more dense open plan environments with standardised desks, fewer individual offices, common print and offsite filing . Similarly there are numerous current examples of organisations that now have better utilised offices that support agile working with hot desking, touchdown and bookable meeting facilities supported by VoIP, mobile devices, 3G and WiFi making organisational agility ratios of 7:10 (workstation:people) a common achievement.

I recently worked with an NHS Hospital Trust to carry out workstyle analysis and case studies involving 400 staff in 2 locations – a Health Centre and hospital space newly converted to office use.  I was able to demonstrate the opportunity supporting  the business case to reduce existing space requirements by aligning agility ratios with staff workstyles coupled with investment in people change – enabling 30% “spaceless growth” in both buildings. This in turn led to a major property disposal saving the Trust running costs, avoiding major backlog maintenance as well as gaining capital proceeds.

A larger example from past experience involved “spaceless growth” in the BT Scottish HQ at Edinburgh Park which enabled the relocation of over 600 staff from Telephone House Edinburgh and its subsequent closure to avoid rapidly worsening terminal structural defects. Although under-utilsation of existing space at Edinburgh Park had been identified, “reclaiming the space for growth” required a combination of replanning office layouts, diminishing desk footprints, decreasing on site storage and improving IT and wireless technology whilst actively encouraging greater staff take up of home and agile working in both buildings. This allied to focus on internal charging with occupier departments and investment in people engagement, furniture and the office environment, grew Edinburgh Park occupation by over 40%.

Nevertheless getting “more from the same space” is not just a case of maximising workstation density or the “agility ratio” of more people per workstation. There is also a third dimension to “spaceless growth”.

The purpose of property is to support people and the activity of work, so workspace needs to be more effective as well as more efficient. Therefore “spaceless growth” involves not only better capacity and improving utilisation from existing space, but also growing the performance of that space in supporting the wider needs of a productive innovative workforce. This leads me to the definition of spaceless growth as: getting more capacity, better utilisation and also greater performance from the same space.

So what does this greater performance mean.  Some see space performance enhancement purely in tangible terms through provision of well designed activity based environments, spaces and furniture. Others see the real focus on enabling IT and appropriate support facilities, while others see office protocols and culture that foster support for new productive innovative ways of working as the key. We must also now consider social and environmental impacts and benefits of the space, such as people wellbeing and sustainability.  In reality enhancing performance is all-embracing, involving the physical, digital, social and cultural aspects of the workplace with the overall aim of creating an appropriately supported , motivated, enabled, healthy and ultimately a happy satisfied workforce.

According to Nick Marks of the New Economics Foundation (Nef) people who are happier at work are more productive – they are more engaged, more creative, have better concentration. The difference in productivity between happy and unhappy people at work ranges between 10-50% – that is 10% for non-complex repetitive tasks, or up to 40-50% in service and creative industries.” That’s an awful lot in terms of business revenue. Certainly we must aim to create work environments that stimulate people in a way that enables them to work to their potential. Maybe that means we should be measuring happiness per square metre !

Many property teams have historically pursued standard “lean” property solutions without true involvement of corporate space users. However, there is now a growing awareness that property is both an asset and liability. While minimising cost liabilities and increasing efficiency are important, its chief value as an asset is in enabling greater performance and productivity from the organisation and its workforce. Creating spaces that enhance and support the performance and outcomes of work is one of the keys to extracting this value. Providing these effective spaces first requires understanding your organisation and to do this you will need to engage with your people at all levels – something that may not come naturally to all property teams !

The Agile Organisation has advised and supported a number of clients in understanding and developing workplace change opportunities – helping them gain greater performance and value from their office space. Contact Paul Allsopp for further discussion about your hidden opportunities:

Paul Allsopp,
Managing Director, The Agile Organisation.
 Member of the Workplace Consulting Organisation (WCO).

paul@agile.org.uk

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The news media is full of stories about public sector plans to cut spending and their impact on employment and services. The big stories relate to the number of jobs that will be lost – most of which will be administrative, support and back office functions. From government announcements it is clear cuts will lead directly and indirectly to a drastic reduction in office requirements, particularly in the public sector.

Many organisations both public and private are already preparing and progressing extensive programmes of office rationalisation focussed on vacation for disposal and particularly lease termination activity. For example in 2011 the UK Government achieved a 6.5 million sq ft reduction in its estate while also extending its ban on taking new or renewal of leases until 2015. In the local authority sector Birmingham City Council are progressing a 35% reduction in its 1 million sq ft back office estate and Somerset County Council have recently approved plans to vacate 40% of its office space. But the pace and quantity of this offloading is expected to accelerate over the next 2 years as the new austerity bites and forces change beyond traditional ways and existing organisational boundaries.

Things looked rosy, backed by the credit driven boom and Public Sector growth in the years up to 2008 but now property markets and values are, with few exceptions on the floor, and some maybe moving towards the basement. This means organisations must review office strategies and vacation plans made in easier market conditions and rapidly re-focus activity to the new harsh realities.

Indeed in these challenging times large parts of corporate office estates are increasingly being viewed as underutilised, inflexible carbon inefficient liabilities that are a drag on rapidly changing organisational needs and business effectiveness.

Organisations can no longer afford long gestation periods and talk without action as they find themselves in the position of having to deliver a great deal more with a great deal less in a short timeframe.  Almost without exception, organisations are following similar paths in driving their office plans even harder to meet growing demands for greater savings and to make up for the diminishing receipts, and inflexible PFI commitments.

Not only do these plans need to take out existing surpluses and poor performing properties but they must also take account of the need to accommodate fewer people in more effective ways. Organisations are rationalising their people numbers, but they also now have the long needed driver to focus on sharing, outsourcing and particularly wider implementation of agile and distributed working. These plans must also provide the groundwork to support the leaner, more agile and virtual productive workforces that will be essential to take advantage of opportunities when better times do appear.

There has been significant investment in new technology, infrastructure and workplaces over the last decade. However, the full benefits of this investment have rarely been claimed due to political inertia, poor management and a lack of business drivers in a profligate booming economy. The current “crisis” now provides the environment to dismantle these barriers to transforming work enabling the creation of more capable agile workforces and seizing the full opportunities from past investment – not in the previous piecemeal approach of pockets and pilots, but across  estates, businesses indeed whole sectors.

A Capita Symonds survey confirmed that 80% of Councils are considering co-locating with other public bodies as a way of saving public property costs. “Total Place” is providing a holistic regional property review with the aim of significant rationalisation through sharing space and resources across all government-funded organisations. In addition to sharing, organisations must also look to utilise their “operational” estate to support distributed and remote working – using existing neighbourhood offices, libraries, housing centres, depots as touchdown offices, as well as “third places” – all of which diminish and change the overall central office requirement.

Many previously reluctant public organisations are now being forced to seek significant property and related savings as well as service improvements through new ways of working and development of agile working programmes. The majority of organisations currently seem satisfied with agility ratios of 70 to 80% (desk share of around 10 people  to 7 or 8 workstations),  but the Monmouthshire County Council example of 50% agility ratio (2 people to 1 workstation)  across its office estate points the way for more ambitious opportunity.

Due mainly to culture and management inertia home working to date has limited application in the public sector, apart from some notable exceptions like Ofsted where over 50% of the organisation is home-based. Workstyle analysis is important to establish suitability of  work and individuals for homeworking, but the ability to use home as a workplace regularly or occasionally for a large element of the workforce is one of the key aspects to the most effective agile working programmes.

The current budget cuts will inevitably force a reappraisal of the wider introduction of homeworking – not just for property savings but also for productivity and service improvement.  The mature BT Agile Working  model shows what can be achieved, where about 15% of its workforce are registered home workers, and a further 70% are remote and homework enabled. BT has seen more than 50% reduction in its office estate over the last decade, with accommodation savings from Homeworking alone amounting to over £100 million pa. Additionally home enabled employees are 20 per cent more productive than office-based colleagues and have 50 per cent lower carbon footprints.

The Office is certainly not dead but its function is changing as technology enables and competitive financial pressure demands re-definition of work and the workplace. Indeed as Jacobina Plummer agile working programme lead at Unilever said “the purpose of today’s office is to bring people together in spaces designed around activity with the emphasis on collaboration and the absence of assigned desks” and this can lead to the “rebirth of the office  rather than its protracted death.” Nevertheless, the overall result of cost cutting, sharing, outsourcing and transformational activity is that many organisations will be, and are implementing plans to reduce their office requirements by up to 50% .

What will happen to all this vacated office space.  Clearly the natural logic of large quantities coming onto an unreceptive market  is that there will be a massive oversupply. Yet nearly every organisation appears to be focused on feeding this oversupply. Where will demand for office space come from ?

One way for office occupiers to minimise the liabilities of their unwanted lease portfolio is to transfer to a lease liability specialist. Virgin Media recently transferred liabilities and responsibility for managing 28 surplus office buildings to Legacy Portfolio. Under the deal, Legacy assume the costs relating to the rented properties, and pursue reductions or disposal as quickly and as cheaply as possible. Legacy receives an upfront fee covering only part of the total costs of the lease liability, which include insurance, security, taxes, maintenance and utilities in addition to rent – they make money by keeping whatever is left over from the upfront fee. Paul Harris, Virgin’s director of property said “Legacy will take over 530,000 square feet of office space across the UK, allowing Virgin Media to focus on adding value to the operational estate of over 650 properties.”

However, it definitely seems like bad news for many Landlords. Ian Ellis of Telereal Trillium recently confirmed at Public Property UK, “In the life of this parliament, we’ll end up with 4m sq ft of empty space to deal with. These are 1960s and 1970s secondary properties in provincial towns. In the past, we’ve been able to let these to quangos or councils. The culture has been one of: the government will renew because it always renews. Most bodies have expanded rather than shrunk. That is no longer the case. There is more surplus coming to the market, and there is shrinking demand from the public sector overall”.

Demand for existing offices will remain, helped by lower values and tenant friendly deals, but at a considerably reduced level for some years to come.  Speculative development is unlikely although there will be opportunities particularly in the best locations and for better quality space as organisations consolidate and upgrade to newer more carbon efficient space. But the reality is much older space will remain unattractive, even obsolete and alternative uses may be the best focus for these properties. At the same time it will be interesting to monitor the imminent impact of changing more stringent carbon regulation and new international accounting standards on office leases.

And when economic fortunes do improve it is still likely that global competitive pressures, new technology and new agile ways of working will focus attention on “spaceless growth” and more agile sustainable property strategies that require different types of space, procurement methods and tenure arrangements. So who will need offices ?

What are your thoughts…..

Paul Allsopp
The Agile Organisation

The age of property as a “free resource” in large organisations, owned and managed by “silos” is rapidly disappearing. In the current austere climate, it is now imperative that Occupier Departments and their management teams fully understand the value, impact and are accountable for the cost of holding and occupying space not only to their department or service but to their Organisation, or in the case of public sector the tax payer.

UK Government created a centrally run property vehicle in 2010 with the aim of centralising the ownership and management of its disparate office estate. The idea was that control of all Central Government offices would transfer from individual departments to the Government Property Unit, and these Departments will then act as client tenants, each having to request property from the portfolio based on its needs. It was anticipated that up to £5bn on annual property costs would eventually be saved using this model. However, according to a recent National Audit Office report Improving the Efficiency of Central Government Office Property real progress has been thwarted by an inability to breakdown Departmental “silo mentality” and vested interests.

Centralising ownership and management of property is an essential first step to extract value and efficiency from the government estate. Alongside this there must also be a critical focus on utilisation of and needs for office space in the future. This will require challenging, understanding, managing and matching the real occupation requirements across central government – taking account of reduced numbers, focus on workstyles, new service models, IT investment, agile ways of working and capacity for shared resources, not to mention new economic realities.

Martin Read, author of the Operational Efficiency Programme confirmed that UK Central Government uses 30% more office space per head than dictated by best practice and that: “this inefficiency needs to be addressed much more urgently. Property assets should be managed separately and user departments charged for the space they use. This would focus minds on the efficient use of resources”.

The fact that the total UK public sector estate is valued at £370 billion, with an annual running cost bill of  £25 billion and carbon emission of around 20 million tonnes (8 % of total non-domestic emissions) emphasises the scale of the problem to be addressed, but also the potential opportunities through better management and governance, understanding need, and occupier education.

Setting standards and workplace guides and Benchmarking against best practice cost and utilisation metrics are certainly useful tools in promoting better space management standards.  The OGC (now incorporated into the Government Property Unit) working in conjunction with IPD put in place a methodology based around the IPD Cost Code for benchmarking the performance of buildings across the central government estate. This is structured around a set of related key performance indicators which allow for the measurement of efficiency, effectiveness and environmental sustainability performance of individual buildings and against benchmarks from the private sector.

Many argue that benchmarking property performance monitoring is enough, perceiving internal property charging merely as ‘funny money’ – passing from one hand to another and creating unnecessary bureaucracy. Benchmark comparisons are not necessarily straightforward, often based on widely differing information – classification, measurements, property types, ages, locations sectors and users. However, organisations like IPD and the Leesman Index are leading proponents in bringing standardisation and structure to office space management and utilisation benchmarking practice.

Benchmarking is principally about defining and measuring CRE performance. Indeed, benchmarks often end up in league tables, and although such competitive spirit can be helpful in aiming high what is additionally required is something that will focus real understanding of space and property need based on commercial parameters in the space consuming teams and Departments. The argument that benchmarking is enough ignores this key need for occupier users to understand the true cost of their space acquisition and utilisation decisions, rather than hiding this under a corporate umbrella.

The Westminster Sustainable Business Forum Report on Delivering Effective Estate Management in Local Government lauded by Eric Pickles found considerable evidence of poor utilisation of public property, costing money and adding to carbon emissions. The report explained that the space most Local Authority service directorates use is generally granted to them as a “free good” and that property cost is not reflected in their budget but covered by the overall Corporate property budget. “As a consequence service directorates do not fully recognise the cost of the space they occupy and (are) not motivated to use it more efficiently”.

However the report did find and recommend examples of good practice such as Manchester City Councils introduction of centralised control over its property assets which has enabled the Council to release around 30% of its estate achieving considerable financial savings. It highlighted that the Manchester “experience shows that an important part of this process is to introduce an internal charge for the space service directorates use to make them aware of the cost of space they occupy”.

The Council initially introduced service directorate recovery charges reflecting the actual expenditure for the use of properties leased from third parties, supporting the Councils strategy of reducing leasehold commitments. The second step involved the introduction of “notional charges” to the rest of the space occupied by service directorates, which in effect become real internal rent charges.

Internal Property Charging was originally on the radar as a key Government cost control and saving initiative, but unsurprisingly it appears to be finding few friends from entrenched “Civil Service” opposition who fear losing their fiefdoms! The Departments argue that they should have free range to manage “their property” to ensure the right “fit” for them. Why should property teams force business units into buildings which do not work for them simply to meet Corporate property cost saving targets.

However, the assets are ultimately owned by the Organisation and therefore capital decisions should be taken out of this singular equation. Who takes the long-term view for the organisation, and who is looking at the bigger picture? At the heart of all successful Corporate Property Strategies are effective governance, organisation and understanding requirements of the Organisation and the component parts of its operational business. The ability to engage across the Organisation and manage and meet the optimum holistic property and space needs to meet a diverse range of Departmental requirements both in the short and long term is a central role if inefficiency and waste is to be avoided.

My experience at BT Property leads me to the conclusion that gaining Board commitment for “The Property Team” to take a strong role in “controlling” space through centralised management of property is essential for large occupier organisations. This  supported by the use of property benchmarking and more importantly some form of internal property charging is certainly the most effective direction for Public Sector to follow to sustain ongoing commitment to property optimisation and efficiency.

BT managed the ongoing downsize of its massive estate by millions of square feet and running cost savings amounting to more than £500m pa over the last two decades. This was in no small measure due to the role of “internal property charging” and “internal customer account management” which focused Departmental user attention on the cost and value of their occupation, and also the potential benefit opportunities this revealed.  It was particularly effective when the FD accounted space costs as a Departmental “below the line” P&L” (profit and loss) item.  Space was no longer treated as “free” or “wooden dollars”– it now hit their bottom line and bonuses which ensured their enduring commitment to space efficiency!

Internal charging is also an education and identification process. It will create understanding that property is not a “free resource” and it will also focus Departmental attention on “their own” cost base. At the same time it can provide impetus for corporate shared service  and “Total Place” plans as well as introducing agile working and ultimately portfolio re-alignment and rationalisation. More importantly it will also ensure that management at all levels across the Organisation understand not just the cost but the value of property and space to their business performance or service offering – something that is often hidden in centralised accounts in large Corporations.

Many Departments in large organisations still treat property as a reactive resource. Short term pressure and “operational decisions” to take new or expanded space or property often fail to see the long term implications which are not in the vision of departmental decision-makers. They often have no real responsibility for the impact of long commitment periods in leases for rent, rates and running costs including maintenance, plant replacement and service charge liabilities as well as eventual dilapidations.  Internal Property Charging can help better inform this decision-making with commercial cost transparency and awareness as well as visibility of the departmental commitment.

In some organisations external requirements may create a need for transfer charging. For example, some regulated Business Sectors recharge, particularly in multi occupied buildings to ensure full transparency to the regulator to cover potential cross subsidy, and pricing issues. In other businesses it may be necessary for tax purposes where different Group operating companies share space, while in state funded sectors there is an increasing need for visibility and accountability to the “public”.

Many large corporates either already operate or are considering introducing some kind of internal charging regime with schemes based on either actual, notional or “budget” figures and typically based on m2 units of space occupied. However, different organisations approach internal charging in different ways with different supporting mechanisms, rules and procedures to reflect their own drivers, culture and required outcomes.  The Property Director of a major Utility company commented, “we are considering moving to some simple form of recharging shortly but there is probably no one right way, it pivots off the corporate culture and how behaviours are best reinforced”.

Accenture for example, operate two charging mechanisms: one is an overhead charge for the use of their London offices which is levied at a corporate level to all the potential users of the space. The second is on a price list method of charging actual costs back to the user – for instance if someone wants to work from a Regus office in Blackpool the charges for that team are simply charged back to that team. Where the user does not attract the overhead space charge this is a reasonable mechanism for the user to pay for what they use. If they are included in the overhead charge they will end up paying twice. This effectively discourages the people who are eligible for the overhead charge from doubling up on space.

At Cisco, cost allocation is set up such that occupiers pay for the space occupied in large campus locations. For sales offices the same principle applies however the sales division also pay for the empty space in these locations. The reason for this is that the sales division drives the strategy for these locations and by making them pay for the empty space it drives more accountability.

Although “internal rent” or accommodation charging regimes can often be bolted onto or make use of existing asset management systems, it is likely to require some investment to set up. Standard Chartered Bank for example are systemising their accommodation reporting linking up their people soft system  with their space CAD system and are rolling this out globally. Once established the process can provide an ongoing indispensable strategic tool that will significantly repay the initial investment for owners occupiers or tenants of large office estates.

The BT system was not without its problems but eventually the right focus and rules engendered the desired behaviours and outcomes. Indeed, whatever the driver for internal charging, it must be recognised that there is a danger with these regimes, as some of its critics point out that organisations can become “obsessed with detailed charging, turning the process into a self feeding bureaucratic cottage industry”.

Nevertheless such regimes can if focused correctly, control direction and manipulate behaviours, as well as provide encouragement and evidence to the organisation to deliver an optimised estate. It will also support the major property cost transformation that many large organisations are currently pursuing in the search for “more with less”, both in immediate plans but particularly for medium and long term strategy. They also have the opportunity of being expanded to incorporate the next big CRE Agenda item, “internal carbon charging”.

Paul Allsopp,
The Agile Organisation
www.agileproperty.com


Article also featured as “guest post” on:
Public Sector Forums   http://www.psfbuzz.org.uk

The key role of office property is to support an organisation and its people in the activity of work. The office is not the only place of work and although it is often seen as the hub for many organisations, its role is changing as technology enables and financial strictures demand new ways of working.

Many public and private Corporations are now looking to extend agile working across their organisations to help retain key staff, create a more productive workforce and support carbon targets but particularly to make their property assets work harder by re-defining work settings and space requirements – ultimately improving the “bottom line”.

As such, assessing how agile working should be accommodated and supported forms a key element in new office building and property consolidation business cases. Although the asset is important, end users and client occupiers are increasingly looking to ensure their property supports people and their work.

Many people use the term agile working and other related terminology without understanding its true meaning. My article “What is Agile Working ?” is designed to explain the key elements and some of the confusion in its definition. But successful agile working is not something that happens instantly, and it requires considerable time and energy from many sources across the client organisation and its suppliers. Without early insightful engagement with the client to understand Workstyles, the property solution is unlikely to be what the client actually needs.

So what does “Workstyling” involve ? It is not about space planning or interior design. It is complementary to and helps inform these design activities, focusing on engagement, information gathering, assessment, understanding and interpretation of current and particularly future business needs of the client organisation. In the initial stages it is about data gathering , then working with clients to envisage and develop workstyle profiles and standards followed by development of the current “situation” overlaid with the future opportunity. Finally identifying the support, culture and investment gaps that need to be filled and the route map for the “agile journey” and benefits realisation.

The development team are often driven by standard BCO or OGC guidance on “agility ratios”, who are satisfied with limited ratios of  8:10 (desks:people). However, technology and new ways of working continue to develop, with for example Monmouthshire County Council progressing a target of 5:10 agility across its office estate – showing the potential opportunity that assessments can reveal or enable.

Workstyle assessment will better inform this agility quotient and enable better understanding of the key space components as well as related enabling activities such as IT investment, management capability and training, process and culture change requirements. More thought about the Agile Agenda – understanding the organisation, its people and their working requirements at the inception stage will pay significant future dividends.

I have undertaken “workstyling” for a number of organisations embarking on office portfolio rationalisation and in each case the project yielded 20% to 30% space savings. These workstyle exercises not only yielded significant cost reduction in realigning property requirements, but also indicated the need for different worksettings, support mechanisms and IT investment to support the organisations newly discovered workstyles to gain potentially the more significant benefits from new more productive ways of working.

In the current climate property development is only likely to be successful as a close partnership between occupier and developer. Developers and corporate advisers should therefore now be looking to help clients introduce workstyling at the earliest opportunity to deliver better, more focused property solutions.

Today the Client Occupier” is not just looking for a cost effective building asset. Value driven clients are increasingly focused on the core business investment benefits of workplace solutions which understand and enable a more capable agile and productive workforce.

Learn more about workstyles and how it can support space and portfolio rationalisation releasing office cost savings and organisational efficiency and effectiveness, by contacting:

Paul Allsopp, The Agile Organisation.
paul@agile.org.uk

 

 

Article also featured as “guest post” on Public Sector Forums:
http://www.psfbuzz.org.uk/2012/07/the-place-of-workstyle-in-office-development/

UK workers on average spend the equivalent of a day every fortnight travelling to and from work. Some 25 million commuters go to a fixed place of work every day and of these 18 million go by car, compressed into a few hours in the morning and evening rush hours.  Annual UK Office commuting alone produces 19.7 million tonnes of CO2 emission, while in the US a study showed 20,000 federal workers telecommuting just one day a week would save 2 million commuting miles and 81,600 lbs of CO2 emissions every week.

Cost pressures, performance and carbon emission targets are becoming increasingly challenging. This coupled with high workplace stress levels and extended working hours, means that organisations should question whether it is sensible for its people to spend long hours commuting to “the office” when there are now opportunities for agile, smarter and more effective ways of working.

While car travel is one of the big carbon emitters, buildings (and particularly offices) are by far the biggest  source accounting for over 40% of the total UK emission of 153 million tonnes of CO2. So reducing the daily commute in “gas guzzling” cars is one way of helping sustain the planet, but perhaps using this to also diminish the need for “carbon guzzling” underutilised office space is even more effective in reducing carbon footprint.

Implementing agile working can if managed well meet the sustainability targets of reducing both travel and the office footprint for many organisations.  This twin focus on agility and sustainability – sustainagility – can certainly reduce environmental impact as well as property related costs, but also improve service resilience,  business and individual productivity, customer focus, and create better “work life” balance and CSR (Corporate Social Responsibility).

Both Government and Unions are promoting the need for organisations to embrace sustainagility. Transport Minister Norman Baker told the Guardian newspaper, “flexible working could be encouraged to get workers to start earlier or later, while video conferencing could mean people not having to leave home at all, and office “hubs” could be set up on the edge of the commuter belt. It is crazy these days for people to go to work when work can come to people.”

TUC General Secretary Brendan Barber said: “Unnecessary long commutes are frustrating and expensive for staff, and bad for business too. Smarter working must be part of the modern economy. Staff want greater access to flexible and high quality home-working and employers need to do more to provide it”.

Many London organisations introduced agile working in anticipation of impact on staff attendance through travel disruption during the Olympic Games. At the same time UK Government told its staff as part of Operation Step Change to work from home or alternative offices or to find a different way to work to avoid congestion, but this is not seen as temporary solution. Cabinet Office Minister Francis Maude said government departments made plans to positively change 50% of commuting, business travel, deliveries and collections during the Games. This is about different ways of travelling and working, from changing routes to avoid hotspots, to walking or cycling to work instead of taking public transport, to using office space outside London. The lessons learned on different working practices and using IT more smartly will help us become a more flexible and effective workforce.

However forward thinking management aware of the sustainagility benefits have already been embracing the Agile Agenda: allowing, promoting, setting up and supporting more staff to work ‘agile’ and remotely – from home on a regular or ‘ad hoc’ basis, from ‘third places’ and on the move – utilising technology to limit the need to come into the office, working closer with customers and in the community, whilst also staggering work patterns so employees can avoid peak travel times, overall enabling more productive and sustainable working.

In the public sector, Ofsted is the largest home-based government organisation employing over 2,000 staff, of which 60% are home-based inspectors. For Ofsted the idea of homeworking is not about reducing costs, but about improving efficiency through flexibility and locating staff where the work is. Nevertheless, the move to homeworking has significantly reduced Ofsteds building footprint from 8 to 3 buildings.

In other organisations the drive to reduce carbon footprint coupled with a desire to move resources to a more variable cost base is encouraging a change towards a virtual existence. BT has 70,000 remote enabled workers which has allowed the Company to reduce its office space by 50% in the last decade. Supporting agile workers through BT’s extensive use of teleconferencing has eliminated the need for over 850,000 face to face meetings a year, saving £135m in travel related costs and 97,000 tonnes of carbon as well as gaining £103m in productivity benefits.

Unilever’s Agile Working programme made new software available for employees to hold virtual meetings through online discussion forums, document-sharing and presentation capability. This enabled its people to work more flexibly and interact with their colleagues from work, home or while travelling. By 2009  some 97,000 virtual meetings were held, and with over 40 000 employees using the technology, savings on travel costs, CO2 reductions and improved work–life balance are significant. Similarly at O2 by using Live Meeting and Office Communicator to cut out journeys, they are saving £600,000 a year on travel costs, 1272 days in travel time, and 312 tonnes in CO2.

One of the largest Local Authority investment programmes in progress, Birmingham City Councils “Working for the Future” is transforming the Council’s operational property portfolio to enable improvements in customer service delivery, offering new ways of working and enhancing the work environment for employees. The key elements are focused on enabling agile working across the Council through the introduction of new work styles, working practice guidance and new ICT technologies, as well as providing improved more sustainable workplaces.

The City Council aims to make savings of £100 million over 25 years through consolidating the council’s office portfolio. The programme is also significantly reducing the Council carbon footprint not only by creating the ability for people to work remotely – avoiding unnecessary travel, but also by reducing floor space (35% reduction in its 1 million sq ft back office estate) as well as  upgrading and trading in old inefficient space for 3 new “green” buildings on “brownfield” regeneration sites.

A recent survey by Jones Lang LaSalle indicates 83% of real estate professionals think sustainability is currently the most pressing issue facing office property and will be for the next decade. The “drivers”and enablers of change for new ways of working are therefore clearly visible and available to most organisations. So has there ever been a better time or justification to implement and gain the twin benefits of sustainagility?

Paul Allsopp, The Agile Organisation
www.agile.org.uk

Article also featured as “guest post” on:
Public Sector Forums   http://www.psfbuzz.org.uk
Public Sector Nomads  http://www.publicsectornomads.com/sustainability-driver-for-change/

 

Agile Working: more with less

As minds focus on the immediate need to do more with much less, “ slash and burn” may seem like the only option for organisations implementing drastic budget cuts. Both private and public sector are looking at ways to improve their performance with less resource. The scale and timing of required reductions certainly demands a more drastic response over and above the normal temporary fixes and limited tinkering around efficiency savings or departmental reorganisations.

A recent Deloitte survey confirms “business confidence has been hit by the UK’s return to recession, finance directors now see an almost one-in-two chance of the recession continuing to the end of 2012 or for the economy to hit a ‘triple dip’ recession”. At the same time Councils are looking at grant cuts of 26% in the period to 2014.

While slashing  may achieve the short term cost reduction goal  it may also create damage to the ability of the organisation to operate effectively – reducing standards, staff morale, productivity and corporate confidence. Following the thoughts of John McCready, Head of the Government Property Unit, “it is important we build strategies that deal with both the immediate priority of tackling the deficit, whilst safeguarding the interests of future generations.” So to meet the new stringency challenges what is needed is a plan that is both sustainable and transformational, a change from traditional to new different and agile, but at the same time produces early wins.

Many organisations are having to continue making difficult decisions on service and resources in balancing their short and long term budgets – cost bases are inflexible, revenue is reducing, markets have diminished, service requirements are changing while price inflation fluctuates. In essence there is unrelenting pressure to do more with less, not as a “one off” but on an ongoing basis. To cope with this there is clearly an underlying  and urgent need to be more responsive to rapidly changing situations. Therefore organisations must become agile and adopt a new Agile Agenda.

People are an organisations biggest liability but conversely they are also their greatest asset. Employers are wrestling with the need for agility in the workforce – the need for reductions, outsourcing and doing things differently while trying to retain or attract talent to maintain services and  improve productivity, innovation and business value.  Simultaneously employees are fearful for the present and the future – certainty of employment, disposable income, and lifestyle in general. In this situation both the organisation and its people are now much more receptive to culture change, innovation and rapid implementation of agile working.

Property is the second biggest liability on the balance sheet and while it is clearly a business asset which does give support and value to the organisation, in the current economic climate some property can equally be seen as an increasingly underutilised, inflexible carbon inefficient liability that is a drag on rapidly changing organisational needs and business effectiveness. While the property market may not currently be conducive to major disposal activity, there are opportunities which can be found if organisations re-assess and re-focus on creating agile property strategies.

In such a climate has there ever been a better time to introduce agile working ?  A recent survey of more than 250 facilities managers, conducted by Leesman research for the British Institute of Facilities Management (BIFM), suggests the time is right. It revealed that “61% of organisations are actively encouraging remote and flexible working for all staff….and increasing numbers of employers are looking to displace their teams away from expensive corporate environments”.

It would be nice if  you could get “agile working in a box”, but every organisation is different and at different levels of capability. Therefore while the agile journey may have similar ingredients the path is likely to be individual for each organisation . However what is clear is that if managed well, introducing agile working can significantly cut  fixed and variable costs, reduce environmental impact, improve productivity, resilience and customer focus as well as creating a more satisfied workforce with a better work life balance.

The holistic benefits are real and significant for those with the leadership vision and capability to progress transformation across the organisation, but for many agile working has until recently remained no more than a “cottage industry” focussed on studies, small scale pilots and projects with long gestation periods. Too often management inertia, fear of disturbing the cultural status quo and focus on single issues or other political priorities often stalled any serious introduction.

The drivers for change are now clearly in place and agile working is a major element in addressing the ongoing “more with less” dilemma. Indeed the Westminster Sustainable Business Forum report “Leaner and Greener: Delivering Effective Estate Management” confirms that  by following best practice examples of low cost,  agile working practices, UK Local Government could reduce the space it occupies by 20-30 per cent, with the potential to deliver savings in running costs of up to £7 billion a year.

These opportunities are no different but perhaps more urgently needed for survival in the private sector. So in the current changing economic climate a rapid move to deployment of agile working is both irresistible and necessary. What is delaying your organisation ?

Paul Allsopp, The Agile Organisation
www.agile.org.uk

Article featured as “guest post” on the Public Sector Nomads site – http://publicsectornomads.com

 

As the workplace accelerates into a more flexible and agile environment, so storage needs and records provision have been dragged along kicking and screaming,  forced to keep up with the new trends in ways of working and technology as well as the increasing focus on reducing space and property costs.

Storage and records management practices have often been left in the “cellular era”, when people had their own allocated desk, cocooned and enclosed by the comfort of numerous filing cabinets and cupboards – containing records and stationary largely untouched for years – further supported by trusty pedestals, housing half chewed pens, magazines and a secure area for handbags, valuables and other personal items. 

Modern images of clean, crisp, minimalist offices are appearing everywhere; but where is the storage? Is there really a paperless office !  It is true that technology has provided different storage opportunities with scanning and online digital media and these are diminishing the need for paper records. However, the reality is that organisations and people still keep records in paper format not only for ease of use and back up but also to meet legal and regulatory requirements. In addition most workplace audits reveal “non paper”, equipment and personalised or bespoke storage requirements.

So despite the increasing move towards the “paperless office” physical storage is still a 21st century requirement, and agile workstyles also mean there is a different but ongoing need for storage in “the office”. It is key for any organisation to understand what these storage requirements are and grasp the opportunities for change – what to store, where to store it, and what media to use – and then create appropriate records management and storage strategies.

Modern office space is expensive to procure and run. According to the IPD Occupiers Annual Benchmarking Service, annual running costs for Central London office space is from £646  to £969 m2 and the rest of the UK £256 to £434 m2. The footprint of a standard 4 drawer filing cabinet is 0.5 m2 , meaning the annual occupation cost for just 10 cabinets is from £4,845 to £1,288 depending on office location. Take a look at the number of cabinets in your office and from these figures it is plain to see the economic argument for ensuring your organisation has an effective storage plan.

Often the initial driver for re-assessing storage requirements is relocation or major change in the workplace.  For instance, companies that face problems reducing team filing to provide additional workstations, or new office projects such as the Severn Trent Water “Workplace Improvement Programme”. It is within such change programmes that storage standards are starting to emerge  – from 1 linear metre to 2.5 linear metres per person. Although these standards are firm guidelines, there will always be business cases in some departments for additional storage, but  it does force a well needed re-assessment and clear out to align with the new agile and austerity agendas.

The discovery stage in any storage audit is usually the most difficult.  If you ask anyone for an honest answer they might say they look in the cupboards and cabinets around them occasionally; some may even admit they do not have a clue what is in them. With so many changes to the office environment and the introduction of new office practices, staff often cling to the comfort factor that is their storage space – the more they have the more important they feel ! The stalemate between cupboard and owner needs to be broken, the cobwebs removed and the contents explored.

The biggest hurdle I face as a Records & Storage Consultant is getting people to admit they do not need as much storage as they currently have. People always seem scared to throw files away, again bringing us back to the comfort factor, when in reality, much is past its legally required retention period,  maybe duplicate records are held elsewhere in the organisation or are now recorded on other more efficient media.

To help with assessment it is essential that retention and information security policies, filing & retrieval procedures and storage guidelines are in place to assist effective management, storage, and location or disposal of records. This will not only provide staff with an understanding of appropriate requirements but also the confidence to dispose of past records, for example invoices over 7 years old.

Once having prized open a cupboard for inspection contents can be assessed for what is worthy of retention and what can be destroyed. Based on policy guidelines contents can be classed as live or archive with particular security or confidentiality rating. This will further enable assessment of storage location or media.

Where Organisations focus on a standard amount of storage space per person, this provides the opportunity for a re-evaluation of documents in terms of usage, rather than importance or a belief of need. Looking at when the document is used will help define its ideal storage location. Once this is established, a decision can be made as to whether or not it is kept near the desk or elsewhere in the office, sent to off-site storage, scanned onto a share drive or destroyed. These tough decisions on handling documents need to be fully considered when planning budgets as off-site storage/ retrieval and scanning all cost money, but, significantly much less than prime office space.

With the increase in technological capabilities it is no wonder companies are looking to create and store documents in the electronic world. If there is adequate clarity and a generic folder structure in place, is it necessary to print out emails and file them away? Why should you need to print out a 20 page report that was saved onto the shared drive for everyone to access both in and out of the office? Behaviours need to adapt to agile ways of working; just as the office environment needs to evolve towards being, as far as possible, paper-free.

Not only are organisations faced with problems of reducing team filing to a standard guideline, but staff often have personal items which cause “alternative” storage headaches. For example, the encouragement of healthy activity such as cycling to work or running at lunch times creates the problem of where to store dirty/wet or cycle clothes, as well as clean clothes to change into.  Also, in the agile office, in attempt to re-find their identity and define their space many people now choose to store personal items in the office and display them on the desk they are occupying that day.

It is amazing the number of cabinets I have opened exposing items from the weird to the wonderful, and the sentimental to the down-right disgusting. Some people do use their allocated space for work items but many others feel they need to bring their personal lives with them to work ; others unashamedly treat office storage as a dumping ground.

P1M Ltd can help your Organisation deal with the issues it is facing with the storage dilemmas in today’s increasingly agile workplaces. Understanding the requirements and opportunities is the first step to success; the second is implementing a storage solution that will support new ways of working both in and out of the new agile Workplace.

Liz Pim
Director P1M Ltd

Liz Pim is a specialist in Records, Storage and  Document management working across the UK. Liz has developed and implemented storage strategies for the BBC, Severn Trent Water,  Anadarko, Perenco, Noble Energy and Haringey Borough Council.

Working closely with Organisations, Liz and her specialised team follow a successful method to understand the current situation, what the business needs are and plan for a long term sustainable future.  For more information contact Liz on:  07816 133 762

 

The Agile Agenda

 

An agile organisation is one that can readily adapt to changing circumstances, rapidly reassess and respond to changing supply and demand situations, and innovate to challenge and change the dynamics of the market places in which they choose to work.  Agile organisations share with their partners, and integrate employees, contractors, customers and suppliers in developing knowledge and skills. They focus on value and outputs and are characterised by trust, delegation and partnership. Above all they understand that “People are the Company” and embrace this fact.

The mature, regulated, socially responsible western economies today face unregulated “tiger economies” in increasingly competitive Global market places. This coupled with the current financial crisis means that  all organisations, public and private alike,  face unprecedented tough economic pressures and challenges.  However, the pace, unpredictability and scale of change is the greatest challenge for organisations  today, and this makes the focus on corporate agility paramount. Organisations must become agile – work, think and operate in agile ways – if they are to survive and thrive in the current challenging environment.

The Agile Agenda
Views work as an activity not a place,
Focuses on performance not presenteeism,
Creates trust based relationships not hierarchies,
Embraces innovation rather than bureaucracy, and
Values people more than property.

  Paul Allsopp, The Agile Organisation.

Elements of this article reproduced by The Guardian newspaper 18th September 2010:
http://www.guardian.co.uk/money/2010/sep/18/agile-working-flexibility-team-work

Unpredictable change is rapidly becoming the defining characteristic of the current decade. Organisations that simply cut costs or make minor adjustments to static business models may well be able to realise short-term gains to sustain and survive. But in the current dynamic world the only certainty is change, where status quo is not an option. The future is a place where only the agile will survive and thrive.

Introducing “flexible working” can if managed well cut an organisations costs, reduce environmental impact, improve productivity, service resilience and customer focus, also provide a better work life balance for its people. But, for many this is now a standard and limited response that provides just enough to satisfy statutory requirements and token change. Indeed is this gesture to agility really setting the foundations for the necessary future organisational step changes required to survive and thrive – if not what comes next and when ?

What is needed is a much more radical response. Agile Working is multi dimensional –  not just limited to doing the same work in the same way at a different time or place. It incorporates time and place flexibility, but also involves doing work differently – it is transformational. In addition, organisations must look beyond current boundaries and develop more innovative and holistic outlooks not limited by the standard and piecemeal approaches employed in the last decade which in general have not been fully developed.

For example some 5000 Virgin Media employees are now free to work remotely with video calls and shared documents from a variety of locations via PCs, laptops, tablets and mobile phones, following the deployment of Cisco Quad, WebEx and Unified Comms products. “The ability of social media to actively engage audiences is proven, and we’re making the most of collaboration software to bring new ways of working to Virgin Media,” said Elisa Nardi VM Chief Transformation & People Officer. “Our people will be able to connect using video, chat and activity feeds from the office, when working from home and on the go. We’re enabling a more flexible and collaborative work environment and will continue to deliver an outstanding experience to our people and, ultimately, a more agile and engaged workforce.”

Increasingly the NHS is looking to mobile technology to improve patient care, particularly through greater use of telehealth for community care and patients to self-monitor their symptoms at home rather than take up valuable bed space in hospitals. At South Warwickshire NHS Foundation Trust (SWFT) plans are in progress to digitise its paper-based library of medical records and provide staff with mobile devices (including iPads) to access the information from the bedside in hospitals or while in the community visiting patients at home. SWFT is also proposing to use other mobile functions such as online mapping to enable district nurses to plan the best route for their patient rounds.

Duncan Robinson, Associate Director of ICT at SWFT, said these plans will change the way staff work, “whether in an acute or community setting, there is significant duplication of information. Paper can’t be in two places at once. Ultimately, flexible, simultaneous electronic access to the latest patient information will free up clinical time and improve patient care.” This agile working will improve productivity and service capability but also support the Trusts property rationalisation and sustainability objectives.

In the wider public sector, the current silo property approach must be rapidly re-focussed onto the Total Place concept. Rationalising within public bodies is fine and has benefit but not nearly enough. What is needed is a big picture approach across the whole Sector embracing economies of scale, standardisation and common use policies. The current economic state makes change imperative, and people more receptive, but time is now of the essence.

Current Total Place thinking seems to be principally focussed on consolidation and de-duplication of what exists. This has the potential to yield massive property opportunities, but the gains can be considerably improved and reach beyond property costs if there is a simultaneous re-assessment of an organisations agility, ie  underlying business models, workstyles and related requirements.  This should include a concerted drive to enable and install agile working into wider work areas and populations, many of which are currently limited by organisational and individual attitude inertia.

If organisations are to become truly agile then they should be moving to a more virtual existence and their investment should re-balance, focussing on people and technology rather than property. Technology is now providing cost effective, secure and reliable support for mobile and remote working (and learning), enabling secure online capability to create, store and access information, and communicate visually and verbally on a 24/7 basis across all boundaries.

Despite the increasing cost in time and money of business and personal travel – not to mention resilience issues caused by transport disruption – the concept of Home Working, or rather its significant implementation is still something that seems “beyond boundary” for many Organisations. Much of this inertia is about lack of understanding, fear and control brought about by continuing application of outdated management attitude, processes, practices and capabilities which have failed to keep pace with technological capability and service demands.

A recent O2 Homeworking Pilot involved 2,500 staff based at its Slough HQ working away from the office for a day in preparation for anticipated transport disruption during the Olympics. O2 described the pilot an “astonishing success”, a showcase for what could be achieved through well developed flexible working strategies – “given the right preparation and communication, conservative presenteeism-based attitudes to work can be changed, with great benefits for both managers and staff”.

The benefits of working beyond boundaries for the O2 pilot were some 2,000 hours commuting saved with staff instead spending half that time working. Some 90% of staff reported they worked as productively as normal, and 36 % claimed to have been more productive.  While the environmental impact included a 12-tonne reduction in CO² emissions, a 12 per cent decrease in O2 electricity consumption and 53 % drop in water usage.

The OGC “Working Beyond Walls” vision of Workplace 2020  clearly anticipates   “Step-change improvements  …..enabling employees to choose the best place from which to work. Homeworking is commonplace. Mobile working is popular”.  However 2020 is several years away and maybe something more expeditious will now be appropriate, but the key message is that review and improvement must be continuous – it is a journey not a “one-off once only fix”.

Whilst ICT is the key enabler in supporting successful roll out of extensive remote and distributed working, HR teams must provide the framework for a productive agile organisation. A recent Microsoft Survey identified that while 66% of managers believe flexible working increases employee productivity, only 9% of companies have a method to measure this productivity. The survey also revealed businesses are failing to communicate their policies to staff with 60% of business leaders saying flexible working polices and guidelines are available but 70% of workers are unaware of their existence.

HRs role is to embrace and gain impetus for people to work in different ways, times and places by creating the policy framework and installing “output based performance” into the organisation, sweeping away the current reliance on “presentee” systems . Implicit in this change to new ways of working is the move towards a trust based organisation – without trust agile working cannot be truly successful. It will not happen without “Up Skilling”  and engaging the workforce, as well as management coaching and mentoring to embrace a new work culture – the Agile Agenda.

An area of significance often overlooked is the role that can be played by internal property charging. Organisations would be much more receptive to consider remote working if property costs were to be wired into senior and middle manager budgets and targets rather than lost in a central or “wooden dollars” corporate account. Understanding the value of property or space as a cost to products and delivering services at an operating level will bring about more appropriate and cost effective, functional workspace and location decisions that will further drive agile working, IT investment and property rationalisation.

The basic message is that good things can grow out of the current economic crisis. Focus on driving agility into the organisation and related support mechanisms, and this will not only provide further ongoing property benefits, but more importantly produce a healthier more responsive, resilient and sustainable workforce capable of “working beyond boundaries” to meet the demanding current and future challenges.

Paul Allsopp
The Agile Organisation

In recent years both public and private sector corporate office strategy has focussed on developing a core portfolio of fewer but more effective and more sustainable properties. At the same time strategies are becoming more agile and diverse – in terms of tenure and procurement arrangements and especially in terms of space provision, occupation and utilisation. Basically organisations need to be more responsive to rapidly changing situations and property is no exception to this requirement.

This agile trend reflects both the increasing focus of aligning property with core business strategy, and grasping opportunities created by investment in new technology coupled with culture change and the recent rapid changes in business environments brought about by globalisation, sustainability, financial market collapse and recession.

Business survival and retrenchment continue to be the tactical focus for many organisations struggling with greater competition, reduced revenue streams and a cost base fixed in better economic times. Consequently property as a tangible and heavy balance sheet item is very much under the microscope in terms of value to the organisation. Portfolio requirements are being urgently re-assessed against business need. Lease end and break opportunities are providing the focus for major reduction in space costs, which in turn is resulting in space utilisation and agile working initiatives seeing renewed attention and priority. The aim is to rapidly reduce overheads and generate capital receipts without harming, hopefully improving  business productivity, customer service and ultimately profitability.

Property however tends to react like a juggernaut – it takes time to change pace and direction (indeed some may say it is out of control). Forward thinking organisations will already have review mechanisms that align property with business strategy and they will be best placed to react to changing circumstances. Knowledge of the portfolio especially lease events and changing property market opportunities are important, but knowledge and understanding of core business requirements is paramount.

Aligning property requirements to take account of Company business – mergers and acquisitions, contract events, service shifts and financing, workforce reorganisation and change – is key to effective and successful property strategy. Practical considerations and restraints in strategy execution need to be highlighted too. Understand the operational limitations, availability of funding and business benefits payback,  the required support from other areas of the business such as IT, and also remember that relocating people and operations, changing working habits and culture often meet with resistance which takes much planning, engagement and management resource.

The process of disengaging property is not always straightforward. The industry has been used to long term arrangements – 25 year leases with cumbersome rent review and dilapidation arrangements, and in government PFI arrangements. This does not generally support agile business today which looks for financial certainty and flexibility to move more of its cost base from fixed to variable with shorter commitment periods. Indeed confirming the agile trend Glen Corney of IPD Occupiers affirms that “Lease flexibility has improved gradually in recent years, so across the spectrum the ‘norm’ has changed….. average new office leases now just six years”. You may have a vision but predicting the future is difficult and therefore it is imperative to build in the ability to react and change by creating an agile property strategy .

The strategy of portfolio consolidation based on disposal and renewal through new building investment is being severely tested in the current economic climate where disposal proceeds have receded along with cheap financing and revenue streams. Therefore strategy is now focussed on “squeezing the portfolio”, optimising what exists or cannot be exited, including subletting to the market, to outsourced suppliers or to charities, “mothballing” or de-servicing space (even demolition). There is also an increasing and irresistible movement within the public sector towards sharing space and resources through initiatives like Total Place.

At the same time strategies that leave organisations with very limited flex space are now turning increasingly to agile “pay as you go” opportunities from serviced office and business centre operators to meet temporary needs for turnaround and short-term projects rather than invest in longer term leasehold commitments and fit outs. Astute organisations are also using their covenants and the current tenant biased conditions to “play the market” with Landlords and Owner Occupiers to find the most competitive deals for their requirements, whether this is related to existing leases or new.

This strategic drive to reduce office estate coupled with a desire to move resources to a more variable cost base is forcing some organisations towards a more virtual existence. BT for example have 15,000 registered Home Workers and 70,000 agile workers which has enabled a 50% reduction in office space in the last decade. While it is reported that IBM is currently considering the option of replacing some 299,000 permanent jobs by much fewer short-term contracts employed for the duration of specific projects. This “crowdsourcing” strategy would leave IBM with just 100,000 permanent positions with a significant impact on its need for supporting property and other management and business infrastructure.

However for the moment the “office” is far from dead. There is definitely a diminished need partly from reduced levels of business, and also from a greater focus on better utilisation, but principally from introducing new technology and new ways of working. Agile working initiatives for example enable people to work differently and virtually, sharing space, working remotely at home and in “third places” away from their normal office and in different time zones, changing and diminishing the core office space requirements, while creating a whole new raft of corporate support service requirements in Management, IT,  Storage and Property. At the same time the changing nature of work, culture and new generations also demand different non-traditional types and mix of spaces, locations and work settings.

Organisations are looking closely at their strategic space needs and how they procure these requirements and the services that support them, but to do this they first have to understand and assess what these are. This involves not only knowing the estate,  the property market and the supply chain but more importantly proactively getting closer to the business, understanding departmental operating plans as well as HR resourcing and change programmes, IT investment and operational initiatives. For instance, understand the property needs  from off shoring or outsourcing back office functions, insourcing work from contract wins, and introducing new ways of working ; while in the public sector understand the needs beyond the organisation into the wider field of Total Place and shared services. Understand not only the numbers but the risks and opportunities these needs will create in the costs, sourcing, value, flexibility, utilisation and servicing of the desired estate.

In the past property departments were just another corporate silo and property strategy was based around existing headcount plus arbitrary growth factors or vague assumptions because no one properly engaged with the Business. Many organisations now recognise the need for support services (like property) to work in partnership with business departments and other corporate suppliers to create holistic strategies and this has led to the rise of the Informed Client and CRM (Customer Relationship Management) roles within property teams.

Property is about people and communication not just buildings and in the world today change is perpetual which must reflect in corporate property strategy. Property teams must build relationships with partners in business – both external and internal – and they must build strategy that closely supports and matches the business need and organisational objectives. Property Strategies must be agile.

I have helped a number of organisations develop and rationalise their portfolios over the last decade. Let me show you ways to reduce your space requirements by up to 35%, or using spaceless growth contain your organisation within existing space. For more information or detailed appraisal please contact:

Paul Allsopp,
The Agile Organisation.
paul@agile.org.uk

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