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Why workplace matters...when it's really all about culture
- 1. WHYWORKPLACE MATTERS WHEN IT’S REALLY ALL ABOUT CULTURE Beau Everett Vice President, Real Estate and Housing NYU Langone Health April 13, 2018
- 2. ORGANIZATIONAL CULTURE WHAT IS IT? ■ The basic personality of an organization that determines how individuals behave and how things are done. ■ Culture has long been understood to drive the way employees interact with each other and to give them a shared sense of purpose. – Culture is what moves people – and motivates them – when they aren’t being watched or judged or evaluated. CULTURE IS NOW BROADLY ACKNOWLEDGED TO DIRECTLY IMPACT THE PERFORMANCE – EVENTHE SURVIVAL – OF AN ORGANIZATION.
- 3. ORGANIZATIONAL CULTURE CANWE INFLUENCE IT? ■ With this recognition, attempts to examine and shape organizational culture have spread, often in response to organizational crises, such as those at Fox News or Uber or United Airlines. ■ But like fad diets, these attempts often fail to have lasting impact on the organization. ■ We create slogans and distribute posters with trite ten-point value statements, using words likeTeamwork and Caring and Quality.
- 5. SAYINGWHATYOU MEAN NETFLIX CULTURE DECK ■ Netflix CEO Reed Hastings codified his vision of corporate culture – dubbed “Freedom and Responsibility” – into a 100-slide PowerPoint presentation, so that: – “...employees could have clarity about what's important for success, what to expect from each other and to honestly tell the truth about how companies really operate.” * ■ In 2009, the Culture Deck was posted online and quickly went viral. With over 10 million views, Sheryl Sandberg has called it one of the most important documents ever to come out of SiliconValley. *Patty McCord, Netflix’s former chief talent officer
- 6. MEANINGWHATYOU SAY NETFLIX CULTURE DECK ■ In it, Netflix cites Enron, whose leaders went to jail, and which went bankrupt from fraud, as an example of a company that clearly failed to honor its stated values. ■ Enron had these values displayed in its lobby: – Integrity – Communication – Respect – Excellence THESEVALUES, HOWEVER, WERE NOT REALLYTHOSETHAT ENRON LEADERSHIPVALUED OR REWARDED.
- 8. CHANGINGTHEWAYWEWORK WE CAN INFLUENCE CULTURE ■ It’s clear that if individuals even pause to read these statements, the behaviors that are actually rewarded will persist and prevail. ■ Any serious attempts to effect cultural change must be accompanied by systemic changes in the way people work. – These changes must modify the instinctual behavior and habits of the workforce over the long-term. – And they must authentically reinforce the values the organization claims to espouse.
- 9. ■ Whether it’s Facebook, Chobani, Netflix, or Spotify, these new organizations of the innovation economy and maker-movement live and breathe — and indeed profit — by their organizational culture. ■ There is no single recipe for fostering an innovative and motivated workforce, but it is clear that the culture must be reflected honestly in the business, and the organization must nurture that culture in ways that workers genuinely experience. CHANGING CULTURE ANDTHE INNOVATION ECONOMY
- 10. ■ Corporate real estate has an important role to play in the creation of environments that can permanently shape individual behavior and ultimately effect a durable impact on culture. ■ And if we can indeed influence the culture of an organization, then we can also have an impact on its performance. CULTUREANDTHE ENVIRONMENT WHERE WORKPLACE FITS IN WORKPLACE CULTURE PERFORMANCE
- 11. ■ Corporate real estate is by definition at the service of the mission, vision, and strategic goals of the organization. – If your mission depends upon innovation, your facilities must respect and facilitate creativity. – If you seek to be flatter and de-emphasize titles, your workplace environment can’t reflect a hierarchical and rigid structure. – If you envision a culture that values all employees, you must invest thoughtfully in the workplace. – And if mobility, health, wellness, and sustainability are part of your vision statement, they must also be reflected in your workplace. WORKPLACE AND MISSION ALIGNMENT
- 12. ■ What is the future of retail? Is retail dying? ■ Does the brick and mortar experience matter? ■ Is remote work related to online shopping? ■ Maybe it matters what you're selling? Or who your customers are. Or where they are. LESSONS FROM RETAIL WHAT CANWE LEARN?
- 13. ■ The challenge – and the opportunity –Warby Parker faced in launching its revolutionary business was, how to enter a market already dominated by a global conglomerate. – Luxottica commands virtually every aspect of the market for eyewear from Lenscrafters to Sunglass Hut and from Ray-Ban to EyeMed. ■ So with a simple Mission Statement, backed by lots of research and planning and hard work, they embarked on an ambitious endeavor: – "Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses." LESSONS FROM RETAIL WARBY PARKER
- 14. ■ From the outset, mission and culture would guide everything they would do. – Recruiting and rewarding empathy – Investing in social values – Prioritizing the long-game – Listening to constructive feedback ■ How does this translate into the physical environment? For an online retailer, did it matter? ■ Yes.The culture needed to be reflected and reinforced everywhere, including the workplace – even before there was a storefront. LESSONS FROM RETAIL WARBY PARKER
- 15. LESSONS FROM RETAIL WARBY PARKER –WORKPLACE ■ This workplace environment immediately expresses the culture of this organization. ■ The space is unpretentious, social, open, warm, and mission-focused.
- 16. LESSONS FROM RETAIL WARBY PARKER – CUSTOMER EXPERIENCE ■ In this case, the workplace came first, but the translation to a retail environment is familiar, expressing the same core values. ■ Still unpretentious, social, open, smart, accessible, warm, mission-focused.
- 17. ■ A mission-driven organization — public or private, for-profit or non- profit — may be inclined to rely on the higher calling of its external mission to enforce its culture vision. ■ A school, for instance, might expect that its mission to educate young people would be enough to motivate its workforce and foster behaviors that support the goals of the organization. ■ A purposeful focus on an external mission, however, is not enough to guarantee innovation, collaboration, engagement, satisfaction or high performance — or even, in the case of the school, quality education. BACKTO MISSIONALIGNMENT CULTURE DOESN’T JUST HAPPEN
- 18. ■ No organization can depend solely on an inspirational mission or aspirational language to shape its culture, any more than it can build culture by policy, fiat, command, or even compensation. ■ Culture needs to be modelled, nurtured, demonstrated, and reinforced in perpetual, universal, and structural ways. MISSIONALIGNMENT CULTURE MUST BE SUPPORTED WITH INTENT AND CORPORATE REAL ESTATE PLAYS A CRITICAL ROLE
- 19. ■ In this context, a one-size-fits-all approach to workplace strategy is inappropriate. An organization must adopt the workplace model and design that reflect its own values and goals – and speak to the organization it aspires to be. ■ So at NYU Langone Health, when we developed a new workplace environment for a substantial portion of our corporate services hub, seeking cost savings and efficiencies, we still wanted to make sure that our workplace reflected our unique values and would support our culture of caring and excellence. WORKPLACE CAN IMPACT CULTURE PROVE IT
- 20. ■ Our new workplace strategy was primarily a real-estate-driven initiative to create a more efficient, flexible, cost-effective workplace, but we also believed that the workplace should offer a healthier, more collaborative, amenity-rich environment for workers. ■ With a culture focused on excellence, achievement, compassion, and quality, we wanted our workplace to serve as a platform to continue to recruit and retain the most talented workforce possible in a highly- competitive job market. WORKPLACE CAN IMPACT CULTURE CASE STUDY – NYU LANGONE HEALTH
- 27. ■ The project easily achieved its economic goals. We had: – Reduced our footprint from 200 to 160 usable SF per person – Shifted the ratio of private offices from 37 percent to 26 percent. – Cut overall lease occupancy costs per person by 20 percent. – Improved electrical consumption by 10 percent per SF and 34 percent per occupied space. – And by replacing personal printers with networked printers, experienced a 60 percent decline in printer paper and toner use, resulting in downstream waste savings as well. THE EASY STUFF CASE STUDY – NYU LANGONE HEALTH
- 28. ■ But we also wanted to understand if – and how – the new environment affected the way we work. ■ So we engaged Gensler, the firm we partnered with on the design, to help us perform a comprehensive post-occupancy evaluation, using interviews, surveys, focus groups and, most importantly, hourly observations of hundreds of designated spaces. ■ We were particularly interested in comparing the performance of our workplace with that of organizations scoring highly on Gensler’s Innovation Index, which is based upon workers’ views of the organization’s innovation, leadership, and creativity. THE HARD STUFF POST-OCCUPANCY EVALUATION
- 29. ■ We found that workers in our new workplace environment spend less time working alone and more time collaborating with others as well as more time dedicated to learning and social activities. ■ Additionally, workers in the new environment also spend less time in their offices and workstations than workers in the pre-renovation environment. ■ These findings are all positively correlated with higher scores on the Innovation Index and also with other indicators of innovation and performance, such as engagement, job satisfaction, and lower stress. ORGANIZATIONAL CULTURE WHAT CHANGED?
- 30. ■ In short, we changed the way people work. – We didn’t tell them to work differently. Rather, we put them in an environment in which they just naturally modified their own behaviors and created new patterns of interaction. ■ Over time, if these changes are sustained, and if they can be replicated on an even greater scale, we may have made a lasting impression on the culture of the organization. ■ And assuming these cultural impacts — more interaction, better engagement, enhanced communication — improve workers’ productivity, we will have demonstrated a tangible link between our workplace strategy and organizational performance. ORGANIZATIONAL CULTURE THE WAY WE WORK NOW
- 31. ■ At a time whenYahoo, Google, IBM and others are calling workers back into the office from remote work locations, it’s clear that organizations are thinking about the quality and effectiveness of the workplace environment more than ever. ■ Workers are demanding the flexibility to work anywhere, especially millennials and Gen Xers, but employers are also recognizing the value of face-to-face collaboration and unscheduled interaction for innovation and productivity. ■ Whatever the right balance for your organization is in this equation, as corporate real estate professionals, we now know that the workplace matters. ORGANIZATIONAL CULTURE WORKPLACE MATTERS
Notes de l'éditeur
- Thank you, Jim. I'm really honored to be included in this program. As Jim [probably] mentioned, I’ve been in corporate real estate for more than 20 years, serving mission-driven organizations. Probably true for many people, I didn’t directly set out to do this specifically, but as it turns out, I believe it’s been a good fit for me. As much as I love real estate, I don’t think I’d want to work for a developer or a lender or anyone for whom real estate is just a piece of paper or an investment or an ROI. This is a special business we’re in, I really believe that. Today I want to talk about why workplace matters… when it’s really all about culture. More than half of the companies on the Fortune 500 have disappeared since the year 2000. And yet, we are only at the beginning of what the World Economic Forum calls the “Fourth Industrial Revolution,” characterized not only by mass adoption of digital technologies but by innovations in everything from energy to biosciences. At the same time, by 2020, 40% of workers will be self-employed or self-contracted to their employers. This is a time of unbelievable disruption. What does it mean for us?
- Before the slide text: When I was in business school, one of the big debates in the study of organizational behavior was about culture versus structure – which had the larger influence on the performance of an organization or team. I used to be pretty firmly in the structure camp – believing that organizational structure had the larger impact on how people behave and could influence behavior more effectively, primarily since culture seemed a) so wishy-washy and b) so hard to influence. But now I see these as symbiotic, and believe strongly that structure is effective because it emphasizes and reinforces and shapes the culture. And that culture is far and away the most powerful force in an organization. So, what is Culture exactly? After the slide text but before the callout: Culture is what drives people when the boss isn’t looking!
- Instead of third bullet. You've all no doubt seen slogans and posters at places you've worked using words like Teamwork and Caring and Quality and Respect....
- I actually saw this one in a construction office the other day… two months after I prepared this slide! Sounds nice, I guess, but what does it accomplish?
- Before the second bullet. We’re talking about Netflix CEO Reed Hastings’ renowned “Netflix Culture” presentation, in which he details, in 126 slides, how he hires, fires and rewards employees. The deck was used internally at Netflix for years before the company decided to make it public in 2009. Patty McCord, Netflix’s former Chief of Talent who helped create the deck, calls it a constant work in progress.
- After the first bullet. For those of you not old enough to remember, Enron was one of the world's major energy, commodities and services companies, based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,000 staff and claimed revenues of nearly $101 billion. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At the time of its bankruptcy, it was revealed that Enron’s reported financial condition was sustained by institutionalized, systematic, and creatively planned accounting fraud. Enron has since become a well-known example of willful corporate fraud and corruption. The scandal had huge legislative and corporate ripple effects, rocking Wall Street and causing the dissolution of the Arthur Andersen accounting firm.
- Can we blame our employees for their skepticism - even cynicism? Words alone don’t do anything.
- Instead of the second bullet. Any serious attempt to effect cultural change must be accompanied by systemic changes in the way people work - and in the way they experience their work and their employer.
- Before the slide text – So where does workplace come in ?...
- Instead of first bullet, say: Corporate real estate is by definition at the service of the mission, vision, and strategic goals of the organization – this is really why I love what we do. Real estate isn’t just about real estate – it is real estate at the service of the mission and the business. Our job is to translate that mission into the physical environment. Then read the four examples…
- Introducing the slide: Analogies can be dangerous, especially if you use of them too simplistically or literally. But they can also help us see things about ourselves through a different lens. For instance, while reading the biography of Alexander Hamilton, Lin-Manuel Miranda connected the life of Hamilton to the American black experience and Hip Hop culture to tell us something new about both. That is the definition of genius. Similarly, in a Harvard Business Review article published last month, an NYU professor observed that successful health care innovation often results from cultivating partnerships with people from outside the industry. Melissa Schilling, a professor of management at NYU’s Stern School of Business, gave the example of an Israeli guided-missile designer who came up with an approach for visualizing the gastrointestinal tract. "Outsiders often look at problems in new ways," she wrote. "They aren't trapped by the paradigms and assumptions that have long become calcified in industry veterans." So for this conversation about workplace with a group of professionals working with mission-driven non-profits, of course, I'd like to talk for a minute about the death of retail.
- These questions led me to think about Warby Parker. [Luxottica owns Oakley, Oliver Peoples, Sunglass Hut, and Pearle plus optical shops at Sears and Target and also makes glasses for Brooks Brothers, Coach, Tiffany, Prada, and other luxury brands.] Quote from its website.
- From WP’s website, Fast Company, and according to Katie Burke, writing for marketing blog Hubspot
- After the slide text: Is this what we thought the “future” would look like. These new companies of the “innovation” economy rely heavily on tech – but technology is used to enhance the customer experience not "be" the customer experience. And you can see the same is true in the workplace. This environment is very human – it doesn’t look like the Jetsons.
- After the slide text: You can’t buy culture or dictate culture. You have to live it.
- After the slide text: Our job – and our challenge – was to translate NYU Langone’s culture into a physical environment. We had pretty well woven this culture into the clinical setting but what did it mean for the workplace. What did these values look like in the workspace?
- To translate these values into a physical design, we began with a few planning principles that would guide us. [Not an architect...] We wanted the space to be flexible and adaptable over time. We wanted it to support the work our staff and teams needed to do – balancing respect for individuals with support for teamwork and collaboration. We wanted the space to be efficient and sustainable and livable. And we wanted standards that felt equitable not arbitrary. In this final plan, you see a few manifestations of these principles: No construction touches the exterior, light is shared by everyone. The space is broken down into neighborhoods but without relying on walls and inefficient suites. Plenty of meeting space and amenities. All corners allocated for open collaboration. Technology enables work but doesn’t define the workplace. Glass walls, open space but at the same time Seated visual and acoustic privacy. Sound masking and sound attenuation. Other things are shared: Receptionist Copy rooms Paper/toner Standards: One size office and one size workstation Reduced file storage Eliminated paper cups One challenge we faced was balancing the desire to firmly reflect and establish NYU's culture within the space but also try to balance the individual cultures that existed within departments. There are differences between the cultures of HR and Development, for instance. When to fight these differences and when to allow them to remain. Let’s run through a few images…
- Reception and waiting and collaboration Multifunction
- One of two pantries on the floor – lunchroom and break-out space and space for team celebrations Multifunction town hall space
- Unreserved spaces for break-out work or quiet work
- Walk station equipped with phone and monitor Train car for conversation or drop-in meeting, no AV, no phone – most popular amenity space Touchdown/quiet room – multifunction, sit-to-stand, phone room, quiet space
- Each corner of the large floor was allocated for open collaboration – instead of corner offices or even meeting rooms, space to be shared by everyone
- Before the slide text: What did we achieve? Read slide text, then: We had established a real workplace standard for the utilization and allocation of space that reflected our organizational culture.
- After the slide text: I love this finding – improved engagement, job satisfaction, and lower stress – and I love that the environment did this.
- Before the slide text: This is one of the most difficult projects I’ve ever undertaken. It felt like the stakes were very high and I had put a lot of my own personal capital on the line. I wanted the effect of building this space to be that people from all parts of the organization would see this as a workplace that they would aspire to – that they would say, I want some of that. And for the most part, that’s what happened. Implementing this project demonstrated that the organization wasn’t just trying to save money and take away offices. The benefits are apparent and the payoff is visible. But STILL, there is resistance. I was on the phone just the other day, with a relatively senior person in the organization, whom I greatly respect, resisting these changes and arguing that he was going to lose people by moving them into this new environment. But this is increasingly part of the old guard, the old school. Notwithstanding these pockets of resistance, I really think that we set a new course for NYU Langone's workplace, that achieved all that we set out to achieve – and more.