How the push for productivity will transform the workplace

The travails of the stock market and China’s recent “Black Monday” are mostly background noise for senior executives planning long-term strategy in Asia. But there is no doubt corporations face a new set of challenges in the region thanks in part to China’s slowing economic growth.

While reining in costs has been on the agenda since the aftermath of the 2008 financial crisis, many are looking beyond balance sheet re-build towards cautious expansion. In light of this “new normal”, multinationals have a renewed focus on expanding productivity and real estate has a major role to play in this.

As a result we are seeing a transformation in the physical workspace. Asian companies used to insist on traditional office setups, with cubicles for rank-and-file workers and corner offices for the most senior executives.

But they are now taking a leaf from the playbook of companies such as Google and Facebook – both expanding rapidly in Asia – in setting up their workplace for maximum interaction and efficiency.

Big changes due to big data

Data analytics are at the heart of these changes. The amount of data sitting in the systems of organizations is vast, and in many cases untapped. The issue is, “If only we knew what we know.” How you handle that information makes the difference between an efficient company and one that is flailing.

In the next few years, the application of Big Data generated by corporate real-estate teams will allow for highly tailored examinations of space. To track office usage, there are simple tools such as swipe cards that inform a company of when staff come and go.

But the world of Big Data is moving far beyond that. For instance, sensing technology can tell us whether existing desk space is being used or not. Many companies are discovering that, at any one time, at least 25% of their workspace is not being used.

That will no longer be acceptable at a time when, according to research from IMA Asia, 98% of companies are bidding to enhance productivity. They are experiencing a classic profit squeeze, with flattening revenues and costs increasing at double digits in percentage terms.

A series of CEO forums that IMA Asia and JLL conducted across Asia Pacific this year studied the issue of productivity as a solution to that profit squeeze. One of the key findings is that Asian corporates now want to create the “workplace of the future” to deliver that coveted productivity boost.

Freeform workspaces

An open-plan setup breaks down barriers, literally, between colleagues. “Set the tone that collaborative, non-hierarchical and results-oriented work is the norm, so innovation can flourish,” was one conclusion from the forums.

True open-plan offices require the top-level management to give up their private offices, leading by example. Employees come together on projects, anchored to a laptop, not a set desk.

These freeform workplaces serve as statements of a company’s identity. They are a way to engage employees, addressing a crucial challenge for large corporations – retaining talented employees, particularly Millennials, who grew up learning on beanbags and in coffee houses as much as a desk in the library.

This is happening even in the most-traditional of companies. One bank reports that it ditched cubicles for a free-form office, using data from their computer systems to figure out how product-management staff extracted information from the rest of the bank.

Changing the environment worked wonders for productivity. Over a three-month project, the fluid work environment cut wasted time by 85%. Since management was more directly involved in the project, there was very little time spent waiting for decisions or for clarification of details.

Operational efficiencies

Despite this, many companies have overlooked property as a source of productivity. Even for C-suite executives in Asia, 80% said they have little involvement in property decisions, leaving them to headquarters or the chief financial officer.

For real estate, establishing measures such as relative cost per person and profit per professional are smart ways forward that Big Data now enables. Using sensing technology, they can map which departments need to interact, and which can be shifted to lower-cost suburban sites or even moved overseas.

The smart use of data also allows companies to create operational efficiencies. Developers and building managers in Asia are already working with consultants to track energy use and curb it, for instance, through sensor-based lighting, heating and cooling technology.

According to the 2015 report from GRESB, which tracks corporate responsibility in real estate, 78% of property developers and fund managers in Asia undertook technical building assessments over the last four years, with 76% then implementing energy-saving measures.

That has enabled Asian real-estate developers and fund managers to reduce greenhouse-gas emissions by 68 metric kilotons between 2013 and 2014. That’s the equivalent of taking 14,316 cars off the road. In terms of energy reduction, Asia-based property companies have reduced energy consumption by 143 gigawatt hours, or the equivalent of 229 thousand barrels of oil.

Efficiency and productivity can take many forms. But they undoubtedly require a long-term view to achieve and, as with any corporate overhaul, can incur costs at the onset. Increasingly, we now have the data to crunch that show it’s worth it.

Author: Jeremy Sheldon, Managing Director, Markets, JLL Asia Pacific

Image: Employees of a foreign exchange trading company work in front of monitors in Tokyo August 26, 2015. REUTERS/Yuya Shino