Managers are cutting capital budgets to the bone, renewing leases at significantly lower rates, consolidating and shedding excess space, and trying to be more thoughtful about how they use their real estate. Many facility managers are seizing opportunities created by consolidations and moves to reduce costs through improved space planning and greater flexibility. A growing number of facility managers are looking more closely at how employees work, and they are using that information to plan more effective workplaces.
“The real focus is, on spending less and making change easy.” says John Duvivier, principal of the architectural and design firm, Bottom Duvivier of Redwood City, CA. “I think the idea of being able to adapt is very Darwinistic. People realize that if they’re not capable of changing on a dime, they could get eliminated in a hurry.”
“Everybody’s doing the same thing,” notes Bill Davies, president of Davies Office Refurbishing, Albany, NY. “How do we take real estate that costs X dollars a square foot and get more productivity and efficiency out of it? Most corporations say, ‘We’ve got to squeeze the space down,’ or, ‘We’ve got to re-think how we’re doing this’.”
An example of effective space planning comes from the tech world’s Sun Microsystems, whose real estate portfolio contains more than 10 million square feet worldwide. Holdings range from large campuses with a mix of assigned and unassigned space to drop-in centers located closer to employees’ homes. Sun entered fiscal 2003 with plans to trim its work force 11% and shed excess space, but the company has also been looking at ways to spend its real estate dollars more effectively going forward. Key findings from studies conducted by Bottom Duvivier at the Sun facilities offer clues as to how the technology company might do that.
“If you look at the traditional Sun work environment, the overall use of space is somewhere around 40%,” says Duvivier. Utilization rates, he notes, are not significantly different between assigned and unassigned spaces, even though approximately 20% more people use unassigned space. By contrast, usage of the satellite centers is more than twice that of the regular work environment. “What that tells you, I think, is that given the choice, people want to work really close to home, and they’ll do whatever it takes to do that.”
When times are tough, companies tend to increase density as a way of improving space management and lowering occupancy costs. That’s happening today, but not always by shoe horning people into less space. Gagan Singh, vice president of New York, NY- based HOK Consulting, cites two clients, a publishing house and an insurance firm, that increased density 10% to 15% and achieved greater flexibility in managing costs.They accomplished this by eliminating the two larger of their three private office footprints, the smaller of their two work station footprints, and then outfitting each in different ways to support a range of job functions.
No Corner Offices
Fewer standards and allotments based on job function rather than title have the added benefit of de-emphasizing hierarchy at companies where that’s a goal. “Most of the people who are building new space are not going with hierarchy, and as soon as you flatten out these standards, hierarchy starts becoming less and less relevant,” says Singh.
Similarly, private offices for senior executives continue to shrink, and conference rooms once reserved exclusively for executive use are becoming available to the rest of staff.
While executives are having to give up their amenities, companies as a whole are not giving up any of the formal and informal meeting spaces that have proliferated across office landscapes in recent years as companies shifted to teaming. “The need for creative space is still there,” says Michelle Olmstead, senior associate at DES Architects and Engineers of Redwood City, CA. “People are still using those soft spaces, meeting spaces, and informal gathering and team spaces. But we’re not seeing half the real estate as playground. There’s much more attention paid to how real estate is used for space issues.”
Wide Open Spaces
The trend to open plan remains strong, partly fueled by corporate America’s continuing efforts to improve communication and collaboration and, more recently, by the sagging economy. Businesses like open plan for tried and true reasons. The approach can accommodate greater densities, it is far more flexible, and it is more cost-effective to manage than floors carved up by hard wall offices and doors.
Even companies steeped in a culture of private offices are venturing into open territory. In New York City, for example, many conservative financial institutions landed in open space when the loss of the World Trade Center forced them out of lower Manhattan. Needing to get up and running fast, they found temporary quarters in the only space that was finished, furnished, and vacant at the time-former dot-com offices in the city’s Silicon Alley area.
“That space was, in many ways, more open and more aggressive than what the conservative bankers were used to,” says Singh. “They adapted, and when they finally moved to permanent space after a year or so, the new locations, in certain cases, took on more open characteristics just because these people had become used to it in their temporary spaces.”
Within open plan, teaming environments remain in vogue. There is greater recognition, however, that the kind of environments that have become synonymous with teaming-wide open areas with individual work stations adjacent to meeting spaces and little or no visual or acoustical privacy-aren’t appropriate for everyone.
“It was great for people whose work actually required that kind of team solution, like a marketing group that needed to get together frequently to discuss how they’re going to approach a client,”says Nancy Levy, managing principal, Interior Architects Performance Consulting of Hermosa Beach, CA. “But if you’re someone who’s doing research and development or testing software, it’s very counterproductive to have people talking right next to you.”
There are also plenty of people who work in teams but also need some time to work alone. So facility managers and designers are looking more carefully at how they plan for teaming in the future. “We’re not necessarily building private offices for job functions that previously didn’t require them, but people are paying more attention to acoustical privacy and privacy from circulation spaces,” says Olmstead.
In some cases, facility managers are going back and tweaking existing teaming solutions. For example, putting in higher panels might help people who sit near circulation paths and need a little more privacy.
Technology continues to drive changes in the way people work and how spaces are planned. Growing use of Web-based tools that enable people to connect through technology is encouraging more telecommuting, remote collaboration, and globally dispersed work groups while driving down the number of seats companies need for employees.
“Many years ago, there was much more demand in terms of looking at adjacencies and saying, I have to be by this group because we work together,” says Levy. “Now, because people can share data across the country, and across the world, we don’t find that people have to be right next to each other.”
Technology is affecting law firms in some dramatic ways. More attorneys are working with cell phones and laptops. Databases are doing away with the need to maintain large libraries of books. At the U.S. Courthouse in San Francisco, CA, Bottom Duvivier participated in a pilot program for the Federal Bar Association. The company took roughly 2,000 square feet. from an unused portion of an old law library in that building and transformed it into a drop in work center for lawyers.
“It’s like a red carpet club,” says Lisa Bottom, principal at Bottom Duvivier. It has meeting spaces, a couple of small conference rooms, a couple of private phone booths where you can close the door, a counter where you can plug in a computer or sit and return phone calls, and some soft seating.
Lawyers are hard-copy intensive, and few law offices would be complete without a central file room. Yet lawyers tend to make multiple copies rather than use the central files. No one really expects central files to go the way of the shrinking law library, but technology is beginning to be used in innovative ways to try and contain the size of those expensive rooms and improve the way law firms manage their information.
High-density mobile storage is also on the rise in other industries needing greater storage capacity but have limited floorspace, says Christopher Batterman, director of marketing for Spacesaver Corporation, Fort Atkinson, WI.
Raised floors are gaining ground, most noticeably at technology companies and biotechs, giving these businesses much greater flexibility in running cables and managing change.
While wireless technologies are still in the early stages of adoption, they could be a force down the road. “The basic change we’re finding with wireless is that we’re not so dependent on furniture for bringing technology to the workplace,” says Olmstead. “We used to have to look at a panel and wonder how many cables it could hold? Wireless systems are freeing up our ability to plan a space.”
In this post 9/11 world, everyone is concerned about security. Nevertheless, security issues have had minimal impact on commercial buildings to date from a space planning perspective. “Access to visitors has become more complicated in certain situations,” notes Singh. “Most visitors are not encouraged to go into the office building as part of the new security model.” Instead, he notes, a single tenant building might provide visitor spaces near the main lobby. A company in a multi tenant building might provide visitor spaces adjacent to their elevator lobby.
Despite all the challenges businesses face, many remain focused on creating the most effective workplaces possible. “The reality is, the new trend is being driven by economic circumstances,” says Bottom. While some U.S. markets-like Boston and San Francisco-see a glut of furniture and commercial spaces, not many other companies are there to pick up the slack for the tech companies that are no longer eating up the workplace.
Dubbs is a freelance business writer specializing in commercial real estate and facilities issues. She is based in Escondido, CA.
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