An office looks good by looking simple
By Luke Johnson
Published: October 26 2010 21:52 | Last updated: October 26 2010 21:52
Is a workforce more productive in a wonderful building, or are the surroundings almost an irrelevance? When I visit someone in a splendid new office, two thoughts strike me: first, how pleasant it must be to occupy such comfortable accommodation; and second, how very expensive.
As a business owner, spending your own cash on the rent and fit-out of an HQ, you should be acutely aware of the relative expense of good-looking space. It is the classic fixed overhead – and usually a long-term rigid commitment. In an era of relentless competition, stagnant revenues, rising costs and squeezed margins, lavishing large sums on palatial surroundings feels like a bad idea.
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As a case in point, in 2007 the highest office rent ever in London – and possibly the world – was paid by an Icelandic business for an office floor in Mayfair. That company is now bankrupt and being investigated by the police for suspected financial crimes.
Yet there is a cohort of reputable brands that do feel the need to have super funky workplaces – and obviously feel they can afford them. A recent book, I Wish I Worked There!, describes the extraordinary offices of companies such as Google, Hasbro, Nike, Sony Music, Virgin and Urban Outfitters. Apparently, their environments “stimulate, enable reflection, promote collaboration and encourage play”. I accept that decent working conditions help in recruiting and retaining talent. But do on-site massage and basketball courts have such a positive influence over the efficiency and creativity of an enterprise, or are they just self-indulgent? It would be fun to labour on a campus like that – but I’m not sure I would get much work done.
More typical are glittering tower blocks. They may look imposing, but I think they lack character and tend to crush the individuality of those slaving away in them. As Noel Coward said: “The higher the buildings, the lower the morals”. The managers of such facilities appear to be obsessed with security – entering some is as exasperating as travelling through an airport. And negotiating repeated layers of receptions, then waiting endlessly for elevators is tedium itself. The entire impression is of a bland, impersonal edifice, the epitome of a corporate anthill.
It is curious how service organisations such as investment banks, accountants, lawyers and advertising agencies tend to lease ostentatious premises with profligate foyers, magnificent views and extravagant meeting rooms. Visiting clients must surely think: “My fees are paying for all this grandeur – am I getting good value from my supplier?”
Basics such as location, size, heating, lighting and price are ultimately more important than appearance. The cleverest entrepreneurs with whom I’ve partnered have always taken space below their company’s means, because status symbols matter less to them than operating a lean business.
Start-ups often find the best bet is shared space, incubators or serviced offices. They may not be plush, but they are flexible, and when you are focused on survival, you watch every penny and each long-term obligation. Moreover, in the digital age, many staff can work from home or on the move, with hot-desking a common feature of many outfits. Such circumstances are unlikely to be relaxing, but they are economical.
I like well-designed commercial structures, and I appreciate high-quality offices. But too often such workplaces are an architect’s folly, built by developers to appeal to the vanity of conceited business leaders and planning officers. I do not think offices should be ugly or shoddy. But at heart such buildings are 21st-century workshops, which must be functional and ergonomic in all aspects.
The head offices of my most successful investments included a metal shed on an industrial estate, a converted textile mill and a mezzanine floor in a warehouse. Hardly prestigious, but they did the job – and meant more cash could be ploughed into winning customers, launching products, hiring the best people and owning the finest machines. It’s all a question of priorities.
The writer runs Risk Capital Partners, a private equity firm, and is chairman of the Royal Society of Arts
Copyright The Financial Times Limited 2010.
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