Expert Corner

Special Feature Interview

CoreNet Global’s New York City Chapter took a closer look at the innovative ideas in corporate real estate that have emerged in these uncertain economic times by asking a few industry experts about how they are leading their companies down new paths.

Ellen Albert, Executive Vice President of CORE Services at Viacom/MTV Networks
Tim Bender, Senior Director, Head of Global Real Estate Services at Merck & Co.
Michelle Marwood, Firmwide Director of Real Estate, Kirkland & Ellis LLP

Question:  What innovative efforts has your company put in place to not only survive this economic downturn, but to thrive in it?

- Merck is using the down economy to spearhead progress in alternative workplace strategies. We’ve introduced an AWS program called “MerckSpace” that we’re rolling out simultaneously with Flexible Work Policy. The down market has provided an opportunity to introduce both concepts more formally and present the innovative solutions as offering more flexibility for Merck employees, rather than just decreasing our space usage.

The Flexible Work Program will enable the staff to work remotely. By being in the office less, this creates an opportunity for Merck to use space more efficiently and align cost savings. We think employees are starting to embrace concepts like hoteling more easily and we’re continually working to optimize corporate resources and assets.

EA - We’ve really been focusing on good practices. Last year rents were up by 50% in some locations, so we were already taking a closer look at lease renewals and how to use our space better. Could we relocate our businesses to less expensive places without sacrificing our talent pool? Would people be willing to relocate? These things became not just real estate decisions, but HR decisions as well.

Today, we are still addressing these issues, but for different reasons relating to the economy. We’re consolidating and filling vacant spaces as much as possible. We’re not discussing bankrolling or growth of space any longer.
One of the many ways our use of technology has enabled us to better utilize space as well as become more sustainable is our move to multi-function copiers, printers and faxes. We’ve eliminated nearly all of our fax machines and 85% of individual printers, which not only creates more space for individual workstations, but drastically improves energy efficiency. These combination technology solutions permit more innovative and space efficient desking solutions.  Before joining a law firm, you worked in financial services for 12 years. How does your new role, especially in the current economic environment, compare to your previous positions?

MM - The roles are similar, however this role is broader and contemplates the entire project lifecycle, including real estate. Our priorities are slightly different, in the sense that law firm space is all about “location, location, location” for the convenience of our clients and to conduct business smoothly and efficiently, with focus on clients’ needs.

The delineation between attorneys and support staff is much more location specific and current models demand support staff to be adjacently located and in close proximity to the attorneys they support. It is quite different from the model at many financial services institutions where relocating support or back of house operational staff to a separate office in perhaps a lower cost location tends to be the norm at some investment banks.  Adjacencies and close proximity between attorneys and their support teams are critical.  

Question: Explain any recent positive trends that you have seen emerge in the industry or at your company.

EA - The industry, as a whole, is learning to be more adaptive. Despite job losses in many parts of the CRE community, there’s this vast CoreNet Global network to reach out to and to find leads in different sectors of the industry.

TB - A down market produces an environment of “no sacred cows,” in which many companies are setting targets and taking on a “just do it” attitude. In addition to further exploration and implementation of alternative workplace strategies, I’ve also seen greater sourcing of CRE services and companies aggressively evaluating the sourcing mix in various areas across the organization—Merck is undergoing a similar process.  There is absolutely a greater appetite for sourcing in this market and for cutting costs to operate a leaner business.

MM - When looking at the industry as a whole, I’ve seen smarter and more creative uses of outsourcing. I also think CRE professionals have developed more creative ways to manage projects effectively and efficiently by using a consistent approach, defining standards, processes and procedures, and by not “re-inventing the wheel” for each new project.

The U.S. industry is just starting to embrace project cost management (akin to the European use of quantity surveyors), in periods of downtown project cost management. I would imagine this will take center stage, potentially even contributing to cost savings in the long run.  

Question: What professional lessons has the current economy taught you?

TB - The most important lesson I’ve learned is to focus on contributing to the bottom line of the organization. All efforts should focus on bringing value—in order to accomplish this, we must be strategic thinkers and players.

As we strategize how to contribute to the bottom line, we need to fully understand our company’s overall approach to cost cutting. Opportunities for savings can exist across an organization’s various sectors that involve the CRE, such as infrastructure, and services for both frontline and back end of the business

One such example might include IT sourcing of services. As we evaluate where contracted IT talent might sit, there is an opportunity to save a lot on the real estate front.  In addition, any realignment on the research or manufacturing front also has large impacts to rationalizing the real estate portfolio.

EA - I’ve learned that constraints often produce better outcomes. In strong economic times, many companies often try to do too much. But when they are forced to prioritize and base their decisions on costs and expediency, they are often pleased with the final product.

I’ve also learned the value of being prepared and staying in tune with what others in the industry are doing and evaluating what works and what doesn’t. In our current economy you have to have several possible solutions prepared, so if you need to vacate or fill a space quickly, you have options ready.

MM - It has taught me to stay open minded and to recognize the importance of understanding the entire project lifecycle, from real estate event through project closeout.  Many organizations are siloed, generating barriers or avoidable inefficiencies by segmenting parts of the project lifecycle.  A holistic approach can ease communication, speed project completion and often help mitigate exposure to the risks of cost or schedule impact.  I’ve also learned that nothing is ever certain, and deals that are prima facie, or “done,” begin to have some negotiating room.  

Designing the Mobile Workplace

“Mobility” is no longer just a buzzword. Increasingly, it reflects the contemporary workplace. According to Nemertes Research from 2007, 35% of U.S. companies have a mobility program and 26% have one in development. Considering that offices, workstations, and conference rooms sit empty 50% of the time, mobility programs are key to guiding clients to informed design solutions.

The next generation entering the workforce has different expectations—as employees they are highly entrepreneurial and demand the flexibility in work and life. They personalize the work process and choose when, where, and how to work. We know that talent is sought after in the workplace, and that there is a shift in work processes towards more collaboration and interaction; a mobile workplace is leverage in this changing, competitive environment.

Additionally, the global awareness of sustainability means that corporations are taking on the responsibility to reduce workplace footprints as well as real estate costs, while supporting emerging work patterns with the right technology, spaces, and policies.

Putting those ideas into practice, designers have to understand that every client and every business is different. Research, tailored observations, and strategic programming offer custom solutions to each client’s needs and problems. Implementing mobility programs can strengthen employee relationships and networks, create opportunities for cross-communication, save real estate, and improve business performance. Below are four processes that can guide the development of a mobile workplace.

A Strategic Approach—Survey and Assess
Mobility program development requires a clear understanding of the client’s needs. The process begins with a quantitative assessment of growth, in order to determine space sizes and types. Using worksheets to survey employees in groups allows both the client and designer to see work patterns and assign spaces based on the amount of time each employee— primarily desk based, site mobile, or mobile—spends in the office. Questions that determine percentages of work preformed in the office or on the road give direct insight into programming. Analyzing the nature of work, ranging on a spectrum from highly collaborative to highly confidential, gives designers the ability to institute high-impact changes to existing workspaces in order to more fully support the mobility program to better utilize the space.  

Designing the Great Room
As client’s needs evolve, a mobility program allows opportunities to customize the workplace culture. For a New York¬–based consulting company, Gensler developed design solutions that addressed the core nature of their work, their camaraderie, as well as changes in work style. New standards were developed that addressed how employees interact. The new work environment was based around a homeroom system—a large, conference center–like space that houses groups of 16-20 mobile workers, giving them a workday staging point. By blurring the hierarchy between higher-level and junior staff, the design proves that it is possible to foster collaboration even among a young, increasingly mobile staff.

Creating A Mobility Hub
Typical workplaces are housed in well-positioned, Class-A real estate around the globe. Today studies indicate that these workspaces go unused up to 50% of the time. Why? Because even without a formal mobility program, many employees work from airports, home, other regional offices, and a variety of other places a considerable amount of the time. This leaves vacant a large number of workstations, conference rooms and offices. Reworking traditional workplaces into Mobile Hubs, stand-alone or integrated into existing space, and that support focused working, collaboration, learning, and socializing in the workplace, gives existing real estate portfolios flexibility and greater sustainability.

Designed to support the relationships between employees and to cultivate the interconnections within a company’s community, the repurposed workplace responds to the primarily social and collaborative role that physical place takes on for a mobile population. By leveraging space along two lines: workspace ratio allocation and expanded communal spaces—from teaming areas to family style tables and cafes, touchdown spots to quiet rooms—the workplace can support dynamic work patterns that can lead to innovation and attract new talent.

Tools for the Home Office
The home worker spends 95% of their time working from home and 5% of their time at the office. Given such a mobile workforce, it is critical to address home office planning issues in order to ensure that home office work environments are compliant with company standards. Its within a design firm’s purview to provide planning aspirations and design guidelines, as well as furniture procurement resources to support the residential home office initiative, and create a functional, safe, and comfortable home office work environment. Healthy and ergonomic guidelines include factors such as acoustical privacy, good lighting, human comfort, life safety, and security.

Workplace Strategy Goal #2 - Effectiveness

Third in a series of articles about workplace strategy, this picks up with the second of four topics that cover most every issue or goal that surrounds workplace strategy:

Effectiveness - refers to the performance of the workforce - do they have what they need to be as productive - to add as much value - as possible.

Efficiency - using space, capital or any other asset as wisely as possible; and Agility, the notion of "future-proofing" the workplace to easily adapt to change - will be covered in a later article.

Alignment - insuring that the workplace reflects the unique context of a given organization - was described in the second article.

It seems obvious to say that work environments should support the work being performed in them, as well as the larger objectives of the organization. But in practice, we have typically focused on optimizing "supply" or the management of space, rather than satisfying "demand" - the goals of the business and the needs of the users of the space.

This is not to fault real estate and facilities managers. Their mandate has been the efficient management of tangible assets; their mantra: faster, better, cheaper. But efficiency - without balancing it with effectiveness - can fail to support the broad diversity and change most organizations are now experiencing.

So how can we strike the "right" balance between efficiency and effectiveness?

We suggest that employees' performance will be enhanced when the work environments in which they do individual and group activities are designed to specifically support those activities. Again, this is probably a fairly obvious statement, but how we get there can be challenged by a number of very legitimate trade-offs - so we'll talk about designing for effectiveness, and how we can manage some of the trade-offs.

Planning for a range of functions
Many design organizations have developed very effective tools for profiling work practices. They involve investigating what kinds of activities are happening - like how a given employee spends their time in tasks from administrative to supervisory to answering complex e-mails - to better understand what range of activities are taking place and what tools or resources are needed during each activity.

They also probe the amount of time a worker spends alone vs. with other team members or traveling; and delve into when, where and how communication happens - are meetings scheduled and predictable, unscheduled and highly erratic or some of both? Are workers project-oriented, and their activities depend on which phase of a given project they're in? As the picture emerges of how this worker functions on the job, they compare data to be able to assemble similar work styles into groups.

In a previous role, I worked on a project where we interviewed a cross-section of staff in each category and were able to identify eight categories of job functions that shared many similar characteristics. Knowing how these eight worked as individuals and groups, or as members of cross-functional teams, and how their activities might change over the life of a project made it possible to model typical environments for each of these job functions.

The opportunities for efficiency came from finding what was common to different groups - getting to only eight different worker types, for example - and having that become the basis for what was standardized, while the differences could be addressed with what we considered manageable levels of customization necessary to make people more effective.

In the above situation, we developed eight new workstation designs that were all the same size (8'-0" x 8'-0"), but varied slightly in "division" - how high the panels where and how fully they enclosed the worker; in "surface" - how much and how deep the worksurfaces were and how they were arranged; and in "storage" - how much and what kind of storage did they need at their fingertips vs. close by.

For example, the folks doing programming for new software had the highest panels and were placed in the quieter areas of the floor, since they spent a great deal of their time in heavy concentration. They had surfaces big enough to hold multiple monitors, which lined their station so they could have a colleague sit next to them and view their monitor. They still had manuals - so needed shelves - but not much in the way of filing space.

Those differences I mentioned were made easier to manage by using stackable panel add-ons, mobile surfaces, and having both a bookcase and a file cabinet in our "kit-of-parts". Other companies have made other trade-offs - using only one height of panel, for example, to limit the variations they would need to manage. Another company, on the other hand, might give each worker the same set of components, but allow each of them to configure their work space in any way they choose.

We also spent a lot of time understanding the range of group spaces each kind of worker needed. Instead of using a "one-size-fits-all" approach to assigning conference rooms, for example, we assigned types and quantities based on usage patterns. So teams of certain types of workers got two or three conference rooms, while others got one or none, because they needed project rooms they could assign to their teams, or because they didn't meet frequently enough to need one of their own.

In the next article of this series we will continue our study of Efficiency, discussing other examples of the balancing act between these workplace goals. Please stay tuned to the Corenet Global, NYC website for the next article in this series.


Workplace Strategy Goal #3 - Efficiency

Fourth in a series of articles about workplace strategy, this picks up with the third of four topics that cover most every issue or goal that surrounds workplace strategy:

Jan Johnson

FIIDA, LEED AP, VP of Market Development at Allsteel

Efficiency is using space, capital or any other asset wisely, with as little waste as possible.

Agility, the notion of “future-proofing” the workplace to easily adapt to change - will be covered next.

Alignment – insuring that the workplace reflects the unique context of a given organization – was described in the second article; and Effectiveness – focused on the performance of the workforce – was described in the third article.

So far we’ve reinforced the premise that using workplace strategies just to save space is at best short sighted and at worst downright dangerous. Now, let’s turn to the process of identifying the appropriate opportunities for efficiency.

In doing so, let’s assume we’ve already uncovered the business results the organization is seeking. We’ve identified the job functions that make up the organization. We understand workers’ needs as individuals and groups and have analyzed them over a period of time; and have integrated organizational and personal goals.

With that all-important information, we have a clear picture of the where, what, when and how—the kinds of spaces people need for the variety of tasks or activities they do, and the ways they move through them--and can demonstrate what benefits could be derived by the organization and the individual. We can now use this knowledge to model the ways spaces can be utilized; and identify opportunities to use individual spaces, group or support spaces or any other asset more efficiently.

Space utilization strategies can fall into at least three categories: smaller spaces than before, spaces that accommodate multiple users, and spaces that accommodate multiple uses.


We’ve already touched on the meaning we assign to space as a manifestation of rank or achievement, so changing the rules of who gets how much requires diplomacy. Moving to fewer standards for individuals’ areas, though, can create the opportunity to also make each office or workstation smaller. A former client, for example, went from eight rank-based sizes of offices and open workstations to two – a 10’-0” by 12’-0” office, and an 8’-0” by 8’-0” workstation. They then used their knowledge of work practices to design more functionality into those offices and workstations.

Other organizations have balanced their knowledge of current work practices with what emerging technology makes possible to justify reductions in surface and storage – and therefore in the overall size of a given workstation.

When offices line an exterior wall, the modularity of the vertical window mullions may set the width of those offices and make it infeasible to make them narrower. Going to interior offices is one option that removes that constraint. The same client I mentioned above also set a “big rule” that no offices would be placed on the exterior so that natural light and views could be enjoyed by the majority of the occupants. These new interior offices have clear glass front walls to allow light to enter.

The last issue concerns what’s practical and feels acceptable. Sun Microsystems have used what feels to me like the smallest possible private office size – 8’-0” by 10’-0” – and carefully designed the furniture components in it to find the ‘right’ balance between work surface area and open space. It feels like a well designed boat cabin – extremely efficient, well proportioned and functional. They, too, have used glass fronts and/or glass sliding doors.

Multiple users

The most familiar example of multiple users is “hoteling”—where a number of workers can share a smaller number of offices or open workstations because they are only in the office for brief periods in between assignments and are otherwise traveling or working from home. Another form, used by many call centers, is split shifts.

Other strategies that don’t always net huge space savings, but are typically better allocations of space, are those that redistribute space from large, individual areas to shared spaces like phone booths, quiet rooms, project rooms or open team spaces. This is the thinking behind approaches like “group address” or “activity settings” where a group is assigned to a variety of space types, and people move between the areas that support the tasks they need to do. Behind Sun’s adoption of that smaller office size was the reallocation of the space they saved to more group work areas. Other organizations have merged more aggressive group address practices with hoteling concepts and found significant space savings.

Multiple uses

An example of multiple uses might be a room devoted to a new project that may start out as a formal conference room—and later, be converted into work space for half-a-dozen people in the project’s development phase. Or a lab might expand into an adjacent project room during the testing phase of a project, then return to its original size.

Other efficiencies

There are several other strategies to improve efficiencies, including a “kit-of-parts” approach to space and/or furniture components, and ways to reduce the costs of ownership. We’ll cover making change easier in the next article, but will spend a moment on “kit-of-parts”.

For those that haven’t heard that term, the idea is to develop the fewest number of components that can satisfy the breadth of ways they need to be assembled. Another former client learned that modest changes to the design of workstations they’d developed across multiple locations would reduce the parts needed to build them from 41 to 14. Those 14 parts – 3 panel sizes, 4 work surface sizes, 2 pedestals, 1 file, 1 bookcase, 2 overheads, and 1 storage tower – could be configured into 11 different layouts for 5 different sizes.

In short, space efficiency is a great goal, but best tackled once organizational goals and work practices are thoroughly understood. Other efficiencies – like reducing the costs of inventory or reconfiguration or re-purposing – can also make the organization more agile…which we’ll take up in the next article.