How to Reimagine Office Space to Fit a Hybrid Work Environment

Podcast

How to Reimagine Office Space to Fit a Hybrid Work Environment

Episode 80. November 16, 2021.

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The typical university campus has tens or even hundreds of thousands of square feet of office space begging for a makeover. With so many campus employees working remotely, schools have a golden opportunity to transform that space with less disruption.

EAB’s Elizabeth Denny and Michael Fischer offer advice to help university leaders think through their options whether they’re looking to pilot a few modest changes or completely reimagine the way that people study, live, work, and interact on their campuses.

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So I think sometimes there's a knee-jerk reaction to say, "If we're giving up our office space, if we're moving people away from being in the center of campus every day, campus is going to feel empty, it's going to feel less lively." And that's not true.

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Transcript

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0:00:13.4 Michael Fisher: Hello, and welcome to Office Hours with EAB. Today, we return to one of the most pressing topics in higher education, how to reuse and repurpose campus facilities to adapt to the new hybrid work model. The pandemic is profoundly changing the way that we work and our relationship to the spaces in which that work gets done. Today, we take a look at where universities are on that journey, and we spend some time exploring the experience of one university that jumped in with both feet. That school has already recouped the full cost of their campus makeover, and expect to save millions more in reduced facilities maintenance costs. Thank you for listening, and enjoy.

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0:01:04.7 MF: Welcome to Office Hours at EAB. My name is Michael Fisher, it's a pleasure to be with you again. And today, we're gonna be talking all about work, it's on everybody's mind as we return to campus and repopulate our spaces, now thinking about some of the longer-term considerations, what we've learned from the pandemic and what that might mean for the future of work and the future of space. So I'm very pleased to have with me today, someone who's been in the field, asking all the right questions and inquiring with university leaders around the world about this topic, Elizabeth Denny. Elizabeth, how are you doing today?

0:01:47.8 Elizabeth Denny: I'm doing just fine, Michael. How much yourself?

0:01:50.2 MF: I'm doing all right. I'm doing all right. It's weird, I still... We're still at EAB mostly in our home offices, haven't gone back, so as I imagine what university offices and spaces might look like, I also kind of wanna think about what our own corporate offices might look like as well.

0:02:05.2 MF: Elizabeth, let me ask you to put things in perspective, where do things stand today? As we think about space on campus, in particular, office space on campus, compared to six months or a year ago.

0:02:20.1 ED: Well, Michael, I would say at a high level, that as with so many things, as we move through the later, possibly stages of this pandemic, we're in a really exciting transitional phase. I would say the needle has moved. When I talk to facility leaders, business officers, all different kinds of stakeholders on campuses throughout the country and throughout the world, I am hearing that there's a sense like never before that people are open to new ideas around office space. Workforces and the way we work have dramatically changed at institutions as much as anywhere else, and as a result, people need different things from their offices, and the way that they've used all of campus space, classrooms, administrative facilities, all of that has been permanently changed in people's minds, if not yet in policy, by the fact that we've had a year and a half of remote or flexible operations. There's an appetite and an openness to changing things like space utilization policies, to revisiting the idea that every worker needs a permanent full-time one-to-one desk, but at the same time, people aren't yet sure what the future is going to permanently look like.

0:03:28.4 MF: And I think it's important for us to put into perspective the magnitude of either this problem or this opportunity. Since the 1970s, data collected by the society of college and university planners show that the amount of office space per student on campus has nearly tripled, and now it's the largest category of space on the average institution's portfolio. But even more so, the relative proportion of campus space that's taken up by office space, has grown by somewhere near 10%. So when we think about potentially redeploying, repurposing, reutilizing this administrative-focused space, we're talking about thousands, tens of thousands, potentially even hundreds of thousands of square feet that maybe could be better used for student-facing or mission-critical purposes as opposed to relatively under-utilized offices.

0:04:27.2 ED: Absolutely, Michael. And I think one important point to think about there is that mission-centric is the word, it's not just about shrinking campus or shaving square footage off your portfolio, though that is an attractive solution for some institutions depending on their situation, but when we say space utilization, it's all about, how do we take the space that we currently have dedicated to various purposes and think about redeploying it in a way that works better for the things that are important to us? Like classrooms, like student-facing activities.

0:04:58.2 MF: And so you're saying that there's general agreement amongst the business and academic leaders that you've spoken to, that we want a more collaborative and flexible working environment for our employees. And I think that's a big bridge to build over the gap. Our data suggests that for every eight square feet of private offices on the average campus, there's about one square foot of collaborative space, so we're talking about pretty significant shift in the repurposing of some of that space.

0:05:30.1 ED: Absolutely, that is indeed the case.

0:05:32.6 MF: And do you think, Elizabeth, that there is... Is this only for professional services and administrative staff? Is there an opportunity for academic staff, even faculty, for some of this experimentation?

0:05:44.5 ED: I think there absolutely is an opportunity for faculty and academic staff. Most of the institutions we have seen that are either committing to early moves in this area or seriously exploring the possibility of moves, are focusing on your central admin staff, because just from sort of a policy and logistical perspective, that's easier because they all report up the same way. With academic staff and faculty, in addition to having a somewhat different type of job and different way they use their offices, there's also many different reporting lines because things are frequently organized by department or academic unit. That said, I think people, although they haven't made perhaps as much progress, yes, on that front, definitely do have their eye on the ball in that area. Because frequently on campuses, academic offices can represent the single greatest amount of square footage among office space.

0:06:34.6 MF: Well, let's get into some of the nitty gritty details then, 'cause we've heard some institutions actually go through the early experimentation stage, and generally, I think that there are three major models of growing complexity towards approaching the redeployment and re-utilization of the space. There's the relatively straightforward consolidation and movement of offices either into a single administrative unit or somewhere off campus, free up some of that individual space there. Then there's the pilot work with an individual department or unit, to do some experimentation with the hopes of driving that message and providing a proof of concept to more skeptical institutions or divisions on campus, and then a more campus-wide transformation effort where you're touching a lot of different units all at once with the hopes of kind of pulling the band-aid off and getting everybody into a more efficient, more productive, more meaningful space, from the beginning. So maybe we can talk through a couple examples of each of those. When it comes to re-deploying or repurposing at a consolidation or movement level, what are we seeing institutions learning from those early movements? Where are they seeing success and where are they maybe seeing pitfalls that we can avoid?

0:07:57.2 ED: Absolutely. So to call this low hanging fruit would not be quite accurate, but what I really like about it as a strategy is that I think it's something almost anybody, any kind of institution, can practice doing. The main philosophy behind this is sort of taking your wins where you can get them. You maybe don't have the capacity at this moment to pursue a more large-scale plan for really comprehensively reshuffling your campus space portfolio, but what you can do is if you know that you have individual units, perhaps in the absence of a campus-wide remote work policy, you've had some units that have committed to working a certain way, and know that they'll need less office space as a result, you take those units and you consolidate them, maybe you move two departments in together, which can actually have some added productivity and process benefits if they do similar work. You might... If you know that the unit's gonna go completely remote, you could seed all or more of their office space. And what we've seen in some institutions that have practiced this, like Northeastern University is a great example of just sort of making these moves wherever they can, they're able to then repurpose that space, kind of wherever it pops up, in a way that makes sense.

0:09:06.0 ED: So for example, like a lot of institutions, they had higher than average enrollment this Fall as a response to the lack of availability last year, and they've been able to take some of that administrative space and actually convert it into classrooms that they really needed, or student study space. In other areas, they've been able to... Someone has moved out of the heart of campus, for example, like the provost's office, and that office then moved to the outskirts of campus because the people working in that division that moved were not really interacting with students very much on a face-to-face daily basis, and that space was instead given to a unit that did do that, and now they are kind of at the heart of campus where the bustle of things are. So I think sometimes, there's a knee-jerk reaction to say, "If we're giving up our office space, if we're moving people away from being in the center of campus every day, campus is going to feel empty, it's going to feel less lively." And that's not true, if you're doing it the right way, if you're being thoughtful about who you move where, I think you can actually end up with more of the activities that matter, in the places that matter.

0:10:05.0 MF: I think that that's... What's... One of the things that's really impressive about Northeastern, is it's not just their IT facilities, finance divisions, that are going through this process. They have leadership from their Study Abroad office and their Provost's Office, who are saying, "We could do this as well and create more academic advising space, more faculty cluster space, more student collaboration space", whatever the case might be, in some of these historic and central parts of campuses, and they're getting to set the bell weather in a way that maybe we wouldn't normally expect prior to the pandemic, a lot of academic departments would necessarily do. For institutions that maybe have a little bit more pressure on campus to go back to the way things were, that... We can't move too quickly, there's a lot of potential political consequences to making some of these changes. I think one of the things that we at EAB have put forward, is doing some pilot programs and proof of concepts. What do those look like at the institutions that you've spoken to?

0:11:06.9 ED: So the pilot program, as you said, Michael, is a great approach for institutions where it's just not really clear where the institution as a whole is going yet with some of these changes in policies. And the advantage of a pilot is, as the name would suggest, unless you try out these concepts at a smaller scale and see how they work and maybe even get proof of concept, before you commit to anything that would require, for example, the agreement of multiple units, or might involve actually renovating and changing physical space. So many, many institutions are trying this, in my experience. I think it is far and away the most common approach at the moment. If you have a unit on your campus, which is the case that a number of notable places such as Duke and Stanford have both publicly recently experimented with this, and you know that that unit, regardless of the rest of campus, has decided to commit to a hybrid or a remote work model, then you can find some space for them.

0:12:15.7 ED: In Duke's case, I believe it was an office building that had been vacated by a unit that had consolidated and shut down. At Stanford's, it was some space that they already owned that they were able to repurpose for this pilot conception, and they have set that up at a low cost, at sort of a hybrid-friendly office facility that provides the amenities that people need, if they're coming into the campus during the day to work in that mode, but also gives them the flexibility to be home when they've agreed that that's the right cadence for their work. And then the pilots could last for anything from a couple of months to...

0:12:36.8 ED: Over a year in some cases. And during that time, you're not just seeing sort of, how does this work, how has it changed this unit's relationship to campus, how is the office functioning, are we still getting everything done? What about this blend of space and amenities that we've tried out, do we need to fine-tune that? You can not only collect feedback from people and let them sort of slowly adjust to the concept, but you're also potentially getting some valuable data about what a good office set up like that should look like. There are some institutions that have gone as far as using their scheduling systems or their automated space systems to be getting data about, for example, who's coming in and out of the building when they swipe their entry card, or who's scheduling a meeting room, from what frequency? So whether you're not sure yet or you know that this is what you wanna do, but you're just not sure what the correct approach specifically is, it's a great way to do it in a low-stakes way, and if it doesn't work out for any reason, you can always just end the pilot and go back.

0:13:33.4 MF: Yeah, I think I like the idea of using the sensors or scheduling systems to collect that data about how people actually are using the space, as opposed to how they might say or how they might think they're going to use the space. It's something that I had a lot of conversations with facilities and auxiliary leaders prior to the pandemic, as I thought about dining spaces on campus, trying to figure out, what kinds of food, what kinds of convenience do students want within a particular dining hall or Student Union, and how can we use that to re-develop a certain kiosk or storefront that isn't really popular with students, or direct students to where they can get food faster? I think it's a similar idea and principle that we can apply to our office spaces. Are people using this type of collaboration space? Well, do we have the data to back that up? And because the benefits of doing a pilot program are gonna be relatively small from an actual utilization and improvement of efficiency, the point really is to get that baseline of data, show that improvement in collaboration, efficiency, productivity and employee satisfaction, and then magnify that across your more skeptical or more neutrally-minded units on campus, so that you can go through a broader campus-wide transformation of space.

0:14:51.5 ED: Absolutely the case, Michael. And in Duke's case, for example, they've written a wonderful series of articles in both their campus and the local paper, about how those experiments have been going. And I always remember there was one employee who was interviewed at length, and she said, "I thought I really wouldn't like this arrangement at first, but having tried it for five weeks, it's pretty great. I was worried about not having an office on campus, I didn't wanna work at home, but this is working fine. I can come in whenever I want."

0:15:16.0 MF: So you're an institution, you've done maybe some piloting, you've done your low "hanging fruit" with some consolidations, now you wanna take one big step into the future, into a campus-wide transformation effort. Are there any institutions you think have sort of given us a template that an institution might pursue in trying to do a more systemic change of space on campus?

0:15:42.7 ED: Absolutely, yes. The first one that comes to mind, obviously, is the University of Leicester, who is one of our partner institutions in the United Kingdom, and they are really unique among the approaches we have seen for... There was some appetite to move to a hybrid workforce, pre-pandemic, for various reasons, and they were able to capitalize on some of those existing discussions that were being tossed about, but hadn't really quite come to serious fruition yet, and move forward with that during the pandemic. The leaders involved realized that then was the time to strike while the iron was hot as it were, with the result that they've been very busy during this time, really coming up with a comprehensive space plan, just... Honestly, nothing short of a total re-imagining of what office space looks like on that campus. And the wonderful thing about it is that they were incredibly thoughtful and methodical with their approach to that. I think you have to be if you're gonna undertake something on that scale, with a result that... Although I think probably there's not too many institutions that are ready to comment the way that they've committed. The way that they have designed their approach and gone about it offers a lot of lessons for anybody at any stage in the process.

0:16:52.7 MF: Walk us through what their general approach was, what were the major steps or lessons learned that they gained along the way?

0:17:00.9 ED: I would say that it was basically three steps, and the first one was data gathering, which is probably where any effort at any scale should start. In their case, it was very ambitious. But even if you're planning to try this out in a smaller format, it's good to begin by asking your employees, what kind of space do you actually need? Which is what they did. They designed and deployed a survey to managers who are asked to provide information about what their employees were doing in the office and what their work styles were. And what that basically breaks down to is sort of, "What things do you need when you come in to get your work done?" And then, "About how often are you expecting to be on campus based on the nature of your work?" For some people, that's quite a lot of the time, but they ended up finding out that when they surveyed their central administrative and professional staff, almost 90% of them could work primarily remotely. They did not need campus space to do their jobs. And what Leicester actually derived from that was that, when people were coming to campus, they weren't coming because that was the only place that they could work, they were coming in for other reasons, because they wanted the social benefits of being with their colleagues or being in the middle of campus. And that informed the second stage of the process, which was to analyze the data and then translate that into, what kinds of space do we need, and how much of it?

0:18:20.5 ED: It was a pretty involved process, they crunched the numbers, they consulted again with all the relevant stakeholders, they did a wonderful job with change management throughout this process, I would add, everybody was very involved, there were regular meetings with stakeholders where people could ask questions, very important piece of the process to make this work.

0:18:39.4 MF: And they came up with both a ratio of the amount of private space that they were gonna give to people, and some archetypes of what... The types of spaces that they wanted to create on their campus would look like. I know that that ratio was about, for every two employees there'd be one private space for them in these buildings they were going to test this on. And that... Obviously, they were very upfront that this number could change. Two to one is very much their early line in sand.

0:19:10.1 MF: Correct.

0:19:11.7 MF: But I think I've heard from other institutions, from the UC system, from some institutions in the United States Northeast, they're also landing on that two to one number, so I think it's an early baseline that we're gonna move up or down from as we see how people respond to these new types of spaces. But I think that's an early... A data point that we can react to, set it up almost, as a comparison for the reality of work on these campuses.

0:19:40.3 ED: Correct. I would say that there is some early consensus emerging that that's a place to start, if you've decided that you're going to commit to hybridity.

0:19:48.7 MF: What do these new spaces look like, what kind of infrastructure is Leicester putting into their more collaborative or more focus-driven spaces?

0:20:00.5 ED: Well, as I mentioned, the most important thing that Leicester learned from their data gathering and analysis, was that people were using their office space in a hybrid mode, in a different way from the traditional idea of what an office should look like, and I think that's an important takeaway for anybody considering this question, is, if your employees have the ability to do work at home, what they need the office for is going to be different. And what that translated to for Leicester as well as what we're seeing among other institutions that are sort of creeping out and experimenting with what these new spaces should look like, including in the private sector, is it's more of a focus on collaborative space. There are more, and a greater variety of types of meeting rooms, ranging from your traditional closed-door conference area, to informal spaces where people can gather and chat perhaps over food, or work without so much privacy and intensity, if that's what they need.

0:20:43.7 ED: It's designed to facilitate socialization and connection, there's a lot of... You find cafe-type space where there's also a food service available, lots of openness, the idea that the space could be multi-purpose and use, not just by administrative staff, but perhaps by students who need somewhere to study, which again, contrary to that fear that people being remote is going to cause more isolation and a less active campus, it actually facilitates connection among groups that previously would have been pretty physically siloed from each other. So there's the decrease in desk space as we spoke, much less space dedicated to individual workstations, more dedicated to areas where people can work together. And as they design these spaces, I'm sure something that's on most facilities and business officers' minds as they contemplate this question, is the cost. And flexibility is the name of the game here. It is all about...

0:21:43.1 ED: We know that we're gonna use the offices differently, but I don't think even the most confident people who've seen the most data, think that they... We know what the final form is going to be. There's expectations that especially technology is going to rapidly evolve. What makes a great hybrid conference room now could be completely outdated in a year or two, and so it's all about trying to... When you configure these spaces, making investments that you can continue to change for a relatively low cost, so that's things like a lack of permanent walls, for example, so that you can reconfigure the space easily with temporary barriers or by rearranging your furniture rather than committing to something that is gonna be very difficult and expensive to change if you don't have exactly the right balance of space types at the moment.

0:22:26.3 MF: And I think that this is something... Is a lesson that we in higher education learned in the classroom 20, 25 years ago, when we made the shift towards trying to serve different types of students who had different types of learning expectations and needs. We said it's not just gonna be about lectures, it's not just gonna be about tests, we want to meet students where they're at, and provide different modalities of learning. And we're just applying that same principle now to those students graduated, who are now our employees, and saying, "People have different ways of working, they have different needs when they come to the office, and when they come to the office, we want them to actually benefit from that experience as opposed to saying, "Well, I could have done all this a lot easier if I had just stayed home and had not commuted." So leaning into flexibility, leaning into making the campus experience one of collaboration and interaction while working from home or from off-campus is the more individually-focused, more concentrated work, I think, seems to be the balance that we're gonna be aiming for over the coming years.

0:23:31.1 ED: Absolutely.

0:23:34.8 MF: So, for Leicester's three-part approach, first they collected the data, then they analyzed that data to create some archetypes and guidelines for how they wanted to approach it. Third step, I assume, is that they did some implementation of the space on their campus.

0:23:50.7 ED: Yes, and actually, they are already underway with that. Their signature space is already in the process of coming online, they've been able to open up some of these newly designed work spaces for their staff and employees, and I believe they're expecting to have most of their revitalized office space for the central administrative staff, open through 2022.

0:24:12.3 MF: And then, you alluded to earlier, the question of cost. It's on a lot of people's minds. Big space projects in the past have been stymied by tight financial and resource constraints. How is Leicester calculating their ROI, how are they figuring out whether this is gonna be cost effective?

0:24:31.3 ED: Well, coming up with those numbers, our contacts at Leicester have told us was a very important part of generating the buy-in for this, doing that math. Obviously, nothing is final until everything is completely finished, but they have already been able to see some really significant returns. As a result of being able to get rid of their previous office space and consolidate it into these newly designed hybrid-friendly workspaces, which was an initial investment of about 2.7 million pounds, was the figure they gave us. They calculated that from that, that would add up to about 200,000 pounds annually in reduced operating costs, about 1.3 million pounds less in eliminated deferred and maintenance costs that they were going to have to pay on their old spaces. And most significantly, they were able to sell four old properties on the campus for almost 8 million pounds, and they've already sold some of those. That is money that is already back. You can see that even though this was a significant investment, it's already paid for itself and it's projected to ultimately pay for itself three times over.

0:25:36.8 MF: And I think that for institutions that don't have the capabilities of really selling their buildings, because they're in a relatively rural environment, even those calculations of just the reduced operating costs and the elimination of deferred maintenance in five, 10 years, would equate to that initial investment. And when it comes to our infrastructure, 10 years is a relatively short time frame, when we have to think in terms of decades or 40-year lifespans. So while... The icing on the cake for Leicester was that extra 8 million pounds generated through the sale of some of their buildings, even some of their other calculations of ROI suggested this was gonna be a worthwhile investment, not to mention the increased productivity and satisfaction with their employees in a time period where there is a lot of turnover and a lot of disengagement, during The Great Resignation.

0:26:30.4 ED: Absolutely.

0:26:32.9 MF: Elizabeth, I know we only have a couple of minutes left, I'd love to hear as sort of your parting thoughts, any major lessons learned or advice that you would give leaders on campus or advocates who are thinking about space changes, but maybe don't feel like they can do something as big and as bold as Leicester yet. How should they approach it, what would be the either low hanging fruit, easy, quick, provable wins, things to get the conversation started on their campus?

0:27:00.8 ED: Well, I think, as you've said, there are very few institutions that are going to be ready to commit or even start planning for a change as comprehensive as what Leicester has accomplished, but that does not mean that these things and the associated gains with them are out of reach. I believe that there is something almost any institution could do to start making progress on this front, and that is the keyword there, is progress. This is a gigantic cultural change underway, it's something that is profoundly changing the way that we work and our relationship to the spaces in which we do that work, and that is happening all across the world in sectors far beyond education.

0:27:38.8 MF: As one of my favorite partners said about this, the genie is out of the bottle on remote work. Whether you decide to get on board with that now, or in five years, it's happening. And as a result, you can't put off this conversation about how your spaces should adapt to meet that change forever. Even if you haven't come to an agreement yet on that across campus, even if you haven't formally changed a policy, start where you can. As we said, take your small wins. If you have a unit that knows that's what they want to do, and they have the autonomy to make that change, they should do that. And then you've reclaimed some footage that you can either do something with it now, or maybe once you've accumulated a couple of those, that adds up to something. It's about not just getting your spaces from being able to sell a whole building like Leicester did, although that's great if you can achieve it, but about using your space better, however you can.

0:28:29.1 ED: And more importantly, about keeping your workers happy. They need to be in a space that works for them, and if you don't have a space that's doing that, that is gonna spiral quickly in terms of your productivity and morale.

0:28:40.9 MF: Well, a lot are already learned, and a lot more to learn, something that we at EAB will be continuing to track. And hopefully, Elizabeth, you and I will be able to get on one of these sessions down the road and tell a lot more success stories. Elizabeth, thanks for being with us today.

0:28:57.4 ED: Thank you, Michael, it was great to talk about this.

0:29:00.1 MF: And thanks to all of you listening. Again, my name is Michael Fisher, and I hope you enjoyed today's Office Hours with EAB.

0:29:13.1 MF: Thank you for listening. Please, join us next week when we're joined by the president of Colorado State University, who has created one of the most diverse cabinets in higher education. You'll want to hear what she has to say. Until then, thank you for your time.

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