What is your CEO doing about the mounting body of evidence that shows the connection between the Workplace and your companies competitive advantage in their marketplace? What questions should he/she be asking of his/her board to ensure that your enterprise is extracting the maximum productivity from their staff and their assets? Surprisingly the answer it is not cramming more and more staff into smaller and smaller singularly ill-designed noisy and distracting open plan spaces.

In December 2016, BIFM in conjunction with Sheffield Hallam University, The Crown Estate and The Leesman Index produced The Stoddart Review. When the Review was released I covered the contents in my post; Stoddart Review-Why the Workplace Environment is Key to Productivity

The Review is designed to generate a strategic conversation amongst business leadership teams with regards to how their workplace was contributing to productivity and effectiveness and competitive advantage in their marketplaces, why the office environment is the key to workplace productivity and how the effectiveness of the workplace has largely been ignored.

In another post on Workplacefundi entitled Chief Workplace Officer – a Promotion for Facility Managers? I touched on the ten questions a CEO should be asking their board about the workplace. That post focused on the Review’s recommendation about a new C-Suite role, that of The Chief Workplace Officer.

In this post, I want to use the ten questions raised in the Review to provide a framework of how the CEO and the leadership team should go about understanding this complex issue? This together with an explanation as to why these questions are important and what a CEO should be able to expect from her workplace team.

As you might expect each question overlaps with the next, providing a template for a conversation and train of thought that will generate more joined up thinking on this crucial issue.

Overview

The debate around productivity has been a central theme in the discussion around the workplace for some years. The Leesman Index which has recently topped 250,000 respondents and is the basis for the evidential data upon which the report is founded.

As Tim Oldman the CEO of the Leesman Index was at pains to point out to me when we met in Spain earlier this year, his data does not measure productivity. Each company needs to tackle this issue on their own, after all, productivity in a publishing house will look very different to how a pharmaceutical firm might measure it.

What the Leesman Index does do through experiential-based survey techniques is to point to whether the workplace supports the productivity of the survey respondent in their particular context. This is the beauty of Oldman’s research, it is simple, and the question is universally applicable “Does your workplace enable you to work productively” Worryingly his data points to only 1 in 2 people agree!

Worryingly only 1 in 2 agree with “Does your workplace enable you to work productively” Click To Tweet

Alison Nimmo, the CEO of the Crown Estate in the UK, points out in the Review

“The research in The Stoddart Review has uncovered an explicit link between how well a workplace supports the activities that employees undertake in their role and the extent to which they say that their workplaces help them to work productively.

The Stoddart Review is a cross-industry initiative which examines these questions. It has a single purpose: to help business leaders fully understand the contribution of the workplace to organisational performance – in short, to see the workplace as a key performance lever.”

Here are the 10 Questions the CEO should be asking the board

1.   Whose responsibility is it to make sure the workplace is delivering to its full potential?

In Chief Workplace Officer – a Promotion for Facility Managers? I made a case for Facilities Managers being the go-to person to fulfil the role outlined in the Stoddart Review. This is not a viable proposition for all businesses, but what I do see in almost all clients, is a fragmented approach to workplace strategy and the reporting lines of those responsible for the workplace.

In my experience, most in-house facility management and workplace teams report into the Chief Financial Officer (CFO) or the Chief Operating Officer (COO). Perhaps unintentionally this almost guarantees a cost-driven approach where utilisation rates and cost per metre squared are the metrics by which the teams are measured.

More recently other more progressive companies are beginning to see their workplace as an organisational and competitive advantage enabler. Accordingly technology and human capital are rising to equal importance. This is facilitating a healthier change in reporting lines to HR or IT.

There is a business case for prioritising effective user experience over economy-focused space-saving strategies. It is evident from the research that reporting lines do matter, particularly when considering the link between the workplace and organisational objectives. So we need to choose the reporting lines with care. The CFO, COO and CEO produce different emphases and outcomes, some of which may produce undesirable results.

In this event, a direct reporting line into the Chief Executive Officer would be preferable. The companies that have executed on this intent and that are learning from their employees about their workplace needs are showing marked improvement in employee engagement, productivity, effectiveness and competitive advantage and perhaps the most telling, customer satisfaction.

Different FM reporting lines, produce different outcomes, & potentially undesirable results Click To Tweet

2.   Do we have a workplace strategy?

The strategy of the organisation is led and implemented by the CEO. This provides the overarching context and direction to the activities of the group. This includes its facilities management and workplace activities. The CEO should, therefore, be driving a workplace strategy that supports the overall enterprise strategy.

The workplace strategy of an organisation should be expected to improve the performance of the FM function by supporting the organisational strategy. This responsibility and support function has always been understood, but the link to corporate strategy has not yet been fully enacted.

I believe that this is due in part to the misperception that the workplace strategy should be set by somebody who works in FM. Unfortunately, there are few FM’s who have the requisite understanding of business principles, and I would rather see someone who understands the business and how the workplace supports its strategic objectives, be at the helm of setting the workplace strategy.

Facilities Management deals with the overlap between an organisations’ two most valuable assets its real estate and its people. For a workplace strategy to be enacted there needs to be an appraisal of the workplace to understand how it currently supports the activities of its occupants.

While management has the responsibility of appraising the performance of its people, who will be responsible for the measurement and appraisal of the workplace? If the workplace is second only to the cost of the people it houses, surely it is myopically short-sighted not to understand how it is performing and how it supports organisational objectives?

This appraisal need not be elaborate or expensive, but each organisation needs to know how its workplace best supports its employees and what they are charged with trying to achieve. This at its very heart is the essence of the corporate workplace strategy.

3.   Are we being presented with evidence-based information to make decisions about the workplace?

If an appraisal of the workplace is at the core of the workplace strategy as highlighted above, then measurement to date has largely been about the utilisation and efficiency of space rather than the productivity of it.

The previous reference to reporting lines is evidenced most obviously in our preoccupation with densities and number of staff per metre squared. The cost based focus of CFO and COO reporting lines has led to occupancy strategies that support higher densities at the expense of performance and productivity. This has neglected the significance of properties, and a means to connect corporations to their markets, customers and resources. Position or Place, after all, is one of the P’s in the 4 Ps Marketing Mix in E Jerome McCarthy’s 1960 book Basic Marketing: A Managerial Approach.

If we continue to measure only costs then cost is all that will be managed. It is no surprise then that this has lead to the dominance of cost focused property metrics and hence organisations will continue to exert pressure to slash costs facility costs.

What gets measured gets done, but a regime of careful planning, rigorous feedback and regular measurement will provide evidence-based information upon which the business can plan and move towards a high performing workplace.

While each company will measure productivity differently this is not an excuse to not taking the first step of at least measuring the perception of productivity in the certain knowledge that as the business develops the space in which occupies will always be a prototype that is constantly evolving.

If we continue to measure only FM costs then cost is all that will be managed Click To Tweet

4.   How do we measure our productivity?

Tim Oldman agrees that the ‘productivity’ debate within the knowledge work environment is the subject most likely to fuel vociferous discussions amongst workplace professionals. Many businesses turn to him and his company to referee this debate.

With the only one in two respondents to the Leesman Survey stating that they agree that their workplace allows them to work effectively and one in three saying that they disagree. Business leaders should be highly concerned with productivity and with performance.

There is no all-encompassing panacea for the workplace productivity debate but why with employees representing 90% of an organisation’s cost base, would businesses not be driven to invest financially & intellectually in ensuring that their working environment will optimise employee performance?

What we need is clear information on which factors will directly and positively affect measuring how effective workplace environment design and management contributes to employees performing at their peak.

5.   Does our workplace support our business goals, enabling cultural transformation, competitive advantage, innovation, agility, capital efficiency, talent optimisation and facilitation of effective leadership?

Are the workplaces you occupy, manage, or deliver, proactively supporting the roles of those they accommodate? Corporate real estate is worthless unless it supports the goals of the organisation irrespective of its actual monetary value.

Workplaces have a role to play in the execution of not only an HR strategy but its support of the company culture and values as well as the IT strategy. Facilities play a pivotal role in the execution of the core management agenda. Initiatives such as remote working, collaboration, innovation, agility, employee engagement and leadership all have facility related dimensions.

In a hypercompetitive world, the workplace is a key differentiator in the attraction, development and retention of the best candidates. According to a 2015 resources and talent planning survey by Chartered Institute for Personnel and Development (CIPD), job candidates consider physical workplace a more important factor than leadership, CSR, technology and the diversity and inclusion agenda.

According to Leesman’s research, satisfaction with the variety of different types of workspaces, which support various activities is the highest probability indicator that an employee will agree that ‘the design of their workplace enables them to work productively’. This applies in particular to scenarios where the complexity and variety of work related activities increase.

6.   Have we asked our people if the workplace makes them proud and gives them a strong sense of community?

As Workplace and Facilities Managers we have been guilty of ignoring the effect of the densification increased space utilisation has had on the productivity of employees. We have been fixated on arguing over what productivity is, and in the meantime, we have taken our eye off the ball. Rather we should be encouraging the board to challenge their team to seek answers to a broad range of questions such as

  • Do our workplaces actively support employees doing the job we employ them to do?
  • Do we understand whether different activities conducted in the organisation have differing workplace needs?
  • Do we know if our employees are proud of their workplace?
  • Do we know if the workplace is helping to create a strong sense of community?

We need to encourage feedback from our clients, customers, end-users and employees as part of our engagement strategy. This is fundamental both to employee engagement and satisfaction as well as the organisations’ continued success.

7.   Have we asked our people how the workplace could be more productive?

Few company Directors inhabit mahogany lined corridors any longer, but they also are not always in touch with what goes on, on the shop floor. We all know what assumptions are the mother off…. So despite the reticence that any board member might experience in wanting to survey their staff they need to get out of their ivory towers and understand what staff are saying about the facilities they inhabit for a third of the working day and how it supports what they are contracted to achieve.

Leesman’s data tells us that only 57% of people agree that their workplace allows them to work productively. Looked at another way 43 % of individuals who commit to a commute to work every day do so in the certain knowledge that the office actually hinders what they are trying to achieve and what their bonus may is measured on. What could be any more frustrating and demoralising? Perhaps more worryingly the most talented and hence mobile individuals feel this level of frustration most acutely.

Do our workplaces actively support employees doing the job we employ them to do? Click To Tweet

Here are examples of some of the data captured by Leesman. One doesn’t need to go to this expense and hire Tim and his team but take the example and start somewhere!

All images are courtesy of www.Leesmanindex.com

8.   Are we using technology to help our people work productively?

The growing use of technology both that provided by the company as well as the rise of BYOD (Bring Your Own Device) has lead to unprecedented tech challenges in the workplace. The way in which technology is used and workplace go hand in hand, yet in many offices, this is not only disappointing but has a direct impact on the productivity of staff as well as their resultant satisfaction.

There has been a misnomer brought on by a misunderstanding of the use of technology and the conflating of this with the open workplace. Rather than isolating workers, from their surroundings and their colleagues, the exact opposite is true. Technology is a facilitator of like-minded communities resulting in greater levels of collaboration and innovation.

The role and impact of technology have changed the options of how and where people work. A workforce with access to good technology now has the choice of whether to come to the office and that the office plays a vital role in facilitating community and cohesion

Research shows that paradoxically, businesses cannot rely on tech as a differentiator. While technology is the enabler of any workplace, it is not the differentiator between the average office and the high performing office.

The clear message is that rapid changes in technology reinforce the fact that there is no such thing as a one size fits all approach. The industry will not provide unconventional solutions on a plate. Business leaders need to create and negotiate alternative provision models that suit their needs. But with the right investment in technology and workforce, the existing institutional barriers do not have to stand in the way of agility.

Research shows that paradoxically, businesses cannot rely on tech as a differentiator Click To Tweet

9.   Are we using technology to measure how our people are using the workplace?

Attaining greater productivity is a holy grail that continues to excite but elude most company executives. Business leaders, economists and politicians are united in wanting to ensure firms get the most from their staff at the lowest possible cost. But where should they start?

In the HBR report Workspaces that move people, they recount the rescinding of remote working and the recalling to the office of all employees by Yahoo’s CEO Marissa Meyer. This was done to bring together people so as to create better decision through interaction. This is born out by the concept of collisions in the workplace.

The history of the Office has been a journey from the factory rows of the Adamesque industrial revolution to Herman Miller’s vision of the “action office” culminating in the demolition of the universally hated ‘Dilbertian’ cubicle farms to make way for the birth of open plan. All of these innovations are underpinned by the reduction in cost provided by the greater utilisation of ever increasingly expensive office space.

Over the century this journey has taken and despite the increase in the promise of productivity from technology, little or no thought has been given to the resultant falling productivity levels, caused by inappropriate workplaces.

With the rise in activity based working the picture is becoming more and more sophisticated as are the spaces being designed to support the more mobile worker. We have to ask ourselves are any of these ‘innovations’ actually improving the office experience and aiding productivity as opposed to reducing the cost.

The first step has to be to measure because if you cannot measure something, you cannot manage it and as such, you cannot improve it. Despite this, the measurement or appraisal of the office is rarely undertaken. Through studies based on motion sensors and trackers, it has been discovered that that face-to-face interactions are by far the most significant activity in an office.

But as HBR note in their report “Few companies measure whether space’s design helps or hurts performance, but they should. They have the means. The same sensors, activity trackers, smartphones, and social networks that they eagerly foist on customers to reveal their habits and behaviour can be turned inward, on employees in their work environments, to learn whether it’s true that getting engineers and salespeople talking actually works.”

10. Do we think our strategy is maximising the full commercial potential of our workplaces?

I cannot answer this question for you, but I do know that you will not be able to answer this question without having done the work required by the previous nine questions.

Conclusion

As I have highlighted throughout this article, little connection has been made about the vital contribution of the workplace as a performance inhibitor or facilitator. Considering the cost impact of the workplace, it is puzzling that there has up till now been little or no assessment done on its effect on the commercial impact of the organisation.

The Stoddart Review is an attempt to jumpstart and catalyse the conversation in the boardroom. The ten questions listed are a guide for CEO’s to begin this conversation and to be demanding answers from whoever in their organisation is responsible for the workplace.

I would really love to hear your views on these questions and their ability to create an on-going conversation, please leave your comments below.