Workplace Strategy Wars: the battle for turf
Most wars in history are a contest between only two factions, but there have been a few cases that involved three distinct competitors, each battling the other two. Examples from the last hundred years include the war in Bosnia that ran from 1992 two 1995 involving Serbians, Croates, and Bosnian Muslims; the Lebanese civil war that ran from 1975 to 1990, involving Lebanese Christians, the Lebanese Nationalist Movement (a socialist faction with ties to the PLO) and the Lebanese government; the Chinese Civil war which ran from 1927 to 1949 with Japan joining as a third player in about 1931; and most recently the war for domination in the workplace strategy field between architects, real estate companies, and management consulting firms.
There are numerous big and small players in each of these categories and right now it is a buyer beware situation as each kind of firm tries to simultaneously land clients and gain expertise in the fields of the other two in order to capture a larger market share.
Before I continue, I want to return to recent history, to the pre-workplace-strategy-frenzy and pre-great-recession era to look at how this battle launched. In the olden days 20 years ago, when it came to commercial space, Architects were hired to help customers figure out how many spaces they needed and of what size in an exercise called “programming”, Real Estate companies were hired to find the right piece of land, building, or tenant space to fit those requirements in an exercise called “CRE or commercial real estate services”, Consulting firms helped create the change management strategies that would transition companies into their new spaces generally under “business strategy” or “change management”, and we all played happily together in our respective roles.
But then, a couple of things happened:
1. Technology finally developed enough to untether us from our desks and that allowed companies to drive down the square footage per person. When the average square foot per person went from 250 in 1985 to 150 in 2012, it significantly impacted the commercial real estate industry whose compensation is based on square footage. They needed and found new sources of revenue by moving into areas traditionally offered by Architects and Management Consultants, most notably programming and change management.
2. Millions of smart educated people were laid off from their jobs in 2008. They were forced to figure out how to freelance and they become part of the freelance/contract labor trend that as of 2014 had 34% of the workforce independent (contract or micro-preneur) and that percentage is still rising. As the economy has improved many of that group have been offered positions but do not want to go back. In 2010 with an unemployment rate still high from the crash, over 3000 jobs went unfilled for more than 6 months. Architects are now using design strategies from retail and hospitality, woo-ing potential employees with cool looking spaces that are fun to be in and create a sense of community. Architects have lost ground to real estate firms in the pre-project programming phases but are moving into the Management Consulting area with human capital attraction and retention work as well as change management services.
3. Businesses came out of the recession gutted, scarred, and nervous about investing. Technology had opened the floodgates to competitors from all angles. The percentage of Millenials who have their license at 16 has dropped from 51% in 1981 to 32% in 2012 and still falling. Young people are connecting with friends in other ways and see car ownership as a liability and not a ticket to freedom. Did Ford ever see Facebook and Snapchat as their competition? In order to guide their clients in this challenging environment, Management Consulting firms had to become experts in making sure that every dollar spent served multiple purposes so a real estate move was not just about getting more space, but also became an opportunity to be more productive, support collaboration, and attract the right workers. To do their job well, and to keep those clients happy, Management Consulting firms needed to know how to use physical space to the advantage of the business and so they now offer assessment, programming, and even space planning services – formerly the turf of Architects and Real Estate firms.
And so the battle lines are drawn and there are others entering the fray as well, furniture companies, software companies, property management companies…change is a tough problem that intersects all of those fields and so each one brings a valuable set of skills and perspective. However, I believe that the victors will be those players that really dig into the causes and conditions that most effectively solve the human problem. How do we work together well? How do we talk to each other so that we understand? How do we make space for the difficult conversations that allow us to fail fast and then pivot? How do we enable the diverse opinions that lead to innovation? These human dynamics can derail the best real estate strategy, the best architectural design, and the best business strategy.
Humans, and human behavior are always the most difficult part of any project, as any parent will tell you. My thinking is that in the workplace, if you can begin by enabling difficult conversations you will become the David to the Goliaths that are already in this war. If we can shift the focus to the people part of the equation and work to solve that, our workforce becomes happier and more productive – and that would be the real victory for all of us.