Productivity is the ultimate #CRE buzzword

I’ve worked in real estate for over a decade now. Every single year I have been in this industry I come across some new and novel approach to defining real estate’s impact on employee productivity. It’s always worth a laugh to me to see various workplace vendors trying to give a productivity increase number associated with sit/stand desks or collaborative areas. There’s simply no studies or numbers that can prove or disprove this effect while also accounting for all other variables. It’s just not possible.

Yet every year someone new takes a crack at it. It only makes sense. If you can be the one that cracks the code for proving the impact of real estate and workplace on employee productivity, you would be in line for millions of dollars of new business and global acclaim. If you can absolutely prove that your desk designs improve productivity by 10%, companies would be falling all over themselves to implement it.

But alas, that’s not how this world works. Productivity is such a nebulous and changing concept that has different definitions for every single employee in the company. What improves one person’s productivity may kill another’s.

What does this mean to you? Carefully question anyone that claims that can improve your productivity through workplace changes. It may happen, it may not – but it will likely never be proven. All you can really do is focus on making a workplace flexible enough to meet the needs of many different types of employees while also aligning the workplace with company culture. If you can achieve these two things, productivity should follow. Just be careful thinking you can prove it.

Mutually Exclusive/Collectively Exhaustive – thinking through your problem design

There’s a principle in decision theory called MECE – Mutually Exclusive and Collectively Exhaustive. It essentially says that when you define your decision criteria that shouldn’t overlap and they should include everything you are going to base your decision on.

For example, you shouldn’t leave finance out of your decision list because “it will take care of itself.” Finance is part of 99% of all major decisions and so should be included. Similarly, finance should only exist in one part of the criteria and not exist in multiple places. You shouldn’t have Total NPV as a criterion and then the cost of a single piece of software in another. You are double-counting the software in that instance.

This is a difficult principle to wrap our heads around, particularly if you’ve never encountered it before. Putting all of our HR related issues into one box and finance related issues into another seems like we are separating topics that go in hand. You can’t have a project that expands workforce without also increasing costs.

The goal of MECE is to enable us to understand the trade-offs that exist when we make decisions. Expanding workforce may be good but is the decision ranking offset by the incremental increase in costs? Without understanding our independent thoughts on additional capacity versus added costs we can’t score that trade-off.

At the same time, if our criteria overlap and include combined topics we’ll never have a clean evaluation framework for making our decision. The goal of decision theory is to assist in making quantitatively supported decisions. A decision framework that doesn’t provide clean scores will naturally keep us in the qualitative realm.

There are certainly problems with MECE. The first being that it isn’t always possible to separate criteria completely. To use a baseball analogy, if you value players that hit homeruns but also players that drive in and score runs you are double counting since a homerun always leads to both an rbi and run as a result. It is very difficult to separate criteria without going down to valuing player specific attributes such as bat speed and reaction time – the data for which is either not available or difficult to work with.

Every #workplace is only as good as you make it. #WorkplaceWednesday

Designing an office plan is one of the most difficult things to do in support of a business. Every group works differently, has different technology or privacy needs, wants different levels of collaboration space, cares about the creative nature of the space, or simply wants to sit next to the people they work with the most.

The fact is, designing the ideal workplace is nearly impossible. In reality, the best you can hope for is to design a workplace focused around flexibility so that occupants have the ability to control their productivity themselves. And that is the biggest win possible – when you enable people to find their own productivity sweet spot you will improve the average productivity of the office considerably.

Designs that focus on getting everyone to the same average productivity may improve the bottom end but it will cap the top end productivity of your superstar employees. Typically a fixed workplace limits collaboration more than any other item which is the area that allows for exponential productivity increases. If you uncap the potential of your top producers you will find greater net business improvement even if it means some of the poorer performers self-limit themselves through bad decisions.

The self-limiters are also now going to have nowhere to hide because their productivity is their own to control. A flexible workplace gives no excuses to anyone to not be at least at average productivity. When there is no place to hide, the best rise to the top.

A defense of the trend toward open offices #WorkplaceWednesday

There is a lot of anger and dissatisfaction in the working world toward open plan offices. For those not up on what open plan is, it is the office design with no private offices, workstations that have half-panels so that you can see through the entire floor and often it features unassigned seating. The common dislike of it is that it usually leads to a louder office that isn’t conducive to heads down work that requires a lot of concentration. Many also argue that it leads to too much idle chatter and lazing about the office since there is nothing separating you from your neighbor.

In defense of this design style, I always point out that no workplace design/strategy can work without an accompanying change in management philosophies around how work gets done. No one who does 10 hours of heads down programming should be forced to sit around people who talk on the phone all day in an open workstation. But at the same time, there is no reason to give that person a quiet, private office because their work is being performed in isolation. They should be enabled to work from home or from another quiet venue of their choice that supports their style of work. A private office is expensive, especially when everyone thinks they need one.

The biggest problem then becomes managers who refuse to let people work away from the office. There continues to be a management belief that you can only manage people that are right in front of you. My manager sits in England so I can personally attest that you don’t have to be present together daily for productivity. Yes, some people don’t work well from home because of their home environment or they don’t feel comfortable not being at the office. The open plan office can make accommodations to grant more secluded areas for work and that should be accounted for.

Additionally, there is a cultural change period that occurs when people first move to the open plan environment. It takes time for cultural norms to develop in a given office to understand when you can start a general conversation with those around you, whether you can take conference calls from just anywhere, whether parts of the office become dubbed “quiet zone,” etc. These norms eventually develop and give everyone an opportunity to work in ways that make them most comfortable.

Open offices also promote more collaboration. When I say collaboration, I don’t mean conversations. I mean that these offices encourage you to sit around people you are working with so that the simple 10 second questions can be asked when they occur that lead to quicker resolutions and solutions that would happen via email, text, phone or other indirect communications. Also, as the people you are working with change you can change your location to be around the new people that you are beginning to work with. Simply being around people encourages everyone to know each other better across small interactions ultimately making a team more familiar and comfortable with working with each other.

There are clear and obvious trade-offs of course. No single office design is perfect. Different organizations will always have different needs. The designs implemented for each should be individually tailored. But the concept itself is good, it just takes work to get right and to perform well within.

Isn’t that true of almost everything in life though?

What will be the state of CRE Technology in five year?

I typically try to avoid doing these prognostication type posts because I believe that (generally speaking) tomorrow is going to be much like today. Sometimes an iPhone comes along and changes the world but even then the change was still relatively gradual for all intents.

I had a demonstration from a technology company that made me think differently about my opinion on CRE Technology. Their actual tool was not that different from everything else on the market and their pitch was the same I had heard too many times to care for. But as I was looking at the actual technology powering their system I realized that if you decoupled a couple of features they actually filled a niche that was open at the moment. It wasn’t something that they had intentionally tried to do but it was a side effect of the technology they were building in.

Essentially the underlying technology had advanced to a point where it made some of their ideas more powerful than would have been expected. If the right person steps in and looks at what they have and listens to some feedback they might have something amazing.

But the broader point is that the world of software (especially mobile and online tools) have evolved so far at this point that the tools themselves are beginning to provide as much or more value as the idea that it is being applied to. The flexibility and capabilities of the tools themselves are blending with these CRE ideas in surprising ways and it is now just a matter of time before someone accidentally invents something that shakes up the industry.

I don’t know where this surprise will come from (probably from where we least expect it like around demand modeling) but it is coming like a freight train. The underlying technology is reaching a degree of power that it can’t help but find the right application.

Something to think about.

Can real estate actually directly impact employee productivity?

Over the years architecture firms (and more recently real estate firms) have claimed that the right workplace strategy and design can improve employee productivity. It’s a bold claim because an increase in productivity is the same thing as reducing costs while increasing revenues. Improved productivity is the Holy Grail of business operations.

As I’ve dealt with these claims I become more and more hesitant about them. Sure, a well-designed workstation with the latest technology could make an employee more efficient. Two monitors are theoretically more efficient than one. Three monitors may be more efficient than two. Although I doubt many people believe four monitors are better than three currently. But it’s not the workplace that is enabling this efficiency, it’s the technology. The workplace enables the technology.

Similarly, a well-designed office plan can make seat sharing and inter-office collaboration feasible which promotes work-from-home and flexible scheduling which improves employee productivity. But here again, the workplace is enabling an HR and management policy of work-from-home and flexible scheduling. Without both pieces then none of it matters individually.

Real estate is at the heart of everything that happens in a business but real estate does not directly make any given piece work more effectively in isolation. Real estate works best when in partnership with HR, IT, supply chain, business leads, finance, etc. It’s the partnership piece that is really where real estate is best.

 

Something completely different: Google Fonts for the typography fans in the audience.

How you present your message matters.  If you choose to put a table in your presentation that is in Calibri size 11 font copied straight out of Excel with no formatting I will lose respect for your ability to show information.  Having a minimal level of design is of critical importance to your long term success (and no, I don’t think I’m exaggerating).

TheNextWeb just ran an article that pointed readers to a redesigned Google Fonts website.  If you work online at all this is a resource you must make use of.  Fonts reflect the way potential customers view your business and message.  Picking one that portrays the image you want people to take away yet also sticks out in their mind is the path to getting noticed.  Without attention you will have that much harder of a time growing your business.