Why Companies Are Creating Their Own Coworking Spaces

Nestled in the Silicon Sentier district of Paris, the Villa Bonne Nouvelle (“House of Good News”), or VBN, initially appears to be another new coworking space. But what sets it apart is that only half of its 60 occupants are freelancers. The remainder work for Orange (née French Telecom), which launched VBN in 2014 to teach its programmers and engineers how to work with and learn from people outside of the company. The experiment succeeded: Teams temporarily stationed there worked better and faster than colleagues elsewhere, and they reported greater satisfaction and engagement (along with bouts of depression upon returning to the office). Even the HR executives managing the space were surprised by their bonhomie. More villas are now in the works.

Orange describes its approach as “corpoworking,” a cousin to coworking. It’s not alone in trying to jump on the trend of shared workspaces, of which there are now around 19,000 worldwide. Dozens of companies, ranging from telcos (SprintAT&T), to tech giants (SAP, IBM), to automakers and insurance companies (MINI, State Farm) have launched similar experiments. The real revolution in coworking may have less to do with freelancers or startups than with employees of large companies working beyond the boundaries of their organizations.

A case in point is WeWork, the provider of coworking spaces, which has grown its enterprise customer base in the last year by 370%. As of June 2018, corporate occupiers make up roughly one-quarter of WeWork’s members and revenues. It’s also creating stand-alone locations for individual clients such as IBM, UBS, and Facebook. It’s typically assumed these companies are seeking a jolt of hipness. But our research and reporting show this isn’t the case. We’ve separately toured and interviewed principals in more than a dozen corporate coworking spaces in the U.S., South America, and Europe over the last three years. We’ve found that these companies and their employees are searching for the same qualities freelancers and entrepreneurs report from their experiences in shared workspaces — learning skills faster, making more connections, and feeling inspired and in control.

In addition to coworking spaces for individuals and those that partner with employers, we’ve identified two types of corporate coworking. One is what we call open houses, in which companies offer workspace as a public amenity, typically for brand-building. In Brooklyn, for example, MINI, where one of us works, runs A/D/O, a combination coworking space, café, concept store, and fabrication lab. Its mission isn’t to sell cars, but to attract and learn from local designers. The other type we call campsites — internal, invitation-only spaces where teams from one company co-locate with peers from another. Campsites are temporary, affording coworkers stationed there opportunities to learn, ignore org charts, and collaborate across corporate boundaries. Orange’s VBN is one example; another belongs to a large telco in Silicon Valley, where its teams huddle alongside those from customers to prototype products and services. Projects that would have taken months of calls are finished in weeks, demonstrating the importance of co-location in innovation. Some companies are aggressively testing both. SAP’s HanaHaus in downtown Palo Alto is an open house that charges walk-ins $3 per hour, or roughly the cost of their Blue Bottle coffee. (Notable visitors include Mark Zuckerberg.) A few miles away, at its Silicon Valley campus, is AppHaus, one of five such campsites worldwide, where SAP engineers work with local customers and startups to explore consumer software.

But what are the goals of these corporate coworking spaces? Who uses them? And what do they look like? Here’s what we’ve learned.

The purpose of these spaces can vary widely, but they typically fall into one or more of three groups: transformation, innovation, and future-proofing. In the case of transformation, the space is designed to be a Trojan horse, sneaking new ways of working into an otherwise staid organization. This is explicitly the goal at Orange’s VBN, which Ava Virgitti, an employee experience lead for Orange, describes as an “HR lab” to test and learn how teams behave in the presence of leaner and meaner startups.

Innovation is the goal at other campsites, where diverse stakeholders are assembled with specific tasks and equipped with special facilities and methodologies (say, design thinking) to achieve them. Future-proofing is more open-ended; these spaces are designed to generate new contacts or ideas, which seems to be the thinking behind HanaHaus.

For these reasons, users are typically quite diverse in rank, role, and affiliation, and are present for only a few months before rotating out or back into the company. This is a critical feature of campsites in particular — a revolving door means a constant stream of fresh insights and expertise. Orange’s VBN uses nine-month “seasons” to reset the space; others switch participants as necessary.

The role of community managers in fostering this culture can’t be overstated. Traditionally nonexistent in corporate America, they typically help select, vet, onboard, and connect new users with existing ones while organizing the space, arbitrating conflicts, and hosting events. User satisfaction surveys consistently rank them as the favorite aspect of corporate coworking.The other important aspect in creating these spaces is their physical design. Like the culture, which the design complements and enhances, the layout and amenities of these spaces are a far cry from cubicles. Nothing is stationary — whiteboards, movable walls, and flexible furniture are common. Amenities and kitchens are strategically positioned to “engineer serendipity” and conversations across organizations. And writing on the walls or floors is encouraged, as making a mess is considered a precursor to innovation.

Now, do these spaces work in promoting innovation? This seems to be the case, although, as with coworking in general, their effectiveness is difficult to measure and only quantifiable indirectly, through user satisfaction surveys and interviews. A few companies we spoke with also offered examples. Orange’s VBN reported a 92% user approval rating of the space, and pointed to the long waitlist for future seasons. At Grid70, one tenant reported a 30%–40% reduction in product development time after a redesign of their workspace. According to researchers at the University of Michigan, the most common reasons people seek coworking spaces are interaction with people (84%), random discoveries and opportunities (82%), and knowledge sharing (77%). Corporate coworkers seek the same.

As one might imagine, demonstrating the ROI of this is difficult — most don’t even try. Some eschew metrics altogether, gambling they will learn as they go when it comes to measuring what’s important. Many prefer the soft metrics, such as satisfaction and engagement mentioned above, and still others defer measurement into the future, minimizing expenses while awaiting a business case to emerge.

For this reason (and others), strong executive sponsors are crucial for corporate coworking. HanaHaus was instigated as the personal urging of SAP cofounder Hasso Plattner; Grid70 was conceived by a cluster of local CEOs. Orange’s VBN has the firm backing of senior HR executives, and so on. With the metrics so hazy, the decision as to whether these spaces are worth it is being made on a case-by-case basis.

Just as coworking was seen as a fringe phenomenon less than a decade ago, its corporate variant risks being perceived as a vanity project. But in light of the trends animating creative work today — increasingly flexible arrangements, cross-firm collaboration, and employees’ thirst for agency and authentic connections — these spaces hint at a future far beyond WeWork.

We’ve identified a few principles to keep in mind if your company is interested in exploring corporate coworking.

Be clear about your goals at the outset. Is it a Trojan horse for corporate culture, a cross-firm skunkworks, or a public branding exercise and serendipity engine? This decision will drive every facet of the project going forward, including participants, design, sponsorship, and ROI.

Community managers are the key to success. Hire carefully at the outset, involve them at every step of the design and recruitment process, and give them broad latitude in shaping the culture and programming of the space. Your project will likely fail without a strong community manager, and learning how their role could scale elsewhere in the organization is an incredible opportunity.

Don’t overthink the design. Focus less on foosball or Ping-Pong tables, and more on good overall layout principles. Co-locate teams in adjoining spaces for easy conversations; centralize amenities such as kitchens to increase serendipitous encounters (yes, even the unplanned can be planned for!). Empower users to make the space their own, and cut through red tape during construction — no one wants to spend nine months in just another project team room.

 

Originally posted at: https://hbr.org

Teams and Team Building

Many companies, when they decide to invest in team building, decide to do offsite events like bowling nights or ropes courses. Sometimes these events get really elaborate. One sales and marketing executive I know told me how he was flown to London with 20 of his colleagues, put up in a pricey hotel, and then trained to do the haka, a traditional war dance, by a group of Maori tribe members from New Zealand. This exercise was supposed to build relationships and bolster team spirit, and, by extension, improve collaboration. Instead, it fostered embarrassment and cynicism. Months later, the failing division was sold off.

Mars was not immune to the conventional wisdom. Before making the commitment to study collaboration intensively, we also did things like this. Once, we spent thousands of dollars to hire an orchestra to spend an hour with a group of senior leaders at an offsite retreat and help them work together in harmony. It was a nice metaphor and an interesting experience. It did nothing, though, to change how that group of leaders worked together.

Events like these may get people to feel closer for a little while; shared emotions can bond people. Those bonds, though, do not hold up under the day-to-day pressures of an organization focused on delivering results.

In 2011 senior HR leaders at Mars decided that we would study our global workforce and try to crack the code of how to maximize team effectiveness. The resulting research, which I led, revealed that most of what we — and others — thought about team building was wrong. Most important, we learned that quality collaboration does not begin with relationships and trust; it starts with a focus on individual motivation.

Our research drew on data from 125 teams. It included questionnaires and interviews with hundreds of team members. We asked, among other things, how clear people were about the teams’ priorities, what their own and others’ objectives were, and what they felt most confident about and most worried about. If there was one dominant theme from the interviews, it is summarized in this remarkable sentiment: “I really like and value my teammates. And I know we should collaborate more. We just don’t.”

The questionnaires revealed that team members felt the most clarity about their individual objectives, and felt a strong sense of ownership for the work they were accountable for. To further investigate, we turned to another source and analyzed several years of data from Mars’s 360-degree leadership surveys. The two top strengths identified in those surveys were “action orientation” and “results focus.” The picture was getting clearer: Mars was full of people who loved to get busy on tasks and responsibilities that had their names next to them. It was work they could do exceedingly well, producing results without collaborating. On top of that, they were being affirmed for those results by their bosses and the performance rating system.

It occurred to us that their failure to collaborate was, ironically, a function of their excelling at the jobs they were hired to do and of management reinforcing that excellence. Collaboration, on the other hand, was an idealized but vague goal with no concrete terms or rules. What’s more, collaboration was perceived as messy. It diluted accountability and offered few tangible rewards.

Based on that insight, we developed a framework to make collaboration clear, specific, and compelling — to make collaboration something to be achieved. At the core of this framework are two questions to pose to any team. The first: Why is their collaboration essential to achieving their business results? And second: What work, which specific tasks, would require collaboration to deliver those results?

We had a chance to test our framework in early 2012 with the Mars Petcare China leadership team. Over two days we posed our questions and hashed out specifics. We spent the entire first day wrestling with the answers to our two questions. Initial reactions were bemusement and frustration: What did I mean by “essential to business results”? We restated the question as: Why is your working together, as a team, more valuable than just the sum of your individual efforts? That got the conversation going, and we spent three hours discussing and debating what we called their “team purpose.” They finally agreed that their purpose would center on people development and deployment of their new strategy throughout the business.

The second question, the one about which specific pieces of work required collaboration, was more contentious. One leader in particular felt that he needed to be left alone, that none of the work he was responsible for should include any of his peers. The debate became heated, but eventually his peers won him over. Eventually we were able to sort our list of projects into those that could be handled by individuals and those that really would be improved by collaboration.

Our second day focused on accountability. They agreed to build their collaborative commitments into their individual performance objectives. Then they cocreated a list of the behaviors they expected of each other in support of those commitments and agreed on how they would hold themselves accountable for them. (At one point we compared and discussed their Myers-Briggs types. That discussion about relationships lasted 15 minutes before they urged me to take them back to discussions about how they were going to work together. I thought that was remarkably telling.) We ended by creating a plan for how they would sustain the progress we had made during our two days together.

I spoke with the general manager of Mars Petcare China a few times over the next year. During our final conversation I learned that their growth had rocketed up 33% — a stunning achievement. Their primary dog food brand alone was up 60%. It was the first time in eight years that they had met their financial commitments to the larger corporation. How much did our work together contribute to those outcomes? “Massively,” the general manager told me. Their team purpose had focused their collaboration on the things that mattered most to the results they planned for. The sense of accountability for their work together, based on the agreements they forged, made their working relationships far more productive than they had been.

At Mars, we learned that to get people to work together, we had to let them figure out how that would actually improve results.

We officially deployed our fully developed and tested framework later in 2012, embedding it in a single management development program. Within two years, the Mars High Performance Collaboration Framework had gone viral throughout the company.

Strong relationships and trust do matter to collaboration, but they are not the starting point. They are the outcomes of dedicated people striving together. Connecting collaboration to the motives of success-minded team members is what unlocks productive teamwork.

 

Posted from: http://www.hbr.org