Creative Math: A deep dive into workplace benchmarking
by Fran Ferrone
“Not everything we count, counts; not everything that counts can be counted.” – Albert Einstein
Readers: At the end of this article, McMorrow Reports invites you to participate in Mancini Duffy/TSC’s benchmarking research on how people respond to their workplace. Survey findings will be reported in February 2014.
Almost without exception, the first thing clients share with us at initial meetings is that they are seeking ways in which the workplace can support innovation; next, they ask us what other companies are doing. Even before the design process begins, this puts benchmarking front and center in the decision making process.
True benchmarking involves a deep dive into financial metrics as well as business processes, company culture and employee experience. Looking at actions taken by others can prove to be a source of real inspiration if management takes the time to fully understand not only the what, but the how and the why. Too often, however, companies focus solely or primarily on financial metrics without challenging cultural assumptions or seeking input from employees to test their appetite for change. Companies modeling themselves with such a narrow focus should also consider the following:
Benchmarking is an important part of the design process and essential as decision support in an increasingly complex and risk-averse business environment. Since the 2008 financial crisis, it has become increasingly important in corporate real estate as a means of controlling internal costs. But while professional organizations such as IFMA and CoreNet have made great strides in standardizing benchmarking definitions, companies still vary widely in their ability to capture and maintain critical data. Statistics are often compromised by the mix of internal systems as well as the number of external vendors used to capture and manage the data. Additionally, even when information is captured with reliability, it may only tell part of the story.
In the perfect world of fully integrated systems and holistic business thinking we’d see powerful metrics that combine financial data with metrics around employee well-being and employee engagement and perception of company performance.
|Space allocation:||RSF/person; RSF/seat|
|Cost reduction:||$/RSF; vacancy rates; operating costs|
|Standardization:||Office and workstation sizes; adherence to standards|
|Top talent:||Time/cost of recruiting; exit interview comments on workplace|
|Speed to market:||Ability to quickly form teams; access to management; reduced decision time|
|Innovation:||New product, service or idea development per quarter|
|Space utilization:||Time spent in various spaces; user preferences for space types|
|Brand enhancement:||Awareness of what other business units are doing|
These metrics are more complicated to obtain and require a bit of creativity to measure. Nonetheless, they also have financial implications, and can be extrapolated from hard and soft real estate, IT, HR and business unit data extracted from a combination of reports, surveys and observational studies. Creating these types of measurements requires:
Companies seeking to innovate might look at how others solved for similar problems or achieved similar goals. Doing so in a comprehensive manner will yield the balanced perspective needed to gain approval on initiatives that could make a critical difference but may be costly and/or require significant organizational change. Provided below is a snapshot of several industries on a spectrum from least to most amount of RSF/person. Compare not only space efficiencies but if or how these cultural characterizations resonate with your own organization:
These vignettes offer just a peek into why certain industries have been able to achieve certain space efficiencies and others have not. To apply learning from other companies and industries to your own requires a willingness to test how adopting new practices might affect the culture of your own firm. Ideally, this ‘test’ would take the form of a pilot during a period of time when no other major company event is occurring (for example, no restack, no merger or acquisition). Success would be measured in new ways that incorporate qualitative as well quantitative data.
By the nature of their work, design professionals have a unique perspective—a window into what many companies are doing—that provides an opportunity to compare and contrast data across multiple clients and industries. In offering this information to clients as decision support, designers and architects also have the responsibility to balance the quantitative metrics that address real estate goals with the qualitative data that represents an organization’s culture and people.
PhD’s Robert S. Kaplan and David P. Norton created The Balanced Scorecard (Harvard Business Review, 1996) to help companies to do just that. Recommending the adoption of a broader perspective to determine value, The Balanced Scorecard includes measurements pertaining to quantitative (financial) as well as qualitative (process, learning and growth, and customer satisfaction) measures. The Balanced Scorecard Institute goes as far as to say that a showing of solid financials but weak customer satisfaction scores is an indication of trouble, and that “recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction” as a measure of success.
In the world of corporate workplace-making, the employee (or end user) is the customer. Yet performing due diligence with the (end user) customer can be gated when management resists probing beyond programming data to fully understand not only what is, but what could be. Findings from NewWOW’s 2013 Benchmarking study highlight this challenge citing that while ‘people issues overtake costs as top business drivers . . . people issues remain top barriers.’
Why are companies so reluctant to ask employees what they think? Do they fear reaction to change? Are they concerned about not being able to please everyone? If so, these things will only get worse if not communicated and managed through, and the earlier they are faced the better the outcome and the greater the opportunity for employees to become part of the solution. If resistance stems from the difficulty of obtaining data or because the firm has waited too long in the process, tools abound to help. Bain & Company’s “Management Tools and Trends 2013” cites over 25 information gathering tools. Along with Balanced Scorecard and Benchmarking, Customer Relationship Management and Employee Engagement Surveys were among the top five. Granted, gathering data from multiple sources is more complex, but the results promise to be far richer. Once it’s decided what’s important to measure and how to creatively define it, it’s a matter of making data collection, synthesis and analysis part of standard operating procedure. No one is saying this doesn’t take forethought, effort and coordination. But at what peril do companies ignore these rich sources of information from which creative and innovative solutions can arise?
In 2013, The Coordinate, a quarterly survey conducted by The Center for Workplace Innovation at Mancini Duffy/TSC looked at four key workplace topics: Branding in the Workplace, Attraction and Retention, Agility and Work Patterns. Our findings showed common themes across more than 30 industries about what people think and feel about their workplace, covering topics pertaining to:
We believe that the solutions companies are seeking lie within giving people more of what they want and need whenever and wherever possible, and that many of these ‘gives’ can be accomplished without significant cost to the enterprise. Our findings thus far indicate that there is more commonality than divergence in these desired characteristics. The McMorrow Report affords us the opportunity to cast an even wider net in search of more convergence on how people respond to their workplace. We invite you to take our survey now, and be part of our report detailing findings in 2014.
PLEASE BEGIN THE SURVEY NOW. (Live url link here)
Fran Ferrone, Director, Center for Workplace Innovation, Mancini Duffy TSC, New York, is a skilled communicator and facilitator helping clients prepare for, communicate and manage change by aligning client-specific business drivers with company culture. Ms. Ferrone has worked with numerous Fortune 500 companies in the US and abroad in the course of her 25-year career. As Director of the Center for Workplace Innovation at Mancini Duffy TSC she leads the workplace strategy and research practice for the firm. www.workplaceinnovation.com
Mancini Duffy TSC is a leading architectural and interiors practice devoted to creating architectural environments powered by innovative design that positively impact the lives and businesses of its clients. For over 90 years the firm has delivered award-winning design excellence to clients in the US and abroad and across multiple industry sectors, and is consistently listed among Interior Design magazine’s annual “Top 100 Giants”. www.manciniduffy.com
Balanced Scorecard Basics. Balanced Scorecard Institute, Management Group. http://balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.aspx
NewWOW 2013 New Ways of Working Benchmarking Study. Jim Creighton. http://www.newwow.net/
Management Tools Trends 2013. May 8, 2013 Bain Brief, by Darrell Rigby and Barbara Bilodeau, Bain & Company http://www.bain.com/publications/articles/management-tools-and-trends-2013.aspx