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The COVID office crisis: A hidden opportunity for savvy leaders

HR Leaders need to make decisions now to build a strong, scalable working environment for their team. And when it comes to the physical workspace, there’s one thing we should all be doing, without exception: reimagining.

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Jan 17, 2024
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Last updated on Jan 21, 2022

If you’re looking for a symbol of the havoc wrought by COVID-19, you can’t do much better than an empty office building in Manhattan, New York. When the country’s most expensive commercial real estate is operating at 28% capacity, you know there’s a problem. For founders and HR executives, this problem is pressing and mission-critical: 

How do you run a business if old-fashioned offices are obsolete? With no physical workplace, how can leaders build a strong company culture and a productive work environment that attracts top talent?

You’ve probably seen some fascinating think-pieces on this subject. Will offices be transformed by exciting new designs and technologies? Will we all end up working in soundproof pods, radically designed spaces, or self-contained mini-offices? Maybe someday! The future is an exciting place.

But founders and HR leaders don’t live in the future. They need to make decisions now to build a strong, scalable working environment for their team. If you’re a business leader, you might even be pondering a lease renewal on your current office. Should you maintain it for 2022? Or should you expand your footprint to accommodate new hires? Maybe you should dissolve the physical office and go full-remote. What’s the solution?

Obviously, only you and your leadership team know what’s best for your company. Every business is unique. But there’s one thing we should all be doing, without exception: reimagining. That means treating the office like any new product or new client – as a white space that requires serious thought. In this piece, Below, I put forward four essential steps to rethinking your company’s office space, and offer one possible solution (the Hybrid Model).

4 Key Steps to Rethinking Your Office

Step 1: Quit Looking Backwards

Many executives are hoping the toothpaste – somehow, someway – will get back in the tube. It’s not going to happen. The old-school office is dead.

Sure, there will be big legacy companies that cling to a 20th-century office concept (i.e., a shared daily workplace with 100% attendance). But innovative, high-growth businesses see the writing on the wall. And they’re the big companies of the future.

Why am I so confident here? Just look at some job requisitions. The most selective companies with the best compensation packages are all offering remote work as a benefit. They simply have to in order to attract the best people. Knowledge workers have had a taste of the post-office world and they aren’t about to give it up. 

And there’s a deeper issue. During the pandemic, businesses have hired many new employees who live nowhere near their current office locations, while existing employees have made permanent moves to new places. Perhaps there was an initial expectation that these workers would someday relocate – but that becomes more unrealistic with each passing day. How many executives are really willing to die on this hill, losing valuable team members to more agile competitors?

Even businesses that want to return to a centralized office plan will run into massive execution problems. The old-fashioned office is gone, and accepting that is the first step towards building something better.

Step 2: Interrogate Your Assumptions

What is the office for? (Don’t say “work.”) We have to be this naive and open-minded if we’re going to get anywhere with this exercise. 

So sit down with your co-founders or fellow executives and itemize the specific outcomes you expect physical workplace to deliver. These could include mentorship moments, spontaneous collaboration, sense of belonging, and so on. Different companies have different priorities, and that’s OK. You might also want to assign a priority score or other quantitative metrics to these outcomes – whatever helps you think about them clearly and concretely.

Now you know why you want an office. But is an in-person workplace really the best way to achieve those outcomes? To push your own thinking, try following McKinsey’s advice and flip the logic. Consider remote work your default solution. Assume that it can and will meet your team’s needs, and put the burden of proof on anyone (including yourself) who wants to argue that a physical office is really necessary. 

The goal of this exercise, of course, is not to make every company 100% remote. The goal is to break our own mental habits and unleash new approaches. We are seeing rapid change, but business management is still deeply entrenched in office-centric thinking. When you shake up your assumptions, you may be surprised at the creative solutions that emerge.

And even though it’s painful – and happening under truly tragic circumstances – it’s amazing that we have the opportunity to rethink our own lives so radically. 

Step 3: Talk to Employees

Now that you have some hypotheses about the ideal office plan, it’s time to test them out. And that means talking to your team to gauge their needs, preferences, and challenges. After all, any plan – no matter how brilliant – will fail if it’s not built for real people. 

Your research methods will vary depending on the size and complexity of your organization. For a very small company, it may be as simple as informal chats or a roundtable discussion series. For a large one, you might need surveys and interviews as well as a task force to interpret the data you gather.

However you engage your team, it’s essential that you get their honest, unvarnished opinions. In the words of Harvard Business School professor Michael Beer, “Make it safe to share the whole truth.” There are a variety of ways to accomplish this, but the point is that employees need to feel supported and protected from resentment or retaliation – even when they’re giving feedback you might not want to hear.

Step 4: Keep Yourself Accountable

Researching and developing an innovative new office plan is one thing. Implementing it is quite another – especially if you’re breaking with tradition, or bumping up against received wisdom. That’s why accountability to your customers (the larger team) should be an explicit and upfront value during this process.

Again, this will work differently in different businesses. Large, complex organizations might need ongoing feedback from representatives across different departments to assess the execution in real time. In small companies, it might be sufficient for the founder to have one-on-one check-ins with different teammates. 

In any case, transparency and openness are your friends. Make the office conversation internally public and revisit it when necessary to keep yourself accountable to the team – and to help them stay realistic in their expectations. It may seem counterintuitive, but inviting public participation in a complex problem can help temper criticism and create a more sympathetic reception to the new arrangement.

Sample Solution: The Hybrid Model

That all sounds very nice, you might think. But where does “reimagining the office” actually get you? What are these creative new solutions I keep talking about? Let’s dive into an example I’ll call the Hybrid Model. 

How the Hybrid Model Works

Let’s say your company has a range of needs that can’t be met via a pure remote-work model. Some sort of physical workplace is necessary, but in-person attendance is currently at 10-20% with no sign of change on the horizon.

Employees occasionally need the collaborative benefits and focusing effect of an office environment, but prefer to work from home as a default. Executives, meanwhile, feel very strongly that they should meet with their teams a few times a year for morale, culture-building, and L&D purposes. 

In the hybrid model, you’d meet all these needs with three major adjustments:

  1. Downsize your HQ significantly. You just don’t need that big central footprint anymore, so stop paying for it. You might even release the space entirely, depending on how your employees are distributed. (See the following step.) 
  2. Open multiple smaller coworking spaces in strategic locations. The goal here is to give your team an open, flexible option for in-person work. Choose the areas with the highest concentration of team members and bring the workplace to them. 
  3. Hold semi-annual company-wide “onsites.” A few times a year, bring the entire company together at a special destination for a few days or a week. These meetings will support company-wide strategy and goal-setting, foster team building, and create opportunities for L&D (think speakers, workshops, and so on).

Hybrid Model in Practice: An Example

Let’s make things a little more concrete. Imagine a hypothetical company, Company.xyz which saw its normal office operations thrown into chaos by the pandemic. How would this business implement the Hybrid Model? 

Company.xyz Pre-Pandemic

Prior to the COVID-19 pandemic, Company.xyz was a 200-person company based in New York City. Most employees lived in the NYC area, and in-person office work was the norm for the entire team. Company.xyz paid about $100k monthly to lease an office in Midtown Manhattan.

Company.xyz Deploys the Hybrid Model

As the pandemic took hold, the company’s daily office attendance dropped to 5-10% of its total employee count. New hires were made during this time in areas far from New York. Some NYC-based employees also moved away from the Company.xyz headquarters. This led to a workforce that was more distributed and significantly larger (about 250 full-time employees).

To adapt to its new circumstances, Company.xyz reduced its headquarters size dramatically. Instead of spending $100k monthly on a large central office, they now spend just $20K monthly for a coworking space that accommodates up to 30 people. This covers the business’s typical daily attendance count (around 20 people) with a comfortable margin for busier days.

The Results

The new office plan saves Company.xyz about $80K monthly (nearly $1M annually), which the company has reinvested into “Company onsites”. During these quarterly meetings, the entire team gathers in a popular city (Miami, anyone?) and stays in a fleet of nice Airbnbs and hotels rented by the company. For several days, employees attend a full calendar of workshops, presentations, breakout planning sessions, and trainings led by notable guest speakers and thought leaders.

These well-funded “destination” onsites are beloved by workers and leaders alike for their goal-setting, team-building, and L&D aspects. The company is also enjoying greater liquidity thanks to its lower real estate expenditures. And workers feel happier and more secure now that a clear attendance policy is in place. 

The Bottom Line

The pandemic has forced change upon our world faster than anyone was ready for. And even when we paint it in a positive light (say, by emphasizing the “accelerated digital transformation”), it’s a painful and challenging time for all of us. These are uncharted waters.

Fortunately, you can't go wrong following the common-sense best practices I outlined above: shed old assumptions, communicate openly, and stay accountable to your team. It's also a very important moment for horizontal knowledge-sharing among founders and HR professionals, which is what we do at TroopHR.

Remember, the Hybrid Model outlined in this piece may not work for your business! It's just one of the innovative new strategies to emerge in the last year – strategies that can help you attract the best talent, stand out from the crowd, and build a more effective business. In other words, we're in the midst of a generational opportunity. Let's make the most of it.

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