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The Office Dilemma: what changed since early 2020

By Campus X's Co-Founder and CEO Boyko Iaramov


Let me preface this article with something which is extremely important to get across from the very beginning:


The drive behind my analysis is not to judge the decisions of any organization and its people, whether they will revert to pre-Covid office use practices or not. The complexities and internal dynamics specific to each organization and its people are so encompassing, that anyone that claims to have a complete grasp and understanding of this, to me, is delusional.


This analysis is a challenger view for those organizations that in any form, size and fashion decide to have some sort of physical office footprint. A challenger view that aims to empower these decision-makers with the complete set of transparent tools and provide an alternative way to analyze the conventional office model as it depreciates post-Covid and the flexible office model that is gaining worldwide momentum.


Campus X flexible workspaces in Sofia, Bulgaria
Campus X, Sofia

In hindsight


We talk of the transformation of office services due to Covid- 19 as if this was a flawlessly operating sector before that. Muted within the comfort of operational inertia, there were many signs that this segment was ripe for innovation and disruption.


The global health pandemic was not the spark that ignited the remote office quest. People were the spark.

Long before COVID-19 people craved flexible ways of working but there were just a few sectors willing to embrace the unknown (at the time) and build for a flexible workforce with a flexible office footprint. In fact, research by Eurostat conducted in 2019 states that the lowest rates of teleworkers in the EU were reported in Bulgaria (0.5%).


Why? Simply because there was no governing mandate to invest in something new when the old seemed to do the job.


Then COVID-19 came, everything changed overnight.


All of a sudden, employees were finally empowered to take a stand, demanding flexibility of how they delivered their output and employers had no choice but to succumb to this – rushing in to “catch up” with missing remote-only practices across all levels of their organizations.


Since this article aims to be forward-looking, spending more time on the “days long gone”, serves no purpose and I will allow all the readers to honestly reflect on the above in the comfort of their private homes.


But my main point is – the office experience was ripe for transformation well before COVID-19 struck.

I know this will stir a lot of thoughts and comments. I welcome all. I am speaking from my first-hand experience as a tenant of a growing IT company, as a property owner for the largest IT Bulgarian exit (Telerik, which got acquired by the American Progress), and as an operator of four business properties in Bulgaria (Campus X).


All along these two decades, I have witnessed the deficiencies of the legacy modus operandi. Yet, entrenched deep into archaic infrastructure, all participants in this supply chain stood to benefit, while providing no breathing space for any major disruption. Not unless someone with a completely radical vision and sufficient backing came along and pulled the rug underneath the Barcaloungers enthroned by realtors.


And just like in many other sectors –transformation happened. Slow at first and then quickly Regus/IWG, WeWork, and other challengers grew from a small pea-size discomfort under the mattress, to an unbearable reality in the office segment. The introduction of Office-as-a-Service was born and now any client has the opportunity to tailor their office experience directly with the provider – adding and removing capacities and add-on services, expanding or reducing footprint based on business drivers month-to-month, and enjoying many more freedoms within their new office.



Flexible work at Campus X, Sofia


This was a necessary preface, so as to level set that I address the deficiencies of office space services in Bulgaria not from the angle of the pandemic alone but combined with the many signals the sector was receiving from clients long before that. The first being:


Legacy inertia


“ELECTRIC LIGHT DID NOT COME FROM THE CONTINUOUS IMPROVEMENT OF CANDLES” – Oren Harari

As with any historically stable sector, we were comfortably bound to the delirious inertia of legacy business habits. Since this may sound like a mouthful – let me try to put this in context with some parallel examples:


Health and Pharma


Starting from the topic, which has been on focus in the recent year and a half. It’s groundbreaking to witness the development, distribution, and management of a global vaccine rollout just a few months after the COVID-19 pandemic struck. Approaching a global crisis both from the health perspective, but also from an innovative approach to vaccine development. Had it not been for the urgency put upon these domains, we would most likely continue to move forward no faster than we use to before. How long would a new vaccine otherwise take to develop? How else can we pursue global coordination and vaccination coverage? R&D, Technology, and infrastructure lay the foundations.


Education


(Please note that I base my analysis and commentary on education in Bulgaria as a focal point.)


With the rare exception of a few early believers in online education, there was no support whatsoever for laying the foundation of a functional infrastructure in educational institutions, to allow developing additional and alternative methods of learning. Many attempts have been made through the years via business angels, non-profit organizations, and private participants to engage in a discussion to embrace technology in schools and allow further flexibility for learners.


Except for a few bright but small sparks in the dark sky of disillusionment, online education was labeled as a no-go. Well, I ask, where were your kids during all the lockdowns and the quarantine periods? They were trying to catch up word-for-word what on-premise schools would teach them, but now – through a new online medium. I would hurry up and agree with many of you, that this new “experience” was far from ideal. It severely lacks the necessary excellence. But it was the start that gave way to the “no-go” mentality towards diversifying and providing more flexibility towards learning.


Transport/logistics/mobility


Carsharing (Uber, Lyft, Spark), Unmanned cargo (ZipLine, Dronamics), autonomous vehicles (Tesla, Amazon). Not only in Bulgaria, but worldwide we are witnessing an unbelievable disruption of supply chain optimizations and people and cargo mobility.


Entertainment


Where is Blockbuster now? Netflix has dominated video streaming and video content consumption alongside YouTube and other platforms. Audio CDs are long gone, as they initially were disrupted by peer-to-peer pioneers like Napster and Kazaa and eventually the music industry fully endorsed models of Spotify, Tidal, and many similar.


And finally, Office Space:


While we have Airbnb and Booking.com for residential spaces, we were slow to recognize the need to transform the office sector until recently (prior COVID-19). Small and fragmented steps were made in democratizing office space. While I am sure, many will jump to the example of WeWork, putting aside for a moment crazy valuations and over-confident leadership, WeWork were among the first ones to vocalize, visualize and execute, an alternative way in which companies and individuals can think about and benefit from physical workspaces. Taking a more structured and analytical route Regus/IWG has grown to be the dominant provider of flexible spaces even through the rough Covid-19 months.


Fast forward to today, when many businesses are still trying to figure out what is the best way to survive and grow. Along with the multiple line items within the general ledger, there are those classified as General & Administrative Costs – rent rates, office upkeep and maintenance, and other operational costs which often remain buried under many other business-critical entries. Yet, due to legacy inertia, this is exactly how these entries had been disguising the complete true cost of office operations.


With the global pandemic, more than ever, organizations and businesses were challenged to do an extremely deep dissection of every single ledger item that can be optimized.


For the first time in many years, every idea (however crazy, bold, or not typical) was welcomed on the table, as long as it provided a more efficient alternative to how things were done yesterday.

With every subsequent lockdown, old ways of utilizing office spaces were slipping further and further away from a meaningful method of continuing to run these operations.


Lengthy contracts that provided higher % discounts down the years, now seemed like shackles dragging companies deeper and deeper into the moving sands of the divergent workforce, now eyeing the opportunity to build a hybrid approach to office and remote work.


Just like the many other business processes, companies were finally forced to look for alternative ways to build their future spaces and maintain the specifics of their internal culture, all the while, no longer locking in for the % discount upside.


Recognizing the opportunity to continue to operate in excellence, yet not be bound to any limitations and capital investments is as liberating as getting out of an Uber in downtown traffic and not caring where to park or what happens next with your vehicle.

The freeing sensation that you can now entirely focus on your business and services and know that every other detail is handled by core-focus specialist operators, provides bandwidth, resources, and time to invest in your core focus – team, product/service, and clients.



Flexible offices, Campus X, Sofia
Flexible offices, Campus X, Sofia

So where is the catch, you may ask? That single question is yet another demonstration of the comfort of inertia and resistance towards disruption and innovation. Per Sundin is quoted as saying “The first mistake we made was trying to defend our existing business model” when referring to the potential for disruption in the music sector when digitally downloaded music was not a thing. Fast forward now through Napster, Kazaa, iTunes, Spotify, etc. Long gone are the old ways of doing business.


As with health, education, transport, and entertainment, the workspace sector is long overdue for disruption, and those who stand to benefit the most will be clients (please, note I would never refer to members as “tenants” as the term refers to the old modus operandi), who can leverage on an optimized end-to-end solution to their office needs.


Flexible office services, encompassing the whole scope of services that a business needs, have the gravitational pull of a disruptor.

Executed with a focus towards the client, and continued innovation in the breadth and depth of services required onsite by clients, these are the Operator partners that future companies will want by their side.


At Campus X, we put clients in full control


In the last year, we have taken our mission-bound client-focused approach a step forward. We further augmented it by empowering our clients with transparent decision-making tools like our new real-time office search and pricing tool, which puts users in full control of their search criteria, while not requiring any personal interaction unless explicitly requested.


Thus, we provide a way to quickly, objectively, and most importantly of all, with complete flexibility make strategic business decisions so as to best align with the dynamics of an ever-changing environment.

Building on top of this frictionless “discovery” tool, we have transparently published our complete pricing configurator, enabling each client to book any service they deem necessary at the moment of booking. Decoupling any component of the office experience, so as to address a “snapshot need” of any client, enables an efficient mechanism to grow into a full scope of services if and when a client is comfortable.


Going back to the various general ledger entries and their part in forming the true cost of an office operation, which spreads way beyond a simple charge per square meter, we have developed an interactive model (True Cost of Operation), which provides all our prospective clients with the means to uncover the true cost of utilizing an office space and plan for the future development of their teams.


This tool not only allows users to take into account items that are usually not directly associated with running an office (e.g., anything from network infrastructure and security through the team’s beverages and use of collaboration facilities, capital investments, and others) but also provides them with valuable insights, tips, and best practices. We will soon uncover this insightful tool on our website, again with the purpose of providing complete transparency within the decision-making process.


In the coming weeks, we will also share the next steps we are taking for supporting our consciously curated community and the immense achievements we are already seeing from members of Campus X.


To be unveiled soon.

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