Show Me Where You Work, I’ll Tell You Who You Are
By Charles Plaisimond
A proverb “show me your friends and I’ll tell you who you are” was one I remember my grandfather sharing with me in a letter during my first days of boarding school — what I initially understood as a simple warning to choose my friends wisely, which has over time evolved to embody a greater consideration of the influence my environments have had on my character.
From the hallowed halls of universities to corporate office spaces, we’ve seen a transformation of how we perceive and interact with real estate and the role it plays in the performance of organizations. Often a response to social and cultural trends we need to recognize the top down impact spaces can have. As context, we need to understand how in short order, we’ve moved from the industrial age to the information age and only in the last decade experienced the growing importance of big data, machine learning, and artificial intelligence to name just a few. These advancements have and will continue to impact us in a myriad of ways but through the lenses of academia, industrial, office, and retail real estate we’ll touch on how workspaces change employees.
Let’s start off with our education. Universities and college degrees have ceded way to skills-based education as we’ve witnessed by acquisitions of such companies as General Assembly by Adecco or Flatiron school by WeWork. The fragmentation of industries has created opportunities for entrepreneurs and emphasized a need for creativity in addressing varied customer niches. The education system where each grade was tailored to a commensurate level of education for the assembly line, a high school degree for the factory floor, an MBA for management so on and so forth, has ceded way to the entrepreneur executive. Schools are increasingly gravitating towards labs and spaces where students can ideate on, identify and execute on addressing specific customer needs.
Often a response to social and cultural trends we need to recognize the top down impact spaces can have
The collaborations between industry and academia in finding such alignment has paved the way to corporations delegating portions of their research and organizational development to schools. Where ideas and individuals can be sized in the secure confines of academia. What this means for the student of today is more autonomy and agency for developing their education in a practical business friendly manner.
The changes in education are no more evident than in industrial. Long viewed as warehouses and factories, this category is being impacted by automation and IOT making the skillset necessary of warehouse workers ever more advanced. Companies like Amazon face a shortage of workers, for their growing network of fulfillment centers coupled with last mile solutions such as in-store pickup which their acquisition of Whole Foods is certain to deliver. I can readily foresee the scenario where the capacity of these highly skilled fulfillment center workers goes the same way as AWS, Amazon’s cloud service, an excess of capacity itself turned into product line, if we don’t consider Amazon Mechanical Turk as such already. What this means for this worker is that increasing automation and complexity to his job will likely create a perpetual cycle of training for technologies and knowledge that change as fast as they enter the market. A journeyman of the on-demand economy, this worker will increasingly develop a fluidity in his skill set to navigate a labor market far different from the stable blue-collar existence of his parents.
Companies like WeCompany (formerly WeWork) are creating whole ecosystems to provide individuals comprehensive space needs
The office has not been spared the impact of technology. Companies like WeCompany (formerly WeWork) are creating whole ecosystems to provide individuals comprehensive space needs- from co-living (WeLive), to gyms (Rise by We), schools (WeGrow), to networking(Meetup). WeWork has positioned itself as a platform and their service (Powered by We) is such a reflection of the change. Where there exist purely financial incentives in providing companies greater flexibility to expand and contract as the market demands, the access gained to insights on a generation of workers whose ethos is fundamentally different from those of generations prior is increasingly attractive. The global network long reserved for established multinational corporations is now made accessible through companies that have recognized the nuanced view of a generation that sees work as a reflection of themselves and their values. With 70% of WeWork tenants having worked with each other, the digital tools such as their social network, embody a generation that have come to see community as an essential element of economic self-reliance.
These economic considerations also find themselves reflected in the battle for talent raging among technology companies. No better exemplified by Amazon’s recent decision to split HQ2, across two different locations DC and New York. Where location in these instances are attractive based on their proximity to strategically important cities, how such locations are leveraged are a greater indication of organizational development of strategy. The notion of campuses prevalent with companies like Facebook, Google, Apple, indicate a larger preoccupation with retention. The tech sector with a turnover of 13.2% has the highest such rate with certain industries such as the gaming industry reaching as much as 15%. Where high turnover is coupled with short tenures, companies need employ not only tactics to promote employee satisfaction but leverage economic realities.
Positioning yourself where your desired employees are produces complimentary effects. The fear communities have of decreased affordability when tech companies move in is well founded, cities such as Oakland serve as prime examples.
When you are the only employer capable of paying a competitive wage that allows one to live in proximity to your company and desirable surrounding amenities you create a barrier to entry for yourself. What this means is that offices in cities such as New York use their location two-fold, to attract talent drawn by opportunity but also lock them in through the wages only you and your peers can offer. What this can tell me about a person are their ambitions and preferences. With increasing access to work remotely those that choose to live in highly urbanized and increasingly expensive locales self-select for competitive opportunities.
Convenience used to be the anchoring factor behind the dictum “location, location, location”
Lastly, retail, the point of consumption. Convenience used to be the anchoring factor behind the dictum “location, location, location”. Yet thanks to digitization, it is often difficult to properly value real estate. In the age of e-commerce, the lines between fulfillment center and retail outlet have been blurred. Companies such as Wal-Mart offer in-store pick up and shopping experiences where the product is delivered at your doorstep rather than purchased from the store. The convenience factor we sought through proximity has given way to a convenience of utility whereby something is only useful to a shopper as it increases their experience or interaction with the brand. Shrinking retail formats and a movement from online to offline have made the calculus behind retail presence even more interesting. Where the cost of advertising online was historically more cost effective than brick and mortar, increased competition and cost of digital visibility has made storefronts more appealing. The industry with the second highest turnover, retail and consumer products has come to reflect the direct to consumer paradigm that increase the importance of the shopping experience. The person in this role has now to produce for the customer a tailored experience, host a community and manage a brand as an extension of themselves, a trait requiring a capacity for self-effacement.
Whether it be a desire to adjust to a new economic reality, the to keep up with trends to operate in a tech enabled warehouse; to seek out a tribe with which to take on the world; to find the most competitive arenas, or embody a brand, the repercussions of changes in real estate on organizational development have been the result of an evolution of technology but also attitudes.
When my grandfather set out to give me this piece of advice, I never put it into context, a man who joined the army at a young age, experienced the tumult of the cold war and ran a company in challenging times, the characteristics of his environment told me more about him than I could ever imagine from his peers.
Charles Plaisimond is a consultant at TLGG Consulting US.
