How Will Big Business Respond to Coworking?

If collaboration serves as the model for today’s ideal workplace — and the golden child that every business wants to adopt — then coworking is the unwanted orphan that mid-sized companies and corporate America have yet to embrace.

But it’s an orphan that’s rapidly growing up.

From its technology-sector beginnings in 2005, coworking has morphed into a global phenomenon with more than 1,100 facilities worldwide. That number that has doubled annually for the past five years, according to a recent survey from deskmag. (Coworking Survey Booklet)

deskmag “Coworking spaces & the demand for private offices”

These facilities often include a broad spectrum of young entrepreneurs as well as mid-career, self-employed professionals of every stripe, from accountants to real estate agents to financial planners. With their predominantly open floor plans and sense of community, coworking facilities offer individuals who work alone or from home something they might only find in an office: the opportunity to interact and collaborate with other people.

Bob Fox, CEO of FOX Architects and publisher of Workspace Design Magazine, led a discussion panel of designers and architects at a coworking round table sponsored by Teknion. Everyone agreed that the phenomenon has become the workplace’s newest frontier, with huge potential for growth.

“We’re in the midst of a workplace transformation,” Fox said.

Steve Meier, a principal with global architecture firm Gensler and one of several panel participants, responded by saying, “The question is whether coworking will shift the business model for everybody else.”

The self-employed — currently the biggest users of coworking facilities — already account for nearly a third of the workforce. That’s the largest percentage ever, according to Freelancers Union.

 

Pioneers of a New Way to Work

Coworking spaces — which are frequently paid for on an as-needed basis with hourly or daily rates and a membership fee — are an enticing way for companies to cut one of their biggest fixed costs: the $60 billion they spend annually on leasing commercial office space. These costs often go underused by their increasingly mobile employees.

But substituting coworking facilities for a portion of that office space would require a tectonic shift in attitudes.

“Established companies don’t know how to work this way,” said Gary Miciunas, one of the round table’s participants who helps lead the global advisory services for Nelson, an international interior design and architecture firm.

“A new way of working”

Managers are especially uncomfortable working with a mobile staff. Companies can’t be sure their off-site employees aren’t frittering away their time yakking on the phone or playing computer games.

“The biggest concern is trust. Can you trust everyone to be productive?” said panelist Meg Osman, who heads Cannon Design’s corporate interiors practice.

If managers could learn to trust more, they would find that people are more responsible than they think, adds panelist Enza Parrella, a partner with architecture and design firm Partners by Design, who has seen the issue crop up with some of her clients.

Because coworking facilities house people from different companies, some of which may be business competitors, safeguarding trade secrets and other proprietary details are other concerns. Meier has designed coworking facilities and concedes that eventually the problem will need to be addressed, particularly as the facilities max out their space and pack people in more tightly. Right now, “distance makes for good neighbors,” he said.

State Farm, Next Door

But the greatest deterrent for companies considering the coworking route may be coworkers themselves. Independent and entrepreneurial, coworkers are essentially pioneering an entirely new way of working that conventional businesses often interpret as avant-garde and even a little renegade. The often informal, youthful nature of coworking facilities — some of which have more in common with a college dormitory than a traditional workplace — can also be a turn-off.

Miciunas sees it as a culture clash, one that pits “freelancers with an Occupy Wall Street mentality” against the very companies that trade on Wall Street. He said this difference could keep coworking “on the fringe.”

 

Companies Experiment with Coworking

Nevertheless, some large companies are so intrigued by coworking that they have begun to experiment with their own facilities. State Farm, for example, opened a facility for the public in Lakeview, Illinois.

“If you have an insurance question, someone can help you, but the point is not to sell you insurance. It’s to provide a more upscale version of Starbucks where you can work,” said Osman.

While insurance sales may not be the overriding goal, the facility does help beef up State Farm’s presence, something that probably won’t hurt sales either.

“It’s a great marketing and branding thing for them,” said panelist Arturo Febry, a managing principal with Interior Architects.

State Farm’s “Next Door”

Some companies borrow the coworking concept and incorporate it as a design feature in their own workplace. At Fidelity’s Boston office, mobile employees who occasionally come to the office to work are directed into an open room on the ground floor where there are touchdown workstations. There’s also a tech-support station similar to the Genius Bar in an Apple store.

“The fact that they have that kind of access — and combine it with IT people who can help you at a moment’s notice — was brilliant,” said Osman.

Although not a true coworking facility (because it is only for Fidelity employees), the space demonstrates how coworking is already having an effect on the conventional workplace.

Even some hotels are jumping on the coworking bandwagon and opening up their business centers to the public, said round-table moderator Kay Sargent, vice president of architecture for design and workplace strategies at Teknion.

State Farm’s “Next Door”

The practice allows hotels to make money off of a little-used business center. But some panelists felt that the centers were too impersonal and stiff to succeed, lacking the friendly community feel of a neighborhood coffee shop, which coworking facilities often emulate.

The discussion ultimately turned to what might drive more companies to adopt coworking or to create their own coworking spaces the way Fidelity has. Osman sees the next generation as the key.

“These kids coming out of school want that community feeling they get in a dorm room. They seek that same kind of environment for work,” she said.

Eventually, when the economy recovers, employers may find coworking a useful tool for attracting and retaining younger workers.

An interest in promoting wellness may also lead more companies to experiment with coworking.

State Farm’s “Next Door”

Barb Riekse, a project principal with Cannon Design, said health and wellness are already driving office design as companies look for ways to improve the well-being of their employees.

“There’s an interesting push for how we wrap wellness into our careers so that we keep people at their jobs and more entwined with the organization,” she said.

Because stress and illness often go together, workplace strategies like coworking at a facility that’s closer to home than the office help employees find a better work life balance, which in turn helps companies curb their healthcare costs.

“This idea of people choosing where to work goes back to wellness. Employers are going to have to let go of calling the shots and trust their employees that don’t come into work,” said Miciunas.

Febry believes something much simpler could prompt companies to rethink their views of coworking.

“We need to put managers through a coworking seminar,” he said. “Maybe if they tried coworking, they would understand its value.”

That Teknion brought together this kind of event demonstrates their own role as an emerging thought leader beyond their product innovations.

Said Kay Sargent of the company’s focus, “We’ve hosted think tanks in more than 20 markets in the US and Canada. We bring together principals of firms and influencers in those markets to discuss the challenges facing our A+D community. Then, we follow many of these events with Challenge Sessions that continue the dialogue to find solutions as a community.”

Sargent said that’s why the Teknion team works with designers and end users. Ultimately, it’s about the people within the environment. And coworking is evidence of that momentous shift.

“To meet our client’s needs, we can no longer design environments. We are designing the experience.”

 

Photo credits:

  1. deskmag, “Coworking spaces & the demand for private offices
  2. The Malaysian Insider, “A new way of working
  3. State Farm – Next Door
Headshot for Catherine Siskos

Catherine Siskos is a freelance writer and editor for architecture, business, real estate and finance for both consumer and trade publications.

10 Comments

  • September 3, 2012

    Anna

    Hi there Katherine,

    Thanks very much for the mention! I just wanted to point something out, though: you mention that there are over 1,100 coworking spaces worldwide. Many more, in fact! Out most recent count puts the number of coworking spaces at 1,800; further proof that the coworking movement is not but a fad or passing trend.

    You can read the article here: http://www.deskmag.com/en/1800-coworking-spaces-worldwide-700-in-the-us-survey

  • September 3, 2012

    Anna

    Excuse me, Catherine with a ‘C’!

  • September 10, 2012

    Luana Anselmo

    Congratulations Katherine, that was a great article! I think coworking is an awesome option for startups and for big business! At the same time you have the opportunity to grow faster your own business you can also extend you social network, I mean: win and win! When i moved to Brazil, i found a cool coworking office here, they offer low cost too, and the localization is the best part!! That’s all guys, I hope when you came to Brazil all of you have this awesome experience here, if someone gets interested about which one coworking office i’m working right now, here’s the link: http://www.coworking-itaim.com.br

  • September 12, 2012

    ZÃ ©

    Great article. I’d like to point out a single issue with what companies usually say:

    \”“The biggest concern is trust.”

    And I’ll say just this: if you’re biggest issue is trusting the people you’ve hired, then you’ve either hired the wrong people or, if not, you will need to try and see what the wonders of treating your employees like adults can do for their productivity.

  • September 12, 2012

    Fernando Mendes

    Hi there!

    I’m Fernando Mendes, founder of Coworklisboa (since 2010). This is pretty much what we thought would happen when big companies realised the potential of cowork spaces. I think it is virtually impossible to keep counting new venues right now as too many “conventional” spaces are shifting and adapting any empty room into a workspace. The article mentions hotels and we could add any other private or public space. Right here in Lisboa, several experiments are being implemented like malls (work WHERE your public and clients are!) and national sports clubs!
    It is not about work anymore, really. It’s about melting work and pleasure. Or being just happy.

  • September 13, 2012

    Rui Aires

    Great article…

    This is exactly the vision that sprung the creation of our project (http://all-desk.com), a marketplace of temporary workplaces that can provide this upcoming generation and community of mobile business coworkers (and full digital nomads) to find and use any workplace, all over the world.

  • September 29, 2012

    cherryhill

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