Focus: Managing Through the Recession: From Empty to Inspiring

So we’re in a global recession, and the furniture industry is certainly not immune. For 2009, the industry’s shipments were down approximately 31 percent. And with the recession comes job loss, and the numbers are staggering.

In the United States alone, recent unemployment rates have hit a 26-year high, with 10 percent of the population out of work. Mass layoffs have left many office spaces empty and uninspired.

With the New Year, uncertainties about the economy remain high. Though there have been some signs of improvement, no one can predict exactly when the current veil of economic repression will lift. For the furniture industry in particular, indicators are still uncertain, though the Business and Institutional Furniture Manufacturer’s Association (BIFMA) is forecasting momentum in 2010.

To help weather this economic storm, companies must be realistic about the existing challenges they face, and leverage their assets—both real estate and human capital—in more effective ways.

According to CoreNet’s 2009 State of the Industry Report, 63 percent of respondents indicated that their company’s real estate portfolio was going to contract during the year. By investing in smart office design, companies can create great small spaces that cater to the demands of the modern workplace and the current economic situation.

Visionary companies are striking a balance between cutting costs and offering better support for their employees. These organizations realize that while their real estate portfolio (and workforce) may be shrinking in size, the physical workplace remains a gathering place, a collaboration center and a resource for corporate culture—the true essence of a company.

And, for those that remain, it is essential for companies to create inspiring spaces that raise morale and foster innovation to help them progress beyond—and in spite of—the economy.

To help create these inspiring spaces, forward-looking companies are implementing alternative work strategies, which break the paradigm of an assigned office space for every worker. For many, an alternative work strategy is synonymous with telecommuting (employee works from home, substituting telecommunications for the commute to work), but companies facing today’s unprecedented challenges are offering additional ways to support work and workers like never before. CoreNet’s 2009 State of the Industry Report found that 77 percent of organizations see their alternative work programs growing over the next three years, while in North America, alternative work strategies have an 83 percent adoption rate. These work strategies give employees control and offer choices about where, when and how they work—empowering them during a time when many feel powerless.

Besides telecommuting, increasingly popular work strategies include:

• Mobile work: a work style in which employees consistently use multiple spaces, both inside and out of the office, to accomplish work;
• Hotelling: a work style in which reservations are made for unassigned seating. Typically used by mobile workers, but also used by any worker not near his/her assigned workstation;
• Coworking Spaces: smaller spaces located in areas closer to employee’s homes.

Oftentimes, alternative work strategies enable companies to reduce their real estate portfolios, and in turn, transform their workspaces. Innovative design and product approaches are providing companies with the means to reconfigure the office to adjust to changing work and employee needs. At Steelcase, this is referred to as "emerging work strategies." These strategies offer ample collaborative spaces for work and socialization and integrate design and technologies—such as videoconferences and file sharing—to ensure focus and learning. These are all key components of creating a more inspiring place to work.

Companies that are able to manage and transform their workspaces during this time of recession, may find that once it is over, that they—and their employees—are in a better position than ever before to thrive in the improved environment. Research shows that companies that create supportive workplaces tend to be the most successful in attracting and retaining talent and obtaining maximum productivity from their workforce.

In fact, a study by the architectural and design firm Gensler found that 74 percent of respondents from top-ranked companies in the areas of profits, better employee engagement and stronger brand position, were highly satisfied with the functionality of their personal space (while at average companies, workplace satisfaction was 48 percent).

Satisfaction often leads to commitment, and research indicates that committed employees perform at a higher level. A 2008 Corporate Leadership Council Survey of 50,000 employees in 27 countries found that highly committed employees perform up to 20 percentile points better than less committed employees and are 87 percent less likely to leave the organization than employees with low levels of commitment.

Beyond workplace satisfaction, integrating emerging work strategies into the workplace can offer economic, social and environmental advantages. Coined by Peter Wege, a retired Steelcase executive who currently serves on the company’s board of directors, this is widely known by executive leadership as "the triple bottom line."

Companies can realize economic gains with alternative work strategies by reducing the amount of square footage they require—which in turn reduces rent—and by obtaining versatile products that can quickly adapt to changes in staffing and office needs. Additionally, a high-performance, flexible workspace can help attract, engage and retain workers, which alone represents a significant benefit.

Socially, companies and their employees will benefit from improved collaboration and increased (and more meaningful) social interaction—whether through videoconferencing or actual time spent in workspaces that encourage gathering.

Designers and architects have a responsibility to help companies consider the environmental benefits that a revised workplace design can offer. Depending on the design, energy can be reduced through the use of natural light in every workspace, and the life-cycle of materials can be extended with furniture, technology and work tools that are easily reconfigured. Additionally, telecommuting can reduce carbon emissions and energy use by replacing physical travel with technological solutions.

Together, these triple bottom line components can help a company manage through the recession. However, encouraging companies to advance toward this transformed workplace is no easy task. Companies must be willing to make the changes most appropriate for their business and future plans, while addressing the triple bottom line.

Here are some thoughts on how to take those first few steps:

• First, advise companies to be realistic about their resources and the current landscape. It may be impossible to do everything right away, but it helps to make moderate changes to the space. This might include incorporating more advanced technology, new design elements, or work process changes as part of the gradual shift towards the ideal workspace. 
• Second, look at the company’s existing challenges, which might include a shrinking workforce, the lack of collaborative spaces and technology capabilities as well as isolated work areas. 
• Third, consider the company’s future plans while developing the physical space and selecting products.

Again, with limited budgets and an uncertain economic outlook, these changes may not take place overnight. But small, marginal adjustments to improve the workplace can lead to a full transformation over time and help inspire employees along the way.

Sara Armbruster is vice president of WorkSpace Futures and Corporate Strategy for Steelcase Inc. Named to this role in May 2009, Armbruster manages Steelcase’s research and applications development activities. She can be reached at [email protected].