Business leaders are facing a challenge no leader has faced before. The way we live, work and interact has been changed forever by the pandemic, the behaviours it has engendered and the trends it has accelerated.
Leaders around the world must take their organisation through this disruption and ensure it has a future on the other side.
That means addressing changes to how and where people work, and the ways in which they interact with one another and with the products and services they use. It means delivering the technology, skills and spaces needed. It means addressing how the whole organisation must work: how it creates value for customers, communities and society, and how it maintains and increases productivity.
It also means understanding how to analyse, design and finance the changes needed.
It’s not an issue for HR, IT or operations to deal with in isolation. This must start at the top, because success depends upon being able to view the whole landscape, recognise the complex and intricate ways in which everything connects and unite the organisation behind a clear strategy.
The narrative developing over the past year has focused on ‘the death of the office’. But while some people undoubtedly thrived working from home, others have struggled. Similarly, productivity gains seen in many organisations have come at the expense of employees’ work-life balance, as the working day expanded, unconstrained by commuting or social life.
Many people have missed daily interactions, serendipitous conversations that sparked creativity and the wellbeing boost of socialising with colleagues, clients and customers. Others have grown concerned about their personal and professional development if they cannot maintain relationships with managers who control access to opportunity, or build stronger relationships with clients and customers.
Whatever the reasons, many cannot wait to return to the office. It may be different. It may serve a changed mix of activities and its value may come from the quality - not quantity - of time spent there.
But the office is not dead.
77% of UK employees want a mix of face-to-face and remote working
Effectively changing where and when your people work, what spaces you provide to employees, clients and customers, and what technology is used are not straightforward changes.
They must be made in line with an organisation-wide focus on considerations, from real estate, legal, finance and tax to wellbeing and purpose. And they must show a clear understanding of the business case for doing so, and how it will be delivered and funded.
Organisations must avoid making piecemeal changes without a clear, unifying strategy and business case, based on measurable outcomes such as increased productivity, retention and revenue growth.
Craig Hughes, Global Real Estate & Hybrid Transformation Leader, PwC UK, says: “Don’t approach this problem by making superficial changes to your offices, or focusing only on how many days per week people will be in, or what technology you need. If you try to fix this in individual silos, you’ll end up multiplying the complexity you face.”
“Every change you make will have a knock-on effect. Everything is interconnected and every action has cost implications and unintended consequences. This issue must be addressed holistically. The full scale of the task must be analysed, understood and planned so it can be delivered practically and funded effectively.”
As well as needing a clear business case for the hybrid transformation your organisation needs, it is critical to ensure changes are right for your people and will bed in effectively.
Organisations must be able to assess how ready they are for change, where their strengths and weaknesses are, particularly around areas such as diversity and inclusion, cyber security, technology, real estate or culture. Conversely, they must assess which of those critical ‘levers’ for change are more mature than others, as that may help define the starting point of the transformation, or help prioritise which interconnections are most critical.
No two organisations are the same, or will be starting their hybrid transformation from the same place. So your business case and strategy will need to be a unique reflection of your starting point, your strengths and your weaknesses and your desired outcomes.
The pandemic has created a stronger sense of community in many people’s lives and the changes we make as we shape a future beyond it must harness that response.
Remodelling the footprint of your organisation presents an opportunity to address geographic and economic inequality, improve diversity and inclusion and create greater access to untapped talent pools across the UK, and around the world.
This will support the UK government’s ‘levelling up’ agenda and social mobility by encouraging the growth of local economies. However, it will also create new opportunities for our major cities to evolve - as they always have - and remain exciting places to live, work and visit.
To prepare for change, organisations must focus on their people. How do they want to work? How do they need to work? What must you do to keep people happy and effective? What technology does that require? What is the value of bringing people together?
Answering those questions will help inform decisions about redesigning, repurposing or reducing office space. And it will help shape cultural changes and address potential legal, regulatory, tax and HR issues.
But it is critical your organisation reviews and understands the needs and preferences of other important office users, such as clients and customers.
Victoria Robinson, Hybrid Workforce Strategy & Culture, PwC UK, says: “The formula for how and where we all work best, in ways that will drive maximum productivity and engagement is unique to each and every one of us. Understanding and addressing that is at the heart of this issue.”
“Organisations must cater for personal preferences in order to get the most from each individual, while also maintaining organisational and team priorities. They must also ensure it all hangs together in a way that works for everybody, alongside all the other changes taking place.”
A focus on people should include a fresh look at reward and how it can be reshaped for a hybrid age, to ensure performance is aligned to the outcomes you want to achieve as an organisation and employees are motivated and treated fairly.
Does your current system reward outcomes and achievements - whenever and wherever they are attained - or is it still anchored in a recent past when presenteeism was rewarded? Does it drive the behaviours you want to see from your people, whether in the office or working remotely, to ensure dispersed teams are treated fairly and can develop in an inclusive, collaborative way?
Is your reward strategy evolving to reflect changes and opportunities for you and your people?
Some employers are looking at how they provide financial support for employees creating ergonomic home workstations, or upgrading home broadband. Others are reviewing the relevance of geographic premiums, such as London weighting, as location becomes less of a consideration for many employers and employees.
Organisations must also understand the options available to encourage people back into the office, from reassurances about health and safety in the days following the easing of lockdown restrictions to informing them how the employee experience in the office is evolving.
If your workplaces are reduced in size, or reconfigured considerably, for example, you may need to ensure overcrowding is avoided in the middle of the week.
“Nobody should be planning for peak capacity and accepting there will be huge empty spaces at either end of the working week,” says Hughes. “Think about the ways in which you can work with teams to create the best possible experiences and spaces for them, at home, in the office, in other shared spaces, while doing what you can to shape and manage occupancy levels to support those experiences and the organisation’s needs every day, every week, every year.”
Measures might include allocated days for different parts of the business - from ‘marketing Mondays’ to ‘finance Fridays’, ensuring your people are also more likely to get the interaction they want with relevant colleagues.
Support for active commuting, for those who want to cycle or jog to work, including improved cycle storage, shower and changing facilities may help people maintain healthy habits picked up during lockdown as well as providing a compelling alternative to public transport for those who want to return, but not on trains and buses.
In city centres, the office will remain a draw for those who want to shop, eat or socialise after work. Organisations should think more about how they support both their people’s social lives and the local economy, by building closer relationships with local stores, cafes, bars, restaurants and theatres.
There will also be an opportunity to make the office - and a healthy attitude towards its role - a greater source of differentiation in the competition for talent. In the past, efforts to make the office a benefit in its own right have ranged from the occasionally superficial, with soft furnishings and a ping pong table, to more high-end investments such as creches and chefs.
But at its core, there has still been a ‘one size fits all’ approach. Rarely has there been much personalisation. Now all organisations face the opportunity and challenge of a more fundamental rethink, to look at the idea of the workplace-as-a-service and the extent to which they can cater for the broadest range of individual preferences.
“The pandemic has changed people’s expectations and forced many to reprioritise what they want in life, from their career, from their employer,” says Robinson. “Organisations must look at every opportunity to deliver on those expectations, in order to keep people motivated and productive and to attract and retain the best possible talent.”
Whatever you plan, you must plan for ongoing change. It may take a year or two for new habits to form and for people to settle into a routine. Some may never settle.
Critically, nobody should feel coerced into returning to the office. Reinventing presenteeism for the hybrid age will only result in top talent choosing more supportive employers.
Across sectors with large office-based workforces, there has been an initial effort to downsize or find alternatives to their current set-up. But while freeing up capital will buy businesses time, shrinking property portfolios as quickly and completely as possible could prove an over-adjustment.
Some organisations are looking to introduce an agile property portfolio through shorter, more flexible leases or by working with flexible office space providers. This blend of core and flexible space may provide the ability to scale office capacity as situations change.
Repurposing and reconfiguring space should be a greater focus for your organisation and may prove a more effective approach for the long term. Where occupancy is down, space can be repurposed for everything from cafes, canteens and different dining options to the introduction of doctors, dentists or gyms on-site.
Such moves can only improve the quality of your employee experience and workforce productivity.
77% of UK organisations plan to reconfigure their existing office space 50% think they will reduce the size of their office portfolio
With the scale of the changes required, there is not only an opportunity for you to reimagine the role of the office and shape a hybrid future, but a chance to define a ‘third space’ between work and home - a shared digital realm that delivers great experiences wherever people are logging on.
Organisations should challenge themselves to look at the role of collaboration technology and ways that can help remote workers feel included in office discussions and create a richer experience for everybody, such as virtual and augmented reality. Hybrid shouldn’t be about a choice between the office or remote working, it should be about creating seamless relationships and harmony between the two, enabled by technology and visionary leadership.
Data must play an increasingly important role, with sensors and smart office technologies, wearables and data analytics giving details on the effectiveness of any hybrid offering, from levels of occupancy and the flow of people through the office, to the health implications for individuals. This insight will also help you adapt to ongoing change.
77% of UK CEOs are increasing their investment in digital transformation as a result of the pandemic
The foundations of business and society have been shaken so significantly that doing nothing in response is not an option.
However, jumping in and making rash decisions in silos, without considering the impact on colleagues, customers and clients must also be avoided, as must adopting an approach that is inflexible to further change.
Leadership must take action, with a clear view of how change will affect the whole organisation and how that change can be delivered.
And those changes must start now.
To discuss how to plan and deliver your own strategy for hybrid transformation, please get in touch.