5 expensive tactics to reduce cost and one big missed opportunity for improving corporate performance in a down market
One of the immediate tactics corporations make in their recession strategies after downsizing is to seek release of real estate. Real estate is a tangible line on the balance sheet, whether as owned asset or lease, and RE and facilities staffs, pressed for a contribution to the task, see their best move as cutting space.
If not able to release space because of market conditions, corporations and other organizations also explore or move on attempts to consolidate from other locations, sublease unutilized space, compress in the space they have based on current or downsized standards, and turn off the lights in underutilized or abandoned space.
Most of these tactics while eventually saving costs have relatively high interim costs, in the carry, the fees, the planning, the moves, and the disposition of furniture and equipment, as well as in the apparently intangible or non-measurable losses to the corporation from a resultant anxiety or hostility psychology of the staff.
Research in other places shows that significant enhancements to individual staff performance and overall corporate financial performance can come from workplace planning and design that recognizes that work looks different now. Some organizations have broken the straightjacket of workplace standards perpetuating the unreasonable demand for ever more spacious and high-walled cubicles (the Thain influence?). They have implemented programs that have supported and managed planning that recognizes that we are all mobile, even within the office walls, that work is highly varied for most people during the course of the day, and that each component of modern work is enabled by a worksetting that suits the activity.
Planning in these organizations is focused on these differentiated workstyles and interactions and not on individuals and titles. The strategy results in the ability to attract better talent and, with a more active, agile and energetic workplace, they get better performance from them.
It's important to remember that cutting real estate and occupancy costs will never yield the metrics that matter--share price growth. When confronted with excess office space as a result of staff reductions, corporate RE and HR staffs and their advisors may want to look beyond the metrics of space and into the metrics of performance. It just may be that a little thought spent in observation and analysis may yield insights for planning and design that will provide, rather than the static hurt of one-time cost reduction, the dynamic pleasure of ongoing and significantly higher growth returns.