Let us reflect on 2020 for a few moments. COVID-19, a medical event triggered a political reaction (global closure) which in turn triggered an economic collapse of speed and scale we had never seen before which further triggered a market reaction & a response that led to long-term cycle, emotional– behavioural changes. Many organizations realized they were not as agile and nimble as they thought. At a fundamental level, it led organizations to continually work on separating: what they know for sure & are best at (Growth and Value Creation) from what they know nothing or less of.
As with all crises, this led to a change too. Trends that were already underway whether political, economical, or market-led, only got amplified and accelerated then for sure but there hasn’t been a reversal of these trends in current.
Office buildings and workplaces were one such underlying trend.
During the pandemic, survival instincts had kicked in and businesses immediately resorted to the work-from-home model continuing their BAU (business-as-usual) activities. On the other end of the spectrum was the commercial real estate industry whose financials continued to be hauled down in the Western world owing to the weight of vacant leased office spaces, high rentals, and rigid leasing terms!
These never-seen-before predicaments had led to the rise of flex space offices whose business model addressed each of these problems - rotational use of workspaces, pay-as-per-use memberships, flexible lease terms for upscaling or downscaling among other mileages, and customized-hospitality-centric managed offices!
Cut to today, this strategic shift allowed employees to seamlessly transition between the office and remote work, effectively addressing both the return-to-office mandate and the imperative to rationalize physical office footprints. Dynamic seating arrangements and collaborative zones are becoming standard, fostering an environment that harmonizes physical presence with virtual collaboration.
Organizations continue to meticulously recalibrate their spatial utilization by aligning short-term imperatives with long-term fiscal prudence. This intricate tapestry of balance-sheet-heavy real estate solutions with the convergence of return-to-office imperatives and pragmatic response to layoffs has necessitated a nuanced examination of how companies create workspaces.
No matter the company size, the key areas being addressed are:
1. Volatility in the workforce which has three elements to it – headcount volatility, location of work, and the need for increased efficiency
2. Continuity of the company’s culture
3. Capital efficiency– strong balance sheet
There has been some hard thinking done to truly create a model that enables agility and capital efficiency– human and monetary. Deep work has gone into ensuring the enabling culture remains non-dilutive and agnostic of workspace management. It not only aligns with the exigencies of a recessionary climate but is virtual-signaling towards innovative, agile, and digitally transformed workspaces. All of these and more are what organizations seek as attitude traits in their employees!
Traditionally, prominent IT firms, often the vanguard of India's economic engine have led the hybrid work model changes. Adoption and adherence challenges have been there. Interestingly, it is not just the technology sector but also the more traditional banking & financing sector (BFSI) that is adopting the ‘new way of working’.
Adoption of flexible workspace solutions, may it be built-to-suit offices or enterprise coworking solutions, is strategic and will cut across many industries. Organizations will make judicious capital-efficient decisions embracing technological advancements with initiatives that augment an enabling culture, increased productivity and robust employee engagement. Here is the best part– all of this has led to exponential scale and increase in offerings in the ‘Flex Office Solutions’ industry. Many have adopted innovative practices creating a ‘horses-for-courses’ office space strategy. This ensures that there is an optimal solution for every team size, price point, and industry genre!
The above views are expressed by the Chief Executive Officer at 91Springboard