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Coworking Industry

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.

Making the Connections: Coworking & CRE

In the July 13 issue of the Wall Street Journal, two articles sit side by side with no reference to one another. That they are presented as separate stories is both ironic and alarming.

The first article, “WeWork’s Top Rival: Anyone and Everyone,” talks about how WeWork is and will continue to face stiff competition from numerous players, big and small, in the now burgeoning coworking industry. This is simple enough. The article quotes a commercial real estate executive in New York, who says that for now they do not plan to enter the coworking market, but that they are mindful of it.

The second article, “Service Firms Feel a Chill,” discusses the flagging performance of the world’s largest real estate services firms- CBRE, JLL, Cushman & Wakefield, Colliers International, and Savills. The article pins the blame for this poor performance on both the changing nature of the industry and on the macro-economic impact of Brexit. While surely Brexit will impact the CRE industry, particularly in Britain and Europe, that is really only part of the larger picture. For some reason, whether it is a lack of peripheral vision or simply willful ignorance, few participants in the mainstream CRE industry quite manage to make the necessary connections to have a truly holistic view of their own industry.

The first article about WeWork, it might seem, is entirely unrelated to the second article about CRE, but of course it isn’t.
The massive growth of coworking reflects fundamental changes in how people are officing- in small startups as well as in medium and large firms. It decreasingly makes sense for large firms to lease based on the ‘one fixed work station per employee’ model on which the traditional CRE leasing model is based. That is, like individuals in the coworking world, many corporate employees now work ‘in the cloud.’ Sometimes they go into the office, sometimes they work at their kitchen tables, and sometimes they work at their local Starbucks. That such mobility-of which the coworking industry is a huge part- is unrelated to the decline in revenue among the largest CRE firms, is simply not a tenable notion.

Note that 51% of coworkers in the US are company employees, not freelancers, an important and telling change in the industry.

Where are these folks coming from? They are coming from companies that are, in a variety of ways, changing the way they use and lease work space. It is a leakage problem for CRE. There are, though, internal solutions. When, we ask ourselves at OpenWork, will large firms (CRE and their clients) put their fingers in the dike and build coworking-like environments where their employees actually want to be?

Author: Drew Jones, OpenWork Partner