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Interview with Curtis Knapp Senior Vice President Jones Lang LaSalle |
Curtis, what strategies do you employ to help companies optimize the size of their real estate portfolios?
There are two categories of strategies. There are supply-side strategies – restacks to consolidate and eliminate shadow vacancy, reduction in numbers and sizes of work spaces, and alternative workplace environments: free address, hoteling, distributed workforce, whatever you want to call them. When you’ve achieved maximum utilization on the supply side, then you go to a demand strategy – forecasting changes in head count, either through expansion-contraction, outsourcing, or centralization-decentralization.
In an ideal world, you work both strategies together at the same time. In my experience, though, you establish credibility with senior management on the supply side first. Most corporate real estate groups want to get their arms around the space first. Then you can begin planning ahead, integrating workspace needs with broader corporate strategy.
You’ve been in the business 17 years. Are people thinking more – or thinking differently – about occupancy planning that they did when you started?
The primary change has been the realization that you have to do planning on an ongoing basis. Five to 10 years ago, companies would hire consultants to come in and do a one-off engagement: “Help me figure out how to get more people into the building, or consolidate and free up some space.” Consultants would come in and do a report and leave. Some large-scale portfolios might have conducted ongoing planning, but they didn’t outsource it. Now they do. They see the value we can bring to them in terms of global perspective, technology, benchmarking and knowledge of best practices.
Can everybody benefit from the implementation of an alternative workplace?
That depends upon the company, of course. If you occupy 10,000 square feet and shrink your space to 7,500 square feet, it may not be worth the investment. But if you’re a big company employing thousands of knowledge workers, you should be able to save a lot of space, and money.
My first recommendation would be to determine how many employees are working in a non-traditional setting. Look at the amount of time they spend in the conference room, in the car going from meeting to meeting, and so on. Let’s say you find out that they’re not in their workspace 60 percent of the day. Then you drive greater utilization of your space through hoteling. As I put it to clients, our job is to squeeze 10 pounds into a five-pound sack.
We’re talking to every one of our clients about the application of this approach. A few are absolutely not interested in the opportunity. But I think it’s doable at any company. There are pockets of people at any company who underutilize their office space.
What do you see as the major advantages of a “work from anywhere” strategy?
Gains come from productivity, the loss of down-time. Use my own situation as an example. I have a 50-minute drive from the house to the office. Without a cell phone, I wouldn’t be having this conversation before 9 o’clock. I’d have to squeeze it into my nine-to-five schedule. Also, I can be doing business while I’m driving from client meeting to client meeting during the day.
Think what it was like checking into an airport before the BlackBerry. I’d have to turn on my laptop. Say I had 25 minutes before boarding the plane. Maybe I’d rather save my battery and work on the plane. That’s the logic you go through as a road warrior. Now there’s no trade-off: I spend that 25 minutes reviewing e-mails on my BlackBerry that have come in, and giving short responses. That 25-minute time slot is productive. One could argue that reading Business Week is productive, too: You’re getting business intelligence. The difference is that my productivity extends to others on my team. Now people don’t have to wait for a response from me. It’s an opportunity to expedite the work process.
How about work-life balance?
That’s a component of productivity. I know a guy whose kid was puking his guts up at 4 a.m. He officed from home and was still productive. His spouse went to work knowing that he could care for the child. What was critical wasn’t the total amount of time he spent working but his ability to keep tasks moving forward.
Business is placing greater demands on your time. It’s the 30-minute give-backs that take the anxiety away. When I have the ability to have lunch at my kid’s school, it doesn’t bother me to take that 10:00 p.m. conference call with Asia.
Being anywhere, anytime makes it convenient to my clients and me – and all without a workspace at the corporate office.
Have you observed any barriers to hoteling? Employees craving their own personal space, that sort of thing?
This is all personal opinion… I’m on the road three to four days a week, and the balance of the week I office from home. The only thing in my cube at the office is the family photo, a few files, and not much else. Documents are all being converted to files on the laptop. The reality is, I don’t need a lot of trophies and tchotchkes sitting in my work space because I’m never there. I think it’s generational. Forty-and-older workers brought the concept to the workplace of having a physical space they could claim as their own. I don’t think younger workers do.
I’d say we’re at a turning point. Technology is way out ahead. People are getting these new tools and figuring out how to use them. In many cases, corporate policy is still catching up with practice. There aren’t any metrics out there yet. But if you find out that 25 percent of your workforce has BlackBerries, they’re probably not spending much time in the office. You may be paying for excess space.
How about supervisors who don’t like managing employees from a distance?
The resistance I’ve seen tends to come from the senior managers in big companies who have risen as far as they’re going to – they’ve hit the glass ceiling, they’re never going to become an officer. They only thing they have for status is their workspace. They’re the ones who lock in the tightest as far as willingness to change.
How do you manage a distributed workforce? Accessibility is the key issue. If it takes someone longer than a day to return an e-mail, if you call five times a day and you never reach them, you might have a problem. If that behavior becomes routine, it becomes an issue you have to manage. Candidly, I can call my employees at 8:30 at night on their mobile phones and most of them will answer. If they’re running their kids to the doctor or watching Oprah in the afternoon, I don’t care as long as I can reach them at night. I’m not going to monitor whether they take 45 minutes or an hour-and-a-half for lunch break as long as they are meeting client and company objectives.
Who’s on the cutting edge of hoteling? Who’s doing it right?
It’s the accounting and consulting firms. But even they would suggest that there’s room for improvement. We found that the acceptance rate increases over time. Say you do a 10-year lease with a seat-to-head count of one to three. Over time, it becomes one to eight. You still have surplus space!
Between hoteling, outsourcing, restructuring and growth, workplace needs are continually fluctuating. I read somewhere that the lease of the future is 100 rentable square feet on a month to month basis! Jones Lang LaSalle is looking at understanding those trends, forecasting space needs up front, and minimizing the impact longer term.
Curtis Knapp is Senior Vice President and National Director of Occupancy Planning at Jones Lang LaSalle, a real estate services company with clients in more than 100 markets and 35 countries. He heads a staff of 28 that help companies reduce occupancy costs by optimizing their real estate portfolios.
