Reassess your workplace needs
Prior to the inception of hybrid working, it was relatively straightforward to calculate an organization’s workplace capacity needs. But this is no longer the case.
In today’s episode we assess how organizations can determine the true capacity requirements of their workplace. The AWA Institute held a webinar last month on the topic of workplace capacity and this episode expands upon some of the issues highlighted during the webinar.
Karen speaks to Calle Sågbom, who recently joined AWA and is based in Paris. We’ll also hear from two senior associates at AWA, Nida Mehtab and Matthew Atkin, and from Tamar Draper Mahru, who’s VP of Global Real Estate and Workplace at Twilio, a San Francisco-based company that provides programmable communication tools.
If your business is one of the many reviewing the size of its workplace, this episode will provide valuable food for thought.
00:00:00 Karen Plum: Hello there. Calculating workplace capacity used to be quite straightforward, but hybrid working has kind of turned that on its head, along with so many other aspects of how, when and where we work. So how do we go about it now? Let’s find out.
00:00:17 INTRO: Welcome to AWA’s Podcast, which is all about the changing world of work and trying to figure out what’s right for each organization, because we know that every one is unique. We talk to people who have walked the walk, who’ve got the T-shirt, and who’ve learned lessons that they’re happy to share with us. I’m your host Karen Plum, and this is the DNA of work.
00:00:43 Karen Plum: At the end of 2022, the AWA Institute held a webinar about workplace capacity and the fact that we need to change our approach to how we right-size and plan our workplaces. I wanted to explore some of the topics that they discussed on the webinar, and I have a colleague with me who’s recently joined AWA, based in Paris. He’s Calle Sågbom – hi Calle.
00:01:07 Calle Sågbom: Hi Karen, thank you for having me.
00:01:09 Karen Plum: So you’ve spent the last 10 years working on workplace projects for global organizations operating in the Nordics, I believe?
00:01:17 Calle Sågbom: Yeah, that’s right. I’ve been working mostly with local organizations in how to change and transform their workplaces in the Nordics and they have been both Nordic based companies but mostly also global organizations that have a presence there.
00:01:36 Karen Plum: OK, and I know it’s a hot topic for you this one.
00:01:39 Calle Sågbom: It is, it is, and I’m really passionate about it, so thanks for having me.
00:01:44 Karen Plum: So you’re a great guest to help me explore the subject! So why don’t we kick off by going back to basics and just exploring workplace capacity – what do we mean by workplace capacity?
00:01:58 Calle Sågbom: Well, I would start in its very basic form it means simply answering the question of how much space do we need, or rather how many people do we need to accommodate, provide infrastructure to in a way, at any one point in time. And so the next stage of that is going into more detail asking what do people then do when they come to the office and then how many and what types of spaces do they need? This is sometimes called the kit of parts. And then finally, how would we then provide these spaces in the best possible way, for people to succeed and perform in their daily work, including building around any support space that would also be needed as part of the office to function and to provide a great experience.
00:02:52 Karen Plum: OK, so how have organizations typically started on this journey? So you mentioned that at its fundamental level it’s about how much space do we need – so typically how have organizations gone about calculating the amount of space?
00:03:08 Calle Sågbom: Well, for a long time I would say we’ve had a standard way of figuring out the capacity based on the headcount of users that we have. So you would start with exactly that – how many people you have working from the office and then you would define the number of desks that those people need. And so I would say before the pandemic this approach became quite established. And you might have had benchmarks like square meters per person or per desk, and in its worst form I would almost say I think this method became inverted, so that for a long time we used the same targets for all offices such as square meters per desk. And then you would apply that to your number of people and voila, you would have your space need. And so there was not much strategy to it. It was just a very basic straightforward process of doing the math and so at some point we kind of stopped asking questions and challenging our assumptions around this, how people work.
00:04:19 Karen Plum: Yeah, and I guess we did those calculations regardless of the type of work that those people were doing?
00:04:25 Calle Sågbom: Yeah, exactly.
00:04:27 Karen Plum: And of course, now we’re getting through the pandemic and so many organizations are now operating hybrid ways of working, so people spending some time in the office and some time not in the office, you can’t just say well how many people are there and how many desks do we need, because people aren’t using desks all of the time. And that really was the focus of the webinar the AWA Institute held recently, to talk about how organizations need to really adapt their approach towards calculating how much space they need. So on this episode we’re going to hear from two of our AWA Senior Associates, Nida Mehtab and Matthew Atkin, and we also hear from Tamar Draper Mahru, who’s VP of Global Real Estate and Workplace at a company called Twilio, based in San Francisco. Twilio provides programmable communication tools, so for making and receiving phone calls for sending and receiving text messages, things like that, and performing lots of communication functions using their web services. So let’s hear from our three guests about what they think about the calculation of workplace capacity.
00:05:39 Nida Mehtab: We first have to unlearn the ways we are used to thinking about how space should be calculated – it’s no longer a linear equation. Before pandemic even, I used to think that there are two sides of the capacity and strategic planning – one is the mathematical side and the other is more spatial side. But now after pandemic its truer, more than ever, that now there are four sides – that time and behavior dimension that has been added to it. And yes, some of that was already there before, but it is absolutely a moment of realization after pandemic that now we are trying to balance not only space, the math of the portfolio that we have, the behaviors, but also the time component of that and that has made it all the way more interesting. When we really started off reimagining the workplace, we have to redefine how workplaces define and the capacity management plan we are no longer in that world of desk count. I think we should be looking at what really makes up the good anatomy of a workplace in terms of work points because the work doesn’t just get done on the desk. And we have had these discussions, everyone has heard it over and over again – so why defining the capacity just by how many desks do you have? Especially when teams come together, they also don’t work just on the desk. Team needs collaboration spaces, social spaces, community spaces to get that energy and that vibe going and collaborate to yield the right results that can lead to the innovation pipeline for the industry. So that is one thing that if I would encourage everyone to think about that do not define the capacity of the workplace as desk, but the work points.
00:07:18 Matthew Atkin: What we all need to remember is that buildings are very expensive, and they use a lot of carbon. So what’s incredibly important here is to make sure we understand the purpose of why we have this building and what we’re asking this building to do. I spent many, many years where you had, you know, a person required a desk and that required a certain amount of square footage and off you go and you multiply it out and you get some collaboration space, you get, you know a Comms room and you get an office. Throw that thinking away completely throw that away! But then I think where you start now is you go to each team., you look at what each team in your organization needs, what they actually need in order to function. And then you use those different pieces of information you get from the teams to build the picture. Don’t just say because you’ve got an organization, we’re all going to work in the same way. Different teams will be doing different tasks and will work in a different way, and that’s the starting point that I would always go to now when defining what do you need to provide? And also to think very clearly about what is the purpose of what it is you are providing. To make sure what you’re providing works for the teams within your organization.
00:08:23 Tamar Draper Mahru: There is a trail of data across a number of different inputs that we have to collect and actually analyze and then create a way forward that the data is actually being honest in telling us what we should do. And I know that that seems fairly analytical, but when we couple that data with a sound story and then look at what Twilio as a company wants to be able to do, then what we arrive at is really being able to have a fairly holistic picture that says what people desire to do, how they are actually behaving, and how does that work with what Twilio wants to see out of its workforce. So I think all of it is an ecosystem of data that has to paint a picture that everyone can be behind.
00:09:10 Karen Plum: There’s lots to dig into there, Calle! Firstly, how easy is it to get clients to move away from that traditional focus on how many heads and how many desks?
00:09:23 Calle Sågbom: Well, I would say it’s definitely easier than before, because of our learning throughout the pandemic because many are putting now innovation, collaboration or social interaction at the core of their workplace strategy. So it becomes natural to start to think about what other places could we have at the office actually, that could be of value to individuals and teams. So it becomes a bit easier I think to introduce this new way of thinking about capacity and broadening the concept to something more than just the number of desks. But I would also add that what then becomes challenging is when you actually trust what people are saying and you use the data to visualize what types of spaces you might actually need. There’s still a very cautious or skeptical response to it because it is a radical change, so this change, I think might still take some time for the industry and organizations to get used to.
00:10:28 Karen Plum: Yes, and I guess you have to be fairly confident about your approach or your policy towards hybrid working because that really is going to determine how much space and how many workstations or work points you need. So if your hybrid approach hasn’t really settled down, I guess you might still be nervous and erring on the side of, oh well, perhaps we need more space than actually we do.
00:10:54 Calle Sågbom: Yeah, definitely I agree, you need to put a bit more time and effort into the first phase of thinking about how to redefine and plan your offices.
00:11:07 Karen Plum: Yeah, and I was interested – Matthew mentioned being clear about the purpose of the office and the office space and you know, the building that you occupy. And I know that you’re passionate about being clear about the purpose of the buildings too.
00:11:24 Calle Sågbom: Yeah, I guess it’s my favorite topic right now, at least. I think we’ve learned through the pandemic how important purpose really is and that without it we can’t really motivate people to come to the office or even inspire those that do come to the office. So purpose is then so connected to capacity planning that I would almost say they go hand in hand and so now that organizations are rethinking the purpose of their office, what the value of it is to their people; and while we’ve learned through the pandemic that from the perspective of a single individual or task, or a short-term goal, we actually don’t need the office – we can work from anywhere. And so that puts a whole new perspective on things and as an industry we, I think, should be more strategic and be more relevant to the business, so therefore we could be able to justify the existence of the office and prove its value. And I think this is a relevant point also from that business perspective, but also from a people perspective and sustainability, going back to what Matthew said, I think about buildings being expensive and using a lot of carbon.
00:12:51 Karen Plum: Yes, absolutely. Another interesting thing that I picked up on was – and this links to what you said about understanding the needs of the people in the organization and designing around those needs rather than just providing you know X number of desks for Y number of people. Tamar from Twilio was mentioning – do more than just doing surveys. Here’s what she said.
00:13:16 Tamar Draper Mahru: Listening has to come from more than just surveys. I think that we have surveyed our people to death at this point. And this year one of the things that my team did is that we created a project where we actually got in front of about 500 Twilions and had focus groups and had these listening sessions and they were meant to actually augment surveys that they had done before. We asked questions a little bit differently, so it was a different quality to them and in some cases that data was the same in the surveys but really where the richness occurred was in things that they don’t necessarily write down in the survey. And the conversation and picking up keywords and so if we are going to do this listening approach, let it be across a number of different formats and not just surveys, because I think that you can get more information that way.
00:14:11 Karen Plum: Do you agree Calle, that surveys don’t always provide enough information?
00:14:16 Calle Sågbom: Absolutely 100%. I think we should always try to enrich the information that we have from data to develop a strategy and gather that qualitative information through focus groups interviews, like simply talking to people. And then we can really validate our analysis and assumptions that we have done based on the data. But the fact is that you get a much deeper understanding of reasons behind the data, what people truly think, what they value. So the solution we develop will be more stronger and sustainable. And if we just do a survey, we can’t be really sure now that we’re asking the right questions. I mean, because we’re really going now into something that is a bit more novel to us with hybrid work, so we can’t really predict the full outcome, and so I think we can save ourselves a lot of trouble if we just put more effort into this first phase of the project.
00:15:22 Karen Plum: So if you’re doing it just as a tick box exercise to say, well, yes, we consulted, and this is what we found out – It’s not necessarily going to give you information that will inform the design.
00:15:33 Calle Sågbom: I agree fully, yeah, and it’s also about continuing to validate and gather more information from people, from talking to people throughout the process. That approach is very different to I would say, what was the usual approach before the pandemic.
00:15:53 Karen Plum: Another thing that they touched on in the webinar was about how to measure success. And I guess as we change the way that we plan the workplace and how we run and operate the workplace, we also need to think about what metrics to capture so that we can be confident that we are meeting our objectives, fulfilling the purpose of the workplace that we set out, right?
00:16:18 Calle Sågbom: Absolutely. As we talked about purpose before and how important it is to find your organization’s purpose tied to your specific DNA. Now that we’re thinking about and redefining really the purpose of the office, we need to work on ways to measure also the impact of what we’re doing. And many of the old measures have really become a bit outdated, as the use of space is changing so much, so we really need to go beyond the basic measures like occupancy or utilization or even sharing ratios. And so for example, how you allocate the space for different functions; and then how people relate to it – so satisfaction or even NPS about a number of things like the space, the work life balance for example. Or well-being, digital workplace, workplace experience. So those are measures that aren’t really tied to your square meters directly, so those kind of transcend the traditional corporate real estate set of KPIs and I think this kind of work is really needed.
00:17:32 Karen Plum: Yes, and much more tricky to try to measure those things. 00:17:36 Calle Sågbom Much more tricky, yeah!
00:17:37 Karen Plum: Things which are associated with individual people’s experiences and perceptions rather than, as you say, the hard metrics that you can just take out, almost take out a ruler and measure those. And the other aspect to the metrics I guess is in the service delivery side of things. You know you mentioned KPIs and obviously in the past a lot of service KPIs for things like cleaning, catering, reception services, all of those sorts of things that help the office keep running, those need to be re-evaluated and changed as well. You know no longer are we just chasing the lowest price.
00:18:18 Calle Sågbom: Exactly, yeah, this will change a lot while our user space changes and the space allocation or simply the types of spaces that we will be using in the future. And for a long time I think we did things, try to do things in an efficient way, the most efficient possible way and so now we kind of have to take a step back and redefine also those types of measures.
00:18:49 Karen Plum: Yes, and not just look for the cheapest way to do things because actually you can save a lot of money, but you can also destroy the experience that people have while you’re trying to save a few dollars or pounds or whatever.
00:19:00 Calle Sågbom: Exactly.
00:19:01 Karen Plum: So we’re going to take a quick break now so I can share a message from Brad Taylor, who’s leader of the AWA Institute, that recently ran this webinar that we’re talking about. And Brad’s message is all about the Institute’s upcoming program on Strategic Workplace Leadership.
00:19:19 MESSAGE: With an AWA certificate in Strategic Workplace Leadership, you’ll learn how the hybrid workplace experience can be used to generate a competitive advantage: discover what makes for effective workplace design; how to define hybrid working practices that attract and retain talent; and how to lead multidisciplinary strategic workplace initiatives with confidence. The program is delivered online with a certificate upon completion. To register for our 2023 program visit advanced-workplace.com/AWA-Institute.
00:19:51 Karen Plum: Welcome back. Another thing that we talked about in the webinar was the coming together of the different functions who are responsible for delivering the workplace. Functions like real estate, human resources, IT, FM, and for many years those functions have been operating perhaps in silos and have had their own objectives and metrics. But in doing so, in working in silos, we never really get a really holistic joined up approach, and it’s only when they come together and have shared goals that the magic really starts to happen. And I think that our speakers were reflecting on having those functions under a unifying role if you like. Let’s hear what Nida had to say.
00:20:42 Nida Mehtab: The fact that there is no one person in the organization or one role in the organization that is responsible for creating that holistic experience where technology, policies, people data, building data and the real estate is coming together under one function, which I call the Chief Workplace Officer role. And that’s what I know we have seen in one organization – then that goal and that vision does not get translated in the same way across various disciplines. And they definitely are not measured the same way, and I cannot emphasize enough on the fact that when teams are measured differently, they try to lean towards different ways of solving a problem, and we have to create a cohesive workplace experience, which is why having that one responsible and accountable and the one vision for that entire team has to come together.
00:21:40 Karen Plum: And Tamar also reinforced that sort of helicopter view as a key asset for people in real estate, giving a perspective that few people in the organization actually have.
00:21:54 Tamar Draper Mahru: I truly believe that real estate and workplace is at the centre of a lot of activities that happen in organizations, and we have a picture that is at a 30,000 foot level that a lot of other teams just don’t. And that is because of the way and the things that we have to do from a physical building perspective, then bringing the people to that place and then making it so that that place works for those people. And all of the inputs that go into that come from other places, but we truly have the most holistic view. And I think that that’s one of the reasons why a move in this direction towards Chief Workplace Officer that Nida described is something that, in and of itself is its own thing that can be counted on to help drive an organization forward, rather than it being a voice that is somewhat down in the organization, that then only gives you solutions.
00:22:52 Karen Plum: So while it might seem obvious to bring these functions together, clearly not everyone’s doing it. I think you need to be open to experimenting, which again is something that a lot of organizations have had to become more comfortable with during the pandemic period. But also to taking more risks, which doesn’t always sit very well in every organization’s culture.
00:23:18 Calle Sågbom: Yeah, it’s a complex question for sure. When you think about workplace holistically, what it enables, that is the productivity, performance, well-being of your people, you’re kind of putting everything related to work like work processes even, culture, leadership, even engagement under that same umbrella. So I think that’s why these efforts haven’t really worked out because there are already in place so many silent functions, processes, operations that this would disturb. So you would need someone with vision and drive and a cross functional understanding of all these things, which isn’t really easy. And so, that said, I am a huge fan of the idea to have a Chief Workplace Officer. Interestingly, I think many fully remote companies I’ve seen have adopted Chief of Remotes, which I think is a great point that we could learn from because these organizations, they aren’t tied to thinking that much about the physical space and how to operate it. So it’s less operational, but they are putting work and the employees at the core, and so that enables them to focus more on supporting teams in staying connected, how to collaborate; how to have a supportive working environment; and how to foster trust and social cohesion and so on. So a Chief Workplace Officer could be outlining this vision and creating a shared direction and then of course own and drive any initiatives that come of it. But then, you know operations could be built around that in the way that is best suitable for any organization and their DNA, and that can have many different forms, I think.
00:25:18 Karen Plum: Yes, I mean it’s all about not having the tail wagging the dog, isn’t it? You know you start off with what you’re trying to achieve and what’s the work you’re trying to deliver and then work back from that to see, what do we need in terms of space, technology policies, in order to deliver that. And that’s quite a change for a lot of organizations. I think I’d like to finish with a look to the future, to what needs to happen to make this whole landscape easier for organizations to cope with, given those challenges. We’re still working through a lot of volatility and uncertainty, and you know a lot of people would say change is the new normal, uncertainty is the new normal, all of that sort of stuff. But I guess organizations need as much flexibility, particularly in terms of space, as they can. You really can’t afford to have those big, fixed costs and infrastructure elements weighing you down if you need to make changes quickly. Market demand has meant that long leases are less acceptable than they once were, but organizations also need more flexibility in the other types of services that we mentioned earlier. Here’s what Matthew said.
00:26:36 Matthew Atkin: The sort of things that I am imagining through this is, for example, companies going into an office space, but in that office building there are facilities there which they can use on an hourly basis, so for example, for town halls or whatever. So they’re going into these spaces and within the building there are facilities which they can hire on an as needs basis. Another one is going into buildings where there are WeWork type arrangements, coworking type arrangements where if you start to, for a period of time, expand much more than you had expected to, and you do in fact need some more space, that you have the opportunity to go into this co-working arrangement and then come out of it and therefore, and that being part of the building itself which you are in, or maybe the building next door, or whatever. But those are the sorts of arrangements in terms of flexibility, signing up to long term leases for large amounts of space is going to become less and less and less popular.
00:27:32 Karen Plum: Are you seeing these sorts of solutions becoming more prevalent?
00:27:36 Calle Sågbom: Yeah, I am. I think there’s a huge demand for the flexibility that you and Matthew describe, but organizations are right now really struggling with what to do with their current space and ongoing leases. So it might be hard to see what it could look like. So it’s the transition that is going to be the hardest and so really figuring out how to do it the best way, it will take some time. But in this transition, I think flex space or co-working spaces are so incredibly great. These service providers they have been perfecting their offering throughout the pandemic, so you can clearly see them becoming more interesting for not only younger companies and start-ups, but for corporates as well. And so it’s about flexibility for the business, yes, but also about flexibility and convenience for employees. A flex space closer to where you live can help you with your you know calendar planning, avoiding commute. And so most of these flex spaces they offer an on-demand element, so there is really a lot more flexibility to it. And I think flex spaces can provide a major advantage for both organizations and landlords. You can build flexibility into your portfolio. But you can also improve the workplace experience on a building level, if you can offer your employees access to these well curated amenities and services. And so these services and spaces, they’re incredibly expensive, and so it’s becoming really hard, I think to justify keeping them as part of your corporate office space, which they really aren’t. And so, you can think about outsourcing some of these needs to someone more specialized in this exact offering. What Matthew said, I think, is really interesting, inspiring even, because within this idea, if we look at building perspective, you might have in the future, traditionally at least, office floors, but then you can also have in the same building flex space, you might have separate meeting and event space, gym or wellness spaces. And then all these work lounges, restaurants, cafes that can be shared. So these all have different purposes, and they can be either occupied by one big tenant, but they can also be shared by many, and so the actual footprint of the leased office could be, I think, significantly smaller, and so the rest could be then used and paid for on demand.
00:30:28 Karen Plum: Yeah, and I think two years, well, three years now of pandemic working, hybrid working has shown that there is a strong appetite for people to have more choices and different sort of places to work. And managers and leaders have become much more willing to have people in places where they can’t see them. So I think it’s laid the groundwork for more of these sorts of shared spaces to thrive.
00:30:54 Calle Sågbom: I agree it will take some time. But I have no doubt the use of flex space and co-working will increase in the coming years.
00:31:02 Karen Plum: Well, it’s been a fascinating discussion. Thank you for joining me to explore some of the webinar topics Calle.
00:31:09 Calle Sågbom: Thank you, Karen, it was my pleasure.
00:31:12 Karen Plum: And that’s it for this episode. I hope we’ve given you some food for thought and encouraged a different way of looking at the capacity of your workplace.
00:29:01 CLOSE: If you’d like to hear future episodes of the DNA of work, just follow or like the show. You can contact us on our website, advanced-workplace.com. Thank you so much for listening. See you next time. Goodbye!