Brightspot its about the work ispe 2011 - final

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Workshop Presentation from ISPE 2011 Annual Conference. Presentation focuses on a new value proposition for workplace strategy that focuses on employee engagement productivity rather than space savings based on the relative value of each. Concrete examples of what organizations can do - along with possible ROI - are provided.

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Brightspot its about the work ispe 2011 - final

  1. 1. It’s About the Work:Strategies for Space, Services, and CultureElliot Felix | brightspot strategy
  2. 2. it’s about the work objective: redefine the value proposition of workplace strategy, describing ways to improve space, services, and culture so that people and organizations can thrive. agenda: 1.  value proposition for workplace strategy 2.  tactics to achieve tangible benefits 3.  q & aBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 2
  3. 3. I. workplace strategyBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 3
  4. 4. workplace strategy, defined Workplace strategy is the process of aligning the workplace with an organization’s future vision and business goals. It is developed from engagement with people to enable change and research and analysis to enable informed decision-making. aligns space with engagement with informed by research business strategy staff and leadership and analysisBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 4
  5. 5. an example ©brightspot strategy 2011 All Rights Reserved. ISPE Annual Meeting 2011 5
  6. 6. Google Google’s workplace fosters collaboration, enables customization, provides a variety of settings, and reflects the brand and values. Google London Googleflickr: christiano Mountain View HQBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 6
  7. 7. Google what works1: work and culture drive space provides a variety and choice of spaces enables personalization balances interaction with concentration 20% time and manager training complement space Consistent Fortune Top 5 company to work for $1.2M revenue/employee annually2 1.  Further information on Google’s Workplace Philosophy available in previous talk: http://bit.ly/uMLwqS 2.  2010 revenue = $29,321,000,000 http://investor.google.com/financial/tables.htmlHQ employees Google London Google Mountain View 2010 = 24,400 http://investor.google.com/earnings/2010/Q4_google_earnings.htmlBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 7
  8. 8. workplace strategy the current value proposition (paraphrased): Space is an incredibly valuable commodity: It can foster communication and teamwork It can help your people be productive It can express your values and brand So… You should have less of it and reduce your real estate cost. (When explaining this, use ‘open’ and ‘collaborative’ as synonyms for ‘less’) Google London Google Mountain View HQBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 8
  9. 9. workplace strategy the problem with this approach: The people within an organization are much more valuable than the space they are in, and viewing space as a cost to be reduced means all you can do is take it away. Google London Google Mountain View HQBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 9
  10. 10. some calculations* *Using rough numbers to illustrate directional thinking so not intended as an exhaustive analysis. Improvements welcome.BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 10
  11. 11. space and people, comparedAnnual Workplace Costs1 Annual People Costs2Leasing Cost/Sqft $50 Base Salary $65,000.00Energy Cost/Sqft $5 Social Security $5,000.00Subtotal $55 Retirement $6,500.00Typical Sqft/Person 200 Disability $1,200.00Space Cost/Person $11,000 Healthcare $6,300.00Technology Cost/Person $6,700 Time Off $8,250.00Total Cost/Person $17,700 Total $92,250.00 conservative space : people ratio = 1:5 1.  Space assumes class B office space in NYC or Class A in other metro centers, with energy costs and space per person estimated based on experience (high, conservative #s). Tech costs from Computer Economics 2011 Benchmarking Report. Cf. previous calculation by M. Brill / BOSTI or Scott Francisco 2.  $65,000 salary based on National Academies Report:Google Mountain in Biotechnology” by Fiona Google London “Knowledge Workers View HQ Murray and Helen Hsi. Benefits from salary.com for pharma sector (~1.4x multiplier)BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 11
  12. 12. space saving scenariosAnnual savings in space costs Low High Densify1for 500 people Mobile2 Mobile3Base Sqft / Person 200 200 200Reduced Sqft / Person 160 135 110Savings 40 65 90Cost Savings / Year / Person $2,200 $3,575 $4,950% cost reduction 12% 20% 28%Cost Reduction for 500 people $1,100,000 $1,787,500 $2,475,000Renovation Cost ($100/ft/10yrs) -$800,000 -$675,000 -$550,000Net Savings for 500 people $300,000 $1,112,500 $1,925,000 1.  Densification: reduction to 120sqft offices, 45sqft workstations @1:5, +25 sqft team space / person 2.  Low Mobility: 10% offices, 20% sharing @ 3:1, 40% @ 1.5:1, 30% @ 1:1, + 20-40 sqft team space Google London Google Mountain View HQ 3.  High Mobility: No offices, 25% sharing @ 5:1, 50% @ 3:1, 25% @ 1:1 + 20-40 sqft team spaceBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 12
  13. 13. space saving scenariosScenarios for reducing Low High Densifyspace for 500 people Mobile MobileSpace Reduction 25% 33% 45%Cost Reduction for 500 people $1,100,000 $1,787,500 $2,475,000Costs to Renovate ($100/ft) -$800,000 -$675,000 -$550,000Net Savings for 500 people $300,000 $1,112,500 $1,925,000But…Productivity Loss that 1% 2% 4%Negates Space Savings1 ~2 weeks @ 0% ~4 weeks @ 50% ~8 weeks @ 75%   Google London Google Mountain View HQ 1.  Taken as Net Cost Savings / (500 employees x annual salary and benefits)BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 13
  14. 14. results The trouble is: The results of workplace strategy are mixed – sometimes decreasing costs and increasing productivity, other times decreasing both. Good Example: Bad Example: GlaxoSmithKline “The sum of our mobile office for research reveals that increases a space may or may productivity and not encourage revenue growth1 interaction….”2 ✓   ✗   1.  Strategy by DEGW / Design by JacobsWyper. Case study: James Murdock, HQ Magazine September ‘10. “A Prescription for Profit” http://hq.construction.com/case_studies/0911_GlaxoSmithKline.asp 2.  Anne-Laure Fayard and John Weeks Harvard Business Review July 2011 “Who Moved My Cube?”BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 14
  15. 15. scale of knowledge workers in U.S.1. US Bureau of Labor Statistics, non-farm as of 1/11 4. Low Mobility Scenario, at135sqft/person2. Tom Davenport estimate in Thinking For A Living 5. $100/sft over 10years (some cost by landlord)3. Average from www.indeed.com job aggregator 6. Guess $200/person for typical workplace strategyBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 15
  16. 16. we need a different approach…BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 16
  17. 17. workplace strategy, redefined new value proposition: what if we measured success not in the amount of space reduced but in the amount and quality of time gained? then workplace strategy would… align an organization’s space, processes, and culture with their business goals so employees can be engaged and productive.BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 17
  18. 18. II. strategies:space, services, and cultureBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 18
  19. 19. workplace strategy impacts Comparison of cost savings from vs. return on investments from possible* workplace strategies (500 person company) workPLACE     WORKplace *Rough estimates based on available data. Opportunities will vary by workplace and organizationBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 19
  20. 20. distractions The average knowledge worker is distracted 2.1 hours per day (including recovery time). However, distractions can be managed by creating shared norms/protocols and by providing a variety of work settings for internally mobile employees. understand different create shared norms provide quiet and ways of working and space protocols lively places to go to(-) Interaction (+) Google London (-) Mobility (+) Google Mountain View HQBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 20
  21. 21. distractions: example ROIAnnual Workplace ImpactHours Distracted per day a Typical Knowledge Worker1 2.1Hypothetical # of Employees 500Workdays per year 230Total Hours Distracted for all Employees 241,500Estimated Reduction2 25%Hours Gained 60,375Hourly Wage ($65,000 @ 40 hours/week) $31.25 Return on Investment $1,886,719 1.  “The Cost of Not Paying Attention: How Interruptions Impact Knowledge Worker Productivity” BaseX Whitepaper. PDF Download: http://bit.ly/t3ts73 (includes distractions plus recovery time to return to task). Multitasking is also contributes to this issue. Cf Amabile et al on negative impact on creativity: http://bit.ly/s02LjP (pdf) or Dux et al on how multitasking takes 30% longer: http://bit.ly/tSP9nz (pdf) Google London Google Mountain View HQ 2.  Guess based on establishing protocols and enabling mobility and choiceBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 21
  22. 22. technology-related time loss Working in more mobile and collaborative ways requires new kinds of support within the workplace - mobile communication, room reservations/setup, technology support, meeting facilitation, food and events. These services need to be designed.VISION AND WORKSTYLES & CUSTOMER SERVICE PROTOTYPESPHILOSOPHY PERSONAS JOURNEY MAPS BLUEPRINTS AND PILOTSDe ning what Creating pro les of Illustrating the user Providing guidance Testing designs tosuccess is for the the motivations & experience of a on the delivery of a mitigate risk and toservice and values behaviors of user space/service and service for staff and prepare the userto guide decisions types to support the “touchpoints” identifying systems baseBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 22
  23. 23. support service design: example ROIAnnual Workplace ImpactHours lost per day to technology issues1 0.33Hypothetical # of Employees 500Workdays per year 230Total Hours Distracted for all Employees 37,950Estimated Reduction2 50%Hours Gained 18,975Hourly Wage ($65,000 @ 40 hours/week) $31.25 Return on Investment $592,969 1.  Statistics compiled from interactive feature from: Laing, Craig, and White: “Vision Statement: High- Performance Office Space” Harvard Business Review. September 2011. http://bit.ly/spAMrd 20mins per day seems like a conservative number so additional ROI would be likely for for some organizations 2.  Guess based on use of service design to develop new support services (helpdesk, scheduling, room Google London Google Mountain View HQ setup/reset, etc)BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 23
  24. 24. meetings Meetings are an essential part of work but often a waste of time. Based on a Microsoft survey:1 they are ~70% unproductive (63% don’t have agendas). Designing better meetings2 means considering purpose, people, protocols, product, and place. PURPOSE PEOPLE PROTOCOLS PRODUCTS PLACEWhat is the meeting What type of group How will people What does the What’s the bestaccomplishing? is it? E.g.: Deciders / participate? How group need to setting for theWhat is the desired creators? Recurring will decisions be produce? A list? A people andoutcome? or 1-time? made? map? A prototype? activities involved? 1.  Microsoft 2005 survey: http://bit.ly/ucbVDm Google London Google Mountain View HQ 2.  Forthcoming article: “Meeting By Design” by Elliot Felix and Susan Worthman on the “5ps” approachBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 24
  25. 25. meetings: example ROIAnnual Workplace ImpactTypical Daily Hours in Meetings1 2.04Hypothetical # of Employees 500Workdays per year 230Total Hours Meeting for all Employees 234,600Estimated Reduction2 40%Hours Gained 93,840Hourly Wage ($65,000 @ 40 hours/week) $31.25 Return on Investment $2,932,500 1.  Average of two most cited statistics: 37% of time (National Statistics Council, cited in Verizon report: http://bit.ly/rKSLao) and 5.6 Hours per week (Microsoft 2005 global survey: http://bit.ly/ucbVDm 2.  Conservative guess based on participants estimates of % of unnecessary meetings and wasted time. Cf. Wall Street Journal estimate of 80% reduction by followingMountain View HQ Google London Google agenda and starting/ending on time: http://bit.ly/udJ8OzBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 25
  26. 26. engagement Gallup estimates the lack of engagement at work costs $300 billion annually.1 A clear purpose enables an organization to function more like a cause than a company. The culture of the organization can develop it & a healthy workplace can sustain it. understand drivers develop the culture align workplace of engagement of your organization image with brand Drivers of Engagement1 %* Leadership 80% Image / Brand 60% Career Development 47% Empowerment 47% Google London * = citing as top Google Mountain View HQ Towers and Watson Survey “creation story” example Autodesk Workplace GalleryBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 26
  27. 27. engagement: example ROIAnnual Workplace Impact “Not Engaged” “Actively Disengaged”% of Employees (Gallup)1 55% 16%Hypothetical # of Employees 500 500Employees Not Engaged 275 80Estimated Loss of Performance2 25% 50%Average Salary $65,000 $65,000Estimated Loss $4,468,750 $2,600,000 Subtotal Loss $7,068,750 Estimated Improvement3 30% Return on Investment $2,120,625 1.  Gallup estimate of employee engagement (estimated to cost $300B) http://bit.ly/tBLj6L 2.  Actively Disengaged based on average of statistics product, cost, and customer service score from Seijts, Gerard H. and Dan Crim (2006). "The Ten Cs of Employee Engagement.” Ivey Business Journal. 3.  Based guess of 50% improvement for 60% people identifying “image” as driver in Towers and WatsonBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 27
  28. 28. turnover Reducing turnover has a cumulative effect because people reap other improvements. It can be increased with holistic view of space, process, and culture – critical since 88% of voluntary terminations are non-financial1 and turnover cost 150% salary.2 space reflects brand, work processes are understand and act values, and purpose aligned with purpose on retention drivers Leadership Traits %* Trust 79% Caring 67% Encouraging 56% Visible 42% Financial Mgmt 42% *Towers and Watson Survey 1.  PWC Saratoga Institute study cited in Leigh Branham Seven Hidden Reasons Employees Leave 2.  Society London Resource Managers, for “Professionals” (can Mountain View HQ executives) Google of Human Google be up to 400% salary forBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 28
  29. 29. turnoverAnnual Workplace ImpactsAverage Annual US Turnover rate1 (excluding retail) 15%Hypothetical # of Employees 500# of Employees Leaving Each year 75Percent Non-Financial Root Cause 88%# of Employee Leaving, Culture-driven 66Assumed Reduction through Workplace Culture 25%# of Employees Retained 16.5Average Salary w/ Benefits ($65,000/yr x 1.4) $92,250Average Replace Cost as % of Salary2 150% Return on Investment $2,283,188 1.  US Annual Turnover rate across all industries is 24% (Bureau of Labor Statistics), but because retail turnover rates are high (40+%), we conservatively estimate 15% excluding retail. 2.  Society London Resource Managers for “Professional Staff” Retaining Talent http://bit.ly/sJkTv2 (pdf) Google of Human Google Mountain View HQBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 29
  30. 30. workplace strategy, redefined Getting started means looking at each workplace and organization and and Turnover?   then mapping opportunities ✗   Hard to increase engagement and Difficulty* Engagement?   productivity within the workplace by considering space, services, technology, Distrac$on?   ? processes, and culture. Easy Technology?   ✓   Mee$ngs?     ? Low High Impact* Google London *Educated guess. Will vary based on organizationBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 30
  31. 31. it’s about the work… Workplace strategy can help people and organizations thrive, Revenue (10x) offering a great work experience and it’s outputs. To do this, organizations must: •  Provide a healthy, stimulating, and magnetic place to work with variety and flexibility •  Manage distractions Revenue (2x) multiplier effect   •  Design more effective support services People •  Meet more effectively •  Create an engaged culture that people want to be a part Facilities of and are less likely to leaveBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 31
  32. 32. questions?BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 32
  33. 33. presentation link:www.bit.ly/ISPEwork(case sensitive)BRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 33
  34. 34. thanks!Elliot Felixelliot@brightspotstrategy.com@brightspotter@elliotfelixBRIGHTSPOT STRATEGY ©2011 All Rights Reserved. ISPE Annual Meeting 2011 34

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