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How World of Work Is Changing, How Regus Is Changing in Response
By Mark Dixon
Regus CEO
After the Office

The office as we know it is dead. Welcome to the new workplace – a place where business and social worlds connect, much closer to home.

The way people work has changed enormously in recent years, and as the survivors emerge from this latest global recession, new patterns are emerging. At Regus, we observe these changes at first hand.

We are known as the world’s biggest office company, but that is already a misnomer. It would be more accurate to say that we provide physical and logistical support for more working people and businesses than anyone else in the world.

Most of our 500,000 customers now work from home. That is probably the single biggest change to have happened to the world of work in recent years. New technology has made it possible for millions of people to work wherever they want, and naturally enough, most of them choose to work where they are most comfortable, at home – even if home, for some of them, is mobile.

The non-home workplace

These people nonetheless need something else: not an office in the traditional sense, but an address, a place to meet either clients or their own colleagues; somewhere to perform practical tasks and engage with the wider business world – a non-home workplace, you might call it.

This non-home workplace fulfils three basic requirements. The first is the essential veneer of professionalism. You don’t want to invite prospective clients to your garden shed, even if that is where most of your most valuable work is done. You need somewhere with meeting-rooms, workstations, staff and essential facilities.

The second requirement is basic social interaction. Working from home day after day, you can go stir-crazy if you don’t get out and meet people, find out what your peers are doing, and reconnect with the wider business world.

Finally, you are sure to need certain office equipment, whether it be a heavy-duty printer or photocopier, video-conferencing facilities or the ability to rehearse a presentation with a number of colleagues plus a screen and projector.

Homeworkers make the running

Homeworkers do not fit readily into a single category. Some are self-employed, running their own businesses, or working with colleagues in small to medium-sized businesses. Others work as sales or bookings staff for big companies. Whoever they are, they are the workforce of the future, and they could scarcely be more different from the traditional wage slave, commuter or office drone who is obliged to travel an hour or more to their place of work before returning every evening exhausted, their horizons narrowing with every day spent on the treadmill.

The world of work is moving towards the homeworker in more ways than one. Right now, Regus is opening centres not necessarily in established business hubs like big cities but often in residential areas, the places where people choose to live – from where they want the shortest possible commute to a workplace. That’s why we’ve recently opened centres in Beaver Creek, Ohio and in Chelmsford, Essex.

There are many encouraging aspects to this development. First and foremost, it’s what our clients want. But there are wider benefits, too. It is in no one’s interests to spend a couple of hours every day in a traffic jam heading into Los Angeles, Madrid, Beijing or Amsterdam. Far better for the people involved, and for the environment, to have people make shorter journeys to a smaller workplace, then occasionally make longer trips for major conferences.

What are offices for?

What do we need offices for anyway? We no longer need them for storage, or filing, or other centralised functions like sending and receiving post. Computer databases and email take care of most such daily tasks. We don’t need expensively furnished boardrooms, executive dining-rooms and oak-panelled private offices that perpetuate outdated corporate hierarchies. We don’t need staff to work 9-5 in the same place, reporting to the same boss every day. Nowadays there are other, more sophisticated ways of getting people to do what you need them to do, and measuring the results. And we certainly don’t need the old-fashioned office culture that rewards those who are seen to be at their desks when everyone else has gone home – as if being there longer were some guarantee of productivity.

We need offices, or workplaces, to bring people together from time to time, to get to know their colleagues, compare notes and develop a corporate ethos. We need personal chemistry to spark good ideas, to test theories and develop strategies. But you don’t get much of that chemistry when people follow a typical office routine. Instead, you get habits, silos and conscious limits on behaviour rather than an awareness of possibilities.

We’ve discovered that for ourselves at Regus. In the days when our corporate headquarters housed a large number of staff, many people would travel quite long distances to get to work; then they would not be inclined to linger and socialise because they would want to get home. Although individual staff were quite productive, the office environment wasn’t necessarily helping them. We now have a minimal global headquarters, while meetings are held and decisions made every day in different corners of the globe. Former commuters are using other workplaces closer to their homes, and are happier and more productive as a result.

What matters to us is not the physical alignment of people – having everybody in the same place – but intellectual alignment – having them thinking along similar lines. We need a shared sense of purpose, and that is best achieved by allowing people as much freedom as possible to work where they can be most effective. So nowadays we concentrate on bringing the right people together for strategy meetings, or marketing meetings, or whatever subject needs addressing, while we encourage team bonding at awaydays. Otherwise, we trust our people to do their own thing – and they repay our faith. I know many of our clients are doing the same – because success in business depends on being purposeful, not sitting in the same place, waiting for things to happen.

The property trap

Perhaps the biggest intrinsic weakness of the traditional office is that it is bound up with property, or real estate. And if recent recessions have taught us anything, it is that the fewer overheads you carry, the better. There can be nothing worse than to find yourself committed to a piece of property that is no longer fit for purpose. People change, and business changes every day – much more quickly than property can. It doesn’t matter whether you actually own premises, or rent them. You still commit to fitting them out in a certain way, buying or leasing expensive equipment and hardware. This was something Regus learned the hard way when the dotcom bubble burst just over nine years ago and so many of the offices we had let to all those US start-ups were standing empty, leaking money by the day.

Of course, the property that is your home means something to you as an individual; but business property, whether owned or leased, is little more than a millstone. Why would you want a substantial building in one particular place, serving one particular bunch of workers or clients when the business world could so easily transform itself within a few months? A year ahead, for instance, you might want more or less space for those workers or clients, and you might want to be somewhere else.

And that brings me to the next crucial consideration for how we work in the future – geography. Where should you go? Any business that aspires to be global must certainly be looking for opportunities in China, India and elsewhere in the Far East, as well as other developing countries around the world. But venturing into new worlds like this requires care and preparation, and some testing of the water. The further you are away from home, the higher your risk when it comes to selecting workplaces. You could so easily find yourself in the wrong building, in the wrong place, paying too much for the wrong services.

All of these factors are having a profound effect on what Regus looks like, and the way we work. In geographical terms, we will change shape, just like many of the businesses we support. For instance, China and India currently account for a tiny percentage of our worldwide business. Within the next 10 years or so, we expect this to exceed 10 per cent.

Workspace for rent

There will be other major changes, too, but the most crucial one is that we are changing the whole nature of our service. Our clients no longer want offices as they once did; instead, they want more flexible workplaces that can adapt to changing economic pressures and switches of strategic direction. In response to this new demand, we have launched more products in the past 12 months than in the previous 15 years.

The most significant development has undoubtedly been Businessworld – a smartcard that gives subscribers access to any of our offices round the world, for a certain rate depending on whether they want an individual workstation, meeting-room, conference hall or whatever. Not only is Businessworld uniquely flexible, it can also be used to record information about the user.

So an entrepreneur with a small business can use his card to meet colleagues in Europe one week, then clients in Tokyo or San Francisco the next. We can see how he uses his card and tailor our service accordingly. Meanwhile, large companies can use the card in the same way to operate wherever they need to be, while tracking and measuring the performance of their sales teams, or the way in which certain resources are used, so that they can tailor their systems accordingly and maximise efficiency.

A leading telecoms company has done precisely this, abandoning most of its offices and opting to issue its staff with Businessworld cards instead, so that they can run an effective corporate network without being tied to a small number of largish offices in big cities. A similar approach can work for many others. Access to Regus business lounges costs no more than $3 per day. In just eight months we’ve got more than 250,000 in circulation, and we believe this is the working model of the future.

Charting a route out of recession

The current recession will have three main effects. First, there will be a lot more small companies starting up. That’s what always happens when people lose their jobs and are forced back on their own resources. The start-up businesses that emerge will want low-cost, flexible workspaces. Secondly, larger companies will continue to feel the pressure to be more efficient and not be held back by fixed costs, like property. They will use services like Businessworld to gain a competitive edge. Finally, the huge majority of businesses will have to adopt a more global perspective if they want to build something that will last: they may find their most productive staff or most rewarding customers are no longer to be found in Europe or the US but in China or Africa. The young, the tech-savvy workforce of the future, are the first generation to have a truly international outlook – and businesses need to share that vision.

To some of us, all this may seem like a vision of the future. But it is here now – especially in the US, which seems to be a few months ahead of Europe in adopting the flexible workplace model. It applies to businesses of every shape, from one-person enterprises to multinationals and the very largest global corporates– all enthusiastic users of Businessworld cards.

In a few years’ time many companies are going to look radically different as they rethink the way they recruit, train, motivate and deploy their workforces. The new flexible workplace will be at the heart of that change, and Regus is determined to lead the way in helping our clients to transform themselves. We believe it will be a better, more rewarding world of work, reflecting the way people want to live their lives. And no one will mourn the passing of the office.

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