Corporate Coworking as Innovation Driver. Dr. Gabor Nagy, MCR Research Program Manager, Haworth, Inc. San Francisco CA, USA

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1 Corporate Coworking as Innovation Driver Dr. Gabor Nagy, MCR Research Program Manager, Haworth, Inc. San Francisco CA, USA

2 Global study of 15 companies Four paradoxes Four waves of coworking Four types of coworking What we learned Key takeaways Speculations for the future

3 Paradox #1: Disruption Vicious Circle of Innovation Best innovation comes from external disruptions Companies must let themselves be disrupted in order to disrupt others

4 Paradox #2: Innovation closed and open innovation Hire smart people Discover it ourselves Create best ideas to win Control our IP Control risk Work with smart people Don t have to originate the idea to profit from it Make use of best ideas to win Profit from others use of our IP Hedge risk

5 Paradox #3: Space Less and More important

6 Paradox #4: Place Urban and Suburban

7

8 Four waves of coworking Social Movement getting together, breaking even Small Business entrepreneurs open spaces to make profit Big Business consumerization of workspace Crossing the Chasm corporate coworking

9 Four types of coworking Commercial B2C Wework, Industrious Open to the public Membership-based Freelancers & corp. employees Goal is profit Regus [IWG], Serendipity Labs Open to the public Fee-based (short leases) Corporate temp offices Goal is profit B2B State Farm, Staples Open to the public Free or low fee Drop ins from street Goal is marketing / future sales Orange, Vodafone By invitation only No fee Internal & external people Goal is innovation / transform. Corporate

10

11 Wait! Corporate what? Campsites Startups in residence Enterprise studio Catalyst Innovation Center Network Co-innovation spaces Work Lab Corpoworking Temporary Internal & external Experimental Larger agenda

12 Drivers Change / Transformation Controlled, purposeful disruption Provoking change by proof of concept Help transform products / businesses (e.g. digital transformation ) Experimentation new ways of working / doing things Test & learn + Observe (space, management, collaboration) living lab

13 Drivers Innovation / Startup Ecosystem Cross pollination bring in startups and collocate them with internal employees Co-creation discover and make things together Incubating/prototyping: fail quick, fail cheap then learn and refine Highly collaborative: learning by doing / sharing with an open mindset Hedging risks outside of the organization

14 Drivers Future-proofing Exploration of future of work and industry Accelerated serendipity: collaboration across diverse domains Beyond company s products, domain and expertise Pushing boundaries / outside of comfort zone: explore areas the company has never been before Externalize: explore how to apply company values to other problems

15 Users Temporary: users work 6 to 9 months on specific projects Internal & external: besides employees, there are startups, entrepreneurs, freelances, researchers, and academics involved Curated community: there is almost always a careful vetting process: selection is based on expertise, personality, openness, and cultural fit Preparation: newcomers are prepped by the community manager; usually one day immersion to mutually experience working together Startup mindset: non-core / support business functions are usually readily available to speed things up and to cut thru corporate red tape

16 Executive Sponsors Functional VPs, CEOs or founders CEOs from multiple companies, usually for a greater good The higher the rank, the greater the chance of continued endorsement Depending on sponsor, very different expectations

17 Culture Intentionally different from parent organization Hidden agenda to change the culture of whole organization Main common characteristics: Higher risk taking Family spirit, sense of community Trust and common sense over formal policies Being curious, willingness to learn Self-initiation / do it yourself mentality

18 Community Manager, aka Feel Good Manager User Experience Manager Community Curator Concierge Vibe Manager

19 Community Managers Common Characteristics Personable Social Excellent communicator Passionate High on energy Ice breaker on two legs Inspirational Embraces change with grace

20 Community Managers Critical Roles Community curation: user selection, onboarding, connecting Maintaining the culture Encourage people to bring out the best of themselves Arbitrating conflicts Organizing and hosting events #1 reason why users like the space

21 Space Design / Branding Intentionally different from corporate No branding Informal Non-corporate Temporary feel Flexible, multi-use User-centric

22 Space Design / Branding Usually managed internally, but purposefully not by CRE/FM Process: observe analyze understand roll out multiply User participation in concept development and design Economies of scale: at least 8,000 to 10,000 sqf Engineered serendipity: e.g. centralized amenities Inspiring design & natural light: ranked with highest importance

23 Measuring Performance No Metrics No ROI, but space is expected to deliver in terms of learnings Speculative learning process with lots of iterations it could not happen if it was surrounded by metrics and 3-year plans Since results are not predefined, they have to be extraordinary

24 Measuring Performance Soft Metrics Ideas, innovation qualitative User satisfaction surveys (avg. 92%) and observations Pre-Post questionnaires / interviews on UX: Social quality of space Friendship and collaboration opportunities Engagement Learning experience

25 Measuring Performance Hard Metrics / ROI Number of workshops done / prototypes made Financial impacts from workshops Speed: two months of work done in two weeks (collocation factor)

26 Measuring Performance Deferred Real impact will be measured in the longer term In the beginning try to be successful and keep the burn ($$) to minimal To continue and scale eventually, there will be a need for a business case

27 Unexpected Benefits Social Social capital, expanding networks (across and beyond corporate) High-energy, viral enthusiasm from surrounded by startups Emotional attachments: real bonds among people through communities; friendships surviving space closures Increased collaboration among notoriously solo people, e.g. software engineers

28 Unexpected Benefits Spatial Hosting events very popular Managers retreat to escape being disturbed Neutral place for tense meetings or negotiations

29 Unexpected Benefits Business Retention: employees wanting to come to work here Attraction: new talent interviews ( coolness factor ) Corporate clients want to meet here

30 Success Stories High utilization rates & long wait lists to get in New methodologies or practices inspired by the startups Innovative products co-built well beyond the normal capabilities of companies 30-40% cut in product development time Surprisingly easy-sell to CEOs to build more spaces based on success and lower space costs

31 Lessons Learned Importance of Space Spaces can t look like other spaces at corporate Learning process never ends: constantly change and try new setups It s not all about collaboration, people also need alone focus time

32 Lessons Learned Importance of Community Managers The glue of communities; when they leave, success is in jeopardy Human chemistry is key; well-built community with people sharing common interests Community curation more important than space curation

33 Lessons Learned Culture Trumps Strategy It s still not culturally acceptable to work from elsewhere at some companies Hard to go back to the corporate environment after this experience Very first group s culture becomes dominant users must be selected on well-defined criteria

34 Future Plans Scaling: most consider their space as a prototype and plan to expand Diversification: looking at other potential participants with varied backgrounds Cyclical nature: startups always move on and new ones come in Growing up: Business model need to move from experimental labs to sustainable model that can be rolled out at other locations Economies of scale: one space is too small to change the perception of the entire organization, but it s a good first step

35 Can successful corporate coworking spaces change the perception of the whole company?

36 Key Takeaways 1. It s about change, disruption and transformation 2. Keys to success: space + community (the social workplace ) 3. Community managers: curators of communities and spaces 4. Co-location is crucial 5. Constant learning process trials and errors

37 The Future? Future of Innovation Open or closed? Can both be sustained? Future of Organization The Hollywood model? Future of Workplaces The coworking model? Future of Cities Downtown offices or suburban campuses?

38 THE END Competition Agendas Observation Saying Formality Assurance Expertise Personalities Value chain Collaboration Community Participation Doing Friendship Boldness Learning People Value Ecosystem Credit: coworkingmanifesto.com

39 Q & A Gabor.Nagy@Haworth.com

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