Archive for October, 2011
SHOULD YOU OWN / LEASE COMMERCIAL SPACE OR OUTSOURCE TO AN EXPERT – YOUR OFFICE AGENT INVESTIGATE AND THE ANSWERS MAY SURPRISE YOU
We sit with companies daily who feel they are adapting their work style to reflect the changes that are happening in their business world. Sometimes though their proposed innovations are not changes at all and are just the same walls with different wallpaper.
We at Your Office Agent would argue that there is too much focus on just being clever with how the same old office space solutions are repackaged from a PR perspective rather than actually implementing cutting edge Alternative Workplace Strategies to reduce the true total cost of occupancy and improve real employee work life balance. Traditional brokerage can still only think in square foot cost and open plan or individual office configuration and not outside those office walls into the virtual world that technology has introduced us to.
In this issue we investigate the age old tradition of companies taking long term leases and compare this to newer practices such as the integration of mobile working practices and the outsourcing large amounts of space to specialized managed space providers to manage. Before we start though it’s important to know that 99% of global commercial real estate is still fixed long term leases, while most company business plans are no more than 6 months. Because of this it really is no coincidence that there is currently so much sublease space available globally and that so many companies have gone out of business in this recession because of mismatched space and business needs, but this needs to change.
The reasons for this mismatch between available space and business needs is mainly due the commercial real estate industry having too much to lose to want to change, but Your Office Agent are leading the opposition to this outdated working practice. The old fashioned fixed inflexible space needle needs to move down to 70% or 80% or the companies we advise just won’t survive against their newer more nimble competitors. In addition outsourcing some of a company’s facilities is the first step to even more effective mobile working practices and every study being done now not only shows mobile workers being more efficient than their office counterparts but also that they work more hours and are happier. In summary there are so many options available to us that a poor and mismatched facilities strategy is unforgivable based on what we know today?
In our comparison we have looked at the most important elements of commercial space from a company perspective and compared a standard lease with the most basic alternative workplace strategy, which is to start to outsource offices which are less than 5,000 square feet to outside providers to manage for you. We have color coded and commented on each critical decision criteria with green being good, red being not so good and orange being worthy of a deeper dive. For example, under ongoing costs we firmly believe that one charge for all the facility costs is a great thing but a full cost comparison needs to be done between the relevant traditional space and the best outsourced provider so that the costs work. We have cost models for doing this however they are location specific.
Everything that outsourced managed space providers like Regus, ServCorp, Premier, Pacific, Regent, CARR and MWB to name a few have done in the last 10 years have got the office industry to a place where managed space is now trusted from a service perspective by the majority of small, medium and large companies and that is the leap of faith that was needed to get the outsourcing movement started. Now it’s just about making sure the cost argument makes sense.
Irrespective of these companies though, if data, mobile and video conferencing technology keeps moving as fast as it’s moving now, then the fixed inflexible traditional office space model will become obsolete as we know it and consumers will find their own solutions.
Let us know what you think and speak with any one of our agents in Your Office Agent and we will be happy to discuss openly what solution is best for your company
Marketing is an integral part of any successful business strategy. Back in the day when there was no Internet, an ad in the local newspaper and the yellow pages was enough to get the word out to customers. It is different these days. Customers go to the Internet for information on your business and if you want to attract more business your way and save on advertising expense, local search marketing is for you.
To put it simply, local search marketing is making sure your business is promoted by search engines and yellow pages on the Internet such as Google, Yahoo, Bing, Yelp, CitySearch, and Foursquare. As you can see, there are many options you can choose from but make sure to use the ones that are popular with your target customers. The form may differ with different services but the basics of each are the same.
Build a website or claim and register your business
A storefront is not enough. Create a website so that your business can be found online. Also, do not forget to claim your business in Google Places or any other sites similar to it. And, register your business in Internet local directories. These are all great ways to be easily found online.
Optimize your site with keywords to increase ranking in local searches in search engines (SEO)
Get the right keywords people use in searching your type of business and add them to your website or any other place your online business profile might be in such as review sites or online local directories. Google AdWords can help you identify relevant keywords for your business.
Encourage customer reviews
Reward customers with incentives if they leave a review online for your business. Reviews are important for other customers to know if your business or service is something they would like to pay for.
These are just a few ways to begin to tap into the important world of marketing online. With the increasing popularity of smartphones and GIS devices, it’s essential to your business’s success to be prominent in the online space. If you’re not, your competitors are and they will be found first!
Are you embracing new ways of working in your company? Doing nothing could cost you more than you think.
The term “new ways of working” is fast becoming much more than a footnote in the corporate boardroom agenda these days. It can deliver real, long-term advantages to your workplace if it is properly understood and implemented. The four principle factors to deciding on an alternative workplace strategy are below and are easily quantifiable in the short, medium and long term.
Greatly reducing Commercial real estate needs and costs – Companies have traditionally strived to have between 100 and 200 square feet per employee but, by employing alternative workplace strategies such as teleworking, smart working and outsourcing, this can be brought down to as low as 50 square foot per employee. Yes, we are talking about serious savings here.
Increasing productivity – Contrary to corporate belief, employees do not live to travel the long commute to a corporate building just so they can spend 60% of their lives in a glass box and the new generation of employees just don’t see any sense in it. Not only is the workplace full of efficiency wasting distractions but it also plays tricks on the mind, because, just by being at the workplace there is a feeling that we are already working. This is contrary to when an employee is working from home where the difference between being productive or not is much easier to measure as well as the fact that the employee is always eager to show how much more productive they can be in a comfortable environment, so they just work harder.
Boosting staff retention and satisfaction – Home / work life balance is just so difficult these days and any flexibility given to employees to help is normally greatly appreciated. A study was done recently with University leavers who said that they expected to never be in one job for more than a 2 year period. Employers now have to work much harder for that loyalty that came so naturally before.
Providing flexibility across the organization – This is key because in this economic environment companies need to be able to change direction to react to whatever is thrown at them that day. The Wall Street Journal famously said after the 2001 recession that companies who could not change direction on a dime in this economy would not survive, no matter how big they are. This was true then and is still true today. This is not a matter of workspace preference its about economic survival.
The issue is not that companies wont embrace new ways of working its just that so few brokers and consultants really understand how to analyze and implement a strategy for companies of all sizes, together with the medieval attitude that still remains in some areas of corporate America that our workplace is our castle. In reality this is just a thinly shrouded way of saying that I like to see my company name on the biggest building in town or that size really does matter.
We at Your Office Agent don’t propose that this is an all or nothing strategy and the opposite is actually true. Companies should analyze this by employee and review daily depend on the 4 principal factors we mentioned. If you are to be successful in this type of work style change then you need all the help you can get to help to guide you through the maze of opportunities and pitfalls that come hand in hand with implementing a highly effective and productive plan for your company.
New ways of working is also sometimes called “agile working” and as the ultimate agile concept of “virtuality” gains ground, creating an internal robust business case for changing the way your company works will become essential. Winning strategies at work are all about success and this success is for both employer and employee, as the concept of VWork delivers dividends in a number of areas.
A very good example of this type of success is a legal firm we are advising who feel they have a unique business model and wish to take advantage of the low cost / high impact market entry options available today. Their entry strategy is to take executive suite offices and virtual offices in 20 new cities immediately, start their advertising straight away helped by low facilities operational costs and then follow up by increasing office size by market as their operation grows and reducing space when not. Here is the genius in this case. The company become global in a 3 month period and can change their office cost in line with their business success. Smart working to reflect a new world if you ask us with virtually no upfront fit out costs and an additional saving of $300,000 in year one against the next best traditional business facility plan available to them. it also reads very nicely on the balance sheet for their investors.
We at Your Office Agent help many of our clients with change management and strongly recommend some level of agile working in every organization. This does not mean that we encourage extreme change but your company should continually be reinventing itself to both stay competitive in this new business world we live in and also show your teams that your money is being spent on them and the marketing of their product, not expensive inefficient real estate.
This is not complicated. Just seek to really understand all your options, not just the traditional ones and live by the rules of the “KISS principle” when choosing a consultant partner and implementing your policy. Everyone has to understand the why and how and you wont go wrong.
Good luck and let us know how Your Office Agent can help you.
Over the past 30 years companies all over the world have experimented with every imaginable workspace strategy. They started with some simple home working ideas and increasingly got more clever (or not) by introducing more and more ways to maximize the efficiency of their people, while trying to at least give the appearance that these staff members are happier now than at anytime before. It was difficult in the 70′s and 80′s because the workplace really was the home of our alter ego and the bigger our office the more superhero like we were perceived to be. You only need to look at the television series “Mad Men” to realize just how hard it was to implement any kind of workplace change at all at a time where your office was also your living room and your bar. Still the large consultancy companies pushed this envelope and after playing with hot desking, hub offices, more advanced home working strategies and teleworking, it was the early 90′s and the turn of Ernst and Young to come up with the latest great concept in changing the way we work. “Hoteling” was born. The concept started with hoteling as a way to maximize use of real estate assets. Instead of having permanent private offices or desks, employees had to reserve desks on a weekly, monthly or project basis. Office space became, in a sense, a commodity to be allocated through market mechanisms and was called by some as a model made for robots not humans. Then, PricewaterhouseCoopers, not to be outdone by their rivals, managed to find an even more inhumane method of managing their people and implemented “reverse hoteling”. This is where people have permanent offices, but when they go out of town on business or on vacation, they have to give them up to visitors and floaters.
To some its a step to far and to others a balance between privacy, ownership over space, and the need to use real estate assets to their maximum. All the advances in hoteling and reverse hoteling in the last 30 years have been in the name of efficiency by pushing people out of the office unless they specifically need a desk for a specific function. Fans say that combining hoteling and reverse hoteling gives you a range of desk systems to match different needs. Service hubs mark key interfaces at the corners. The old-fashioned hierarchy of enclosed space and rigidly defended territory has been swept away through a variation of use of cellular space. Privacy is there when needed, but offices can be booked out when unoccupied.
Ironically the latest phenomena in officing today is a concept that claims the same efficiencies by bring people together from different companies and industries to help each other become more efficient by adding knowledge, contacts and generally being happier in their workplace. This latest revolution is called co working and is sweeping the US and the globe right now. Co working is an alternative way of working in which independent professionals, telecommuters, and others with workplace flexibility share one working environment, rather than work remotely in separate offices or places. Coworkers don’t need to work for the same employer or even know each other to work together in a co working environment. A co working space is often a cafe-like collaboration space, gallery, or productivity-enhancing multi-functional space, but it could be an office-like setting or even someone’s home or loft. The main idea is that individual workers come together in a shared place to enjoy greater productivity and a sense of community. With over 1 billion home or mobile workers globally the advantages of this are easy to see. Beyond just creating better places to work, co working spaces are built around the idea of community-building and sustainability. Co working spaces agree to uphold the values set forth by those who developed the concept in the first place: collaboration, community, sustainability, openness, and accessibility. Perhaps the most appealing aspect of co working is the creative environment and the sense of community from like-minded professionals. Recently a small US Co working firm, with an excellent Co working model called Blank Spaces stood in front of the might of the business centre industry in Las vegas and explained to them very gently that the business centre industry were no longer the leading edge in outsourced office space, that consumers of today were demanding more than basic technology and enclosed office spaces and that unless they embraced the co working concept they would be left behind. The serviced office industry listened.
So which concept is better. In the humble opinion of the team here at Your Office Agent we believe that we are in a new world where companies go out of business because of poor future cashflow planning and mismanagement of the larger liabilities such as facility costs, so we all have a dept of duty to help our company survive and thrive as long as we are supported by that same company. By the same token we are personally overloaded with work and information, which takes so much time from our families that it is less about the big office anymore and more about giving us the efficiency to do our work well with the best work life balance possible. That means that from a selfish perspective I will support whatever work style supports this and depending on my work activities and home situation at that time I want the option to be able to combine a mix of the best work style for me. Maybe this is the time for two great opposite alternative workplace strategies to be able to co exist in harmony for the greater good, or maybe not. You decide….
I had an enlightening experience last week when I had the opportunity to speak with Chicago’s DePaul College future entrepreneurs in a co sponsored event with Regus business business centers and 10 successful and wealthy entrepreneurs. In the session we had the opportunity to speak about the importance of being an entrepreneur and all those potential barriers that will raise up in front of any aspiring self starter, whether college educated or just street smart. It was then followed up by round table sessions with the entrepreneurs where the students and aspiring entrepreneurs got the opportunity to learn from those who had already got the scrapes and bruises to show for their success and were more than happy to share their war stories with the self starters of the future. My enlightenment came, not from the fact that the students were so much more advanced in their thinking than in my day, or even that it was just so much easier to be global immediately these days, but more that they saw the Your office Agent model of a balanced workspace strategy as the required norm rather than the disruptive business model that we believed it was. If ever there was conclusive proof that the commercial real estate industry needed to reinvent itself to eliminate 99% of office space being transacted in traditional 5 year leases when business plans were never more than 6 months, this was proof that the time had finally come.
The days where new companies start small offices in home markets and expansion into another country seemed like an impossible dream seem a distant memory. Each of these budding entrepreneurs saw the world as their market and saw no reason to wait for initial success to start to expand. if a widget is to be successful in one market why wait to start it in another. These days virtual offices can be purchased for $150 a month and office space can be rented for as little as $50 a day in the best locations in the world. That combined with on demand technology and work anywhere employees mean that any city, country, continent and I am sure that we should soon include planet is or will soon be accessible in an instant. Imagine how long it took for Nokia, Motorola, GM or KPMG to become international brands and then compare that to Google, Facebook and Groupon. What is even more interesting is that the speed of growth is quickening, not slowing down and the mind boggles at what will happen next. All we know for sure is that the institutional grip on how real estate is transacted has to loosen or that decision will be forced upon them by the new end users of tomorrow. Your Office Agent look forward to being there by their side when that day comes to help provide a balanced approach between fixed office space and alternative workplace strategy so that it all revolves around the efficiency of the team and the work life balance that keeps them happy working.
This is the incredible world we now live in where global brands can be made and destroyed for cents in the dollar (or yen) and all that is needed are the right ingredients of brilliant people, an inspired idea and the audacity to take on the biggest guy in the room. With fist fighters like this coming out of every great university, college and backroom all over the world no longer can board members sit comfortably in their elegantly decorated, 90th floor boardroom purveying the spoils of past glories. Now every day is the fight of their lives and unless every organization out there makes their real estate platform as nimble, flexible and adaptable as their oncoming rivals are then they will be at a disadvantage from day one.
Ding, ding. Ladies and Gentlemen, round one….