Trading Places – A Reflection on the Tradeline Space Strategies 2015 Conference

David Willett's picture

I had the expected pleasure of attending Tradeline’s Space Strategies Conference held in San Diego earlier this week. Having never attended a Tradeline conference before, I still had high expectations for this event in based on the agenda, the roster of presentations, the list of attending organizations and of course the venue, San Diego. The latter turned out to be the one disappointment. The high ocean winds turned the hotel into a never ending whistle making it difficult to sleep. I was expecting the morning cloud cover to quickly burn off, revealing a warm beauty highlighting everything set against the amazing blue sky. Instead, I nearly killed myself on what appeared to be brussels sprouts covering the parking lot. Turns out, the high winds coerced the palm trees to release most of their tiny coconuts. For a brief moment, I wondered about investing in coconut futures…

As far as the conference goes, given that a majority of the audience represented higher education, I expected to learn exactly how different space planning and management was being done in the different higher education institutions and for-profit corporations. Going in, I knew a few things:

  • Educational institutions tend to own their buildings and adhere to the FICM standard of measurement, as opposed to for-profit corporations, the majority of whom tend to lease their space and adhere to the BOMA standard of measurement.
  • Both institutions and  corporations track their space to charge back for its use, but institutions use this information to recover facility-related expenses required by granting organizations and the federal government, while corporations pass along the expenses to divisions and departments.
  • Institutions have expressed no interest in tracking “butts in seats” as the corporate world has done for years. None of these things proved to be untrue, but I did not realize there was so much envy of the for-profit sector from institutions. That…is what I found fascinating.

Given the high cost of real estate, regardless of whether you are an institution or a  corporation, whether you own or lease, whether your space is subsidized or not, having too much real estate can greatly impact an organization’s ability to achieve its mission. Other than not having the right people within an organization, there really is only one situation that can be worse than having too much real estate, and that is not having enough. Colleges and universities are not exempt from these costs and challenges. In fact, they actually end up spending more, and that is why they are envious of for-profit corporations. Change is not and will never be easy, but it is exponentially more difficult for higher education institutions as compared with for-profit corporations.

Corporations have been able to shed the “entitlements,” whether real or perceived, faster than higher education has. “At-will” employment gives a capable CEO an advantage over a provost who has to deal with tenured faculty. The CEO can set a direction and lead their company without any confusion with regards to allegiance or intellectual property. If under the advisement of the CFO or CRE VP, a CEO decides to begin to charge back for the use of real estate, it happens. Incidentally, the benefit of charging-back has nothing to do with how the expenses are accounted for because it all comes out of the same pot in the end; the benefit is that this information within an organization can change behavior.

Think about it: you’ll probably approach a family visit to an “all you can eat” buffet differently from the home cooked meal in the dining room. If you’ve paid for a buffet, you feel entitled to eat all you’d like without giving any thought to your fellow gluttons. On the other hand, if you’re at home and all the food is on the table, you’ll likely attempt to ration your consumption…sibling and parental politics and rivalries aside.

Many universities represented at the conference talked about how they are now considering charging back for space usage. Apparently, Stanford University has been charging back for space use for the past few years and have now decided to halt this practice because it had the desired effect on behavior and was no longer worth the administrative overhead to maintain. This is Interesting as it means that entitlements and the potential mis-alignment between faculty career objectives and university objectives must be challenging. Let’s now turn our focus to the topic of administrative overhead, which Stanford cited as the main reason for not continuing the practice of charging back for space use.

One of the biggest problems that both higher education and corporations face, with regards to space management, is keeping data current. Corporate real estate is notoriously under-resourced and -funded and it seems like higher education gets half of that. There are two strategies for keeping data current:

  • You can either put in a herculean effort to manually get the data current and then put processes in place to ensure the data never regresses. This requires policies, procedures, standards and automation. This is the route most for-profit corporations go, and the world I am most familiar with. It is very difficult for higher education to take this same route because it is very difficult for them to establish and agree on policies, procedure and standards and without these, automation is impossible. If for every instance where the policies and procedures are enforced, an exception is created, you’re fighting a losing battle.
  • Currently, higher education is forced to rely on the second method of keeping data current, the honor system. Most higher education institutions present at the conference use a yearly survey where the faculty is asked to review the space they use and make corrections. There really is no alternative. I’m sure a few visits to the mathematics lab could result in some interesting approaches to tracking data quality based on the careful and systematic nomination of spot checks that could be handled by the space manager, but there will always be costly surprises when using this method.

At the conference, I heard horror stories of offices that remained intact for professors that had retired years before or how about being mandated as a condition of employment to provide an office for a professor that only uses it for the few hours in a week that they are obligated to be onsite to teach and hold office hours for students. The one thing higher education does have in its favor is access to an affordable labor pool, students needing financial aid. As it stands now, the use of surveys and mounting frequent herculean efforts appear to be the only option for higher education to keep their current data.

The last topic that I’d like to discuss as a major source of envy for higher education is the use of sensors to determine space utilization. Higher education has never had the ability to track “butts in seat”, even when it was easy in the days of 1 to 1 assignment, person to space. Now that even the most conservative corporations are introducing mobility programs and replacing their stale office cube farms with progressive workplaces that check-off all the boxes necessary for a new workplace: engaging, flexible, sustainable, light, choice, casual, fun, healthy, quiet, caffeinated, egalitarian, stimulating, serendipitous, and designed for the dreaded “M” word... I have to say there is nothing more pathetic than a room full of Baby Boomers talking about the “Millennials” and their needs and workstyles when there are actually only two Millennials in the room and they are asking what is wrong with aspiring to one day have an office all their own. Classic!

But let’s go back to the topic of tracking the actual utilization of space in these new beautiful workplaces. By now, we can all recite it: How utilized is the typical office building over the course of a typical week? Yup…between 40-50% at best. Now that everyone does not come into the office every day and sit at the same desk, it is even more difficult to measure.Eenough time has passed for people to figure out there is no silver bullet of a solution, ultimately, the solution comes in the form of sensors…lots of them. Security sensors track building attendance. Motion and heat sensors track presence within the building. More elaborate power and networking infrastructure can be used to associate energy and data usage to specific areas of a building.

We’ve all heard the stories about Google, and even though their employees show up to the office every day, I bet the person stocking the free food in the pantries can correlate calorie consumption with workplace utilization as it relates to employee well-being. Code Red! We’re up 9 grams of Skittles…has anyone seen Marshawn within the last 3 hours? We’ll give him another hour, then we’ll have to free up the spaces he usually frequents and reach out to his next of kin. All kidding aside, the collection of sensor data (Big Data) is how we will understand how buildings are actually being utilized. This presents a big issue for both corporations and higher education, but it is actually a non-starter for higher education. The issue with sensors is privacy.

The most interesting conversation I had at the end of this Space Strategies conference puts this all into perspective. I went into the conference wanting to dig a bit deeper into understanding how higher education space management was different from corporate real estate. I learned a lot, but what I did not realize is that higher education realizes that it could benefit greatly by using best practices from corporate real estate. They just can’t and are falling further behind as a result. One leader of a large state university told me that higher education cannot continue to fall behind; something’s got to give. That is where I might be able to help out and why I am looking forward to the next Tradeline Space Strategies Conference scheduled for May 2016 near my home in Boston, Massachusetts.

David Willett is the Product Manager for CenterStone, Trimble's leading space management solution.

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