The Momentous Rise of Coworking Spaces in NYC

Coworking is widely considered to be the face of the changing workplace. As The Atlantic reports: “By 2020, the Bureau of Labor Statistics estimates that 40 percent of the U.S. workforce will be freelancers, temps, independent contractors and entrepreneurs who single-handedly run their own businesses.” With an increasing emphasis on the “‘workplace of choice,’” the young workforce will inevitably transform what is now considered a trend into the new norm.

An entire industry has sprung up in the past decade to cater to the needs of this young entrepreneurial and independent-minded set. According to The Atlantic, “Shared workspaces first started as informal arrangements: Freelancers with extra space in their garage invited friends to work with them and groups of freelancers leased office space together to make it more affordable.” But new coworking spaces can offer much more than just physical accommodations: services, amenities, digital platforms, flexibility, networking opportunities, and–most importantly–a sense of community. As Tom Lloyd observes in Forbes, “‘Office work is transforming from one dominated by clerical processing to one where making the most of human capital is the ultimate goal. The knowledge economy is fueled by ideas, and ideas are fueled by collaboration.’”

In accordance with this idea, Inc.com notes that “the number of coworking spaces in America has gone from one to 781 since 2005.” The article references a report by the Commercial Real Estate Development Association, which also distinguishes coworking spaces from other startup organizations like incubators and accelerators. There is every reason to believe this growth will continue. Hiring in the tech, advertising, media, and internet industries is increasing one-tenth annually, and these sectors most often make use of coworking space, according to Jason Bram, economist for the Federal Reserve Bank of New York.

New York by itself has seen the emergence of more than 50 new coworking spaces to support its entrepreneurial citizens. This is partly thanks to an injection of venture capital–49% from 2014 to 2015, exceeding $7 billion–as well as a population of 4.7 million freelancers and the city’s signature “creative abilities to make the most out of tight spaces.” The explosive growth of New York-based WeWork provides an illustrative example: since it was founded in 2010, WeWork has “leased 3 million square feet in New York City alone, […] enough to fill the Empire State Building, with 200,000 square feet left over.” The number of New York WeWork locations is already in the double digits, not to mention its U.S. urban expansion and international outreach, and it has signed “20,000 tenants in less than five years.”

With widely-available communications technology, the burgeoning freelance economy (driven in part by the fallout of the 2009 recession), and a renewed focus on work-life balance, coworking spaces can offer benefits that traditional companies and office buildings cannot. Shlomo Silber, the founder of New York-based coworking chain Coworkrs, tells Crain that coworking ”’is about hospitality, in terms of focusing and taking care of the needs of our members.’” In fact, even big companies have recognized the perks of coworking spaces: benefits for employees such as networking and innovation as well as cost-savings on property rentals. According to Colliers International, “Fortune 100 companies are increasingly taking desks in temporary facilities, both as a cost cutting measure and as a bridge to attracting and retaining talent by providing environments that cultivate a mix of networking, training, team events, and ideation. WeWork is accommodating tenants with large numbers of employees by offering full floors and modifying space for security, reception, IT, etc.“

This kind of accommodation–as well as the meteoric rise of coworking companies such as WeWork–has led some freelancers and entrepreneurs to ironically label these chain coworking companies as ‘corporate.’ Indeed, several founders of successful coworking spaces have discussed the difficulty of manufacturing community. As Kevin Smith, founder of the Vault–a San Francisco-based co-working space–reflects, “‘Collaboration’ is a word you hear a lot, and it’s this almost-mythic concept. […] You’re supposed to put people in a building, and the collaboration will just happen; but it doesn’t unless someone is there directing the show.’” Adam Neumann, founder of WeWork, also comments in The Atlantic: “‘It’s a science. […] We cannot force community, but we can create an environment that encourages it. We’ve gathered massive amounts of data about how to design a space to foster collaboration.’ WeWork has done research into design questions as specific as the optimal number of couches and the ideal location of coffee machines to foster conversation.”

In the spirit of this collaboration, and as an additional service to members, coworking spaces–particularly chains and franchises such as Grind and WeWork–have developed exclusive digital platforms to connect their members. One user called the WeWork app “‘a real life LinkedIn.’” While the app enables these professional connections to happen in person, they are still digitally arranged, which raises the question of how well a digital overlay enhances community. Physical coworking spaces seem to have sprung up in part to circumvent virtual networks, so a digital platform can almost be seen as the antithesis of the community-centric mode of coworking.

In a period of such rapid growth and expansion, many have begun to try to regulate what constitutes a coworking space. “People like Tony Bacigalupo, the founder of New Work City, are working to codify the principles of coworking so that they are easier to incorporate into new coworking communities. ‘There is a sense in the Zeitgeist that coworking is more of a real estate opportunity.’” Another attempt has been documented by The Huffington Post: “LExC is a network of passionate, like minded coworking space owners with aligned business approaches. Led by Jamie Russo, founder of Enerspace Coworking in Chicago, the organization was formed to define acceptable standards for coworking spaces and elevate the industry as a whole. LEXC gives members the ability to work from any member spaces if they are traveling, and defines appropriate operating levels so visitors can expect similar experiences no matter where they need to work.”

One thing that most of these coworking spaces already have in common, though, is their urban roots. According to CityLab, “Downtown San Francisco now has more high tech startups that suburban Silicon Valley,” the birthplace of the tech start-up. Silicon Valley could not possibly hold all the startups that have arisen in its trailblazing wake, but the migration of start-ups to cities raises some issues. Cities and start-ups have a symbiotic relationship: entrepreneurs tap into urban networks and take advantage of the culture and amenities. Coworking spaces fit right into the sharing economy, a predominantly urban trend.

But startup culture and the coworking spaces that support it do not necessarily serve cities well, at least in terms of real estate. The acquisition of urban real estate in order to essentially rent to businesses that would otherwise find office space could lead to inflation. 

San Francisco has famously seen inflation in its rental market and a high cost of living increase due to its proximity to Silicon Valley and its own startup scene. New York is currently evaluating the effect of Airbnb–a startup itself–on its unique real estate market.

For all the growth that coworking spaces can bring to New York City, it might be worth evaluating the impact of this new model and design regulations not only to preserve the sense of community intrinsic to coworking spaces, but also to monitor the scaling of such businesses.

By |2018-10-31T17:55:17+00:00November 14th, 2016|Culture, Technology, Urban Planning|

How Company Culture Shapes Business Outcomes

Company culture is more than just having a ping pong table and the occasional happy hour. It’s the essence of a business: the pervasive vision, values, and systems pulsing within employees, management, atmosphere and more. Some like to call it the genetic code of a company, though in some circumstances it can be more malleable than that.

More and more, good company culture is being recognized as vital to a company’s success; on the flip side, toxic culture has been witnessed contributing to huge failures. Built into business at its most basic level, company culture is both the result of a company’s structure and the support that keeps it standing. It’s both an outcome of hiring choices, and the force that drives them. It’s a self-perpetuating cycle: a company shapes its culture and the culture shapes the company, over and over or all at once.

Company culture is often developed gradually and without intention. At a company’s onset, certain things are decided implicitly: what goals are most important, the attitude it takes to get there, and even common personality traits and values. Even if the company starts with just one person — its founder — a culture is born from that individual’s choices when it comes to hiring and leadership. With each new decision and addition, the culture grows for better or for worse.

Company culture as motivation

The idea of company culture as a success factor isn’t new, but it seems the extent of its value is only on the precipice of realization. Some believe it is just as important, if not more so, than pay. Money is certainly a powerful motivator — as demonstrated with rats by B.F. Skinner in 1938, “operant conditioning” occurs when individuals are rewarded when their behavior is good and penalized when it’s bad. This method of compensation has been the primary model of employment for ages.

But reward and punishment aren’t enough to get the best out of people, Abraham Maslow’s theory of hierarchical needs suggested in 1943. Basic needs like food, water and shelter can be met by money, yes, but a whole pyramid of needs exist beyond the staples of life — like safety, love and belonging, self-esteem, and self-actualization. A workplace that makes employees (and clients) feel safe, welcome, proud and confident will yield higher result than monetary value alone.

Company culture is what either succeeds or fails at meeting these extra needs. Factors like robust benefits, comfortable office space, amenities, extracurriculars and relationship building shape the culture, which in turn motivates employees and impacts productivity.

The benefits of good culture

So, we know that company culture is important. But what can it actually accomplish? We can look at some success stories to get a better idea of what returns may come from investment in culture.

There are various companies that are known for their culture, and are likely successful, in part, because of it. Well-known innovation hubs like Google, Facebook, Twitter and Adobe boast impressive cultures that prioritize inclusion, teamwork and perks. Hiring the right people who will fit and thrive within the culture (in some cases, over qualification and education) differentiates these companies from the rest.

Research suggests that companies with strong, substantial, and adaptive cultures outperform their counterparts when they emphasize customers, employees and investors, fit the business environment and adapt to change. In this way, culture has a strong influence on economic performance.

Culture is more than just perks. It’s onboarding, work-life integration, and an ignition of passion that leaves workers positive about everything from mundane tasks to advancement opportunities. Positive culture makes for happier employees, better business, and also leads to employee retention, which saves time and money on hiring and training.

The risks of toxic culture

There are many qualities that signify a potentially toxic culture, or at the very least a dysfunctional one. Many of these stem from bad leadership, which tends to trickle down into management and employee well-being. Some signs include poor health, high stress, discomfort, fear, and a host of other issues that compromise the hierarchy of needs, as mentioned previously.

In other words, when employees feel unsafe, unwelcome, unmotivated and unheard, it is likely due to a toxic culture. Bad culture costs more than just feelings — productivity is lower, communication is strained, leading to bad business. Equally harmful can be a bad reputation, or worse, lawsuits.

A Gallup State of the American Workplace found that unhappy workers cost U.S. businesses $450 to $550 billion dollars a year in lost productivity. When these unhappy workers leave, it’s not much better: the cost of turnover from just 12 employees is about $250,000 when you factor in hiring costs. When employees are subject to incivility, they spend as little time at work as possible and decreased work quality; those that witness it like clients and coworkers are impacted for the worse, too. In other words, the toxins leak, affecting everyone in the workplace and beyond.

Turning a culture around

In the end, company culture shapes business through all sorts of aspects, like employee well-being, management style, and office environment. And because it often grows organically as a reflection of company values, it can be extremely difficult to turn around.

Changing a culture entirely is a daunting and possibly impossible task. But culture can always be improved, if those with the most influence are willing. And there are better ways than simply implementing a Taco Tuesday — like engaging employees with tasks, policies, and initiatives that keep them motivated and happy, or simply making them know their input matters.

Articulating company vision and ethics, supporting worker health and wellbeing, providing opportunities for training and development, fostering camaraderie, and encouraging healthy work-life balance can also go a long way. At worst, these steps will give employees a slight boost; at best, they will shape the entire business for the better.

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By |2018-10-31T15:59:53+00:00January 21st, 2016|Culture|

Forget WHY: What We Need to Know is HOW

Dov Seidman, a world renowned American author and CEO of LRN, published a New York Times Bestseller about his unique ideas on relationships in business and company culture.

In 1994, Seidman founded LRN and built a business that helps more than 500 companies worldwide develop their value-based corporate cultures and inspire principled performance among employees. The idea with LRN was to shape the future of communication and interaction between employees, managers and others. LRN is also a member of the World Economic Forum Global Growth Company which is an early community of dynamic high-growth companies. As a member on this board, LRN hopes to become a driving force of not just economic change, but social change as well.

After having operated LRN successfully for over 21 years, Seidman used his experiences and wrote his New York Times bestselling book, “HOW: Why HOW We Do Anything Means Everything” with a foreword by President Bill Clinton.

Seidman’s bestseller perpetuates his unique methods on social interaction in corporate capacities. His first rendition,”HOW” was published in 2007 and four years later was supplemented by the highly touted reintroduction of the book.

Seidman’s book addresses an issue that is constantly being evaluated and improved upon both at the startup level and in corporate environments. Company culture and interaction in business has a massive impact on the productivity and growth of businesses and individual success.

Recently, the business world has developed a new level of transparency and the culture of a company is just as important as any other given factor for prospective employees and/or clients. Seidman iterates that, “It’s no longer what you do that sets you apart from others, but how you do what you do.”

For almost two decades, LRN, has helped some of the world’s biggest organizations build a “do it right” culture, which inspires employees to keep their principles first when it comes to work and communication.

Seidman’s vision with LRN has been expounded upon in his book and breaks down how he’s actually gotten companies to practice HOW. LRN has helped more than 15 million people doing business across 120 countries to keep the human aspect in their company culture even in the midst of such demanding competition.

It’s amazing how Seidman’s approach has been received across different world cultures, and has proven so productive for teams that follow his practices.

Since its first release, Seidman expanded HOW with an exclusive Foreword from President Bill Clinton. The author also added a new preface that explains some of the overarching topics that define the book at its core.

Seidman illustrates that our behavior, how we lead others, govern employees, operate in business, trust in our relationships, and relate to others has a massive positive effect when done the right way. But Seidman’s explanation doesn’t just use personal anecdotes from his own experiences, he also explores case studies, edgy research in various field, and interviews he’s conducted with a diverse group of people.

Throughout the book, he defines the methods to uncovering the values of “hows” that will help further your success in modern day business and real-life relationships as well.

Divided into four comprehensive parts, this book breaks down into the following:

  • Exposes the factors that have fundamentally restructured the way organizations operate and the way that employees conduct themselves, placing a specific focus on their “hows”.
  • Provides frameworks to help you identify and understand these “hows” and implement them in powerful ways that increase productivity towards team goals.
  • Helps you channel actions and decisions to get different results.
  • Explains the systems of dynamics between people that shape the culture of organizations. Seidman also introduces a bold vision for leading successful teams through self-governance.

Seidman promotes the importance of values like trust, reputation and how keeping this way of thinking as a staple in your work culture can lead to more efficiency, production, innovation, and growth for your organization. HOW will help you further your business ventures in today’s quickly evolving world where the human aspect tends to get lost.

Photo: The Aspen Institute via Flickr.  

By |2018-10-31T15:52:15+00:00December 29th, 2015|Culture|