The New Workplace: Its Value as a Leadership Tool

On September 19th, we were fortunate to be able to feature a panel of recently interviewed CEO’s to be a part of our continuing discussions about the workplace, from the viewpoint of the leadership positions of four uniquely diverse organizations.

Image courtesy of Elaine Gilligan

The Northern Virginia Chamber of Commerce event, held at George Mason University’s Arlington campus, included Dave Pace, CEO of Jamba Juice, based in Frisco, TX; Lorna Donatone, CEO of Geographic Regions and Region Chair for SODEXO North America, based in Gaithersburg, MD; Roderick (Rocky) Mitchell, Executive Vice President, Global Fixed Assets of Pentagon Federal Credit Union, based in Tysons, VA; and Kevin Virostek, Managing Partner, EY, based in Tysons, VA.

Moderated by Work Design’s publisher, Bob Fox, the conversation kicked off by acknowledging that each organization had either relocated or changed-up their workplace within the past year. Jamba Juice relocated from the San Francisco Bay Area to Frisco, Texas; PenFed from Alexandria, VA to Tysons, VA; EY relocated to a different location in the Tysons, VA area; and the Support Services division of SODEXO consolidated and relocated in the Buffalo, NY area. The panel then offered their perspectives on the changes and challenges, both physical and organizational, presented to them as leaders, and to their entire organizations.

Setting the tone and context, Bob set forth with multiple, yet connected questions centered on how the nature of work is changing in a competitive and disruptive business environment. How does workplace fit into that equation and facilitate changes? How does your space help drive your business? Is your space an extension of your leadership? If so, how?

Our panel shared their ideas about the workplace and how it can be an effective tool to drive change and move business forward. In turn, the participants highlighted some of the changes recently made in their organizations and how that changed their work environment personally and corporately. Each situation was unique to the organization but the parallels among all four participants and how they interpreted those changes and the effect on them, personally, and across their organization were most interesting. Summarized here, are the highlights of this lively conversation.

On the need to relocate and provide new space:

Dave (Jamba Juice): Our move was based on the desire to find a location that made more sense for our business. There was a limited talent pool for the food service industry in the Bay Area. That, coupled with the high cost of living directed our decision to relocate to the Dallas area, which has a much larger pool of food related businesses. However only 10 of our people moved. Our new space not only had to be designed and organized to support our business, but it also had to be positioned to be key in the recruitment of our new workforce. We had to hire over 100 people, so the alignment of our brand with our space was critical.

Lorna (SODEXO): The relocation of our Support Services team in Buffalo, NY was triggered by a lease expiration. This gave us the opportunity to find space to house all of our regional folks, who had been in different locations in the area. It also allowed us to design a space to better support our current workforce. We included updated and technologically advanced amenities to help our employees do their work and also to showcase the kind of spaces and environments that we provide for our customers. This project also offered us the opportunity to test some ideas about workplace as we contemplate changes in our Gaithersburg headquarters, which will be a renovation in place. The physical spaces and magnitude of the work are different, but the basic premise of deciding which type of space best supports the population forces us to think about how we can make the best use of our space, the kind of space to provide, and also how to integrate the best technology.

Rocky (PenFed): We are a technology company delivering financial services and only have 41 physical branches (globally) so most of our work and support for the distributed teams is done at our headquarters. Our membership spans the globe, and is mostly comprised of military service members and their families, so we need to be on board 24/7 to support them wherever they may be located.

We were previously headquartered in Alexandria, VA but desired to move to a location which provided more amenities and that was more attractive to new workers that we needed to recruit and retain. Although we work very hard to make sure our longtime employees remain in place, we wanted our new space to play a key role as we experience exponential growth. There’s a larger talent pool for financial services in the Tysons area. One third of our workforce was recently hired, and the new space was a useful tool in making PenFed an attractive workplace.

Kevin (EY): We have over 2,300 employees in this market. Seventy percent are in their twenties, or recently out of school. Our desire to change up our space was partially about recruitment and retention. We hired over 900 people here in the D.C. area last year. Turnover is a part of our model, but we are also finding that the work environment is key in our ability to recruit top talent. What they see when they interview affects this. Our new spaces have upped the ante in the markets where we have updated our space.

About the key features of the new spaces and how that has affected their business:

Rocky: Our CEO is a people person, and the new space reflects the high energy and collaborative spirit of our culture. If you are not a “team” person, you will not survive in the work environment at PenFed. Our executive suite was designed to be open and accessible (with huge candy jars) in abundant evidence. We wanted an open and transparent environment. The executive team is often out and about with the larger population, not in their offices.

Although most of our spaces are assigned, we are finding that the shared spaces are where we are seeing the most activity. In our previous space, people were more separated. Our current space is open, but people have ample places to find privacy. Huddle and meeting rooms are where we see increased productivity and sharing of ideas. The assigned spaces are where people keep their personal belongings, but the shared spaces are where they collaborate.

PenFed’s new offices are designed for flexibility, collaboration, and innovation – Image courtesy of PenFed

Lorna: Our recent global reorganization yielded a more matrixed organization. Our business segments are more distributed across geographies so our physical space needs to support that. Reliable, quality technology needs to be in place and we are striving to provide that. We have also found that our mission to provide “quality of life services” to our customers also needs to be in place in our own facilities. Our new Buffalo space has integrated that concept into the design, including references to geographical features (such as Niagara Falls) and the surrounding community. We also have made sure that our space makes note of our corporate social responsibility commitments such as clean water, a healthy work space, and nutrition. I could feel those values expressed in our new Buffalo space when I walked in for the first time. It married the matrixed organization to the quality of life for our employees. And for those that come see it, those values are clear.

Kevin: Our new space was also used to introduce new ways of working into our Tysons workforce. One of the bigger decisions was to eliminate all private offices and move to a bookable space request system. As a professional services company, our biggest asset is our people. The desire for change was to provide a better atmosphere to promote sponsorship and mentoring of our younger staff. Our executive team is now physically integrated with our larger staff. Was that an easy sell? Not for everyone, but once those more reluctant to embrace the change saw the increased interaction among all staff they have moved forward in their own work style.

We have forced ourselves to work differently since we moved. The hierarchy is not as visible in our new space. When the walls came down, so did the barriers. The staff feels a lot more empowered and motivated to reach up and ask for sponsorship and mentorship. Partners are not sitting in their office waiting for stuff to come in – they are reaching out and mentoring. This has driven efficiency and engagement which helps retention and recruitment. Personal relationships, that’s something we can measure. We have an engagement index and we hope for improvement since the change.

We built our fabulous open space, our two-story hub, and our coffee bar like a mini Starbucks. It has booths, comfortable seating, and a variety of spaces to work; it’s always busy. In this more relaxed environment, people can wear jeans. Our decisions on changing the physical environment have moved the corporate culture forward in our Tysons location. We have received anecdotal comments such as our older staff “is feeling younger”. They also feel that on all ends of the spectrum, our new space is filled with more energy than our previous space.

Dave: Our space needed to align with the brand. Conference rooms are named for smoothies and our feature walls are all graphics of our ingredients. We had to make sure the space reinforced the brand because we had all new employees. The space had to be attractive enough to make people want to come and work there. We had to recruit many people so our space had to reflect all that we had to offer and be another layer of messaging about who we are and what we do. Providing space that was practical and flexible made a difference. There was a demand for sit to stand desks, and we provided those. That was something employees really wanted and they use it. Also, making our space informal and accessible was instrumental in making our employees feel welcome and engaged with the overall workplace.

Jamba Juice’s offices were designed to embody the company’s brand – Image courtesy of Jamba Juice

Our CEOs weigh in on open versus enclosed offices

Lorna: I was recently in SODEXO’s corporate office in Paris. I was in a meeting with a colleague in an office, but there was no door! We found ourselves whispering as the nature of the conversation required a level of confidentiality. This highlighted the need for flexibility and consideration of providing spaces that meet multiple needs throughout the day. The conversation about enclosed offices is ongoing as we contemplate our renovations in Gaithersburg.

Kevin: For me it is less of an issue now that I have experienced our new way of working. I worked in five different locations in our offices in one day and was able to connect with people in a way that I would not have done so in the past. Having the space options that meet the needs of all kinds of meeting has been accomplished in our new Tysons office. We are in the process of planning the renovation of our D.C. office now, which will have different requirements for office space. The population there is comprised of tax attorneys who are former partners of large law firms. We cannot put them in cubicles as they are still heavily dependent on working with large documents and briefs, thus we need different types of space. We also cannot ask them to work in an environment that would be an uncomfortable transition. We can make sure the new space does have flexible elements to encourage interaction and collaboration but we cannot make the wholesale changes we did successfully in Tysons. Having a flexible environment with the right technology and making sure everyone is aware of it, is key. You must check in, reserve and account for the space you need.

Dave: We have a large open space and our enclosed offices are transparent with glass walls Structurally we are still set up along functional and technical expertise. Our executive team is spread out across the space to encourage to encourage folks to move about during the day. It’s the accidental interactions along the way that keep things lively and have unexpected results with respect to ideas and collaboration.

How the workspace can be a catalyst for innovation:

Lorna: We want our office space to reflect our showcase accounts. We are trying to integrate what we do for our clients into our own spaces – we want our employees to experience what we provide to our customers. SODEXO can be invisible at client sites but the more our employees know and experience what we provide out in the field, that is better for us overall. Conversely, our customers want to see our space, what we can provide for them. For example, where we have demonstration kitchens, (as a lot of our work is food service related), we can show our creativity and innovation in providing services for their businesses. When we integrate our food innovation in our own corporate facilities, we can highlight it and have our own employees experience what we provide to our customers.

We are trying to demonstrate our competency in what we do. Seventy-five percent of our portfolio is food service and facilities management. The cafeteria is more than where you get something to eat. Our cafeteria in Buffalo has a fireplace, a TV, places where you can have a meeting and enjoy a healthy meal. The space demonstrates our creativity and allows our customers to envision how we can provide the same kind of space for them. Air, light, and space is important. By providing spaces that showcase our abilities also helps our employees speak about a this from personal experience in their everyday work lives.

An important design element of SODEXO’s new Buffalo Service Support Center is area centric branding elements and features – Image courtesy of SODEXO

Rocky: Bringing people together was the key to innovation. Previously, all of our IT people were in one place, and our credit card people elsewhere. There is a lot to be said for physical proximity to share ideas – the space and technology we now have makes that happen easily in our new space. We have more people sharing space, and our advanced technology to unites our people who are geographically separated.

Kevin: Our innovation comes from interaction with our clients. We have a lot variety, and in this market, and in multiple sectors, we can see what they are doing and are energized by their businesses. What our clients are doing informs us on what we need to do to keep up with them. In our old space which was organized by team and practice area, the segregation squelched innovation. Having workplace neighborhoods with mixed specialty area populations, and our upgraded conference center, has allowed us to use space differently. We are bringing our clients in to our offices for discussions and events in a way we could not support previously. That energy goes out into our client spaces and the market place. Our new office is the hub of all that increased activity.

Dave: We make smoothies! We need to grow by innovation. We have an innovation lab in our space where we are always working on new ideas. We can interact with our team and we try and keep it lighthearted as well as innovative. Our test area is dubbed the “CRIB” – Center for Research for Innovation and Blending!  We also have a store on the ground floor of our building. Keeping those activities close drives the interaction between our product, the business, and those looking for new ideas and concepts.

Where do you find the most value and how do you measure it?

Lorna: We do an employee engagement survey across all SODEXO every two years. The questions should include, how do you feel and how do you work in your workspace? We are looking at how our new spaces are being used and making sure people understand how to use them. We are also looking at how technology will allow us to use and measure the utilization of space.

Dave – Generally we have achieved what we wanted to do with the new headquarters. We don’t have hard metrics. We have been there a year, and maybe can now evaluate what is working and what is not. What can we change? What have we learned? What do we want to do differently? Facilities can become static so you need to be able to adapt and adjust as time goes on to keep things fresh and dynamic.

Kevin: We moved from 125,000 SF and our new space is the same size, yet we have 700 more people “assigned” to that location. What we have achieved is economic efficiency, the new space feels like we have a lot more room and people are more comfortable. Moving to the new work style was a great people and economic decision. The value has been measured in the retention of our staff. Our people are our assets – when you lose a superstar, it’s an expensive replacement. We need to keep those high performers. Although turnover is a factor in our business, if we can get people to stay longer because they like and can operate successfully in our offices, that is where the space makes a difference.

Rocky: At the end of the day, nothing beats a human touch. We do all the “stuff” technology wise, but nothing beats going out and talking to people. If you are not out traveling, talking and listening, you are not doing your job. It’s a myth that all millennials just want to text. People want human interaction. Communicating strategy and organizational values – it’s important to have spaces to allow one-on-one or small groups to meet and interact. It’s indispensable and results in increased engagement and productivity across all teams. That’s the value, yet it’s not something we can easily provide a quantitative measure of.

In conclusion:

It was interesting to compare our panel’s comments on the key elements that face businesses today, with respect to their workplace. In our continuing conversations with CEO’s across a broad spectrum of business types, we see similarities in the challenges they face in matching their space to the corporate culture and the ability to provide what their employees need on a day to day basis to be personally successful, and positively contribute to the success of the company. A few take aways from this event include:

  • Defining company culture and goals is important when planning new workspace – one must support the other.
  • People can adapt to new ways of working, but planning, communication, and a strong change management structure are critical elements of a successful transition.
  • Workspace is a key factor when people are considering a job change and can be a differentiator in attracting and retaining talent.
  • Incorporating advanced technology into workspace design is a given. People are working across different geographies and time zones, and being able to connect quickly and reliably is a critical element in the planning and design of new or renovated space.
  • The debate continues over enclosed versus open and assigned versus unassigned workspace. Companies need to evaluate what options will work best for their organization.
  • Workspace can support organizational change and move companies in new directions.
  • The methodology to quantitatively measure how space supports business initiatives is still a work in progress.
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