Creative Combustion
Pandemic
Most of us have (happily) adapted to video calls in the spring of 2020. We even joined the gym instructor’s private lessons from our living rooms. As months passed by, so-called Zoom fatigue has set it. Many have used the summer of 2020 to travel, relocate, and meet family and friends, which they haven’t seen in months. At the same time, companies made long term decisions about their offices. Pinterest canceled a lease for its new San Francisco office resulting in a fine of 89.5m Dollar. Many tech companies have announced that they would allow for remote working until the summer of 2021. Twitter’s CEO even suggested that his employees can work remotely indefinitely if they so desire.
While tech may be uniquely positioned to shift to remote work permanently, not every industry is as keen on following suit. JP Morgan Chase has worked on reopening measures for its London office, while Blackstone will pay its employees to commute by taxi. In many cities, the narrative around remote work has been less vocal. Still, given the media’s focus on tech, it appears to have gotten lost that the vast majority of companies globally aren’t joining the WFH gospel, yet.
The pandemic has a lot to do with it, obviously, but I am talking about a post virus / “new normal” / vaccine world.
Creative Combustion
Random encounters and in-person project iterations, the rehashing of ideas that drive many businesses; these are elements that foster the hivemind. The advantage of a company’s brain trust comes from its time linear in-person application, with remote interactions extracting randomness from the recipe for creative combustion. In a widely reported conversation between Jamie Dimon and Keefe, Bruyette & Woods analysts, he voiced concerns about the in-person interactions and community it builds among staff.
“JPMorgan Chief Executive Officer Jamie Dimon has made the case for a broader return to work, saying his firm has seen “alienation” among younger workers and that an extended stretch of working from home could bring long-term economic and social damage. He’s also expressed concerns about productivity among certain groups.” — Bloomberg
Many companies are not willing to risk transmissions within their office and factory premises and allow for remote working. While at the same time, employees yearn for human interactions and more physical distance between their work and home environment.
The Alternatives
We might Work
The ad suggests that WeWork’s management is well aware of the opportunity that is presenting itself to them — picking up the combined demand of companies and office workers to congregate in a safe environment, whenever they want to.
WeWork. and its competitors are already promoting the safety of their locations. With private providers ready to supply timely testing such as Bupa Health Clinics in London, there is no reason not to seize the moment. While the underlying issues of WeWork haven’t gone away, lease terms, it can now capture a much more considerable amount of people given the new safety measures imposed by companies and governments to open their offices. People want to leave their homes and work in a productive and dedicated environment, and WeWork offers just that.
It may not pitch itself selling the seemingly intangible benefit of community the and aforementioned creative combustion, but the first customers will most certainly report back that they saw productivity gains.
Hotels
With its tens of thousands of hotels, the hospitality industry seems like the ideal candidate to absorb the demand of millions of employees looking for an extended office. Four Seasons Orland already offers extended stays focusing on remote workers. The Four Seasons in Punti Mita, Mexico, offers “schoolcations”; see the picture below. Hyatt is also extending its offer to guests to check-in for more extended stays.
A startup called Hotels By Day is selling you rooms to work from with an 8 am check-in. Spa treatments and late checkouts are available upon request.
For the longing business traveler, Changi Airport in Singapore (who else ?) has opened its Jewel Lounge to remote workers and social gatherers alike. It offers 2-hour access for 12$, including two drinks (a selection of coffee, tea, soft drinks) and a snack such as a chocolate danish. A one-hour top-up is available for $4 for every subsequent hour you want to stay, according to AsiaOne.
Picking up the slack
On May 11th, former Google CEO and Chairman suggested a “hubs and spokes” model in a Face the Nation interview. This concept translates into hub offices that its former employer Google has in cities such as New York and London, offering “spoke” locations in smaller towns for teams to meet in person and use for events.
The permanent shift to such a model for global companies seems inevitable. For small and medium businesses, a certain level of physical closeness, may it be via shuttle flights, a commutable distance between an employe’s home and the office is likely to define the flexibility that they can provide for their employees.
WeWork is uniquely qualified to pick up the demand with its established coworking concepts, while it will face tough competition from hospitality companies. Smaller offices, the same staff levels that are more regionally dispersed, allow co working companies and hospitality businesses to target especially the premium segment of remote employees. Alongside the likely increase in demand for coworking offices in second and third-tier destinations (not just cities), this pandemic may ultimately offer more a profitable approach for WeWork’s operating model, and take of the pressure of employers to reopen offices and commit to long term leases.
