The Healthy Organization of the Future: Flexible & Secure

By Boyko Iaramov, Co-Founder & CEO of Campus X


While there are plenty of things that remain uncertain as we try to grasp the impact of COVID-19 on business, there are several things we can claim with a high degree of confidence:


Health & personal well-being is finally priority #1


For too long, me including, we have put personal health – physical and mental, in the shadow of business success. We have way too many examples of burnout, depression, stress, and lack of good work-life balance. We have pushed ourselves, our teams, and collaterally, our families, to the very cliff of sanity, only to extract the last % efficiency and competitive edge. In the process of which, we had put most of the wellbeing, welfare and health care of these groups as a secondary objective.


With COVID-19, somehow “magically” health and wellbeing took the front center stage. The health of our medical workers, the health of our couriers and delivery teams, the health of our food stores, and the health of our critical supply chains. As I write this, I continue to be bewildered that somehow this comes as a surprise, as something which we consciously put away for later consideration. We can’t. And those who did, are now paying the price.

If you asked for a definition of a “healthy organization” 6 months ago, chances are you will get a plethora of answers like:

  • Financial stability

  • Capturing market share

  • Growing customer base

  • Good performance on stock exchanges

  • Great return of value tostakeholders

  • And many, many more.

But I seriously doubt that you would have gotten many responses like:

  • A healthy organization is one that puts people first. Even if it contradicts company's financial outcome/performance.

But it is people that make companies and not the other way around. Despite unprecedented hurdles of delivering a product or a service, those companies that were able to continue to operate were those that adhered to the mandated lockdowns and were able to define a new remote and home office culture. A culture that does not contradict peoples’ aspirations to continue to contribute and feel valuable and one that also acknowledges individual differences of how staff can be productive.


The organizations that embrace this change and show their teams, that regardless of circumstances, they will continue to be appreciated for the expertise and commitment they put in, are the ones that we can boldly say, have put the unshakable foundations of a much healthier organization – resilient people, resilient business.


Acknowledging the new mode of work, these organizations can and most probably will, re-evaluate the size of their physical office footprint, de-clustering their teams, provisioning home office baseline amenities, setting up satellite and remote offices and investing in the technology infrastructure holding it all together. It is a conscious mix of a new operational model.


Not all work is equal


When we speak of the work mix, we have four major modes:


Home Office

Remote Office / Satellite Office

Onsite at HQ

Multi-Mode


Home Office


While the COVID-19 shockwave left many unprepared to transition to home office work, it is a fact is that the technology sector was swift and agile to embrace this method of product or service delivery, because of its mostly digital means of product development and delivery.

At the same time home office, brings in a lot of new challenges compared to an onsite flawlessly executed office experience. The major being:


Connectivity & Infrastructure


While dedicated IT teams, seamlessly do their magic behind the scenes so that the digital organism of a company remains ticking, this is absolutely not the way things would work at home with a standard Internet (ISP) connectivity contract. Depending on criticality (and this being the only way to have access to all external services - email, zoom, etc.), the cost of setup and operation of a reliable internet connection has to be factored in. Missing important client presentations, dropping video conferences, or having no access to email will be unacceptable.


Having permanent access to onsite infrastructure may also be critical. For some it may be bio labs, for others it may be 3D printing equipment and for the rest, it may simply be access to meeting rooms, event spaces, phone booths, etc.


Redundancy


As reliable as a SOHO (Small Office and Home Office) internet connection can be, home users may need to opt-in for a redundant connectivity medium, that would serve as a backup in critical moments. Over the course of a two-month lockdown, some downtime of the ISP is bound to happen and with an overwhelmed support staff, ISP will be slow to respond to home incident reports. Then, people resort to mobile hotspots via 4G/5G operators, incurring additional cost, to be further factored in by the employer.


Building for redundancy at home may also include power redundancy, via an uninterrupted power supply (UPS), loading additional cost of a seemingly simple home office setup.


Privacy & Compliance


As phishing and spoofing attacks have gone through the roof, privacy risk exposure will follow the same direction for home users.


Not all users are tech-savvy geeks, being able to reliably protect their own and company assets when working from home. Specialized software layers may need to be licensed and installed on home computers, remotely managed by company policies, and watchful IT staff. For some organizations, compliance and Intellectual Property criteria may be so high, that they would make it impossible for someone to continue to contribute to a project from home. Certifications and audit requirements will not allow organizations to transfer work away from HQs unless these locations have also been audited and certified. Obviously, this does not scale for an organization with a lot of staff, working from home.


The Community and Me


Humans are social animals. As much as we can adhere to guidelines and limitations, at the slightest legit and safe sign, that we can again interact amongst others, people will flee the confined spaces of homes.


“Community” is not a cliché, when done right. We surveyed hundreds of members and conversed on what they missed the most, as they stood confined to their homes. It was exactly the interaction with like-minded people, that was missed the most. For it is through these intra- and inter-actions, that successful companies acquire talent and knowhow. It is through the constant process of learning, that they grow as organizations and thrive in such social environments. Just look at the collective fundraising footprint of companies operating in these spaces for the last one or two years, according to Forbes Bulgaria.


It is exactly through this conscious curation of like-minded people, that successful and efficient communities are built. It is a process of intent and a constant iteration towards perfection.

Remote Office / Satellite Office


Regularly confused with Home Office, the Remote or Satellite Office topology has very different characteristics. This particular work setup tries to address, at the employer’s expense, all the limitations and shortcomings of the Home Office setup and then – build on top.


Leveraging either existing company competencies (IT, Facility, etc.) or partnering with a reputable Provider are the usual ways, companies go for the Hub and Spoke topology. Thus, providing additional redundancy and resilience in case of some external disruptor and following company protocol/guidelines along the way. As such, this is often associated with mid and large-size companies. They often have long-term leases and a high count of staff and a natural “decomposition” of the teams can be efficiently achieved during and post COVID-19.


To reduce the number of employees working onsite, companies can embrace satellite spaces, as they provide shorter and private commute paths, remain within regulatory compliance, and are flexible enough to address the needs on a weekly or monthly basis. Such an approach also hedges the risk of complete company close-downs. In terms of business continuity and de-risking protocols, such satellite sites allow greater probability that critical business functions (such that cannot run from Home Office setups) remain operational.


It is very important to emphasize that this does not mean building multiple duplicate HQs, but identifying core company services and spreading them (functionally and geographically) in an efficient manner, so as to guarantee the highest % possible, with minimal time and dollar investment.

Onsite at HQ


The classic on-premise presence of all team members. Naturally, up until now, this has been the easiest way to build and grow consistent company culture and provide an end-to-end service for all the staff. However, deploying company competences as HR, IT, Facility, etc., by design, refers to organizations that have the size and muscle to finance these departments and allow them to execute a seamless office experience.


With all these culture perks, it is much harder for a large organization to abruptly scale (down) to the Home Office delivery model and “transfer” this office experience for their staff at home.


For the organizations that lack these internal competences or financial muscle, the end-to-end office experience is either non-existent or very fragmented. However, these smaller companies are the ones which are much more flexible and transitioning to any other form of remote, home, or onsite office is often done quicker and with less administrative overhead.


Multi-Mode


Nature has the beautiful capacity to always find the right balance. Organizations are, in their pure form, another living organism. One that responds to external and internal factors – growth, availability of resources, danger, and others. Not only passively reacting to the current turbulent times, but pro-actively embracing and building for a balanced business co-existence, will allow for the companies’ ultimate flexibility and continuous business operations. Models that allow for the seamless co-existence of home office users, remote/satellite office users, and those that remain at HQ - freely flowing from one form to another, as people dynamics change, will prevail in the future.

Is the Office Space market ready for the changes?


While we do not hold the crystal ball with all the answers, we are lucky enough to be surrounded by like-minded members of our community, who are open and transparent of their internal company dynamics, priorities, and why not – fears. Together with them, we are able to draw some early conclusions, which already overlap with the global trends we are observing.


To consider the outcome of this situation as purely binary, i.e. you are either on the winning or on the losing side, would be extreme. There will be, at least for the short term, participants that remain in the middle, balancing and acting as new information comes in. Hence, the landscape will not transform overnight.


As companies/enterprises evaluate the impact of remote and home office to their capacity to deliver, they may come to multiple realizations, impacting their global or local office footprint. With that, extraction from some office space commitments will gradually permeate through the commercial real estate environment and will then beg the question, how these vacant premises are utilized.


Transforming an HQ with 1000 staff, to a hub and spoke infrastructure, may prove to be much more resilient to disruption. Hub and spoke models, have existed before, but because of the high cost of implementation, maintenance, and compliance, have not been seriously evaluated against a possible disruptor as COVID-19. Active or passive disaster recovery sites, hot-spare office spaces, and reserved overflow office models have long existed but embraced only within organizations with high operational uptime requirements. Now, in hindsight of the last months of disrupted global businesses, we can see that such business continuity investments, would have been not only strategically correct but also economically/financially justified within a company’s operational model.


To build on top of that, companies should not feel alone in building these satellite offices, but could rather leverage Landlords and Operators, to execute against company criteria. To such an extent, that a move-in ready satellite office, should be operational in the shortest and most flexible of time. Such assessments will not be a one-time event, now that companies reorganize their operations to counter future events like this.


As the paradigm shift occurs, the office will remain a more efficient medium for collaboration for mid and large-sized groups of people. True, it will be a much different office than the ones we left behind before COVID-19. But this does not necessarily need to be a worse office experience. Now, companies will be forced to develop and promote a better quality of Life@TheOffice product. This, in turn, will from now on be passed along as a requirement to Landlords and Operators.


So, what is a better Life@TheOffice Product


The Flexible Office


What defines a “flexible” office solution? The dominant understanding is that flexibility is mostly reflected in the “space” and “time” vectors – i.e. how much space does a client need and for how long. However, even these two vectors carry nuances as they reflect the company only in a single snapshot in time. As the organization evolves, these specifics are constantly shifting – more space, less space, shorter horizons, longer horizons – and additional crucial factors come into play:

  • Financial vector – leverage OpEx and not CapEx & minimize upfront costs

  • Facility vector – procured Dedicated or Shared end-to-end services

  • People vector – build diversified, distributed & dynamic teams

  • Business continuity vector – mitigate risk & reduce business uncertainty

As providing office space moves from a supply-side question to a demand-side ultimatum, companies will require Landlords to stop sitting on capital from rent and employ that capital now, to procure flexible office spaces. But as Landlords realize that they now need to include the Flex Office to their product (mix), the realization of actively operating and managing this product comes into question.


This is an interesting branch-off point, as some Landlords may explore the capacity of doing this themselves, as others resort to trustworthy Operators. This is where domain expertise, knowhow, brand, and reputation will come into play and will be a decisive factor. Who has it in their DNA to best understand brand building, community building, and on-premise support presence? Operators with a proven value of their brand, services, client trust, and consistent quality of their product, stand to benefit. By design, this will make it hard(er) for new participants (local or external) to capture such opportunities, unless previous track record can be validated/referenced.


This, however, must again be taken with a grain of salt, since there are more and more examples where Landlords have undertaken the task of operating these Flex spaces by themselves and if Operators continue to live in their co-working only silos, stand the risk of being pushed out of the market.


As a note to Landlords, we need to remind that providing a flexible office contract, does not equal providing a flexible office experience. Flexible solutions come not only in the form of legal paperwork. Providing an end-to-end office experience with all aggregate spaces that make up the complete mix – meeting rooms, phone boots, event spaces, common areas, outdoor areas, dining and relax zones, sports zones, etc., have to address the dynamics of the client mix. In a sense, active Key Account Management has to be instituted for every client in these Flex spaces, regardless of size. Needless to say, this brings an increased management overhead and a radically new format of customer engagement from before.


The dynamics of each client will be so vastly different, that the only way for office spaces to allow for quick reactions to client needs, will be if they have been designed and build out to be not only flexible but also modular. Because of shorter cycle office planning, companies will not be able to foresee (nor plan for) office needs for the year(s) ahead. Neither will they be likely to hedge those needs with complex agreements. The office reality will largely reflect the company reality of the day. What tomorrow brings – will be a conversation for tomorrow. Gone are the days of long term 5 and 10-year leases.


But how can flexibility and modularity be provisioned within such a dynamic client landscape?


Through investments & technology


Subscribing for 5 more seats, should not be different from subscribing for 50. Opting in and out of certain services on a monthly, weekly, or even daily basis, should be as easy as sliding left or right on your mobile app.


Technology, however, is only the interface to a well-structured and well-executed operating model. Thus, investments will be needed both in the backend and on the front-end. These investments will be substantial, especially for landlords operating large m2. It will all be about liquidity, reserves, and good balance sheets, which hopefully larger players should be sitting on comfortably.


Embracing and investing in technology will, much more now than before, go towards elevating the wellbeing and health of occupants. Such implementations will become the baseline (as in, the client will not pay for them additionally) for a client’s consideration. We may as well see category classes of buildings undergo an overhaul as to what defines a Class A office experience. Technology implementations that augment and increase health and wellbeing may become just as instrumental in acquiring and maintaining Class A status. Automation, remote management, and AI can permeate in how we book and use resources – i.e. certain slots are automatically blocked from the meeting room calendars, so as to allow HVAC, particle filtration and UVC treatment to switch on and “treat” these spaces. This on top of an automatic notification for cleaning or hospitality staff to replenish disposable items or disinfect multi-use ones. This is only one very small example of how technology can be utilized to automate and provide for the healthiest and safest possible environment.


Pushing technology so deep into everyday office life, however, has its caveats.


Healthcare security measures will clash with GDPR policies – for example, monitoring people movement, contact relationships, taking regular temperature checks, PCR, or similar tests. GDPR may be a good excuse to negate these measures, but those that manage to find the balance or receive the consent of their clients, will have a much more health resilient, and as a result, business resilient population.


A good question here would be if these measures will “stick”? It is in our nature to be quite forgetful and easily revert to former/older practices. While this is much more often true than not – there are cathartic moments, that not only “stick” but become the criteria of normality. Safety and security measures at airports, for example, were introduced after another cathartic moment and they have become part of our normal way of traveling. We know why the measures are in place and we simply account for the extra one or two hours prior to our flights. But we travel with much more confidence and security. I draw the conclusion that it should not be any different to building confidence and security for our work environment.


So, what will be the impact on the participant mix?


Landlords


Landlords may be at the inflection point of deciding to address the changing behavior of client demand, either by themselves or by partnering. Building an efficient relationship with Operators, through direct partnerships, franchise, or quasi-franchise models. Either way, the writing is on the wall. Change is demanded by clients. This, however, should not be interpreted as a sharp decline in leased m2. Initially, as companies are looking at instilling social distancing within the workplace, larger footprints may be needed by some bigger enterprises. Operating these spaces efficiently, however, is another topic.


Operators


Distinction should be drawn between pure co-working operators and serviced office operators. The former is often categorized with a more aggressive cash burn in order to capture more market share. The latter typically operates on the principle of free cash flow and even if recently stemmed toward some mix of co-working, would still have better resilience to the situation. Those operators that are able to control cash outflows and stop as much of the cash burn as possible, should rather see this as an opportunity to position themselves as potential partners, in the capacity that they are able to handle larger Flex office attributions from Landlords.


Tenants


The biggest risk factor remains proximity to people. Companies will have a much harder time accepting the idea of the mingling and sharing community. It will be a conscious balance between stimulating creativity and innovation and safeguarding the stability of the corporate teams. As this is such a new disruptor, there are few immediate practices that can be employed beyond WHO guidelines and common sense. Such include a radical change in architecture, design, and office layout. The other being technology.


Technology


Technology implementations will augment the wellbeing at the office. Providing additional layers of visibility, security, monitoring, tracking, and reacting. This in itself will have to undergo the test of privacy and GDPR scrutiny, but an explicit buy-in from all clients/occupants will result in a much more resilient community and thus resilient businesses.


Technology can also elevate the remote & home office experience, allowing companies to leverage multi-mode work formats. Perfecting the home office experience through the introduction and implementation of collaboration tools will allow those bound to their homes (because of family or health risk), to continue to contribute to the organization and would testify to those organizations’ claims of diversified delivery channels and work flexibility. Bearing in mind the infrastructure limitations of SOHO, companies have to find the right balance between technological overhead (overcomplicating SOHO deployments) and HQ security and compliance requirements.


Health and Safety Regulators


While this would vary from country to country, even stricter oversight of current regulations and requirements will be enforced. Empowering Landlord, Operators and Tenants alike, to channel any deviations, resulting in collective mindfulness that any shortcuts will be met with the full force of legal and penal law. Building a framework wherein immediate termination can be enforced from either side, for those non-abiding to the ongoing regulations, can establish the foundation of unbreakable trust.

In closing


Bulgaria has been well-positioned in attracting and retaining large clients. In the wake of this office reassessment process – it will be critical that all participants line up quickly and uniformly so that we are ready to retain the clients with the most flexible office experience. Otherwise, we may risk, being a “slow” or “unfavorable” location to other satellite office regions in the CEE.


The biggest mountain to climb, in my view, will be getting everybody (landlords, investors, operators, etc.) on the same page with these new dynamics. As a historically conservative sector, real estate may be tempted to have a slow transition to the new flexible & technologically advanced Space-as-a-Service offering. However, just as the education sector was able to flip to an online model overnight (witnessing this transition first-hand as a parent and co-founder of Telerik Academy), so should the real estate sector be able to transform.


If there is a will, there is a way.

The safety and flexibility of your business are our #1 priority. We have reimagined processes and introduced high-level security measures to power your success and keep your employees safe and productive in the new normal.

LEARN MORE

Keep up with us

Sign up to receive news from Campus X

CampusX-logo-gray.png

info@campusx.company
31 Alexander Malinov Blvd.
1729 Sofia, Bulgaria

COMMUNITY

Members

News

Events

  • Campus X
  • Campus X
  • Campus X
  • Campus X

Campus X, 31 Alexander Malinov Blvd., Sofia, Bulgaria

Copyright © 2019 Campus X. All rights reserved.