Towards new ways of working

1. Space for Success
SENATE PROPERTIES
Towards new ways of working
Aalto University 10.3.2016
Kasper Fabritius
http://vimeo.com/111627001

2. CONTENT
TRENDS
FINLAND
SENATE PROPERTIES
SENATE PROPERTIES’ SOLUTIONS
RE-IMAGINING WORK
MARKETING
CASE STUDIES
A CHANGING GOVERMENTS

3. TRENDS

4. 4
MEGATRENDS
4
• Virtual reality
• Crowd sourcing
• Interactive media
• Sharing economy

5. SHARING ECONOMY
5

6. 6

7. FINLAND

8. FINLAND
8
Finland
Population 5,5 milj
GDP (nominal) per capita 51 $
Government spanding to GNP 59%
Government debt to GNP 57%
Youth unimpolyment rate 21%
Government employees of total workforce (2011) 22,8%
Ministries 12
Source: www.tradingeconomics.com, OECD, wikipedia

9. CURRENT SITUATION IN FINLAND
• Serious economic problems with growth and employment
• Structural deficit of the public sector
• Need for downsizing of the public sector spending
9

10. 10

11. STRATEGIES AND POLICIES BY THE FINNISH GOVERNMENT
11
State Premises
strategy 2014
(Demand)
State real
estate strategy
2010 (Supply)
Principles of ownershipPrinciples of use of premises

12. 125.8.2014
Social and environmental
responsibility
Space efficiensy targets:
Buildings in need of
basic renovation
FINNISH GOVERNMENT PREMISES
STRATEGY AND POLICIES New buildings
18 m²/FTE 15 m²/FTE
Reduced facility costs
More flexible lease agreements and premises
Health, safety
And well-being
Activity-based and Mobile
Work
Senate Properties as an advisor

13. SENATE PROPERTIES

15. Market
Customer focus
- 1995
2000
2011->
Solution provider
Expert services

16. SENATE PROPERTIES – A CUSTOMER ORIENTED APPROACH
• Government enterprise
• Service-oriented approach since 2001
• Key account manager organisation that focuses
on the customer
• Strategy to increase service offering
1. Operational user services
2. Expert services
• Current model is to be a solution provider
• Value proposal: Work environments for the
Government

17. KEY FEATURES OF THE FINNISH MODEL
• Uniform rental model for all functions of
Government
• Gross rents + services
• Centralised ownership and services provision
• Senate Properties is the government single
window towards the market
• A 90% outsourced model for the property unit
(Senate)
• Corporate-mimicking setup for Senate to
enable transparency and comparability
(benchmarking)
17

18. CENTRALIZATION OF THE STATE
PORTFOLIO INTO ONE UNIT
18
National Board of Public Buildings
Education
Defence
Prisons
Culture
Border Guard
Universities
1995/1999 20102001 2003
Road and Rail administraion properties
Border Guard
Separation
between
ownership
and
operations
Economies of scope and scale

19. SENATE’S STRATEGY 2015-2018
19
To change
the mindset
about work
To introduce
a new norm
of “new
ways of
working”
To earn the mandate to be in charge
of a change program to create
savings for the government.
To create generic solutions using
mass-customized services to enable
the required improvement of
efficiency
To create
economies
of scope and
scale
Substantial savings in a faster time
frame
A new norm
of work
Responsible
LCE solutions

20. OUR STRATEGIC GOALS
IMPLEMENTING NEW GOVERNMENT WORKING
PRACTICES AND A NEW WORK ENVIRONMENT
PHILOSOPHY THROUGHOUT THE CIVIL SERVICE
To be a pioneer in this sector
with regards to operating in a
socially responsible manner
increase in
organisational
performance
M €
1%
=
financial
relevance appr.
40
DID YOU KNOW?
REALISING SAVINGS OF
EUR 100 MILLION
in premises costs for the
government over
8 YEARS

21. 21

22. SENATE PROPERTIES KEY FIGURES
Buildings
9 700
State premises
6200000
Staff
309
Offices
11
Rented from private
lessors
1000000

23. Strategy, Development and
Information Management
Financial Management
Human Resources and
Development
Internal Auditing
Marketing and
Communications
Operating Unit
Constructing
Management
Region South Finland
Region West Finland
Region East Finland
Region North Finland
ORGANISATION
Board of Directors
CEO
Defence and
Security
Ministries and
Special
Premises
Offices
Real Estate Development
and Sales
Workplace and
Maintenance
Services

24. STATE PROPERTY ASSETS
10 000
BUILDINGS
OVER
6,5 Mm2
TOTAL
AREA
470
LISTED BUILDINGS
RENTED
FROM PRIVATE
LESSORS
approx.1 Mm2
SHARE (m2
)
MILITARY PREMISES………………..........................46 %
OFFICES ............................................................. 21 %
HERITAGE PROPERTIES......……………………………… 8 %
PRISONS ...............................................................7%
POLICE FACILITIES ................................................4%
COURTHOUSES ....................................................3 %
BORDER GUARD AND CUSTOMS FACILITIES.....3 %
MUSEUMS .......................................................... 1 %
OTHER.................................................................. 7 %

25. CUSTOMER SEGMENTS
25
Properties M€
1 374 1 637
999 286
Ministries and Special
Properties
Defence and security
Offices Development properties

26. 26
Sales portfolio
0,5+Mrd €
Objects for sale
500+OBJECTS
Sales target 2016
135M€
Sales target 2016
100OBJECTS
REAL ESTATE SALES TARGETS
Senate Properties leases
from the market
~ 50M€ / YEAR
Public Sector leases from the
market
~ 130M€ / YEAR

27. 27
WE OFFER THE BEST PROPERTY
INVESTMENT OPPORTUNITIES
IN FINLAND

28. 28
www.statepropertiesforsale.fi

29. COSTS
Premise costs as
percentage of the state’s
operational, salary and
pension expenses
9%
STATE
PREMISES
€950
RENTAL COSTS
M/YEAR
PM’S OFFICE……………………………... 1 %
FOREIGN AFFAIRS……………………….. 3 %
JUSTICE…………………………………….. 12 %
INTERIOR………………………………….. 12 %
DEFENCE...………………………………… 33 %
FINANCE..…………………………………… 8 %
EDUCATION & CULTURE………………. 7 %
AGRICULTURE & FORESTRY…………… 4 %
TRANSPORT & COMMUNICATIONS... 5 %
EMPLOYMENT & ECONOMY……….. 10 %
SOCIAL AFFAIRS & HEALTH……………… 3 %
ENVIRONMENT........................... 1 %
DISTRIBUTION AMONGST DEPARTMENTS
BOOK VALUE OF
PROPERTIES
€4,4
BILLION
INVESTMENTS
€300
MILLION/YEAR

30. STATE RENTAL SYSTEM
2016
PROPERTY VALUE IS RETAINED, WITH NO RENOVATION DEBT
COST-BASED,
FLEXIBLE AND
CONSISTENT
RENTS REDUCED BY 15 %
NEW AGREEMENTS HAVE A 12-MONTH NOTICE PERIOD
SENATE PROPERTIES ASSUMES RESPOSIBILITY FOR
ALL STATE PREMISES AND THE MANAGEMENT OF
PREMISE DATA
RENTS BASED ON USE OF SPACE ENSURE EFFICIENT USE OF PREMISES

31. GOVERNMENT INTERNAL RENT SYSTEM
31
Parliament of Finland
The Government
Ministry of Finance
owner
Senate Properties
state property assets
supply of premises
Ministries -> offices, institutions
Clients of Senate Properties
Rent
agreement
Common
definition
legislation
Budget
negotiations
Shift from
market based to
cost based rent
in all segments
starting 2016

32. NEW GOVERNMENT RENTAL SYSTEM 2016
• A new cost-based rental system - a step away from the market paradigm
• For in-house customers in state-owned buildings
• Short notice time of contracts: 12 months.
• Cost-based = required return on equity will equal to the average debt cost of the state
• Return of equity 3%->1,5%. Required return on investments will decrease from 7% to 6,8%
• In practise this lowered the rents 15%
• Cost based on portfolio level not on customer/building or project level
• “Fiscal” determination of rent – no commercial-type negotiation anymore
• The decision to accept a project/new contract is still based on DCF-analysis i.e. is the
investment “profitable” over the life-cycle. The Board of Senate makes the decision.
• No variation of risk-premia across projects/buildings
• Exit-value payment for pre-planned termination of contract is based on remaining book-
value of special purpose investments
• A general purpose modern office space that can be rented out again easily can be vacated
without penalty
32

33. SENATE PROPERTIES’ KEY FIGURES
33
LIIKEVAIHTO
625 M €
SIJOITETUN PÄÄOMAN TUOTTO,
VUOKRAUSTOIMINTA
3,5 %
SIJOITETUN PÄÄOMAN TUOTTO, KOKO
TOIMINTA
4,2 %
234 M €
KOKONAISTULOS
137 M €
OMAVARAISUUSASTE
63,9 %
KIINTEISTÖOMAISUUS
4,6 Mrd €
BOOK VALUE OF
PROPERTIES
TURNOVER INVESTMENTS
RETURN ON CAPITAL,
RENTAL OPERATIONS
RETURN ON CAPITAL,
ALL OPERATIONS
NET RESULT EQUITY RATE

34. A CHANGING CENTRAL
GOVERNMENT AND NEW WAYS OF
WORKING

35. SENATE PROPERTIES’ VISION
"The Finnish state is a
pioneer in a new era
for work environments
and working practices."

36. Work isn´t a place you go to,
it´s what you do.

37. working practices and culture
have changed
The central
government will
become more
dynamic
Structural changes
will continue
Security will grow in
importance
The objectives of
sustainable
development will be
emphasised
Digitalisation will
progress
Sparseness is the new
norm
The need for
cooperation will grow

38. SENATE PROPERTIES´ SOLUTIONS

39. Management services
• Strategic facilities management
• Development of work environment
• Support for change management
• Facilities acquisition
• Security consultation
Physical environments
• Offices
• Campuses
• Specialised premises
• Hupi co-working spaces and
other shared spaces
• Facilities management services
Virtual environments
In cooperation with Government ICT
Centre Valtori

40. Social work environment
In cooperation with the customer
Management Services
• Strategic facilities management
• Development ofworkenvironment
• Support for change management
• Security consultation
Physical work
environment
• Offices
• Campuses
• Special premises
• Co-working spaces
• Facilities management services
Virtual work environment
in cooperation with government
ICT centre Valtori
THE WORKPLACE OF THE FUTURE

42. Management services
Needs
• You want a work environment solution
that will provide savings and improve
productivity and wellbeing in the
workplace.
• Your organisation is transitioning to
new working practices and work
environments that support them
Benefits
• More efficient facilities and work
environment management
• Savings in premises costs
• Improved performance in knowledge
work
• Simpler reform of your organisation

43. > Strategic facilities management
> Support for change management
> Development of work environment
> Security consultation
Our management services

45. > Offices
> Campuses
> Specialised premises
> Co-working spaces and other shared
spaces
> Facilities management services
Physical work environments

46. We provide flexible, shared working
environments for central government, for both
work and meetings – meet Hupi!
What are Hupi co-working spaces?
• Free-of-charge new-era environments for work and
networking that all government workers can use
• A flexible resource for occasional space
requirements
• The first Hupi is located in Pasila, Helsinki, and the
network will grow this year
• www.senaatti.fi/hupi
PHYSICAL ENVIRONMENTS
CO-WORKING SPACES
AND OTHER SHARED SPACES

47. Our areas of responsibility
• Survey of service requirements
• Tendering
• Acquisition
• Agreement management
• Quality control
PHYSICAL ENVIRONMENTS
FACILITIES
MANAGEMENT
SERVICES
SERVICES MANAGEMENT
RECEPTION AND SECURITY
SERVICES
CONFERENCE AND RESTAURANT
SERVICES
CLEANING SERVICES
OFFICE SERVICES
HANSEL FRAMEWORK
AGREEMENTS

49. • Wireless network
• Conference room reservation systems
• AV equipment and fittings
• Technology for halls and lobbies
• Cost and working time monitoring
• Secure printing
In the future, we will partner with Government ICT Centre Valtori to develop
and offer work environment solutions.
VIRTUAL ENVIRONMENTS
WORK ENVIRONMENTS THAT
SUPPORT WORKING IN A VIRTUAL
SPACE

50. RE-IMAGINING WORK

51. Social
Modern ways of working
and management
Physical
Functional, secure and cozy
premises
Virtual
Good devices and software and sufficiant user support
THE WORKPLACE OF TOMORROW

52. Software support
smooth working
and collaboration
tools are utilized in
social interaction
The different
working zones are
used flexibly
and support
activity based
working
Virtual
Good devices and software and sufficiant user support
Physical
Functional, secure and cozy
premises
THE WORKPLACE OF TOMORROW
ICT requirements
have been taken
into consideration
and the tools and
software are suited
to activity based
environments
Social
Modern ways of working
and management

53. DIFFERENT ASPECTS OF WORKPLACES
Workplaces have
physical, virtual and
social aspects.
08.09.2014
Modified from source: Matti Vartiainen, TKK (Seminaariesitys 2006). Hajautuneen ja mobiilin työn haasteet.

54. ORGANISATIONS
DEVELOP
Steep hierarchies -> flat organizational models
Knowledge work
and organizational
models are
changing.
Centralized organizational structure -> Distributed organizational structure
Direct processes -> Dynamic processes
Individual routine work -> Multidimensional networking
CHANGES IN KNOWLEDGE WORK

55. CHANGES IN THE
OPERATING ENVIRONMENT
Demands on productivity
Economical situation
New technologies
Ways of working
Safety issues
Goals for energy efficiency
ORGANISATIONS
DEVELOP

56. ORGANISATIONS
DEVELOP
CHANGES IN THE
OPERATING
ENVIRONMENT
Demands on productivity
Economical situation
New technologies
Ways of working
Safety issues
Goals for energy efficiency
NEW WAYS OF
WORKING
Information and
communication
devices
Flexibility and
mobility
Working
environments
Management
and culture

57. SHIFTS IN WAYS OF WORKING
Cooperation between
organisations
Team work and team
operating manners
Digital collaboration
devices
Sharing of know-how
and tacit information
Document
management
systems
Meeting
conventions
Paperfree
policies
Multilocation work/
flexible work

58. Activity based
environment
Overbooking
ratio minimum
30 %
Safety zones
Shift in ways of
working: mobility
and multilocation
Hot desking
non-designated desks
min 50 %
STATE PREMISES STRATEGY
AS THE GUIDELINE FOR WORKPLACE PLANNING
Space efficiency
max 18 m2/FTE
in renovated buildings
max 15 m2/FTE
in new buildings

59. ACTIVITY-BASED WORK ENVIRONMENT
- LET YOUR TASK DETERMINE WHERE YOU WORK
Collaboration Concentration Confidential discussions and
materials
Casual meetings
Meetings Phone calls and
online meetings
Customer service Coffee breaks &
encounters

60. THE DIFFERENCE BETWEEN THE GOALS OF THE
INDIVIDUAL AND THE ORGANIZATION
Goals of the individual
• Complete your tasks
• Do results
• Knowledge
• Competence
• Control over information
• Control over own workspace
Goals of the organization
• Provide solutions/servides
• Work together
• Information management
• Knowledge expansion
• Openness, trust, sharing
• Workplace as a resource
60

61. 5.2.2015 61
NEW WAYS OF WORKING
ICT
Information and
communication
technologies, cloud
services, mobile
devices
Mobility and
flexibility
Time and place
independence
Places
Activity-based
working
environment and 3rd
places
Leadership and
culture
Collaboration, trust,
skills and
competencies,
policies
 Productivity and well-being

62. Indoor
conditions
Lighting
Ergonomics
Mobility
Motivation
Sense of
community
Flexibility Acoustics
Look & Feel
Collaboration
Atmosphere
EMPLOYEE WELL-BEING

63. SPACE EFFICIENCY
63
Working space 7m2
Other space 4,2m2
Corridor 3,4m2
Typical office room + corridor = 14,6 m2
Space efficiency
figures in public
sector alternate
between 10…30
m2/person (e.g. new
government premises
strategy sets target
at 15…18 m2/fte)
TOT 29,2 m2

64. POTENTIAL OF DEVELOPING KNOWLEDGE WORK PERFORMANCE
64
Personnel costs
Occupancy costs
Furniture
ICT and equipment
In addition to savings in
occupancy costs,
considerable added value
can be achieved by
improving the
performance and
productivity of knowledge
work.
Source: VTT Rakennus-ja yhdyskuntatekniikka, Toimistorakennuksen kustannusmalli

65. SUSTAINABILITY
65
If an organization
improves its space
efficiency by a third, its
carbon footprint gets
almost equally smaller.
© Copyright Codema 2009
Sources:
Viiden toimiston ilmastovaikutusanalyysi. Toimitilojen ympäristöjohtaminen. Seppo Junnila ja Mikko
Nousiainen, TKK rakentamistalouden raportteja 225, 2004.
Työympäristökehittämisen ympäristövaikutukset, Päivi Hietanen (KIINKO KIPA-kurssi/projektityö
15.05.2009), laskelma Juha Muttilainen/Senaatti-kiinteistöt (23.4.2009)

66. REMOTE AND FLEXI WORK
Spaces for working…
66
Time and
place become
irrelevant for
working.

67. CHANGE
MANAGEMENT

68. CHANGE MANAGEMENT
68
Surviving the challenge
3. Hopeful realism
(hope)
Realistic support
4. Founded optimism
(trust)
Open
forfitting
Hidden forfitting
Resisting
Time
Supportive
Oblivious ignorance
1. Unfounded optimism
(certainty)
Painful realization
2. Founded pessimism
(doubt)
Spaces act as an enabler
in developing knowledge
work practices and
organizational culture.

69. NATIONWIDE OFFICE AND WORKPLACE CONCEPTS
69
• For organizations that have a
nationwide network of offices and a
customer service network
• Objective to achieve scale benefits
• Unified procedures and space
utilization principles
• Applied on several different
administrative sectors: e.g. Tax
administration, National Land Survey,
Public employment and business
services

70. EXPERT SERVICES IN WORKPLACE DEVELOPMENT
70
Public image
• Conveying vision,
mission and values
• Stake holders, peer
groups
• Recruiting
Innovativeness
• Learning, sharing
information
• Creativity
• Stimulation
• Renewing knowledge
• New products,
solutions
• Implementing strategy
Economy
• €/m2
• Churn costs
•
Standardizing/tail
oring
• Spatial flexibility
• Space use rates
• Cost of
technology
Core business/
processes
• Information flows
• Connectivity
• Time-to-market
• Customer service
• Learning organization
• Information security
Individuals/
organization
• Concentration, focus
• Interaction
• Status, appreciation
• Work motivation
• Productivity of work
• Mobility, virtuality
• Ergonomy, comfort

71. A SHIFT FROM MEASURING EFFICIENCY TO MEASURING
PERFORMANCE
71
Work performance
Individual work
habits
Contextual factors
- work
environment
Efficiency
Wellbeing
Physical, virtual and social
work environment
A Proactive, flexible and
mobile ways of working +
efficient use of ICT
Work efficiency and
effectiveness (outcomes,
skills, quality)
Motivation, satisfaction,
drive, ambiance, stress,
work-life balance
Source: SmartWOW-työkalu tietotyön suorituskyvyn
kehittämiseen, NOVI Research Center, Tampere University
of Technology, 2014

72. A KNOWLEDGE WORKER – NOT IN THE ASSEMBLY LINE
BUT IN THE MIDDLE OF COMPLEX NETWORKS
72

73. FACTORS AND ASSETS OF KNOWLEDGE WORK
PERFORMANCE AND PRODUCTIVITY
73

74. PRACTICAL MEASUREMENT APPROACH OF KNOWLEDGE
WORK PERFORMANCE
• Indexes describing the maturity level of ways of working
• Ways and skills of utilizing ICTs
• Ways to utilize physical work environment refelcting the work modes
• Individual working methods
• Group level working methods
• Work wellbeing impcats
• Subjective productivity
• Organization specific human resource inputs
• Organization specific outputs and results
• Measurement before and after work
environment change
• Development of national data base of
knowledge work performance
74

75. THE MODERN WORKPLACE ENABLES
NEW WAYS OF WORKING

77. A STRONG SALES & MARKETING
APPROACH

78. Senaatti-areena was organized in six towns in autumn 2015
Theme: New ways of working and work environment solutions, internal motivation
Target group: Central government administration and experts, 390 participants
SENAATTI-AREENA

79. Senaatin Tori was organized in autumn 2015
Theme: Finnish state’s property development and sales
Target group: Real estate desicion-makers, 200 participants
SENAATIN TORI

80. SENATE PROPERTIES IN SOCIAL MEDIA

81. CASE STUDIES

82. What our clients say
SOLUTION FOR A NETWORK
ORGANISATION
Customs
"Centralising and combining
facilities increases cooperation and
results in significant savings in
property-related expenses."
SOLUTION FOR SINGLE WORK
POINTS
Population Register
Centre
"From resisting change to a positive
surprise."
SOLUTION FOR A MERGING
ORGANISATION
Finnish
Competition and
Consumer
Authority
“New drive for a new office with
an up-to-date work environment."

83. Services provided by
Senate Properties
• Drawing up a work premises
strategy
• Development of work
environment
• Facilities acquisition
• Facilities management
services
CUSTOMS
"Centralising and combining facilities increases
cooperation and results in significant savings in
property-related expenses."
“It was great to be able to bring together those functions and
people who should be collaborating more – it’s more effective,
sensible and economical. The new working environment
facilitates new ways of working, more encounters, as well as
meetings and conferences.”
HANNU LAPPI
CEO, CUSTOMS
Starting point
• Activities at 12 different locations
• Total space: 21,400 m2, 850 people, rent:
MEUR 4.0/year
Objective
• Centralisation of activities in one location
and support for organisational reform
• Savings in rent
Solution
• A working environment for 750
people in Pasila that will
support new working practices
• The customer will gain MEUR
0.7 in rent savings per year
• The state will gain MEUR 26 in
profit from the sale of the old
working premises

84. Services provided by
Senate Properties
• Survey of premises
• Development of work
environment
• Facility management services,
e.g. lobby, caretaker and
cleaning services
HANNU LUNTIALA
DIRECTOR GENERAL,
POPULATION REGISTER CENTRE
"It was a big change for us to move from our own large room to
an activity-based environment. It was essential that the entire
personnel took part in planning and making preparations for the
change. We are very excited about this new working
environment, because shared premises will allow us to interact
in a new way and will facilitate new encounters. ”
Starting point
• As the lease for the premises in Kalasatama,
Helsinki is coming to an end, some of the
staff will move to Kokkola
• Total space: 6,750 m2, rent: MEUR 1.5/year
Objective
• A work environment that meets the changes
in space needs and the wishes of a younger
generation of civil servants
Solution
• An activity-based workplace in the
government’s premises on the
Sörnäinen campus in Helsinki
• Total area of working premises:
3,150 m2
• Savings in rent: MEUR 0.7 per year
POPULATION REGISTER CENTRE
"From resisting change to a positive surprise."

85. SERVICES PROVIDED BY SENATE
PROPERTIES
• Development of working
environment
• Survey of space requirements
• Subletting
• Monitoring of reconstruction
work
• Interior design
• Facilities management services
JUHANI JOKINEN
DIRECTOR GENERAL, FCCA
"Cooperation with Senate Properties was seamless, and we were
given hands-on help to gain the commitment of our employees
and design a modern and functional working environment.
Utilising the expertise offered by Senate Properties meant we
saved time that we can now use on other merger-related larger
projects."
Starting point
• Merger of Finnish Competition and
Consumer Authorities and a drive to create
synergies
• Total space: 4,900 m2 over two locations,
147 people
• Partitioned offices: 33.7 m2/person, rent:
MEUR 0.9/year
Objective
• To get all personnel under one roof as
quickly as possible
• Achieve 10% savings in rent
Solution
• New premises for 147 people
in Hakaniemi
• Space efficiency: 22
m2/person, rent savings: 10%
(MEUR 0.1)
• Utilisation of the
government's MEUR 2 option
to reorganise leases
FINNISH COMPETITION AND CONSUMER
AUTHORITY
"New drive for a new office with an up-to-date
working environment."
VESA-MATTI PULLI
ADMINISTRATIVE DIRECTOR,
FCCA

87. 87THANK YOU! kasper.fabritius@senaatti.fi