Thinking of flex, think hard.
April 4, 2023
A reposting of an article written by Dan Clarke, Managing Partner, Felix Real Estate on Linked In.
Having read a recent article on Commo titled ‘Risky Business’, subtitle ‘If you’re thinking of opening your own flexible or hybrid workspace, tread carefully – success might not be as easy as you think.’ I felt I should pass a comment for any building owner considering adding flex to their property.
The opening two paragraphs accurately describe the opportunities that flexible workspaces bring and their seeming attractiveness: they’re quick to set up, meet the market requirement for agile solutions, add diversification to the portfolio, growing market, and have relatively small up-front capital requirements. The author also correctly warns it’s ‘not straight-forward’.
Although I do feel the article jumbles ‘flexible’ and ‘hybrid’: Flexible workspaces ‘offer amenities to businesses of all sizes requiring agile lease solutions’, whereas ‘Hybrid’ ‘offers workers a more convenient local workspace than their city centre corporate HQ which businesses can utilise to maintain some culture and productivity of teamwork’.
The article begins by describing three challenges: scale, organisational management, and branding/marketing.
The first challenge, ‘Question of scale’ describes how important location and product mix are, not the size of the organisation. It doesn’t however suggest that good research can identify whether a location has a market, or what make-up of business types, and sizes the market might desire. This is the kind of research operators such as Liberty Flexible Workspaces and our flex advisory firm Felix Real Estate make foundational to the feasibility planning we undertake prior to commitment, and in targeting either a flexible workspace or a potential suburban flexible workspace that may be used in a hybrid way.
Many city centre and suburban flexible spaces, meet the above challenge but fail at the next challenge of ‘Organisational Management’. ‘Build it and they will come’ is a field of dreams, not a business strategy. The importance of expertise, and experience in the design, fit-out, customer journey design and ongoing delivery of hospitality and IT services that meet ever-demanding client experience requirements is critical for a sustainable and profitable building amenity. The design, fit-out, and service in this sector are high quality, continuously improving, and require ongoing innovation investment many entrants fail to succeed in.
The third challenge in the article is ‘Marketing and Brand’. While the paragraph stresses the importance of ‘earning the commute’, the focus here is aesthetics and features: getting people through the door and keeping them satisfied with a nice alternative to staying home – which is true for the suburban hybrid model. However, that’s not what we mean when we use the term ‘Marketing and Brand’ and it ignores the secret ingredient to success in flexible workspace, beyond the solution to hybrid suburban facility strategies.
For Liberty and Felix, we believe that there is a difference between branding and marketing. They are not the same. Marketing may get people to be aware of the solution, and consider purchasing, based on the brand’s reputation and credibility, but ‘branding’ creates the reputation and keeps them. Branding is not one-and-done, it is a continuous mission to meet and exceed client expectations and value.
The brand experience is entirely dependent on the client experience, although this is built on organisational, operational, and administrative excellence, it’s totally dependent on a hospitality-led epic client experience team, continuously trying to ‘make work a happy place.’
The article warns that ‘brand and marketing strategy is unlikely to be sustainable or even affordable if it is to cover a few offices or just a single location. Indeed, a brand approach might not even be appropriate if there aren’t significant locations or products available.’ Unquestionably scale is vital to a marketing effort. But the above quote only applies to a one-off suburban hybrid offer. Not one that has internal marketing and brand resources. A one-off CBD location may be able to succeed through differentiation if it can deliver on all of the above three challenges.
I’d add another two challenges owners need to consider and provide for to make flex pace work for them: patience and pivoting.
Even meeting all the above challenges requires an element of fortune in timing. Economic cycles, global shifts, and even local political policies can either make or break a flex space, so having a financial anti-fragility built-in allows patience to meet the tide and for the boat to re-float.
Depending on the tide strength and direction might mean remodelling the offer to meet the market demands. That might mean more meeting rooms of smaller size or one larger event space. It might mean more open-shared offices or small one or two workstation private offices.
Flexibility in workspaces isn’t just about what you offer the market it’s a creed for the flex space itself.