Nap pods. They are quiet, comfortable places in a modern workplace where employees reserve time to take a quick snooze before returning (presumably refreshed) to their work. At last month’s Urban Marketplace event hosted by the Urban Land Institute, it was one of many new office amenities discussed by a panel of real estate executives from some of the Boston area’s most innovative employers. Nap pods, arcade games, nightly happy hours and other novel features are being considered by users in nearly every new office transaction. These unusual amenities are powerful evidence that the evolution of the office is accelerating at the most rapid pace in history.
New office concepts are changing not just the culture and productivity of businesses, but they require that the marketing, underwriting and management of commercial property adapt as well. Knowing how the notion of the office has evolved is critical to understanding where the office is heading next, and what real estate professionals need to do to stay ahead of the curve.
Cubicle Farms And Water Coolers
Rewind just a few decades and offices were smoke-filled, dense spaces with little to no technology. Work started when people arrived and ended as they left the building. It was not uncommon for an employee to stay with the same firm for an entire career. Accordingly, real estate decisions were economic choices – primarily opportunities to fix or reduce costs. These decisions were made by CEOs and CFOs and then communicated to those below them in the company hierarchy. Other than location and finishes, there was not much to differentiate one company’s workplace from another’s.
When considering the type of work performed in offices for most of the 20th century, this paradigm of decision and design made sense. Work activity was ordered, structured and procedural. The office was simply a place where the vast majority of employees performed assigned tasks. In fact, before the introduction of personal computers and mobile technology, the office was often the only place work was possible.
Collaborative Spaces And Baristas
When a critical mass of businesses realized that the concept of the office is really a combination of its workplace and its workforce, the office evolution leapt forward. Proximity to colleagues and effective utilization of common areas factored significantly in a company’s productivity and profitability. Rather than heading to an office to perform rote tasks, workers now engaged in more creative, innovative and collaborative activities. The office became more of a socioeconomic issue than a purely economic concern.
Not coincidentally, this occurred as the technology industry went from a niche sector focused on software, hardware and connectivity to a ubiquitous presence. Most traditional companies have become technology companies in their own way. Consequently, more industries began targeting the same talent. Real estate became an opportunity to gain a competitive advantage in employee recruitment and retention.
The profile of the commercial real estate decision maker shifted as well. Operations and human resources executives assumed far more responsibility. At the most progressive companies, the entire workforce participated in build-out strategies and design details. The new office had to be an appealing place to work.
The Comforts Of Home
In today’s world of Wi-Fi in the park and cloud computing, a new generation of workers – more tech savvy than any previous generation – is shaking up the office more than ever. The notions of the ideal office space that were modern just a few years ago are already stale. Being an appealing place to work is no longer enough. Employees can work from anywhere, but since being together breeds collaboration and innovation, the office now must be a driver of productivity.
Experimentation is the norm in today’s office environment. Businesses are testing concepts that have more traditionally been found in the home. Spaces for rest, entertainment and dining are now part of the office. Perhaps these functions haven’t before been considered a component of the workday, but they are now most definitely a part of the office. Firms also demand sustainability, in office furnishings and indoor air quality. Many leading edge firms value the use of renewable energy as much as price. The most highly-evolved new offices combine workplace and workforce in an environment where people work at their best.
CEOs and landlords will be kept on their toes as the office evolution continues. To craft an office that functions as a facilitator of productivity requires creativity rarely demanded of executives in the past. Surely not every company will get it right. Some trends will undoubtedly fade and come back while others will stand the test of time. For real estate decision-makers, avoiding cyclical tendencies and closely monitoring demographic data could help separate fad from fact. Taking a nap in the nap pod might also help.
James M. Tierney is the managing director for the New England market at JLL.
