Verizon’s new corporate workspace venture focuses on co-working to not only optimize their physical space but to meet current and future business requirements and opportunities.
After attending the soft launch opening of Alley last year – Powered by Verizon in Washington, D.C., we wanted to learn more about the concept behind this new corporate workspace venture.
Corporate real estate managers are often faced with the challenges of maximizing the value of their real estate needs to ensure their portfolios align in ways that do not hurt the bottom line. Real estate is one of the most significant expenditures in any business. As companies become more focused on the benefits and importance of workplace design, they encounter challenges to ensure that their workspace supports their business in a way that promotes employee engagement and productivity. At an executive level, there is also increasing awareness of how workspace can be a crucial factor in recruiting and retaining talent. A common theme in our ongoing CEOs Talk Workplace series, we brought up this subject in our conversation with the Verizon team whose developing new spaces. Our discussion centered around the “why?” and “how?” they embarked on this undertaking.
With a portfolio of over 110 million SF, this presented some severe challenges to business operations. Verizon conducted an internal brainstorming session to evaluate how to optimize their physical space to meet current and future business requirements. Verizon developed a pilot program to re-purpose space in its former headquarters in New York City into a space that blends the flexibility of co-working with the reach of their global business. In 2016, they engaged research and strategy consultants at PLASTARC to expand this program internationally.
At CoreNet’s Global Summit in 2014, PLASTARC’s Melissa Marsh and co-presenter, WeWork Co-Founder & Chief Creative Officer, Miguel McKelvey, described the emerging co-working movement as a disruptive innovation. Their presentation focused on the cultural implications of co-working space. The evolution of co-working as a viable business model has pushed WeWork to become a billion-dollar company with a major global footprint. This success has also fostered the development of next generation communal workspaces to better meet specific needs for both individual workers, small businesses, and specifically targeted audiences (i.e. makers, lawyers, tech startups). How we got from point A to point B in a relatively short time frame parallels the rapid changes we experience with modern technology (how many iPhones have you had?).
Early on, as people embraced portable technology, the “campers” at Starbucks and competition for power outlets and Wi-Fi in other public settings, like airport and hospital waiting areas emerged. Setting the stage for savvy entrepreneurs, a new workplace model emerged. Co-working space is gaining traction within the corporate real estate community as they are open to creating more flexible workspaces to meet the need of diverse and distributed teams. As co-working spaces are becoming more prevalent, large businesses are taking note of their advantages.
Led by Verizon’s John Vazquez, SVP of global real estate and director of real estate operations, there was a consensus that previous attempts to update and upgrade their workplaces had not been successful. Learning from those failures, the team found value in understanding their mistakes to build a new platform for an improved workplace experience for Verizon’s employees. From analyzing the factors affecting their previous endeavors, the team concluded that the key was to take on a more human-centric approach. While this effort remains a “work in progress”, their key findings are helping them find what PLASTARC’s Melissa Marsh describes as “the soul” of the people-side to their business.
Recognizing John’s efforts in experimenting with creative real estate solutions, and a refresh of the internal Verizon CRE team, the working group had permission to test it based on their research findings. From a business perspective, Verizon’s analysis of their real estate holdings revealed that they potentially had over 100 locations near their leading business centers, customers, and key business partners.
The buildings were originally used as switching stations or “central offices” that connected all land-line telephones. These sites were usually in areas where there was an interest in developing business relationships with emerging technology entrepreneurs and potential talent resources with an aim of incorporating them into the Verizon workforce. Eventually, as communication technology advanced, the need for these buildings decreased significantly.
In the information technology and services sector, competition is fierce for hiring the best and brightest minds to develop new products and services. Companies also want to recruit talent that’s ahead of the curve in mastering improvements to existing technology and planning for the future.
The emergence of co-working spaces as practical business models seemed to align favorably with the Verizon’s need creatively transform the unused spaces into vibrant workplaces. The Verizon team then outlined their motivation to develop this vision:
- They could leverage corporate real estate assets by repurposing them as new co-working communities.
- The co-working communities could develop within startup and innovation networks. By supporting small business growth, these locations would give them access to new platforms for talent, technology, and products.
- Learning from member-only, paid co-working best practices, Verizon could advance their workplace strategy and apply that knowledge as they develop new and better work experiences for their employees, guests, and customers.
- Verizon could take advantage of partnership spaces to increase their knowledge of how best to provide and deliver flexible and engaging workspaces going forward.
Once the decision was made to repurpose some surplus buildings into co-working spaces, the team worked to identify a partner that could holistically manage the facilities. They understood that bringing in outside expertise could help to better handle the space. In this case, the need went beyond just making sure the physical space was well maintained, but also required experience in building communities for the technology sector and entrepreneurial startups. The standard corporate services provider was not going to be the right solution for this endeavor.
As facilities were planned, the Verizon team realized that space should also be designed with the local community in mind. They thought that the selected provider had to best match that expected population. While Verizon provided the copper and fiber to deliver communication technology, the team sought to engage the right providers in each community that were grounded in local culture. Their choice of community management providers would help ensure that the spaces would provide the right atmosphere and environment to attract a talent pool that could grow into potential employees, partners, and customers.
As there are other options for co-working spaces online, Verizon wanted to differentiate these areas by working with their partner, Alley. Alley carefully evaluates potential members per location to provide a mix of similar-minded entrepreneurs and small businesses to build that community. They also desired to have a place where Verizon employees could interact, mentor, and help create that community.
There have been some exciting developments along the way as each location has come online and evolved. Findings along the way include:
- There was a need to balance enclosed and open space – some architectural tweaks were needed as Verizon and partners reviewed how the members and visitors use each facility.
- Tuning in to the right type of events to encourage a mix of Verizon and the local community: Hackathons work better in co-working space rather than a corporate workspace.
- Urban spaces are more conducive to attracting the talent Verizon hopes to engage with and foster.
- It takes time and commitment to fully activate the space.
- Community management of co-working spaces is about events and knowledge exchange.
PLASTARC and the Verizon team have evaluated what was working and what needed adjustment as more locations are brought to fruition. On the corporate side, there is a process to educate local executive teams and embrace the concept. Part of the initial analysis included an investigation of areas open to the idea of providing co-working spaces aligned with Verizon’s mission to bring new talent and energy into their existing workforce.
On the partner and provider side, there must be communication and collaboration between the community management and the local business units. Content needs to be curated to match not only Verizon’s needs, but also what will resonate with the community for both existing and potential members.
As the concept and locations mature, Verizon will review and refine to determine the next steps. There are processes in place to measure activity, memberships, marketing efforts, events, and commercial performance on a regular basis.
What is critical in this story is the creativity in reimagining underutilized space. This project brought new life to various areas, and also provided new means of identifying new talent beyond the usual channels. The energy, exchange of ideas, and information within these new workspaces are one aspect of how technology has opened new avenues to how and where we provide places for people to work.