With office space in so much pandemic-induced flux, little wonder that real estate operators and their clients are looking for new models for flexibility and adaptability. One of the players in the field is ROOM, manufacturer of a modular purpose-built spaces for the workplace. It counts among its clients the likes of Google, Hulu, J.P. Morgan, NASA, Nike, Reddit, Salesforce and Uber.
We turned to ROOM co-founder and CEO Brian Chen to discuss the failed models of the past, as well as the current situation facing companies seeking to bring employees back, and office operators aiming to keep their tenants intact and committed.
What were the shortcomings of the modern workplace, pre-pandemic?
Before the pandemic, employees at the vast majority of companies assumed that they were supposed to be in the office Monday through Friday, 9 to 5. By defaulting to this assumption, we limited the flexibility and optionality available to employees, if this was not always explicit, it was at least implicit. Now with 18 months of working remotely, you can throw that assumption out the window entirely. On the contrary, people assume that they deserve and will have utmost flexibility, even when offices are open.
In the pre-pandemic world, with almost everyone going into the office, companies were forced to find ways to fit more people into less square footage. The result of course was the open floor plan, and workplace experience suffered. The “open floor plan” — a one-size-fits-all approach to the work environment — caused all sorts of problems for employees, with over 50 percent of employees complaining to management about noise and with huge losses in productivity.
What is adaptive architecture and why is demand rising?
Adaptive architecture is the term used to classify physical space configurations that are modular and easy to reconfigure according to evolving needs. Demand for this kind of design continues to grow as we’re currently experiencing a power shift from employers to employees in terms of choice — choice for how, where and sometimes even when to work. This has given way to a massive need for adaptability of the working environment, particularly with the integration of technology and videoconferencing, which has been a salient feature of the pandemic but will certainly become a permanent fixture moving forward.
Accommodating these needs requires adaptability to easily reconfigure built spaces, without having to tear down or build up workplaces. The demand also correlates with the rise of shorter-term leases amid the uncertainty of how companies are going to work moving forward.
Has the open floor plan been a failed experiment? What are its pros and cons?
It was a myth that open offices would enhance collaboration and foster relationships between employees. The idea of open space allowing people to share ideas has been disproven: A recent Harvard Business Review study noted that face-to-face collaboration dropped 60 percent to 70 percent in open floor plans, with that interaction being quickly replaced by digital communications over Slack and similar tools. Additionally, the communication that did occur in open offices hurt productivity and the ability to focus, given the increase in noise and distractions.
In reality, I think the irresistible appeal of the open floor plan was real estate cost efficiency and, to some extent, marketing. People could look at an open floor plan, and without experiencing it, they would have ideas of transparency, collaboration, and vibrant energy. The reality, as we know, was different from the promise.
Our workforces need a variety of environments to support the various activities of any given workday. Whether it be for creativity, brainstorming, breaks, collaboration, there needs to be dedicated and purpose-built space to support all of these activities. Conflating all of these different environments into one creates an unhealthy work environment where people are stressed rather than thriving.
Talk about the importance of quiet time or even silence for employees and the working environment.
From a productivity standpoint, numerous studies show that when you’re distracted, it takes roughly 20 minutes to refocus, so obviously the amount of time someone is being interrupted or disturbed throughout the day significantly impacts their productivity. Quiet time is important to employees’ mental health, given there is a direct correlation between a lack of productivity and an increase in stress. This, in turn, can decrease happiness with one’s work, potentially leading to a cycle of trying to “keep up” in an environment where time is limited.
Overall wellbeing and mental fitness are becoming essential considerations in the modern workplace, and it’s imperative to the success and happiness of employees. As more workplaces began encouraging employees to prioritize rest, we saw an opportunity to partner with Calm (the meditation app) and through our Calm Booth, provide a way for companies to show their dedication to employee health in a tangible way.
How has the popularity of short-term, flexible office leases affected the cost equation for building managers and tenants?
The rise in popularity of short-term leases requires the entire real estate stack to be reconsidered from the bottom up. The way offices are financed, built and leased is premised on 10-year time horizons, so the demand for shorter-term leases requires a completely different way of thinking about designing and constructing a space, as well as determining the payback for upfront capital expenditures. Instead of amortizing TI allowance over 10 years, companies now need to figure out how to make the economics work over three years or less. Meanwhile, lenders are typically skeptical of cash flows coming from shorter-term leases, so landlords have to bear the burden of proof that a flexible model works.
This is where adaptive architecture makes a massive difference. Utilizing modular products eliminates the guesswork associated with design planning so TI dollars can be used more efficiently. By optimizing efficiency, adaptability and specific office needs ahead of time, landlords and tenants can reduce the needs and costs associated with fixed construction.
You have argued that companies are taking a wait-and-see approach to furniture design and workplace strategies as they begin re-populating their offices. Why is this the case?
A lot of companies are waiting on workplace decisions because there is still just a lot of uncertainty on what work looks like when we eventually return to offices en masse. There is a reluctance to commit to long-term space decisions because companies are struggling to predict the future of the workforce and what types of policies are going to help attract the next generation of workers. We encourage companies to take an experimental mindset when it comes to office floor plans — essentially looking at everything as a pilot to see what works and what doesn’t in a given space. By adopting a more iterative approach, forward-looking companies will be able to configure and reconfigure their workplaces at any time, allowing the workplace to co-evolve alongside the people within it.
You also claim office design decisions are now being handheld by corporate HR departments. Why is that the case?
People are deciding which jobs to take based on how much of a community they expect to belong to or, conversely, how remote-friendly a company’s policies are. This means that HR departments have a lot at stake in a company’s space and facilities decisions, namely talent acquisition and retention.
Additionally, policies on remote work and the expectation of working from an office have a massive impact on a company’s culture. By definition, culture is a set of behavioral norms, and you cannot define norms without having a stance on whether interactions are predominantly digital, in-person, or a mix.
What is the future of the office workplace? What do employers need to do to succeed in bringing employees back and into an optimal work environment?
The workplace of the future is a multitude of easily accessed environments, each one purpose-built and designed to amplify human potential. Whether for focus, collaboration, self-reflection or videoconferencing, these spaces will need to be intentionally designed for the most optimal outcome.
People cannot be forced back into the workplace, they need to choose to do so based on their wants and needs. It’s our job to inspire them to make that choice by creating environments that foster happiness, efficiency and productivity. The bar has been raised in terms of what it takes for employees to return to the office. Employers need adaptable solutions that are capable of meeting the evolving needs of both individuals and companies.