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Webinar Recap: Pivoting in a Dynamic Workspace Market

WEBINAR 3 DYNAMIC WORKSPACE MARKET

The latest webinar from essensys focused on shared workspace market best practices and elements of both the serviced office and coworking sectors. Our industry expert panel featured longtime industry players Flip Howard of multi-site Texas-based Meridian Business Centers, Christine Andrews, operator of Toronto-based coworking space ACME Works and partner at the global coworking consulting firm The Deco Group, and Mike LaRosa, coworking consultant at Agora RDM and founder of the Coworkaholic blog.

The event highlighted best practices in coworking that traditional executive suites or serviced office operators would benefit from implementing in an increasingly coworking-focused market. Throughout the event, however, it became clear that the flexible workspace market as a whole can benefit from the best practices taken from each sector. We touched on five key pillars in a flexible workspace: design, services, operations, technology, and community. Here’s what our panelists had to say.

Workspace Design: Stay Relevant to Your Customers

In the workspace market, it’s all about staying relevant; to both the times and your customers. Compared to the 70s when the nature of work and technology required larger spaces to store filing cabinets, printers, fax machines and cushy furniture., today’s workspace is experiencing a downgrade in space allocation per person. Flip Howard highlighted the downward trend of large and spacious offices to smaller offices and task-based working spaces. There’s higher demand across all sectors for larger congregation and breakout areas, brainstorm and huddle spaces and common areas.

Christine has run her Toronto-based coworking space since 2010. Since then, there’s been a blurring of work-life balance and an increased focus on hospitality. This has driven coworking operators to create spaces with home-like features, “from the kitchen, soft-seating, furniture, use of artwork and decoration. Spaces – new and existing – are being designed to feel like home,” Christine said.

A game room catering to millennials won’t jive in a traditional executive center. The key is to “keep in mind the overall look and feel of your space. Keep it congruent,” reinforced Flip Howard. The primary takeaway when it comes to design is to stay in your lane. Although the coworking movement has brought popular contemporary elements like bars, ping-pong or pool tables to the modern workspace, “authenticity is critical,” says Christine Andrews. “Have a clearly articulated strategy and know who you are.”

“Don’t try to be all things to everyone,” agreed Mike LaRosa. “Determine what your customer-based is looking for rather than trying to offer every type of space in yours. There are growth and opportunity in niche spaces. Find your niche workspace market, those who want to be in your space and embrace that rather than trying to please everyone.”

Workspace Products and Services

When it comes to services, the underlying theme is to know who your customers are and what they do. Consider the workforce and industries in your region to understand what services and products are in high demand. “Don’t be afraid to pivot back” on an underutilized service, explains LaRosa. “The benefits of working in the flexible workspace industry is that you can try different things and be creative.” Virtual office and mailing addresses are often high value-add services that are under looked by operators. LaRosa encourages operators to consider new technologies enabling operators to offer additional services.

“Consider what’s important to your community and consistent with your overall brand offering. It comes back to your strategy and the demographic you’re trying to attract,” explains Andrews. “The community loves when you ask for their input,” encourages Andrews. “Whether via a town hall or a survey, see what their interests are and what services they need.” In the coworking sector, there is an increased need and desire for a greater focus on wellness. “Operators have a certain obligation to ensure the space we’re offering is a healthy space; not just for the physical space but meeting the needs of a higher order of wellness among our members.”

Andrews also suggested a focus on meeting rooms. The shifting workspace market landscape and the nature of how and where people work means operators need to reevaluate the meeting room space they offer. For example, previously meeting rooms were tucked away in a corner with dry executive-style furnishings and sprawling whiteboards and projectors. “Think about how the room is going to be used and provide occupiers with the tools they’re looking for,” suggests Mike LaRosa. “A teleconference meeting room is completely different from a brainstorm room.” In today’s workspace market, the way people are meeting has changed, and operators must adapt their meeting spaces not only for functionality but also for securing and driving additional revenue. Meeting rooms can be a prime attraction for non-members to test drive your space and even be flexible enough to accommodate events.

Flip Howard suggests that the traditional menu of products and services needs to evolve. The dynamic of the workplace and how people consume space is no longer congruent to the traditional menu of space offering. At Meridian Business Centers, Howard’s team is starting to roll out a wider space menu to sell shared space fractional by time and number of desks in an office, allowing his business to capture revenue from growing occupier bases such as corporates and freelancers. “There are many ways to sell excess inventory to a wider range of occupiers without changing your physical space.”

Pricing models will depend on what you’re offering. It’s vital to be transparent about your membership tiers, what they include and what they don’t include. People generally don’t want to be upsold. Today’s consumer may be willing to pay a premium for services so long as the value and terms are made clear. Christine Andrews suggests always offering a free day to a prospect. Give them the opportunity to see if the space is right for them. If you can afford it, providing a free service is a way to differentiate your brand and offer additional value while competing in your workspace market. Consider your demographic and market to decide which services you may want to include in your membership.

When it comes to amenities, Flip Howard suggests moving away from choosing your amenities and services with the mindset of essential versus nice-to-have. “Think about what will make the experience better for everyone rather than what can I get away with NOT providing.”

Workspace Operations: Shifting Mindset

The growth and changes in the workspace market have demanded the need for operators to reevaluate the operational aspects of their business. From technology platforms and marketing to license agreements, “it all comes back to your strategy” insists Andrews. When it comes to marketing and how you operate the space, “the user experience should be consistent across all touch points. Establish your social media footprint consistent with the experience your occupiers have when they engage with your brand – both via digital and physical channels.”

Some things don’t change when it comes to running a shared workspace. “There is nothing as powerful as a recommendation from an existing member.” Encourage and incentivize members for referring new customers. Make reviews and referrals by happy customers are visible online next to your product and services menu.

The most significant shift in operations according to our panelists is the way operators approach license agreements. Workspace is no longer exclusively a transactional business. This underlying shift is changing yesterday’s transactional mindset that has dominated traditional serviced offices and big players. There is less tolerance in the workspace market for the dying tendency to pass along complex contracts and agreements from leasing operators to the sub-tenants or members of their shared workspace. The coworking sector’s greater focus on the customer service over the transactional side of the relationship contributes to both the growth and appeal it has in the market. “Customers don’t view office space as a real estate transactional anymore,” explained Howard. “It’s a retail thing. They don’t want to be nickeled-and-dimed and subject to contractual clauses.”

The crux of the webinar wasn’t necessarily traditional exec suites/serviced offices versus coworking, but traditional office versus flexible space. From a commercial real estate perspective, “asset owners are recognizing the change in how people are engaging with office space and are looking for ways to monetize shorter lease terms,” said Andrews. “They’re looking to create curated workspace experiences, something they haven’t traditionally played into and are reaching out to those with experience to operate and run shared workspace within their portfolio effectively and efficiently.” To do just that, operators and CRE stakeholders alike need a unified and scalable approach to running and managing their workspace, which brings us to our next section discussed in the webinar: Technology.

Workspace Technology: The Only Way to Run a Smart Business

“Data is everything now,” said Howard. “It makes a huge difference when you know who your customers are. Historically, executive suites have tracked very little data on their members and demographics. Having software that allows you to make data-driven decisions is the only way to run a smart business in 2018.” Andrews added: “it’s not just about demographics, but what the occupiers are doing while they’re in your space and how they’re using your space” and your services. Software not only eliminates the need for multiple, disparate and manually-managed spreadsheets, but it helps you find new ways to monetize products and services that you never realized were possible.

From bandwidth usage and Wi-Fi stats reports, operators can determine which members and tenants are consuming the most bandwidth, track, and bill for usage. Software platforms such as Connect by essensys also make it easy for members to adjust their services as needed, delivering a more tailored experience.

Across the board, the panelists agreed that internet is almost more important than oxygen. Nonetheless, Mike LaRosa noted the increased demand and need for more secure internet in flexible workspaces, whether providing private VLANs or dual authentication access to Wi-Fi networks. In a word of advice to longtime operators, LaRosa stressed the importance of updating their equipment: “there have been major advances in technology since first installing your infrastructure. Certain desired services may not interact well with existing equipment.”

Technology is no longer limited to photocopies and long-distance call charges as it was in the days of yesteryear. Managing the complex IT needs of a multi-site flexible workspace and its occupiers drives up IT expenditure. Howard noted the impact IT advances have had on the overhead at Meridian Business Centers. As his multisite business has grown, so has his IT staff. Investing in a robust platform enables operators in all sectors to offer a comprehensive menu of IT products and services while also scaling your business. Outsourced IT platforms, such as Connect by essensys that are purpose-built for flexible workspaces, remove the burden of investing in both onsite hardware and hiring multiple IT staff members to manage it.

Technology is also providing new opportunities for community managers to communicate with members and for members to interact among each other. An online member directory powered industry-tailored software platforms facilitates synergies within the community. Taking your community beyond the physical structures and bulletin board into a digital environment opens more doors. Read more about nurturing community with technology. Speaking of community, that’s the last topic our panelists covered.

Coworking: Community and Hospitality

There is quite a difference between the community vibe in a serviced office versus a coworking space. On the whole, traditional serviced offices are behind the curve and have been slower to adopt the market’s demand for community and collaboration in the workspace. However, there are measures they can take to spark community and social interaction within their office environment.

For starters, it boils down to semantics. Try to change how you refer to your staff. Rather than “general manager,” give them a warmer people-geared title like community manager or community curator. Amplify their roles and responsibilities to include introductions of members to new members and even prospect tours. It will help to build a friendly environment, more opportunities, and a stronger and broader professional network.

While you’re looking at roles and responsibilities, revamp the outdated job descriptions – across executive suites and serviced offices – to give the position a spin towards hospitality. “There’s a major trend in providing hospitality soft-touches” in positions across the workplace, explained LaRosa. Andrews agreed, “it’s a different skill set; administrative skills can be learned, hospitality skills are inherent.” She also stressed that how people are interviewed can be vital to finding the right person to building your community.

A Rising Tide Lifts All Boats

Perhaps one of the key takeaways from this webinar was that adjusting to a dynamic workspace market won’t come down to serviced office versus coworking, but rather taking the best practices of each. There will always be a need for workspace. The services and expected user experience of that workspace will continue to change. As such, operators must be able to adjust the environment they offer to meet the demands of their occupiers.

“The market is getting bigger and bigger. There are so many more people looking for flex-space – in every type and niche,” said Flip Howard. “A rising tide lifts all boats.” Pivoting towards once sector or another won’t make or break existing operators. “Those who need to pivot hard are the traditional real estate community,” stated Howard. “I’m not losing sleep at night wondering if my business is going away; the name might, but the business model won’t. If I were a CRE guy, I might be nervous.”

 

 

Stream expert industry advice from two prime workspace sectors
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Amanda Fanoun

I'm the Queen of Content here at essensys. When I'm not writing enticing and educational workspace-related articles, I'm out and about with friends and family, trying new restaurants, traveling, keeping fit and planning my next adventure.

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