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Business Culture in the Sharing Economy

Introduction

According to the historian of science Thomas Kuhn, scientific paradigms change only at glacial speed. Even as evidence in a particular scientific field mounts to challenge existing theory, a field’s professionals, institutions, associations, and journals often acknowledge and embrace the new paradigm over the course of a generation. This is clearly happening in the field of psychology, where brain science is challenging and undermining much of what used to be orthodoxy in the discipline.

This article argues that much the same is happening with respect to our understanding of culture in business. Beginning in the early 1980s, a generation of management consultants, scholars, and practitioners established a particular point of view, or paradigm, regarding the role of culture in business decision making, employee morale and energy, and strategy execution. Much of that discussion has taken place within the pages of the Harvard Business Review, even as recently as the Jan-Feb 2018 issue. Our leading consultancies also work within the established ‘corporate culture paradigm,’ which further spreads the existing orthodoxy across companies across industries.

Today, as members of Gen X, Gen Y, and Gen Z become more central figures in large firms, and as the cultural values of the sharing economy permeate social life, consumer behavior, and organizational life, it is time to reassess what we mean by corporate culture. The broader cultural values of the sharing economy- transparency, autonomy, community, collaboration, protean careers- have yet to be factored in to what we think of when we think of culture in companies. What we see today, both within and outside of firms, is much closer to what Douglas Holt describes as ‘crowd cultures’ than it is to the myriad versions of culture types that still largely define the corporate culture paradigm.

In this article, I first outline the structure and assumptions that underlie the corporate culture paradigm, and then discuss how that paradigm is out of step with the fluid and porous nature of culture on the ground today. As public firms become increasingly oriented towards institutional investors and share-price management in the context of a significant generational shift (from Baby Boomers to Millennials), the very notion of corporate culture loses much of its valence for many of the young knowledge workers in those firms. Secondly, I provide a scientific, anthropological re-assessment of how we can better understand the role of culture in business. This requires us to look at culture as more of an exogenous dynamic to be embraced than an endogenous system to be managed.

Next, in a case example, I discuss the coworking industry, which is being increasingly embraced by large firms, as a petri dish for the emergence of a new form of multi-company business culture that reflects and embodies the values of the sharing economy. More aligned with the organic values of young knowledge workers than with the engineered culture types of large

firms, the business cultures of coworking spaces provide a new opportunity for firms to connect meaningfully with young talent in a potentially more sustainable type of employer-employee relationship.

Finally, I provide a framework for how firms can participate in and leverage the culture of the sharing economy to their advantage. The model is grounded in twenty years of consulting with small and large firms around issues of culture, leadership, and innovation. As a trained evolutionary anthropologist, I want to inject a greater level of scientific understanding into the challenge of managing culture in the sharing economy.

The Corporate Culture Paradigm

The corporate culture paradigm (CC paradigm), as it has been institutionalized in business, is premised on a specific intellectual traditional within anthropology.- interpretive anthropology. Articulated by Princeton’s Clifford Geertz in the 1970s, interpretive anthropology is a humanistic (‘non-scientific’) approach to understanding culture. Geertz’s emphasis on values, beliefs, and behaviors has had enormous resonance among the scholars and consultants behind the corporate culture paradigm- Ed Schein, Tom Peters and Bob Waterman, Jim Collins, Terrence Deal and Allan Kennedy, Dan Denison, Jon Katzenbach, Jon Kotter, etc. It is from this one intellectual tradition within anthropology that the paradigm is descended.

Interpretive anthropologists define culture as the values, beliefs, and behaviors that people share as members of a social group (country, region, ethnic group, organization, etc). This frames the default definition of corporate culture as “the way things are done around here.” In the early 1980s, when the CC paradigm was being established, it was very helpful and useful to ask business leaders to focus, as Peters and Waterman did in In Search of Excellence, on the ‘soft stuff’ of organizational life. The emphasis underscored the fact that organizations are more effective when employees feel like they are on the same page, and when they feel good about their work, their colleagues, and the company. When members of a company have a shared sense of purpose (i.e. the ‘company culture’), they tend to work more effectively in executing company strategy. Peter Drucker’s famous dictum that ‘culture eats strategy for breakfast’ is derived from this understanding. In this respect the CC paradigm has been very important.

However, from a scientific-anthropological perspective, it is worth asking: What is the relationship between what we call ‘corporate culture’ and Culture? Is it enough to simply say that culture is made up of those thoughts and feelings that bind people together? As I suggest in the article, the humanistic perspective on culture (the CC paradigm) is insufficient to the task of fully understanding the evolution of culture as it is unfolding today in the sharing economy.

The Science of Culture

Perhaps the CC paradigm is effective in describing the policies and prodecures within a particular company, but those descriptions remain disconnected from what we know about Culture in a broader sense. Interestingly, advances in brain science are contributing to the advancement of anthropology and our understanding of culture as much as they are to the discipline of psychology.

In his book, Wired For Culture, evolutionary biologist Mark Pagel explains how culture is much more than values and beliefs. Culture, according to Pagel, is the very mechanism that has enabled humans to evolve successfully as a species. Culture is a capacity wired in the human brain, and is the mechanism by which humans observe others, learn from others, mimic others, communicate with others, and share and store information within and across generations. If the capacity for culture is the hardware, then shared, stored, and passed-down information and knowledge is the software that drives the hardware. The collective store of knowledge and information, differing in different parts of the world, is what enables groups to more effectively adapt to their specific environments over time. In this respect, culture is a central driver of human evolution, more than just a collection of values and beliefs.

Culture necessarily exists at two levels at the same time. On the one hand it is a genetically wired capacity (the ultimate human capacity) that resides at the individual level in the brain. On the other hand, by its very design, it is a social capacity because it depends on interaction- observation, learning, communicating, transmitting- between people in groups. This basic fact, that culture is both individual and social at the same time, has thrown off scholars for years.

Culture’s power in the course of human evolution is its role in harnessing knowledge and ‘know how’ over the generations that empowers each successive generation with the cumulative knowledge of preceding generations. At the individual level, though, culture is equally powerful. That is, each individual is designed for culture and the related social connections and communities that actually complete the ‘individual->collective equation.’ Herein lies the human need for belonging to some form of group. What originated as a survival skill within humans has become an individual need for cultural identification. The actual social substance that fulfills the individual need is arbitrary. That culture is an individual need, and the social expression of a collection of needs, is challenging for scholars who seem to want it to be one way or another.

Culture Needs

If humans are wired for culture, and thus have an innate need for cultural identification (‘culture needs’), and the specific individual-to-social attachments are arbitrary, an interesting question arises: To what extent do the relationships, collaborations, attachments, securities, etc., that come from working in a company fulfill the ‘culture needs’ of the individuals involved? That seems to have changed over time. It is perhaps the case that from roughly 1950-1990 there was a broad alignment between mainstream cultural values and the expressed values and commitments inside specific companies. During this “golden age” of company culture, the HP Way or being an IBM Man possessed great valence in terms of fulfilling employees’ culture needs. As Jim Collins has argued in his series of books, ‘great companies’ have often been successful through time because of such cultural alignment.

Fast forward to the present, and the alignment between individuals’ culture needs and the expressed values and beliefs of many public firms is dissipating. Outside of regions such as Silicon Valley, there is a visible chasm between the values of young knowledge workers and the ‘corporate culture values’ of the companies for which they work. The golden age of corporate culture is over, and the employer-employee relationship is now mostly transactional The once vaunted and even sacred bond of corporate culture is giving way to a new sharing economy paradigm of cultural identification. The center of gravity in the sharing economy is the relationship between the individual knowledge worker and her/his primary community, not so much with their employing organization and its engineered ‘shared values and beliefs.’ As a source of income and job security, large firms remain central to the careers of young knowledge workers. At the level of culture need, however, they no longer win the hearts of minds of members of the rising generations. To understand where that cultural identification is occurring, we must now look outside the firm.

Endogenous and Exogenous Organization

The CC paradigm assumes what anthropologists call an endogenous model of culture. Endogenous social forces are internal to a specific group, they arise from inside the group, they are shared internally, and the default assumption is that the overall cultural experience that people have in the group is defined by those internally circulating practices and values.

An exogenous model of culture assumes that, more often than not, much of the content (behaviors, practices, material artifacts, values, etc) experienced inside a group is actually derived from outside the group. Whereas an endogenous model assumes that culture is insular and resistant to change, an exogenous model assumes an open, porous, and always-change environment.

For roughly a generation, around the same time that management scholars and consultants picked up the culture concept, academic anthropology has assumed that culture is largely defined by exogenous forces. Travel, trade, investment, and now the internet have opened the transmission of ideas and values to such an extent that the culture concept itself inside anthropology has lost much of its currency. In the corporate world, on the other hand, the somewhat dated and abandoned perspective of interpretive anthropology (translated as “the way things are done around here”), remains the orthodoxy. In order for firms to continue to effectively understand and leverage the power of Culture, it is important to understand the dynamics of culture today through the lens of anthropology.

The New Realities of Culture

There are five emerging realities regarding culture that need to be understood before firms can make full sense of the sharing economy (SE) paradigm and its cultural challenges.

  1. Corporate Values, Shareholder Values

The manifest (vs. espoused) values of many of our pubic firms are already oriented externally towards the institutional investment community. The core, defining value of most public firms is shareholder value in the near term, not the often humanistic-sounding statements that make up the culture talk of companies.

 

2. Gen Y and Gen Z Have Checked Out

While young knowledge workers need the reliable income associated with corporate work, public companies no longer win their hearts and minds. Private firms are often much more effective at this than are public firms. The culture needs of young knowledge workers are fulfilled externally via social networks and distributed personal and professional communities that have little to do with their employers.

3. Endogenous Systems are Slow to Change

Innovation and industry disruption are occurring through multi-party platforms and platform technologies that rely on greater trust, transparency, and collaboration than internally focused public companies are comfortable with. Sharing economy companies (Lyft, Airbnb, Uber, WeWork) have built exogenous business models that more tradition-minded companies now must compete with.

4. Business Culture is Corporate + Freelancer

It is estimated that Millennials will have between 10-15 jobs over the course of their careers. This means that, to a certain extent, they are merely passing through their current assignment (job). This is part of the oft-cited Bureau of Labor Statistics stat that by 2010 40% of the US work for will be engaged in freelance work. The two career realms- corporate and solo- are now part of the same system.

5. Coworking Spaces Host the Emerging Culture of Business

Both metaphorically and practically, the growing industry of coworking spaces is playing host to and giving birth to a business culture that is: 1.) external to companies (exogenous); 2.) made up of large firms, SME’s, startups, and freelancers; 3.) less rule-bound and thus capable of nurturing organic relationships (vs. compulsory corporate ‘bonding’); 4.) cross-company, cross-industry, and cross-disciplinary to an extent never seen before.

The Case of Coworking

As a relatively young industry (b. 2005), most people still associate coworking spaces with young freelancers and startups. This is indeed where the coworking industry originated. This is no longer the case. For example, in 2010 85% of members of coworking spaces worldwide were freelancers or employees of startups. By 2017 only 39% of coworking members were freelancers or startups. The difference over those seven years is the rapid growth in the number of large firms who now pay for employees to work from coworking spaces such as WeWork. Corporate users are now the fastest growing segment of users in the coworking industry.

A few examples from early 2018 are:

  • GE
  • Silicon Valley Bank
  • Salesforce
  • Dell
  • Unilever
  • Google
  • Microsoft
  • Samsung
  • Uber
  • Amazon
  • KPMG
  • Lyft
  • HSBC
  • Merck
  • The Guardian
  • Accenture
  • Marriott
  • Airbnb

To date, coworking has largely registered as a business opportunity for the real estate industry. Much of the narrative has centered around the phenomenal growth of WeWork, the industry leader. WeWork has raised over $4B in funding and is currently valued at around $20B. They have 295 locations in 61 cities around the world, and have largely defined the industry in the way Starbucks has the coffee shop industry.

Of the 27M square feet of office space in the world that is managed as coworking space, WeWork currently operates around a third of that (10M sq ft). Naturally, because it is a new type of sub-letting business model, coworking is fairly classified as part of the real estate industry. However, given the scale of coworking’s growth and in particular the recent growth in the number of corporate members around the world, coworking is also becoming an important site for the development of business culture in the sharing economy.

Research conducted by Emergent Research points to further growth in the industry.

2010 2017 2022
Coworking Spaces 436 14,417 30,432- Avg. annual growth rate of 16.1%
Coworking Members 100,000 1.7 million 5.1 million- Ave. annual growth rate of 24%

 

Nearly as many people cowork (1.7 million) as work at Walmart (2.1 million), the world’s largest private sector employer. According to Emergent Research, more than double the number of people will be coworking in four years (5.1 million) than there are Walmart employees. Currently, in some of the larger coworking locations with 60,000-100,000 sq ft under management, employees from hundreds of companies cowork under the same roof. Unlike their counterparts who work at their company office, these knowledge workers are participating in (and defining) a new form of business culture. This is what exogenous culture looks like in the sharing economy.

Thus far I have merely described coworking’s growth and its potential to partially reshape culture in business. However, most company employees do not (and likely will not) work out of coworking spaces, so why should we get ahead of ourselves? The more important questions, which I turn to next, are: Why are so many people attracted to coworking and why is it so successful? Why is it growing so fast? What is it that people like about it, and why do they opt to return to conduct their work there on a daily basis?

Life in Camp

Seventeen years ago, London Business School professor Nigel Nicholson published a landmark article in the Harvard Business Review entitled, “How Hardwired is Human Behavior?” Nicholson made the case that the relatively young discipline of evolutionary psychology (EP) be incorporated into mainstream management thinking. He expanded on this in his book, Managing the Human Animal. In some respects the article and book proved to be controversial. That said, EP is part of the brain science revolution, and is thus in the midst of the paradigm shift in psychology. I do not defend many of the deterministic claims of EP, but I do think that Nicholson raises important observations that are relevant to modern organizations.

Perhaps most powerful is EP’s basic premise that, as a species, humans were not designed to be sedentary cube dwellers. The legacy structure of knowledge work, where each employee is assigned to a fixed workstation where they are expected to work every day, runs counter to the human need for mobility, movement, variation, autonomy, and choice. The traditional corporate office (and systems and processes) effectively constrain people from physically and emotionally embracing their natural rhythms. Coworking environments, to the contrary, allow people to move about, work in a variety of different spaces, and work according to their own rhythms. In this regard, coworking spaces are more aligned with human nature than their industrial/corporate counterpart. Young knowledge workers of the sharing economy, who already express cultural values around autonomy, choice, flexibility, and mobility, are a natural fit for the coworking environment.

There is an important organizational dimension to this as well. As Nicholson suggests, “groups work best when they can organize around things that really matter to them and their wider community.” For young knowledge workers, multi-company coworking communities house important elements of their ‘wider communities,’ and in this their culture needs are more organically met. Autonomous corporate groups that are empowered to get on with their work in the context of other corporate groups also doing their own thing, appear to have the best of both worlds. According to Nicholson, “Groups fail in organizations because they are in organizations. They reflect the surrounding culture- rigid, formal, and highly politicized in many cases.” Freed from the mandatory culture engineering of the CC paradigm, corporate teams and individuals working in coworking spaces are allowed to co-participate in the creation of a new type of multi-company business culture that is in some respects liberating, while in other respects confusing.

Not only do coworking environments allow people to work more organically according to their own rhythms, there is also a potential productivity premium at play as well. Nicholson talks at length about the innovative potency of regional clusters such as Silicon Valley. Something like this can occur in coworking communities. Clustering “forms the basis of a tribelike agglomeration of interlocking quasi-kinship groups of people who can circulate and innovate as they move around.” Few firms have explored the potentialities for how they might leverage the innovation opportunities that might exist in the new business culture.

Getting Culture Right Today

It is unlikely that firms will shift en masse towards coworking anytime soon. However, there are cultural lessons that can be learned from coworking’s success. Coworking is, in addition to being a new leasing model in the real estate industry, a new modality of work. At its core, coworking is grounded in the emerging cultural values of the sharing economy- choice, autonomy, flexibility, mobility, community, trust, collaboration, transparency, and platform technologies. Empowering young knowledge workers to express and embrace these values in their work is key to managing culture in the sharing economy.

  • Reject ‘Culture Types’

The vast majority of culture advice and consulting is premised on the idea that there are a certain number of culture types (or colors), and that a culture survey will help you understand what ‘type’ of culture you have and how to get to the type you desire. These are the bread and butter of the CC paradigm. This is counterproductive, and reinforces an endogenous mindset about companies, their people, and how they interact with outsiders.

  • Embrace Crowd Cultures

It is important for firms to acknowledge and accept that their young knowledge workers’ culture needs are not likely to be fulfilled by HR efforts at culture building, and that is OK. This does not mean that culture is any less important for them; rather, that they have their own identifications and they will be more ‘themselves’ and more engaged if they can be surrounded by the values of their own exogenous social connections.

  • Leverage the Clustering

Whether within the firm or externally in places such as coworking spaces, allow employees to ‘cowork’ with people from other industries and companies on a regular basis. If you put some structure around this and encourage employees to look for cross-industry or cross-company collaboration, new product, service, or business model innovations might develop more organically and inexpensively than is currently the case.

  • Love the 40%

Current low levels of unemployment are partly a function of a growing economy and partly a function of the fact that many knowledge workers have opted out of traditional corporate employment and work for themselves. This means that a large talent pool is out there that does not want (expensive) benefits, but wants to work with you on a specific project. If you think of your cultural footprint exogenously and inclusively, you can attract top talent more cost effectively.

  • Workspace Matters

Enabling knowledge workers to work according to their own rhythms, in such a way to get their best work, is not rocket science. Too often firms equate ‘workspace’ with exquisitely expensive designs and furniture. Legacy thinking and costs make the shift to coworking-like work environments cost prohibitive. Young knowledge workers want flexibility, collaboration, and productivity more than they want monuments to design. Empower young talent to bring their own design sense in-house.

The institutional inertia of the corporate culture paradigm remains strong. For many managers and consultants, the sharing economy and its emergent cultural values are still pesky upstarts. The very notion of ‘unicorn companies’ implies that some still believe that a real paradigm shift is unlikely if not impossible, and that sometime soon the bubble will burst and the economy will reset to normal Such is the nature of paradigm shifts and the resistance to them. Because of this, I do not anticipate the currency of the corporate culture paradigm fading very quickly. However, if you step into a WeWork location in the middle of a busy weekday and see thousands of knowledge workers from hundreds of companies coworking together, it begs the question: What is the culture of this place? No ‘culture types’ will be found, just culture-bearing people working together.

 


This article authored by OpenWork Agency Partner, Drew Jones, PhD.

OpenWork Partner, David Walker- panelist at 18HX

Please join PDR for 18HX— Eighteen Hacks

Enjoy craft drinks, small bites and inspiring conversation among friends.

18HX brings together a panel of six expert “hackers” who traffic in Cultural Capital. Each of our guests will reveal how they are actively reprogramming the realms of Hospitality, Social Impact, Brand Identity, Data Science, Real Estate and Workplace Engineering.

Come learn eighteen inspirational practices to carry with you into 2018.

Hacker:  noun  hack·er  \ ˈha-kər \ A disrupter of legacy networks. An expert at programming and solving problems; who cleverly exposes the weaknesses of a system and improvises solutions that rattle convention.

PANELISTS

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Brian Carrico
Co-Founder of The Guild
Brian Carrico is the Co-Founder of The Guild, an Austin-based hospitality company. The Guild is a technology-enabled hospitality company with a design focus that relies on a dedicated and motivated team to deliver amazing guest experiences. Brian believes that the company will only achieve its lofty goals by creating a rewarding workplace with a team focused on guest service.

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Royal Frasier
Notley Ventures Director of Communications & Founder of RAD Office Tour
Royal is the Co-Founder & Executive Director of RAD Office Tour, Austin’s first Workplace Design Tour taking place in May 2017. Her background combines community impact, marketing and PR communications. Currently she consults on communication strategies for architecture, design and technology companies such as NBBJ, argodesign, CognitiveScale and the University of Texas for Integrated Design. Royal also leads communications for Austin Design Week.

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Julie Savasky
Associate Partner at Pentagram Design
Julie Savasky is an Austin-based graphic designer. After 22 years at international design consultancy, Pentagram, she now operates her own design practice which focuses on solving client’s communication problems through storytelling, brand awareness and culture. Her body of work includes editorial design, identity, strategy, web design and environmental graphics and has won awards from Graphis, Communication Arts, Society of Publication Designers, and Texas Institute of Letters among others. Julie                                                                holds a Bachelor of Arts degree from Southwestern University.

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Annahita Varahrami
Program Manager at IBM Cloud Garage
Annahita joined IBM in 2013 after an 8-year career as a clinical social worker in nonprofit and private practice. She brings critical thinking coupled with human- centered approaches to develop programs focused on cultivating rich, compassionate culture within IBM Cloud Garages worldwide. Annahita’s ability to connect with people has allowed her to successfully lead client-focused Garage initiatives, driving new business and opening new locations with innovation as a priority.

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David Walker
Partner at OpenWork Agency
David Walker is a Partner at OpenWork Agency, a global workplace strategy consultancy with roots in the coworking industry.  David brings nearly a decade of experience working in the coworking industry. Prior to co-founding OpenWork Agency, David co-founded and led operations at Conjunctured (2008-2014), one of the original coworking communities in the world. Conjunctured received global acclaim for being a unique community and innovative workspace alternative.

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Jackie Wheat
Principal + Director of Design at PDR
Jackie Wheat, is the Design Director at PDR and leads both the Interior Design and Visual Communication teams.  Her teams transform program and strategy into design solutions and help clients identify their brand while creatively infusing it into their workplace.  Jackie has a passion for thoughtful placemaking that connects people and expresses the client’s vision, identity and culture. The results are tailored, sensorial environments that both inspire and leave a lasting impression.


Kindly RSVP here by February 8, 2018.

See you soon!

Thursday, February 22, 5:30 pm – 7:30 pm
PRINTpress 1209 E. Cesar Chavez St., Austin, Texas 78702

Most Interesting Coworking-Related Articles of 2018 (January)

As part of being in the coworking industry since its inception, operating coworking spaces, consulting with coworking operators and real estate developers, participating in (and running) global coworking and workspace conferences, it’s our job at OpenWork to stay-in-the-know regarding innovations (and disruptions) in our industry.

We share a lot on social media about coworking, the future of work, and innovation. You can follow OpenWork Agency on LinkedIn or @OpenWorkAgency on Twitter.

With so much going on in the industry, it’s easy to miss some of the most interesting happenings, so we wanted to take a little bit of time and curate a quick list of some of the more interesting/thought-provoking articles that came across our newsfeed in the last month.

OWA’s Recommended Coworking Articles of January 2018

8 Things You Should Know About Coworking Space in 2018

A transformative change has taken place in recent years – with the concept of coworking evolving from an alternative to a traditional office lease for start-ups and freelancers to becoming an integral component of bona fide corporate real estate portfolios. Here are eight key concepts for 2018 and beyond. (Published: 01/18/2018)

California Resorts Offer Skiing by ‘Subscription’

The idea for the membership began early on when looking at the people taking advantage of the coworking spaces. “People aren’t coming to Mammoth just to work,” said Jung. “They’re coming for a specific reason–to ski, bike, hike, and do all the things Mammoth is famous for. We wanted to create … (Published: 01/18/2018)

6 office improvements to promote employee mental health in 2018

Efforts to reap the benefits of the cubicle farm and the open office floor plan without the downsides mean that 2018 will be the year that employers attempt to find balance when it comes to office space. To do so, they’ll likely focus on a few other key areas to improve employee productivity, creativity and mental health… (Published: 01/19/2018)

 

Health care leader breaks ground on co-working space in Northeast Heights

Albuquerque will soon have a new elder care-focused co-working space – the first of its kind locally, according to its founder. Mary Martinez broke ground on the Isabel Gallegos Center for Aging on Wednesday afternoon, putting her closer to her goal of helping New Mexico’s aging population in every … (Published: 01/04/2018)

Why prioritizing human experience in the workplace is key to shared future success

The World Economic Forum’s agenda for its annual meeting in Davos this month is ‘Creating a Shared Future in a Fractured World’. January is a time for fresh thinking and I’ve been giving some thought to the words ‘shared future’ as the resounding note of optimism in that theme. In particular, I have been reflecting on how that applies to the changing concept of work. (Published: 01/18/2018)

Mumbai, Jan 7 The momentum gained by co-working spaces in 2017 is likely to continue this year as well as large corporates look at consolidating businesses to maximise their productivity, says experts. Co-working, also known as alternative workspaces, is recognised as a style of working as well as… (Published: 01/07/2018)

Micro-leasing deals on prebuilt offices raise occupancy at 1 World Trade Center

the standard leasing model is disrupting/ innovating. (Published: 01/17/2018)

The Changing Value Proposition Of Coworking: A Q&A With Steve King

Allwork spoke with King about coworking going mainstream, the growing value of professional networks and how reducing loneliness is emerging as a core value proposition of coworking. Allwork.Space: With regards to the shared workspace industry, are there trends you’re following that other people may … (Published: 01/11/2018)

That’s all for now… Cheers to a great start to 2018- Looking forward to what February has in store!!


This article was written by David Walker, Founding Partner at OpenWork Agency. Connect with David on LinkedIn to follow his posts about coworking, future of work, and innovation. 

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Company Culture in the Age of Coworking

In my current book project (tentatively called “After Corporate Culture”), I am trying to understand the long-term impact that fluid and mobile working is having on company culture. For quite some time, of course, many firms have allowed, either officially or unofficially, employees to work from home or off-site at least some of the time. However, as more and more firms embrace fully-alternative workplace solutions such as coworking, something new is happening.

The project starts with a couple of simple questions:

  1. What happens to a sense of company community, shared identity, and common practices among employees of companies who no longer work at the company (i.e. on the company campus)? Disconnected from the day to day interactions, informal communications and routines, to what extent does a connection to a common culture begin to dissipate?
  2. The corollary and equally important questions is: How do the interactions and experiences of corporate coworkers (defined as employees of firms who actually work on a daily basis at a coworking space such as WeWork rather than at the ‘company’ office) reflect back on and impact the mother-ship culture back at HQ?

Only long-term research and observation will be able to answer these questions, but I think the questions are worth asking. But why?

Earnings & Omelettes

The first and quick answer is that, at last count, ~15% of the S&P 500 companies now have some number of employees who work out of coworking spaces. That is, coworking is no longer just a cool thing for kids and startups. It is for grown-ups too, and it is happening in real numbers.

The second, and more complicated answer is that by scrambling people who work for different firms into work omelettes, there is fresh potential to perhaps alter the DNA of the companies whose employees are participating in the mashup. To the extent that, sadly, so many public companies have their people locked into the executioners’ cycle of quarterly earnings management, it is hard to see what conventional tweak or tool can possibly intervene in any meaningful way.

At OpenWork, we believe that the long-term potential of coworking goes far beyond workplace strategy and revenue per square foot. While the real estate industry has been the most enthusiastic of the late adopters, we anticipate that large firms (and their HR functions) will make up the late majority of participants over the long haul.

Emergent Culture Inventory

Going forward, we are looking at ways to understand and map emergent cultures in companies and coworking spaces where the omelettes are being made. We would be foolish to assume that the cultural experiences of such knowledge workers will remain the same as their more sedentary and domesticated counterparts. Sending employees out ‘into the wild’ is scary for some firms, but the knock-on effect of that is now a thing.

The Emergent Culture Inventory (ECI) tool is a simple, real-time diagnostic platform that captures key words and phrases that employees use to describe their experiences, levels of motivation, engagement, and productivity. Rather than asking questions that presume that companies fall within a certain “type” of culture, the ECI works from the bottom up and lets the employees tell us what is going on and what it means to them. Monitoring and mapping these experiences over time will eventually tell us what coworking really means for companies that embrace it.


This article was originally posted on LinkedIn by OpenWork Agency Partner, Drew Jones, PhD.

Are You Ready for Coworking?

Are You Ready?

For the past four years we have been closely watching as more and more mainstream users have embraced coworking as a new way of working. What at first seemed like a fringe phenomenon that was suited primarily for freelancers and startups has grown to be much more than this.

coworking readiness assessment

Recently, while walking through a WeWork, we noticed areas where employees of Dell, Amazon.com, and Samsung were all (co)working on the same couple of floors. Employees of different (large) firms sharing a workspace is something that no one would have predicted ten years ago. Yet here it is, happening everyday. In fact, 10% of the S&P 500 companies now have employees who cowork. A recent survey of companies included the following firms:

  • Dell
  • GE
  • HSBC
  • Merck
  • Microsoft
  • Silicon Valley Bank
  • Amazon.com
  • Unilver
  • Marriott
  • KPMG

What does it mean for companies whose employees cowork around employees of other firms? Have you ever thought about how coworking might be relevant to you personally or your company organizationally? Do you think you are ready for coworking?

Find out at: CoworkingReady.com


This article was originally posted on LinkedIn by OpenWork Agency Partner, Drew Jones, PhD.

Boomerangs & Slingshots – After Corporate Culture: Managing Culture in the Sharing Economy

Culture Past and Future

In his 2015 Wall Street Journal article, “Data is our New Middle Manager,” Christopher Mims chronicles the emerging management practices of lean startups. The article suggests that, in an era of radical transparency where ALL employees have access to ALL the relevant data that impacts a company (small or large), there is less and less need for managers to translate information to the ‘little people.’ Peter Drucker’s much-loved professional manager, it would seem, is no match for data. But I am not here to write the obituary for middle managers, that has been (prematurely) done already.

BOOMERANGS

Rather, as I am exploring in a new book, After Corporate Culture: Managing Culture in the Sharing Economy (out in Spring 2018 hopefully), what Mims is really getting at is a fundamental culture clash across the generations. Millennials and others who share in the psychographic of the sharing economy, engage with the world of business according to a different core set of cultural values than their Baby Boomer predecessors. Traditional, Baby Boomer (and Gray Gen) managers, who make up the Boomerang generation and still comprise the vast majority of corporate managers, operate within the basic assumption that the past, predictability, hierarchy and social order are the goals of business strategy and growth. Particularly in our current shareholder driven business environment, what matters is that the net result of business activity, as Clayton Christensen and Derek van Bever argue in their HBR article, “The Capitalist’s Dilemma,” is that capital begets capital and that dividend yields and share buy backs move ever-upward. Indeed, between 2010 and 2015 “spending on buybacks and dividends exceeded not just investments in research and development but also total capital spending.” That is, if executed properly, the system feeds itself and reproduces itself over time, and what suffers is future-oriented strategy and capital allocation. This is the boomerang culture and economy in a nutshell.

SLINGSHOTS

Meanwhile, in other parts of the economy, an entirely different and future-oriented set of cultural values has taken root and is disrupting numerous industries-transportation, labor, hospitality, workplace, etc. Unmoored from “tradition” and predictability, sharing economy business models are firing shots into an unknown future. This is more than just efficient platform technologies (Airbnb, Uber, Lyft, UpWork, etc), it is a cultural form premised on experimentation, innovation, and the belief that business can be an instrument of social good as much as it can be a generator of wealth. As I outline in the book, slingshot cultural forces, which have their roots in the communitarian and egalitarian cultural movements of the late 1960’s, are gradually finding their place alongside the supposedly coherent and meaningful ‘corporate cultures’ which boomerangers have written about over the past forty years. A brief glance here…

Boomerang /Slingshot

  • Companies /Networks
  • Individuals/ Communities
  • Proprietary /Open-Source
  • Scarcity /Abundance
  • Predictability/ Emergence
  • Hierarchy /Autonomy
  • Control/ Transparency
  • Corner Office/ Coworking
  • Tenure/ Results

Beyond Binary

Of course this list is a simplification, but it is a helpful heuristic nonetheless. The point, at this stage in the process, is to insist that culture is a driver of what happens in our economy in ways that often goes unnoticed. It doesn’t help that for economists cultureis merely an annoying ‘externality’ that is difficult to stuff into their models. Behavioral economics helps, though. Hopefully cultural economics is next.


This article was originally posted on LinkedIn by OpenWork Agency Partner, Drew Jones, PhD.

Flexible Office Conference: See you at GWA in Miami Sept 11 – Sept 13

OpenWork Agency, Partners, Benjamin Dyett and Liz Elam, will be attending this year’s GLOBAL WORKSPACE ASSOCIATION’s Flexible Office Conference

Workspace As a Service 3.0

This year, the GWA’s flexible office conference looks at the next evolution of the industry, engaging flexible office providers, users and service/product vendors in a forward-looking dialogue to shape the industry’s future. At this year’s event, you will meet the people investing in the industry (we’re calling this “meet the money”), and meet the corporate users that many think will be the sustainability driver for the next generation of spaces.

Come for the content, stay for the beach…and the pool…and the gym…and the food..at the 1 Hotel South Beach. Our promise to you is to keep the conversation compelling enough to keep you off the beach…we’ll let you go as far as the pool bar between 9 am and 3 pm. The hotel hosts the first “Spartan Gym” and sits next to a Soul Cycle. The food is amazing and the beach beverages are plentiful.

  DEEP DIVE INTO THE FUTURE   Two facilitated and highly interactive sessions: “Deep Dive on Attracting Corporate Users” and “Deep Dive into the Future of Shared Workspace.”
  MEET THE MONEY   Get an inside look at the investors in today’s flexible office. Hear directly from asset owners, investors, and lenders.
 BUILD YOUR BUSINESS SESSIONS    Hosted by Casey Clark and Dave LeVeque with Cultivate Advisors. Take a deep dive into your business needs in leadership or marketing.
  THE FUTURE OF COMMERCIAL REAL ESTATE   Commercial real estate is evolving. What role does shared workspace play in this future environment? How are the models shifting and what are the opportunities?
  FINANCING BREAKOUT SESSIONS    Two separate sessions focus on unique financing and traditional financing. Choose your own adventure and get all of your questions answered in an open forum.

OpenWork Partner, Benjamin Dyett, announced as panelist- The Space Age: Innovative and Traditional Office Solutions

The Space Age: Innovative and Traditional Office Solutions. Economic and lifestyle changes are driving many consultants and nonprofits to rethink the design of their workplace arrangement. Work-at-home professionals and consultants in small shops are finding coworking an attractive style of work that addresses the problem of isolation and loss of human interaction by providing a shared working environment. Nonprofits who are looking to decrease their overhead costs and improve efficiency are finding shared space offers a solution as well as opportunities to collaborate with organizations with complementary mission objectives. Still others find long-term lease and facility purchase best meet their needs. Join us for presentations about the advantages and challenges of these options and possible strategies you can use to address them.

Confirmed panelists are:

  • Benjamin Dyett, Partner, Openwork Agency; Co-Founder/former Co-President, Grind, who’ll provide an overview of coworking spaces and their genesis.
  • David Lebenstein, Executive Managing Director, Co-Director, Nonprofit Specialty Practice, Cushman & Wakefield, who’ll provide an overview of the benefits and challenges of the lease/buy options;
  • Jeff Simon, Owner & Principal, Jeffrey Simon Architect and Designer, who’ll provide an overview of renovation considerations for new and current space; and
  • Kate Sherwood, Associate, M. Arthur Gensler, Jr. & Associates, who’ll will serve as moderator. She knows well the innovative and traditional workspace options.

ANS Educational/Networking Event
Thursday, July 20, 2017
8:30 AM – 12 Noon

The Foundation Center
32 Old Slip
New York City

 

This event made possible by generous support from Cushman & Wakefield

Coworking in a Holistic Perspective

As long-standing participants in the coworking industry, the partners at OpenWork Agency have seen the industry evolve since the beginning. What was once a social movement is now a sure enough industry. Depending on what your vantage point is, though, coworking is different things to different people. In this article I reflect on some of these different perspectives, and suggest that an exogenous and holistic perspective can help make better sense of what is happening than any of the endogenous perspectives that are out there.

The CRE Perspective

Currently the loudest voice in the industry is coming from corporate real estate professionals. CRE professionals around the world are tuning in to see how coworking (and the shared workspace industry generally) will impact their strategy and bottom line. Much of our business is working with real estate firms that are trying to figure out how and if they want incorporate coworking offerings in their portfolios. The starting questions are understandable, but often the questions indicate the limitations of an endogenous view of the scene.

The starting questions are understandable, but often the questions indicate the limitations of an endogenous view of the scene.

From the CRE perspective, the challenge is often framed this way: How can we leverage the “cool and young” vibrancy of coworking as an amenity in our buildings to drive up higher rent rates in the rest of the building or development?Implicit in this and related questions is the notion that coworking is an approach to working that is separate and discrete from the mainstream world of work inside large companies. A kind of Cartesian dualism prevails here, where “real work” (fixed work stations in large offices within long-term leases) takes place inside large firms, while fun and whimsical start ups and freelancers are busy working in the ‘funky’ environments that are associated with coworking. And never the two shall meet.

A kind of Cartesian dualism prevails here, where “real work” (fixed work stations in large offices within long-term leases) takes place inside large firms, while fun and whimsical start ups and freelancers are busy working in the ‘funky’ environments that are associated with coworking.

The CRE industry has been slow to come around to the reality (and it is a reality) that many large firms are now embracing coworking in various ways (on campus and off-campus). This is puzzling, since the large firms that are their tenants are in fact the drivers of this type of coworking adoption. We assume that this blind spot is due to the profound challenge that this represents to their business model. Large, highly credited tenants signing long term leases makes their work much easier. The idea that leasing will dissolve into tons of little micro leases is an absolute nightmare. We get that.

We assume that this blind spot is due to the profound challenge that this represents to their business model. Large, highly credited tenants signing long term leases makes their work much easier. The idea that leasing will dissolve into tons of little micro leases is an absolute nightmare.

The Enterprise Perspective

Meanwhile, facilities managers and HR managers in large firms are witnessing deals such as the IBM/WeWork deal, where WeWork will manage IBM’s entire new Manhattan campus. What to make of this? We know that dozens of large companies are already sponsoring employees to be members at places like WeWork and Industrious, but that is largely an outsourcing process. What will the long-term effect of this be when more and more company employees don’t actually work at the company? This is the kind of question that we ask at OpenWork.

Oddly, it seems that this enterprise embrace of outsourced coworking is being somewhat lost on their CRE partners. As large firms rethink their real estate strategies, they are seeing massive advantages in coworking. It would seem that as some of these companies approach the end of their leases, they will begin to rethink how much real estate they need under their own management. When firms make the decision to shrink their footprint, the real losers will be their CRE clients who are witnessing the shrinking demand for their traditional products. We see this as the elephant standing in the middle of the room!

When firms make the decision to shrink their footprint, the real losers will be their CRE clients who are witnessing the shrinking demand for their traditional products. We see this as the elephant standing in the middle of the room!

We have recently launched a new service that helps firms rethink their long-term relationship with coworking, both on and off campus. But this article is not so much about that. Here I am interested in the intersection between CRE and Enterprise.

A Single Perspective

Of course, all of these changes in workplace are interrelated. Coworking is not just for kids anymore, as the recent corporate adoption of coworking demonstrates. Large firms, as we see it, will continue to open up their work environments, sending some people off campus to cowork while designing their own campuses to be more open and fluid to keep up with the changing generational demands for choice, flexibility, and mobility. In our estimation, this is the single largest driver of change in the whole world of work. Many of us like to cite the figure stating that 40% of the workforce will be freelancers by 2020, and this is indeed a staggering statistic. However, this is a drop in the bucket compared with the massive shift towards new ways of working that will be driven by large firms. This IS the world of work, not some adjunct to it.

For CRE, this is the lesson that needs to be learned. That is, coworking is no longer just an adjunct, or an amenity; rather, it is an early warning signal of what WORK will be in the near future. Yes, this challenges existing leasing practices, as well as the level of TI allowances that they will need to contribute at the beginning of a lease cycle. However, the idea that they will be able to hold on to their conventional leasing process with large firms forever, while playing around the edges of their business model with coworking, is a bit risky.

An Example

We recently toured a forward-thinking Brookfield design experiment in Houston, called DesignHive. Design hive invites local architects to design ‘spaces of the future’ with the idea being that the buildings will come pre-designed and furnished, and that corporate tenants can then say, “I’d like option B.” These spaces were all very much like coworking spaces designed for companies. Now, of course, the question is: Who pays for these up-front build outs? This is no small question, but the small scale and modularity of these spaces feel like the future of corporate offices to us. That is, they feel like coworking spaces. One company might lease one of the spaces, while another will lease a space down the hall, both sharing the same floor. Quite interesting.

Operators

Of course the other node in this process are the operators. As has been the case since the beginning of the industry, these folks have proven to be nimble and adaptive. Many operators have already seen this intersection of CRE and Enterprise and are offering their services directly to enterprise. This is additional pressure on CRE. In this respect, we feel quite confident that the innovative operators will jump on the moment and continue to grow their businesses and thus the industry as a whole.

As relative upstarts and champions of disruption, coworking operators have had a holistic perspective from the beginning. Unlike their CRE and Enterprise counterparts, who are often limited by endogenous worldviews, coworking operators are doing important work in pushing the world of work into the future. As Will Ferrell might put it, “coworking is kind of a big deal.”

OpenWork Agency is a workplace and culture consultancy that helps companies and real estate developers leverage coworking solutions within their offerings.

Coworking and Company Culture

Marc Andreessen once famously said that ‘software is eating the world,’ and that if your business can’t be boiled down to a simple (software) solution it probably doesn’t have much of a chance. Or at least, in his world of venture investing, if your startup isn’t predicated on an elegant piece of software, then your business will be challenged. While some people took offense to Andreessen’s sweeping comment, I think it is even more profound than people might think.

Take, for example, the corporate culture consulting industry. Since the early 1980’s management consultants have made small fortunes helping large firms ‘engineer’ their cultures to be “stronger.” By stronger, we all understand that what is actually meant here is greater profitability and higher share prices. Enron had a strong culture, but that didn’t turn out so well. However, in light of the fact that some 70% of all corporate change programs actually fail, it is worth questioning what the actual value of culture consulting is and why so many existing efforts fail? And, to what extent will culture itself be boiled down to a piece of software?

However, in light of the fact that some 70% of all corporate change programs actually fail, it is worth questioning what the actual value of culture consulting is and why so many existing efforts fail?

For us at OpenWork Agency, this is where design and design thinking are so important. Typically, culture consultancies use typologies to classify companies within one type of company or another, and then help them transition to a new ‘type’ of culture. The whole process remains in the realm of values, beliefs, and behaviors, which tend not to ever change because very little else in the company changes. That is, words are cheap and easy.

Coworking as Design Intervention

In our estimation, what is needed are tangible, material interventions in the flow of peoples’s day-to-day work. By shifting people to the open and fluid mode of work that is coworking, the day to day interactions of employees themselves are changed. Without talking about culture, per se, the elements of coworking- communication, learning, etc- and thus culture itself is changed over time. But only slowly and organically. This is a critical difference.

By shifting people to the open and fluid mode of work that is coworking, the day to day interactions of employees themselves are changed. Without talking about culture, per se, the elements of coworking- communication, learning, etc- and thus culture itself is changed over time.

Thus, we have recently launched a new culture change initiative premised on coworking. We might be fifteen minutes early, but we know what impact coworking has on people, how they work, and on the social interactions between people who cowork together. Of course the proof will be in the pudding, but we are quite confident that as more companies embrace coworking (as many, such as Microsoft, IBM, HSBC, Dell, Samsung, Amazon, Merck, GE, just to name a few, have already done), those companies will in fact change, culturally, over time.

There are no magic bullets, we understand that. Company policies will have to shift accordingly, and will have to allow for the choice and flexibility that is at the heart of coworking. Without this accompanying level of change, coworking will be as ineffective an approach as previous generations of change programs. And finally, to return to Andreessen’s earlier point, the coworking-as-change-management-platform is grounded in a technology platform that allows employees to collaborate effectively and managers to monitor and understand what is going on in real time.

However, software won’t ever replace the value of human interaction and the importance of that for building community and culture. Thus, in the end, with respect to the workplace, Andreessen’s maxim was only partially true.

However, software won’t ever replace the value of human interaction and the importance of that for building community and culture.

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