How to Escape the Tyranny of Rising Office Rents

This may be the end of expensive office space as we know it. With the development of new communications technologies and an increasing trend toward web interaction, workers no longer need to be chained to their desk PC and fixed workplace. No longer will staff even need to be in the office other than to attend meetings.

Welcome to the new way of working – where staff use the office primarily as a meeting space, where desks are shared and booked when needed, where office space is fully utilised and the workplace is optimised for collaboration and interaction.
Staff can be free to work wherever they feel is most appropriate, at home, on the move, at assigned satellite work sites such as business centres. And CFOs can finally stop listening to constant requests for more office space even as, on any given day, the office is actually half empty.
Redefining the Future
Leading companies around the world are already moving in this direction. Standard Chartered Bank, BBC, Citigroup, Nokia and many other firms are actively implementing a new workplace vision focused on giving staff and organisations maximum flexibility and agility.
According to [email protected], a recent research report by future of work specialist Unwired, there are six key trends that are reshaping the workspace: demographics, culture, technology, sustainability, transport and property. There is also clear recognition that as organisations strive to be leaner and more agile, companies need to be aware that “work is rapidly becoming something we do, not something we go to,” the report noted.
The study goes on to predict that “work will no longer be about a building, a dumb container, to which people commute to and which ‘houses’ the corporation’s infrastructure, data, technology and files. Work is now permeable with boundaries blurring and there are better, more efficient places to house technology and data. The future is being redefined.”
The aim is to allow businesses to grow and take on new staff and capabilities without the usual approach of simply adding real estate and the associated costs.
Hot Desks
Three years ago, it became clear to the IT and real estate groups at Standard Chartered that, with the global bank growing rapidly, the demand for new office space and facilities would be huge. “From a desire to review the uncontrolled way we were acquiring new office space and resources, the company found itself asking if there was a better way of doing things,” recalls Edwin Nevis, Group Head of Banking Operations and Global Shared Services.
While the bank had a global workforce of around 9,000 people, at any given time a number of them were on leave, travelling on business or just out for meetings and sales calls. That meant that desks and workspaces were not being fully utilised.
So in 2007, driven initially by the group's CIO, the real estate, IT and shared services teams won leadership buy-in to collaborate and develop what became known as the Alternative Workspace Solutions (AWS). The vision was to create a new environment that would make available more options for working remotely and also create an office workspace that optimise space and use of resources.
Technology was a big enabler, particularly video and unified communications, plus the wave of new mobile technologies and devices. “I'm somewhat of a dinosaur by today's modern lifestyle standards,” says Nevis. “If you take youngsters today and stick them in an office for eight hours a day, I guarantee that they will fall off their chair at some point. Staff today need to be mobile and to be stimulated.”
Today, Standard Chartered offices in Chennai and Singapore have a look and feel far different from what they were before. The emphasis is on formal and informal meeting areas where people can congregate and hold discussions, “quiet zones” where individuals can gather their thoughts, telephone booths and break-out areas. Wireless network connectivity and audio-visual tools are available everywhere.
There are still permanent desks, but they are much fewer in number and assigned depending on a pre-decided hierarchy. (The receptionist, for example, may require a permanent working space; so may the CEO, accounting staff and the HR function.) For the most part, however, employees tap a comprehensive “hot-desking” scheme to use any available desk space and log into their individual desktops.
Beating China Traffic
One case study in the [email protected] research is Nokia, whose brand new Beijing campus provides a unique R&D environment in an effort to attract, retain and motivate staff. Given the Chinese capital’s infamous traffic congestion problems, there was a need to provide a better way for staff to work without having to spend excessive amounts of time travelling to and from the office, which was located on an outer ring road.
Nokia implemented a flexible work initiative to allow staff to work from home or on the road via a network of support centres operated by Regus, which rents out executive suites, office space and meeting room across the world. (Regus commissioned and sponsored the [email protected] study). “In China, we have given our sales force Regus Gold Cards as part of pilot study providing unlimited access to the Regus Beijing network,” said Colin King, Global Head of Real Estate at Nokia.
The Regus centres provide Nokia staff with a workspace and access to technology and facilities just like any other office. “Whereas the new mode of working was an exception, now the office will be seen as a last resort,” says Mark Tamburro, VP of Real Estate, Nokia. He notes in the [email protected] study that as technology has improved, so have people’s acceptance of the idea that they don’t need to be in a fixed place to perform.
It’s a workable solution, but Mark Dixon, CEO and founder of Regus, acknowledges that there are numerous challenges to overcome to reach Nokia’s level of flexibility. Culture changes at the top and at ground level may be difficult to engineer because the new thinking about work may not suit everyone or even be right for everyone.
“This new mode of working will likely work best for those that are already very mobile such as salespeople,” Dixon says. These employees do not need to be in the office other than for key meetings and when compiling reports; the rest of the time their managers want them out selling. But others are more likely to benefit from having a fixed space and environment to work in.
In theory, reporters and writers should be ideal candidates for flexi-working, but editorial teams often need to collaborate and work in close proximity to be effective. “Where there needs to be constant creativity and exchange of ideas, people are better situated [to be] with each other in person,” Dixon says. in Chennai
Standard Chartered knows this better than anyone else. Its AWS program was first piloted in Chennai, where space had become severely limited. Rather than simply acquire another building, the bank developed a work-from-home strategy and then a plan to revamp workspaces.
The Chennai project provided a critical list of lessons from which the team created some key pillars that underpin the AWS strategy. These insights revolve around the need to make a business case to support the new way of working and have a clear understanding of the implications on governance and risk management. The Chennai experiment also highlighted the need for change management, technology enablement and workstation management.
These lessons helped create a standard blueprint that can be followed by other Standard Chartered operations in evaluating office and workplace plans. “Singapore was an example that followed these principles as we had some locations bursting at the seams, all with a non-uniform look and layout in the different locations,” says Nevin. The same principles are being adopted by a new building in London and another two buildings in Africa.
Nevin says the AWS scheme will be rolled out across the group as and when situations arise where real estate and workplace changes are concerned. A task force dedicated to leading such initiatives is also being created from the original team in Chennai, with an eye to consistently apply best practices across the group. 
Video Working
At networking giant Cisco Systems, managing director for Singapore and Brunei Irving Tan estimates that he spends 60% of his working hours outside the office. He is as likely to be working from home as he is from clients’ offices or airport lounges. That portion of time he spends away from the office has been increasing steadily in the last three to five years, he notes.
Five years ago, the need to be physically present in the office was stronger, says Tan. Now, his 75-strong team recognises that they can work just as effectively from the client’s location, from a cafe or from home. “93% of my team are mobile workers,” he says. “Except for myself and my secretary, no one else has a permanent desk.”
But for this increased flexibility to work, culture change must occur at many levels, he cautions. “Managers would need to get out of the mindset that they need to see their team for eight hours a day. For a flexible work style to be successful, managers must judge employees by the results they produce. They must also believe in the professionalism of the employees.” For their part, employees need to understand the metrics they are measured against and work towards them accordingly.
The same flexi-work shift is also happening at Polycom, which develops video-conferencing solutions. “The challenge has been around a cultural shift that is required to move from a structure where you have your own little piece of turf and space in the office to a hotdesk and accepting the fact that office is a place where you only use a limited period of time in a day,” says Chris Taylor, senior regional director for ASEAN.
“This is harder in Asia as people feel their desk is an anchor in the office and the company – it provides a sense of belonging,” adds Taylor. “But productivity and return on real estate are now very important.”
The Next Wave
Cisco’s Tan says the flexi-work arrangement has allowed him to save 15-20% on real estate costs, which has helped the company cut 18% from total operating expenditures. In Singapore alone, the conversion to mobile working reduced energy consumption by 60,000 kilowatt hours a year.
The next phase for Cisco is to provide employees with business video capabilities. It is getting ready to roll out Cisco TelePresence capabilities in the homes of its senior executives. Chief Globalisation Officer Wim Elfrink was the first to have TelePresence installed in his home office in Bangalore three years ago. The company is prioritising deployments by business need, job roles and seniority.
At this point, while data can be accessed remotely, the team has few opportunities to see the people they are talking to, Tan observes. But that’s nothing new for him. “In my previous job, for a year, I didn’t meet the person who reported to me,” he says. At Cisco, Tan holds weekly meetings to promote team cohesiveness and encourages participation in the company’s corporate social responsibility projects.
Cisco believes video is the way forward for mobile working. CEO John Chambers now sends video messages. “Emails are easily misinterpreted,” says Tan. “Video can increase the recipients’ level of understanding.”
Polycom's Taylor believes that technology is now the key enabling piece that will allow this new work vision to mature into reality. “Video, unified communications, collaboration suites are all now coming into place and what people will use in this new work style will depend on each user's needs,” he says. “The days of managing by phone are over.” With luck, so will the era of ever spiralling office rents.
About the Author
Chee Sing Chan is editor-in-chief of Enteprise Innovation, a sister publication of CFO Innovation.

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