Zero-Time Space   Franklin Becker, Ph.D. International Workplace Studies Program Cornell University The Uncertainty Dilemma Technology, mergers and acquisitions, changing workforce demographics, constantly shifting organizational strategies, new ways of working, global competition --- all of these factors generate chronic uncertainty and force management to adopt a new mindset about what good practice means. types of Workplace Uncertainty Size and composition of teams Organizational restructuring Mergers and Acquistions Location of business opportunity Time pattern of business opportunity New technologies Workforce demographics Global politics and financial markets Perhaps nowhere is the face of uncertainty so sharply in relief as surrounding new technologies. We think of this as a "current event," but as experience with ATMs suggests, this is not a new challenge. The ATM was originally designed to ease congestion at branch counters. But once they experienced ATMs, customers demanded 24 hours, 365 days-a-year service --- wherever they were. That was not at branch banks, but in supermarkets, convenience stores and gas stations. One outcome? A huge surplus of branch bank office real estate from which banks are still trying to extricate themselves. Managing uncertainty with speed and imagination is transforming how companies procure, construct, and manage their space. Cost-reduction remains an important driver for an Integrated Portfolio Strategy (IPS). But the primary driver of an IPS is flexibility; the ability to deliver the right type and amount of space, when and where it is needed, for only as long as it is needed. This follows the same logic as Just-In-Time and lean manufacturing processes: pay for and use resources only as you need them. Integrated Portfolio Strategy (IPS) The concept of diversification so critical to a financial portfolio is equally critical to an Integrated Portfolio Strategy (IPS). A real estate and facilities strategy that only considers conventional leased or owned space in "traditional" types of office buildings as an acceptable solution under performs in terms of flexibility and speed. An IPS considers a wider range of solutions, including tensile, modular and mobile buildings that can, in comparison to standard building types, reduce the construction time from thirty to almost a hundred percent; fully-serviced offices paid for on the basis of how often they are used, not how much space they occupy; and the exploitation of information technology to enable a variety of types of telework. Zero-Time Space Strategies Policy Non-territorial offices Time vs. event-paced planning shellong and "dark" space "Copy exactly" design Telework Mix hightly standard and customized solitions Construction pre-engineered structures Mobile Modular Tensile Procurement Fully-serviced offices Excess capacity space shared resources Design Anticipate future uses; design for conversion Modular (kit-of-parts) and free-standing systems Raised access floors Mobile and easily reconfigured furniture Software-based programmable HVAC systems High bay and clear span structures Flexible and fixed zones; servidces spines Zero-Time Space Zero time space borrows from the concept of "acting in zero time" in an agile organization. Zero time space is space that can be procured and/or constructed and be ready for use in as short a period of time (as close to zero) as possible from when the need to occupy (or exit) a space occurs. It can be achieved physically, by new approaches to construction; organizationally, by new approaches to procurement; technologically, by exploiting the potential of information technology to enable remote work; and operationally, by new policies for allocating and using space. Policy Approaches Non-Territorial Space Some forms of AO, notably non-territorial offices, are in fact a form of zero-time space. Non-territorial space accommodates (within limits) employee growth and decline seamlessly, simply by changing the ratio of workers to office spaces. Shelling or "Dark" Space One of the most typical forms of zero-time space policies is "shelling." This is the policy of constructing the base building shell, without interior fit-out, in advance of needing the space. When the space is actually needed, the time to occupy is much shorter because fit-out can be done quickly. Sears provides "dark" space in each building to increase opportunities for more closely locating groups near those with whom they work at the time the need arises. Time vs. Event Paced Construction Intel builds new fabrication facilities every nine months, before the chip to be manufactured in that facility has been designed. Most organizations wait until a specific event triggers the need, but if Intel waited for that to happen they would lose competitive advantage because of slowness to market. Contingent (fully-serviced) Space Contingent, fully-serviced or "turnkey" office space comes ready to use, from furniture, computers, and telephones to a receptionist. Sign a lease or rental agreement and your office can be occupied and used immediately. Excess Capacity Space In California, Pacific Telesis sends 20-30 person sales teams to communities for 3-4 months each year to sell yellow page advertising. Typically, the sales staff live in a local hotel and lease and fit out office space in the community. In a pilot project, rather than leasing conventional office space and providing a daily living per diem, Pacific Telesis contracted with a Marriott Suites Hotel that had a low occupancy rate during part of the year to provide all employees with accommodation, and with exclusive use of its conference rooms for use as a sales campaign headquarters. As a result, Pacific Telesis had no real estate costs; just the costs of IT and office furniture and reduced room rates. Construction Approaches Mobile, modular, and tensile structures are three types of "pre-engineered" building construction approaches that have the common value of being transportable, relocatable, and reusable Mobile Structures At Intel, trailers are used 1) when occupancy is short term; 2) to avoid the costs of compressing office size to increase density; 3) to improve synergy from closer on-campus adjacency to existing buildings. Cost is not the primary consideration. Time and flexibility is. The primary benefit was keeping the design engineers on the same site with those with whom they needed to interact, and doing it quickly. Modular The defining characteristic of modular building is that construction utilizes pre-engineered, factory-fabricated structures in three-dimensional sections that are transported and are consequently tied together on site. Three years ago, the ABN/AMRO Bank found itself needing space for 600-700 people, in about six months time, with no such space available in or near the Southeast Amsterdam HQ to lease. Now, next to what has just become the "old" HQ in Southeast Amsterdam, the bank occupies 100,000 s.f. of Class A corporate office space constructed from pre-fabricated modular units. In its final form the building consists of four floors and a total gross area of 11,500 square meters (approx. 115,000 s.f.). It was constructed using 675 prefabricated modules to create 710 workspaces that are a mixture of cellular, group, and open plan offices. The floors are made of concrete and the ceiling height is about 2.70 meters. The data infrastructure is state of the art; and the building includes entrance, reception area, meeting rooms, computer room, restaurant, kitchen, and coffee corners. The contract is structured as a sale and guaranteed sell back; De Meeuw will buy back and remove the building (The modules can actually be dismantled and returned to the factory for refurbishment.) after five years should the Bank want to do it. The building is designed to last anywhere from 10-25 years or more with proper maintenance. The total project costs were 31% lower than leasing conventional office space (including rent and refurbishing). The end result was a building that once constructed was essentially indistinguishable from a well-built conventional office building. Tensile Like other life sciences companies, the nature of the research being done at Monsanto has been transformed over the last decade. In this changing research context Monsanto wanted to launch a new bioinformatics group of about 30-40 researchers. They wanted them operational in less than three months, but had no available space in existing buildings. Adding to the complexity, it was not clear how long, beyond one year, the new group would exist. The solution selected was the "Bridge," a 7200 gross s.f. temporary tensile translucent "bubble-looking" structure using high technology tenting material stretched over a steel frame. The structure had to meet all the same building codes as a permanent structure. From snow-covered ground to being fully operational took 25 days. Warehouse Most "white collar" workers find the idea of going to work in a warehouse or factory as appealing as a hand-cranked engine. Yet such structures have the potential to provide a special kind of zero-time space solution for companies that cannot predict what activities and types of work will be done in a building. IGUS, a German company manufacturing sophisticated bearings/bushings and industrial chains, wanted a building shell that could accommodate anything from a factory to a supermarket, as well as any kind of reorganization, including having office workers sitting where bearings had been manufactured a few days before. The answer was a clear span structural system provided by tensile cables from structural columns (masts) in courtyards that allow for totally open floor areas where changing functions can be located or relocated anywhere without obstructing columns. Any panel can be quickly and easily changed from a solid, to a window, to a door simply by removing bolts. "Pods", self-contained mezzanine level rooms within the building shell, are not easy to move, but easy to add. Exposed building systems, including the electrical, HVAC, water, plumbing, and power/data organized in easily accessible cable trays and "drops," make it possible to locate services anywhere in the building without restriction. Modular systems (furniture and interior panels, as well as interior and exterior cladding) are bolted rather than welded on. The bolts are exposed and easily accessible, minimizing the need for special tools or labor. High bay space makes possible erecting buildings within buildings to create multi-level space within the same building shell. The building construction took nine months. An exterior polyester-coated aluminum panel, simply bolted on, can be removed in ten minutes; and interior panel takes 1-2 hours. It took two weekends to change the tooling department, with all its machines, to offices. The bearing department, growing between 40-60% each year, has completely moved locations five times in five years. The Pattern Counts Each workplace solution described above has advantages and disadvantages. Modular structures are quick to construct, but they have less residual value than conventional construction. Tensile and modular structures can be disassembled and relocated, but the permitting process may require more time and effort. Fully-serviced offices make immediate occupancy and exit possible, but are often not located exactly where the company wants space. These individual solutions' different benefits and drawbacks, when assembled as part of an IPS, define their business value and competitive edge. One's strength compensates for the other's weaknesses. Changing the CRE Mindset To survive in today's world means managing uncertainty. That requires a broad portfolio of real estate options. Some of these will be quite conventional; others will include workplace solutions like non-territorial offices, shelling, excess capacity space, pre-engineered structures, and fully-serviced space. Key to developing effective IPS is recognizing that to wrest control, force order and eliminate chaos with simple and standardized solutions is unlikely to succeed. A better approach is to fight uncertainty with variety and complexity. The key, according to Eric Beinhocker, is to cultivate and manage “populations of multiple strategies that evolve over time.” An adaptive population of strategies keeps an array of options open over time, minimizing long-term and irreversible commitments. Robust, adaptive strategies willingly sacrifice the focus, apparent certainty, efficiency, and coordination that traditional strategies provide for the sake of flexibility and a higher probability of success. Accepting this shift in what constitutes "best practice" also recognizes that workplace strategies are not, per se, technical decisions, despite their grounding in engineering, architecture, finance and other technical disciplines. As Peter Schwartz writes about scenario planning in The Art of the Long View "The goal is to change management's mindset. With that change, comes a willingness to consider options and strategies previously rejected." ATMs were considered by most bankers 30 years ago to have little value and no future. Few executives regarded the Internet as a threat to (or opportunity for) their core business as little as 2-3 years ago. None dismiss either today. The world in which business is conducted is being transformed, and corporate workplace strategies have no choice but to consider new ways for using, constructing, and procuring space. They must do it as a continually evolving and integrated portfolio strategy, not as a series of discreet, isolated workplace solutions. (an excerpt from ECIFFO 36, March 31, 2000)