Creative Math: A deep dive into workplace benchmarking

Creative Math: A deep dive into workplace benchmarking
by Fran Ferrone

“Not everything we count, counts; not everything that counts can be counted.” – Albert Einstein

Readers: At the end of this article, McMorrow Reports invites you to participate in Mancini Duffy/TSC’s benchmarking research on how people respond to their workplace. Survey findings will be reported in February 2014.

Almost without exception, the first thing clients share with us at initial meetings is that they are seeking ways in which the workplace can support innovation; next, they ask us what other companies are doing. Even before the design process begins, this puts benchmarking front and center in the decision making process.

True benchmarking involves a deep dive into financial metrics as well as business processes, company culture and employee experience. Looking at actions taken by others can prove to be a source of real inspiration if management takes the time to fully understand not only the what, but the how and the why. Too often, however, companies focus solely or primarily on financial metrics without challenging cultural assumptions or seeking input from employees to test their appetite for change. Companies modeling themselves with such a narrow focus should also consider the following:

• Might benchmarking in some ways be short-changing the design process?
• How can we better understand the impact of applied metrics on different company cultures?
• Could the focus on primarily financial metrics be leaving innovation on the table?

Why do we benchmark?

Benchmarking is an important part of the design process and essential as decision support in an increasingly complex and risk-averse business environment. Since the 2008 financial crisis, it has become increasingly important in corporate real estate as a means of controlling internal costs. But while professional organizations such as IFMA and CoreNet have made great strides in standardizing benchmarking definitions, companies still vary widely in their ability to capture and maintain critical data. Statistics are often compromised by the mix of internal systems as well as the number of external vendors used to capture and manage the data. Additionally, even when information is captured with reliability, it may only tell part of the story.

In the perfect world of fully integrated systems and holistic business thinking we’d see powerful metrics that combine financial data with metrics around employee well-being and employee engagement and perception of company performance.

In that perfect world, in addition to operational metrics like these:

We’d also see performance metrics like these:

These metrics are more complicated to obtain and require a bit of creativity to measure. Nonetheless, they also have financial implications, and can be extrapolated from hard and soft real estate, IT, HR and business unit data extracted from a combination of reports, surveys and observational studies. Creating these types of measurements requires:

• Vision to see a future far different from the present;
• Creativity to define value from multiple perspectives;
• Tenacity to extrapolate and coalesce data from multiple sources; and
• Patience to see the process through and measure results over time.

What can be learned from others?

Companies seeking to innovate might look at how others solved for similar problems or achieved similar goals. Doing so in a comprehensive manner will yield the balanced perspective needed to gain approval on initiatives that could make a critical difference but may be costly and/or require significant organizational change. Provided below is a snapshot of several industries on a spectrum from least to most amount of RSF/person. Compare not only space efficiencies but if or how these cultural characterizations resonate with your own organization:

British Technology

• Technology: Organizationally your company is flat and desirous of a workplace with a ‘buzz”. Extreme flexibility is mandatory to accommodate constant and rapid change. Mobile technology enables your employees to work anywhere, anytime. British Technology has this approach.

Trinity Real Estate

• Professional Services: Your firm is largely comprised of highly independent, mobile employees who use the office as home base. Offices have been eliminated, or are used as meetings spaces when unoccupied. Hoteling and free address are the norm.

Sandler O’Neill’s financial offices

• Finance: You seek to attract ‘Google talent’ but your company’s culture finds it difficult to forego entitlements. Successful solutions might include different standards for different functions or offering business units the autonomy to select from degrees of choice within a finite kit of parts.

An international media company

• Media & Entertainment: As an image-based firm you need high profile executive and visitor spaces and specialty areas that use a lot of space. Co-locating these functions reinforces image, creates touch points and generates excitement within and outside your organization.

Latham Watkins Legal Offices

• Legal: Also highly image-driven, your profession is at the top end of the real estate utilization scale. While your culture is extremely risk-averse, your profession is under pressure to drive change. Key differentiators might include incorporating new technologies and consideration of new attorney/support ratios.

These vignettes offer just a peek into why certain industries have been able to achieve certain space efficiencies and others have not. To apply learning from other companies and industries to your own requires a willingness to test how adopting new practices might affect the culture of your own firm. Ideally, this ‘test’ would take the form of a pilot during a period of time when no other major company event is occurring (for example, no restack, no merger or acquisition). Success would be measured in new ways that incorporate qualitative as well quantitative data.

Equal play for the Qualitative

By the nature of their work, design professionals have a unique perspective—a window into what many companies are doing—that provides an opportunity to compare and contrast data across multiple clients and industries. In offering this information to clients as decision support, designers and architects also have the responsibility to balance the quantitative metrics that address real estate goals with the qualitative data that represents an organization’s culture and people.

PhD’s Robert S. Kaplan and David P. Norton created The Balanced Scorecard (Harvard Business Review, 1996) to help companies to do just that. Recommending the adoption of a broader perspective to determine value, The Balanced Scorecard includes measurements pertaining to quantitative (financial) as well as qualitative (process, learning and growth, and customer satisfaction) measures. The Balanced Scorecard Institute goes as far as to say that a showing of solid financials but weak customer satisfaction scores is an indication of trouble, and that “recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction” as a measure of success.

In the world of corporate workplace-making, the employee (or end user) is the customer. Yet performing due diligence with the (end user) customer can be gated when management resists probing beyond programming data to fully understand not only what is, but what could be. Findings from NewWOW’s 2013 Benchmarking study highlight this challenge citing that while ‘people issues overtake costs as top business drivers . . . people issues remain top barriers.’