WeWork: Creating a Community, Engagement, and Workspace Success Strategy

WeWork, a coworking company once valued at $47 Billion , is going bankrupt. When the future of workspace is uncertain, how do we best prepare for long-term success? Read on for expert insights on how to create a flexible engagement strategy.?

The Facts: Where did WeWork go wrong??

Operating as a tech company within the real estate sector, WeWork’s business model involved entering long-term leases with landlords and then independently renting spaces out to their clients.?

Claiming all profits, WeWork experienced rapid growth in 9 years .?

Despite its initial success, however, the $47 Billion company had taken on substantial debt to fund its lease portfolio. According to a Bloomberg report , “As of 2021, Japanese venture firm SoftBank had invested $17 billion in the company.”??

Post the COVID-19 pandemic, WeWork was unable to regain footing in an underperforming real estate market. The shift from both large corporations and startups toward favoring short-term leases to maintain operational agility further hindered WeWork's revival.?

With significant debt of reported $17.09 billion as of June 2023 on Companies Market Cap , WeWork has filed for Chapter 11 bankruptcy protection and began initiating the closure of global locations as part of its efforts to restructure and stabilize its operations.?

The Vision: "Empowering tomorrow’s world at work” (WeWork).?

Upholding their ambitious mission statement, WeWork spearheaded a future of dynamic, flexible, and beautiful workplaces designed to meet the ever-evolving needs of the modern workforce.??

The demand for these future-forward work environments has only grown since conception, with no signs of slowing down. As highlighted by JLL , “Flexible space has been growing at an average annual rate of 23% since 2010.”??

Allied Market Research valued the 2022 global coworking market at a substantial $9.2 Billion USD. The numbers speak for themselves, with the firm forecasting a CAGR exceeding 14% until 2032 at a projected $34.5 Billion.?

"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before." - Adam Neumann, Former CEO and Co-Founder of WeWork?

With WeWork’s exit from the market, attention now shifts to its coworking competitors who, according to The Real Deal , “expect revenue growth of 30 to 40 percent this year, and to eventually boost their share of the office market from about 2 percent to 10 percent or more.”??

WeWork’s explosive growth serves as a cautionary tale, the spotlight now on coworking entities committed to creating spaces that foster community, productivity, and organizational success.?

What does workplace strategy answer??

When building a business case for workplace strategy, it is essential to consider the questions it seeks to answer. In most cases, Workplace Strategy (WPS) helps organizations understand:?

• What does the business need to achieve its goals (whether operational, financial, organizational, etc.)??
• How can “flexible” workplaces be used as a tool to enhance employee satisfaction and accelerate business success??
• Is the current culture and leadership aligned and ready to support a new workplace vision, if necessary??

Maximizing Potential & Minimizing Risk?

Above all, every single project begins with a question of “what is the maximum risk we’re looking at?”?

By prioritizing flexibility and in-depth analysis, we ensure that our clients' workspace strategies remain resilient and sustainable in an ever-changing market landscape.?

Creating a map to success?

A strategic roadmap is necessary to understand and calculate the value-add of workplace strategy. The process of implementing a workplace strategy can be separated into 3 sections (which we call Discover, Design, and Delivery).

The Discovery stage is where the case for workplace strategy is made. Here, critical drivers are analyzed to create data-derived and evidence-oriented deliverables to forecast the value of workplace and your potential ROI. ?

This stage has 3 essential parts, from surveys to operational projects and financial forecasts.?

1. Discovery?

The Discovery stage places emphasis on understanding and recording data regarding the key drivers of any given organization. Here, the client’s business strategies, vision, and priorities are analyzed against the preferences and necessities of employees using insight from the team’s work history (including during the COVID-19 pandemic).?

2. Deliverables?

Once gathered, the data and information are compiled into concise deliverables for management and decision-makers. For presentation, these deliverables include reports on emerging findings, future work propositions, and current-state analysis. ?

Essentially, this is where the data is gathered that defines and directs workplace strategy implementation.?

3. Outcomes?

The last step of the Discover stage requires making management decisions. DESIGN+BUILD provides workplace strategy presentations in an actionable way, avoids unnecessarily lengthy presentations (i.e. “death by PowerPoint”), and simply highlights the info needed to drive informed decisions.

Using findings from the previous stage, management can determine where to focus their workplace strategy to maximize the ROI. ?

Some examples of common improvement areas are:?

• Operational effectiveness?
• Talent attraction and retention?
• Culture and community?
• Technology and hybrid work adoption?

Understanding the key drivers of organizational success can contribute to a more accurate forecast of post-project delivery success.?

Designing for community relationship building?

“The classic fight between form and function! One thing I've learned very deeply is that if it doesn't work, it doesn't matter how it looks.” - DESIGN+BUILD, Design Director Maddy Mackin Freeman?

When designing a human-centric space, every single project starts with open communication and empathy.?

This open dialogue guides us in crafting spaces that are not only comfortable to work in but also highly functional, ensuring that our clients' needs are met effectively.?

We understand that no two clients are alike, and their requirements can vary significantly. As a result, our approach to engagement strategy is flexible, allowing us to provide the most relevant and effective solutions.??

The typical duration of our engagement strategy spans a range of 2 to 6 weeks. To create a space planning playbook, we start with defining unique functional needs:?

• Review of Existing Business Standards & Plans?
• Visioning Sessions and Interviews?
• Business KPIs and Metrics?
• Competitive Landscape?
• Employee Survey?

With evidence-based research, employee/management surveys, and a vigilant awareness of industry trends, we assess findings from these methods to design a space that balances practicality and creativity.?

Balancing company and employee needs ?

Making a case for workplace strategy requires a holistic approach to entirely understand the potential return on your investment.?

For most organizations, renting/owning their office space is a significant expense. However, the potential to reduce the physical space that your organization uses can provide a substantial and instantaneous ROI.

Modern workplaces may reduce property costs by asking questions such as:?

• What is the current cost per sq/ft for the given office space??
• What workspace areas could be reduced or eliminated through an office redesign??
• What additional savings can be expected with a reduction in office space? (in regards to energy, maintenance, security, etc.)?

4 Ways Workplace Strategy Reduces Expenditure?

Real estate cost savings are important, but a successfully delivered workplace strategy will continue to reduce expenditure long after construction is complete. In addition, redesigning your office into a workspace optimized for its employees can create some significant benefits. ?

Here are just a few of the ways that a workplace strategy redesign can influence your ROI:?

1. Better ability to attract and retain top talent

The Society of Human Resource Management reports the average cost per new hire at $4,700. With the numbers adding up over time, this makes picking the right candidate and keeping them invested crucial.?

2. Lower attrition

Forbes reports that the estimated cost of replacing an individual employee is 33% of their annual salary.?

With an example employee salary of $60,000, it would cost about $19,800 to replace them.?

3. Less absenteeism

Also known as the “bottom-line-killer.” This Honeydew Absencehub article will help you calculate the actual cost of employee absence (hint: it will shock you).?

4. Increased productivity

ZipDo found that 95% of employees desire a well-designed office, with a 12% productivity increase post implementing flexible workstations. Recognizing this, it's strategic to prioritize people-focused investments.?

Our Commitment to Purpose-Driven Communities?

At DESIGN+BUILD, we are dedicated to eliminating friction from the process of creating personalized spaces. Our vision is to create purpose-driven communities that foster deeper human connections and inspire individuals to collectively achieve their best work.?

Your Path Forward: Contact A Workspace Specialist

Ready to future proof your workspace? Reach out to our team today, and we’ll start exploring the possibilities for your new office space.?

Share Your Insights and Stories??

Join the conversation and share your experiences by subscribing, commenting, and sharing with your network. Look forward to future editions where we'll continue to bring you valuable insights on a range of topics, including creating collaborative work environments, talent attraction, retention, and more!?

If you have more in-depth ideas you'd like to share, please email us at [email protected] . By fostering a platform for dialogue and diverse learning, we can collectively shape a better workspace landscape for all.?