CEO’S WEIGH-IN FROM DAVOS: TRANSFORMING THE WORKPLACE IS KEY TO SURVIVAL by Work Design Magazine

Bernice Boucher and Ed Nolan recap JLL‘s panel at the 2018 World Economic Forum in Davos where a group of CEOs and senior-level executives discussed how organizations are adapting to prepare for the future of work.

Davos

Organizations are dealing with unprecedented levels of change that are uprooting workplace norms and changing expectations about work: how it gets done, what gets done by whom and where it all happens. The influence of the Fourth Industrial Revolution was a key focal point for discussion among CEOs and other attendees at this year’s World Economic Forum in Davos, Switzerland.

At the center of those changes sits the workplace. Real estate is no longer a static expense to review every five years. It’s a strategic driver of organizational transformation. Organizations that fail to address the fluctuating demands of the new, more agile workforce will find themselves falling behind and risking their very existence.

JLL hosted a panel of CEOs and senior-level executives in Davos to discuss how organizations are adapting to prepare for the future of work—and specifically, how their physical workplaces are changing. While each organization faces a unique set of challenges, the panelists found common ground around four key themes that will be critical to shaping the look and feel of their future workplaces:

Theme #1: Get comfortable with change

“You should be super scared if your company isn’t changing right now,” said an executive with a Fortune 500 workforce solutions company. Other panelists echoed the sentiment that change is the new normal.

Change is coming from every direction. Technology advancements and automation are revolutionizing the nature of work and re-setting the rules about where people work and how they connect. Demographics of the workforce are shifting, as more Baby Boomers exit and Millennials become a growing influence. The gig economy has given rise to the liquid workforce and other new models for work, redefining employment itself.

Maintaining the status quo in this environment is a death sentence. And big brands aren’t immune. Nearly three out of four of the Fortune 1,000 companies have been replaced in the last 10 years, and more than half of the Fortune 500 will cease to exist in the next decade.

Forward-looking organizations are trying to get nimbler, increasingly turning to on-demand workers to fulfill specific needs. Designing entrepreneurial and flexible cultures that empower employees with more autonomy and more choice has increasingly become a priority to attracting and retaining the right talent.

While Millennials may be prepared for this new way of working, older generations are often navigating foreign terrain. Leaders need to use every tool in their arsenal to get people comfortable with constant evolution.

The design of the workplace can help ease the pain of change for people. Choice and mobility are critical elements that give employees a greater sense of control. Meeting the diverse needs of employees requires a healthy mix of different work environments: private or quiet work spaces for focusing, a variety of different sized conference and huddle rooms, open areas conducive to meetings-on-the-fly and places to unwind, especially out-of-doors.

Personalization can be equally powerful in helping employees to feel more physically comfortable at work—and that can have a major impact on productivity. Height-adjustable desks, access to daylight and views, plants and greenery can make it easy for employees to get their personal space “just right” and create a more positive experience at work.

Theme #2: Strike a balance between machines and humans

As automation and technology become more entrenched in the workplace every day, it’s crucial for the workforce model and the physical environment to stay rooted around the human factor. “I was trying to tell employees that technology is going to augment what they do because they are the human touch. What they were hearing was: ‘I’m replacing all of you with technology.’ I consciously now speak directly about the importance of humans touching humans in healthcare,” said Bernard Tyson, Chairman and CEO of Kaiser Permanente, during the Future of Work panel.

Creating an office that reflects a warm, collaborative and innovative culture will influence recruitment and retention efforts. Both the location and physical setting speak volumes about how organizations value employees. For example, Kaiser Permanente located the heart of its IT division — and its Garfield Center for Innovation — in the San Francisco Bay area to help the organization draw the right talent. The location provides a unique laboratory for innovation and the space to think differently.  The right space can reflect the connection between employees to Kaiser Permanente’s mission and the value proposition of the broader organization.

Every industry is in the midst of being digitized, arming organizations with more powerful data and analytics that can lead t innovative new developments. In fact, Accenture research reveals 80 percent of executives plan to invest extensively in technologies related to artificial intelligence (AI) over the next three years. Tech-savvy Millennials may be open to embracing this highly digitized future, but how will organizations get the rest of their workforce up to speed? In addition to the right kind of training, it’s critical to consider how the physical space can help create connections to aid learning.

Davos

Theme #3: Provide the right spaces for employees to think big

The need for continual innovation is driving structural changes in how workplaces are designed. “Work has become much more collaborative, but also much more interdisciplinary, with people from different backgrounds and fields working together to solve complex challenges. Given this paradigm shift, technology is playing an increasingly critical role in crossing the physical and virtual boundaries,” said panelist Farnam Jahanian, interim president of Carnegie Mellon University. He noted that the university has reduced the number of lecture halls and increased collaboration spaces, in response to the new way younger generations are learning and working.

Collaboration spaces are becoming more commonplace inside organizations as well. Innovation is no longer isolated within the confines of research and development; every part of the organization has a commitment to innovate to keep organizations ahead of the competition. Technology can help fuse connections between different divisions, but the design of the office plays an equally important role in fostering collaboration. Cafes and coffee bars where employees from every department can intermingle are breeding grounds for fresh ideas. Some companies are adding third-party co-working spaces to their workplace options, giving employees another option when seeking inspiration or a change of space.

On a grander scale, IBM built 24 IBM Studios around the world over a five-year period to provide collaborative spaces where cross-functional teams and designers could engage with clients to tackle their challenges and accelerate innovation. Kaiser Permanente redesigned its medical school, eliminating traditional classrooms in favor of collaboration halls. The design drives home the message that physicians will be able to work as part of a collaborative team to care for patients.

Theme #4: Eliminate hierarchical office design to build trust

“Trust throughout the organization is the number one thing leaders have to invest in,” said panelist Jo Ann Jenkins, CEO of AARP. To gain trust, she suggested that leaders must articulate a vision for the future, but then give staff the flexibility to determine the best way to achieve it.

Giving employees more autonomy is one way to build trust and boost innovation, providing room to take risks that can open doors to creativity. Hierarchy, on the other hand, can be a significant roadblock, hampering connections between leadership and lower level employees. Social media and other technologies have changed the dynamics within companies—employees expect leaders to be accessible and to communicate openly. The old days of putting the C-suite on a different floor behind locked doors are largely behind us. Office design must consider ways to make leadership more visible, whether it’s creating a visible leadership community via open collaboration settings with glass doors, eliminating hierarchical floor plans or empowering employees with technology to have their voice heard.

Taking hierarchy out of the office dynamic helps to build bridges across generational and social groups within an organization, too. Building relationships between older and younger employees in particular helps create a stronger culture of trust. For example, AARP makes a point of teaming different generations together to help everyone realize the positive impact they can have collectively, instead of pitting different generations against each other. Beyond offices that encourage organic mingling in shared spaces, organizations also bring generations, geographies and disparate functions together using a focus on shared values, culture and commitment to a common community or cause. This sharing of a common inspiration and goal can help organizations rally their people together, delivering benefit not just to their own workplace, but to the larger community, as well.

Evolve, or fade away

Constant evolution is a new organizational mandate that must flow directly into workplace strategies and design. As the world becomes more tech-oriented, creating a human-centered workplace will become all the more critical. With the right focus, the workplace itself can achieve its full potential as a stabilizing and mobilizing force for an organization’s most important asset: its people.

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