CoreNet Global Applied Research Center
State of the Industry Report
January 2008
© CoreNet Global
Chapter 6
THE CHANGING NATURE OF WORK AND WORKPLACE
Less traditional and more flexible workplace practices were first identified by Corporate Real
Estate 2000, the body of research introduced in the 1990’s by one of CoreNet Global’s
predecessors, IDRC. It was within CRE 2000 that the concept and actual practice of
telecommuting first emerged as part of the universe of so-called ‘alternative workplace
strategies’ also benchmarked by CoRE 2010 through the Gallup Organization in our study on the
“Changing Nature of Work and the Workplace.”
The use of AWS by large companies is becoming more prevalent. In a sense, the ‘bleeding-edge’
workplace practices from only a decade ago have gone main stream.
The innovations of the 1990’s are now more standards as best practices are being adopted on a
much wider scale. But innovation, though less frequent, continues to evolve and new best
practices continue to emerge.
The duality of the AWS migration pattern solidified in 2007.
TRADTIONAL WAYS OF WORKING
THE EMERGING WAY
- Focus on place
- Performance based on “time in”
- Supervision
- Team members co-located
- Design based on status, hierarchy
- Empty space held “just in case”
- Focus on work
- Performance based on results
- Mentoring and coaching
- Virtual team, mobile individuals
- Design based on functions/tasks
- Space provided “just in time”
HP’s “Move to Mobility
Page 1
Other AWS influencing factors:
‐ Shift to Information Age, intellectual capital and knowledge workers
‐ Pressure to reduce real estate footprint and drive down occupancy costs
‐ Demand to improve efficiency, business processes and productivity
‐ Increased space utilization and decreases in the use of assigned space
‐ More flexibility to respond to change and enhance continuity
‐ Less risk by combining flexible workplaces with flexible leasing options
‐ The rising cost of energy and the resulting use of less space
‐ Creating environments to attract and retain talent, or knowledge workers
‐ Using the workplace to enhance a company’s brand image or product line
‐ The strengthening linkage of workplace and sustainable practices to talent
The enterprise’s key characteristic of success -- agility -- is being increasingly defined through
the framework of the flexible workplace. Like other drivers such as globalization, technology
and outsourcing, effective workplace strategies add value to the enterprise and to competitive
advantage.
That’s why, of all the CRE value drivers contributing to the enterprise, workplace management
stands out as the area where CRE professionals have most effectively differentiated themselves
in our mission to elevate the status of CRE to a strategic asset. CRE is in fact proving to be the
premier partner to the enterprise in the area of workplace as the use of AWS by large companies
is becoming more prevalent.
The successful launch of CoreNet Global’s Workplace Community
in 2007 reflects the rise of workplace management on the corporate
agenda and a growing number of distinct leadership opportunities for
CRE professionals.
Click here for more information.
Here’s what CoRE 2010 said would happen:
o Almost like a mirror reflecting the globally networked enterprise, “the role of the
CRE executive must become enabling work wherever it takes place – and
supporting individuals working in many different places at different times,” CoRE
2010 offered.
o A resulting tendency by companies to allocate office and other space by the
degree of use at any given time rather than by the total headcount of an office or
enterprise will mean that 25% of knowledge workers would work remotely.
o We also predicted that “tighter integration is needed between IT, HR and CRE
functions.”
Page 2
Here’s where we are today:
o Our March, 2007, study on Corporate Real Estate Workplace Trends shows
evidence of a healthy 2010 adoption rate of unassigned space, space utilization,
mobility and other AWS features.
Click here to view survey key findings.
o Our 2007 research tracks with the Gallup survey predictions and shows a remote
work adoption rate of 20%, compared to the 25% forecast for 2010
o Nearly two-thirds have stopped providing
assigned workspace to at least 10% of
their workforce
‘Working with others while in
o Typical measurements today are cost per
different times and different
workstation and cost per person housed,
places will become the
or square-foot per person, so that higherdominant work style of the
future, replacing nonlevel measures appear to be forthcoming.
interactive work, which was
o Nearly two-thirds, however, still do not
the dominant work style of
measure the effectiveness of remote
the past.’
worker support so that by 2010, more
tracking of this key productivity indicator
GSA Workplace Matters
is likely
What will it look like by 2010?
o The 2007 survey found that nearly half of CRE departments are already
supporting home working initiatives.
o This supports the point that the other half are expecting to obtain and use the
technology (video conferencing, wireless, laptops, PDA’s, broadband, etc.) to
enable remote work.
o IT has the highest involvement of support functions involved with CRE and
workplace initiatives, but much less so with HR, an IRIS-related gap for CRE to
close by 2010.
o The enterprise’s desire to reduce cost and workers’ desire for more flexibility will
make the so-called 2010 ‘social contract’ a ‘win-win’ proposition more of a
certainty in the next few years.
Page 3
Mobile work styles follow diffusion
pattern of most innovations
# Mobile
Workers
1985
Innovators
Program
Focus
Proof of
concept
2007
1995
Early
Adopters
Pilot
programs
Early
Majority
• Real estate
programs
• Lifestyle
• Cost focus
Late
Majority
Laggards
• Lifestyle
© 2007. CoreNet Global. All rights reserved.
Graph Source: Corporate Agility and Hewlett Packard: A Revolutionary New Model for Competing in a Flat World,
2007, Charles E. Grantham, et al.
Beyond 2010:
o The old views of “space entitlement” and “if I can’t see them, they aren’t
working,” are dissipating.
o Companies are increasingly “loosening of the reins” from the sheer weight of the
cost of occupying space, if not for other reasons ultimately leading to the
attainment of agility and competitive advantage.
o As technology’s steady advance enables more mobility and flexibility, companies
will have the option of not building or leasing new space.
o Workplaces practices also lend themselves to performance measurement, and
while most companies today still measure efficiency, usually in terms of cost, the
ability to measure effectiveness, mainly through revenue, satisfaction and
productivity, will one day complete the evolution toward CRE as the enterprise
source for key performance indicators (KPI’s), especially in the workplace
management context.
Page 4
Possible Outcome:
With today’s forward-thinking, results-driven companies
reinventing the whole concept of ‘going to work,’ today’s
CRE professional will wear three hats reminiscent of the
Enterprise Skill Set: real estate executive, IT strategist
and human resources manager. In regard to the latter, the
ability to proactively drive change management –
influencing the internal support for new ways of working
among company employees – will be a highly soughtafter skill set. Consider that healthy majorities of those we
surveyed in 2007 introduced or expanded desk-sharing
(73%) and stopped providing unassigned space (65%), so
there’s plenty of demand for effective change
management even now.
Related case studies
Hewlett Packard’s “Move
to Mobility” via the
Workplace Community,
Nokia’s “Mobile
Workplace Story” via the
China Chapter, GSA’s
“Workplace Matters” via
2007 Global Innovator’s
Award finalist cases, and
the Hearst Corporation’s
New York integrated
workplace transformation
via LEADER Magazine,
May 2007.)
Hewlett Packard’s Move to Mobility
Mobility is the centerpiece of HP’s recent workplace transformation initiative. The strategy is to
reduce the company’s real estate holdings, occupy fewer sites globally but increase the
effectiveness of the remaining sites. Director of Workplace Services for North America, Renée
Leach, describes HP as “a forward-looking company” that wants to get ahead of the AWS
adoption curve and take advantage of the opportunities presented by a more mobile workforce
and redesigned workplaces.
Four key goals drive the strategy:
‐ An integrated set of space, technology and service solutions providing a productive
work environment
‐ Well-utilized resources supporting various work styles
‐ A combination of workspaces to meet both independent and collaborative work
‐ Flexible, measureable programs that can change to accommodate continuous
workforce and workflow evolution
LEADER Magazine Executive Profiles, and Corporate Agility, page 21
Page 5
Workplace, Technology and the Web
Like globalization, information technology and the Worldwide Web are broad forces enabling
and often defining today’s networked enterprise model. From a CRE perspective, technology and
the Web are key reasons why the nature of work is changing, and how CRE departments are able
to optimize the globally integrated real estate portfolio and supply chain.
Information technology (IT) is a multifaceted dimension of CoreNet Global’s CoRE 2010
predictive body of research that now surrounds:
- Mobile and flexible work
- Building technology and ‘smart’ buildings
- Portfolio analytics (See chapters 14 and 15.)
Mobility, flexibility and building technology are drivers of collaborative work. This confirms
one key facet of collaboration, the CoRE 2010 expectation that “by 2006, the virtual team will be
the fundamental structure for knowledge work.”
New Environments for Working
As CoRE 2010 pointed out, technology “is an integral part of the workplace” and that “mastery
of its applications in support of work . . . is the overarching and evolving challenge for CRE.”
The use of technology to create flexible and mobile work environments is a strong point for CRE
executives. High-speed broadband, wireless, mobile technologies, social media, video
conferencing and other advances are all being effectively applied in workplace transformation
initiatives largely in partnership with the corporate IT department and service providers, as our
2007 workplace trends research showed.
The potential for corporate flexibility to increase dramatically around workplace practices is
growing every year, as is the leadership opportunity for CRE executives and their partners.
One reason: technology advanced even faster than our CoRE 2010 forecast in 2004.
-
Broadband speed and capacity are no longer major concerns.
-
Security and access have also improved greatly.
For these and other reasons, the environments for new ways of working continued to evolve in a
more pronounced way in 2007 and will continue to accelerate, especially in the context of
collaborative or team work.
Page 6
Predominant New Work Styles Seen in 2007
MOBILE WORK
A work style in which a person consistently uses multiple spaces and places in which
to accomplish their work.
DISTRIBUTED WORK
A catch-all phrase for work that is spread amongst distributed teams, in variable
locations and which occurs at varying times.
HP’s “Move to Mobility”
Here’s what CoRE 2010 said would happen:
• Network access is secure and predictable
• New technologies improve the security of information networks
Here’s where we are today:
• Secure connectivity to company data through multiple devices
• Increased network bandwidth
• Better collaboration tools
• Robust technology platforms
o Email
o Instant messaging
o Shared files
o Calendar management
o Audio and video conferencing
“Virtual presence” and other digital high definition video conferencing media connecting
individuals and teams in real time began to have significant impact in 2007. It allowed one
global technology firm to base its chief technology officer at its new R&D hub in India, for
example. Other companies have begun to notice how it reduces travel time, cost and carbon
footprint.
Beyond 2010:
According to CoreNet Global’s Workplace Community launched in 2007, the trend is already
well in place for the blended work model of the future to replace the traditional idea of “going to
the office.”
•
Its components are the company workplace, virtual teams in multiple locations, satellite
sites, telework centers, home, and “on the go.”
Page 7
•
Company workplace features already include individual work places, team work places
and community work places.
•
It’s enabled by technologies that are place centric like WLAN and mobile for voice and
data.
•
It’s also characterized by multi-generational features that address the work and
technology preferences of the three age groups now populating the workforce: Baby
boomers, Generation X and Millenial.
Ultimately, 24X7 infrastructure and tools will facilitate time management and flexibility that also
link to the War for Talent, are critical to work/life balance, and are the cause for greatest job
satisfaction and productivity.
The radical redefinition of Work
Traditional Work
Emerging Work
FOCUS
Place
Work
PERFORMANCE
BASED ON
“Face time”
Results
MANAGEMENT
TOOLS
Supervision
Mentoring & coaching
PRESENCE
Co-location
Virtual teams /
mobile individuals
SPACE PLANNING
RATIONALE
Status, hierarchy,
“just in case”
Function, task,
“just in time”
© 2007. CoreNet Global. All rights reserved.
Page 8 Possible outcome:
As outlined in CoRE 2010, collaboration has become the “dominant work style.” That means the
space for collaboration is different than the space needed for individual work. With more
collaborative and less assigned space, CRE must flexibly manage shifting workplace
configurations used by smaller employee populations on the one hand and by expanding
networks of suppliers and business process integrators on the other.
As illustrated, the impacts of mobility on the nature of business and work are already
pronounced:
Evidence of mobility/distributed work
Accenture
45% of Office and R&D
employees have a manager
not located in the same site
40% of the US workforce does
not sit in same facility as
manager
Consulting is highly mobile,
with ~90% of time working at
client site, and third places
(including home)
75% of managers have at
least one team member in
another country or time
zone
60% outside the US does not sit
in same facility as manager
Mobility for Business Practice
functions varies by
Geography (US/UK highest)
with very strong traction in
emerging markets and Asia
Development of a typical
mobile device involves
teams in 9 different office
locations
On average HP employees are
present in their “office” less than
50% of a normal work day
Distributed work business
model with globally spread
development and Systems
Integration teams supporting
nearly all engagements
Company-wide 200,000
hours of conference call
and online meeting time
every month
Mobility is upon us and
contributes to low space
utilization and a low-energy
environment
Employee Engagement scores
are positively linked to worklife balance advantages of
mobility.
© 2007. CoreNet Global. All rights reserved.
Buildings of the Future
Intelligent, or smart, buildings are another way that technology is supporting significant changes
to the nature of work. It’s also another important element in the sustainability, energy
management and carbon reduction mix.
Like other trends and practices, its adoption varies by global region.
With Europe and Australia as the earliest regional adopters of green practices, the frequency of
smart buildings is more pronounced. Long-term emphasis on the quality of lighting, air and the
work environment in general is a key reason for this. Government regulation has also been a
driver and will remain so. Canada should be regarded in the same context.
Page 9 Because of the huge stock of existing building inventory in the U.S. versus the recent emergence
of smart building development as a global trend, the
introduction of intelligent buildings will take longer. The
likelihood of increased government regulation will push the
EXAMPLES
trend but it will happen more around new instead of existing
Ministry of Science and
buildings.
Technology, Beijing
Asia, especially China, is fast becoming known for the
development of smart buildings. This fast-growth region has
the advantage of large-scale new development, and is
capitalizing on the integration of digital and other new
technologies with the built environment.
Here’s what CoRE 2010 said would happen:
• Smart buildings accelerate productivity
Here’s where we are today:
• Building architecture’s converged systems
• Service-oriented building architecture
• Features e-concierge capabilities, defined processes
that are in place, systems and devices.
• The model is now driving lighting, HVAC, elevators,
24/7 monitoring, fire and video surveillance
Telus Regional HQ,
Toronto
30 St. Mary Axe, London:
“The Gherkin”
Pacific Controls HQ, Dubai
UAE
Cisco Bangalore, India,
Campus
Matashushita HQ, Tokyo
Bank of America Tower,
New York City
This convergence toward IP-based control systems for
buildings represents a major industry shift. But it’s important that life-cycle design and cost
implications get incorporated in the design and development stages, much like life cycle cost
accounting needs to be applied in making a building ‘green’ in the planning stages, not after
construction.
It starts at the base level with the physical infrastructure of a building, then it leads to system
integration via convergence of various technologies. This incorporates unified communications,
physical security and building technologies. At the highest level, it ultimately creates service
offering options for owners and landlords to enhance the value occupiers receive.
Page 10
SMART FEATURES
OCCUPIER BENEFITS
Differentiation of the
facility
Managed services
Streamlined processes
Adaptable environments
User mobility
Cost reduction
High speed connectivity
Wireless
VPN
Unified communications
Audio and video
conferencing
Visitor management
Interactive media
Digital signage
OWNER BENEFITS
Improved space utilization
Simpler management
Reduced costs
Increased services
revenue
Click here for Buildings of the Future Presentation from the CoreNet Global Northern
California Discovery Forum, September, 2007.
Page 11