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Three Scenarios of the Future of Work and Workplace Implications

By November 11, 2015Lease Accounting

PriceWaterhouseCoopers (PWC) recently published a report,  “The Future of Work, a Journey to 2022,” in which the consulting firm developed three scenarios of how the future of work may evolve over the next 7 years. The project employed  the scenario planning technique invented by Peter Schwartz, and described in his book, “The Art of the Long View” made famous by Shell Oil which anticipated the oil crisis in the 1970s.  The three scenarios in the PWC report emerge from two orthogonal vectors:  1) fragmentation/ integration and 2)  collectivism/ individualism. PWC labels the three scenarios as the “Orange world” where small is beautiful, the “Green world” where companies “care,” and the “Blue world” where corporate is king. In the Orange world, “ companies begin to break down into smaller collaborative networks and specialization dominates the world economy.” In the Green world, “social responsibility dominates the corporate agenda with concerns about demographic changes, climate and sustainability issues.” In the Blue world, “big company capitalism rules as organizations continue to grow bigger and individual preferences trump beliefs about social responsibility.”

While the report focuses primarily on the human resource implications of the three scenarios, it has little to say about the workplace implications of these three futures. Here are my thoughts on that question:

The Orange world workplace: This is the world of entrepreneurs and free lancers, who favor highly flexible and IT intensive work environments. Incubator, co-working workplaces will proliferate, particularly in urban, regentrified neighborhoods. (think Silicon Alley in New York, or South of Market in San Francisco) Informality will dominate where millennials are the primary users of the workplace facilities, although boomers, and gen-Xers will also grow as a percentage of the workforce as people live longer and put off retirement.

The Green world will emphasize environmental and sustainable work environments. LEED (Leadership in Energy & Environmental Design) certified design will predominate and most of the office growth in the green world will occur in suburban and rural markets, because of the lower cost of development. With its emphasis on sustainability, the Green world will prompt continuous innovation in office design, and advances in mechanical and electrical systems that will embrace technology at every level of design, installation and operation. The Green world will spur development of “the internet of things” where all aspects of building operations will be managed by automated control systems, spanning the entire spectrum including electrical, mechanical, security, and other aspects of the building environment.

The Blue world reflects perhaps the most conservative and traditional office environment. With its emphasis on cost containment and control, the workplace is more formal and more hierarchical with a mix of closed and open workstations. This is the world of high rise offices, and suburban campuses, and even though there will be workplace flexibility, and proliferation of mobile technology, the workforce of the Blue World works primarily from more traditional office environments.

There are megatrends that will cut across these three futures and influence the CRE management tasks and responsibilities in the years ahead:

·      Mobility: the workforce will become ever more mobile as communication technology advances with stunning speed. CRE managers will need to embrace workplace agility concepts both in office design, and operational support

·      Internet of Things (IOT): Virtually everything about the office environment will be machine addressable through the internet. This reality will revolutionize building operations and design. Most aspects of the workplace environment will be automated and regulated by digital technology, and this data flow will be captured and analyzed within building management systems of the near future.

Big Data: The growth of massive data bases and analytical software, mostly based in the cloud, will revolutionize the management of real estate, leases, and the whole spectrum of fixed assets. Forecasting office demand will be like forecasting the weather, and CRE managers will have enormous insight into workplace drivers and costs through the advent of big data and analytics.

Demographics: The changes in demographics will have a profound impact on workplace design and location criteria. The workforce is aging, retirement will be extended, and racial diversity will be the norm particularly in urban and international markets.

Outsourcing: Outsourcing will grow more rapidly. Most corporate functions including real estate and workplace management will invariably be outsourced to service firms. Increasingly specialty service firms will take on the responsibility of non-core activities. This will be driven in part by technology enablers, but also as cost containment becomes a management imperative. 

Some years ago I concluded a research note with a quote from William Jennings Bryant. I think its apropos as we contemplate the future:  “The future is not to be predicted but imagined and acted upon. Destiny is no matter of chance. It is a matter of choice. It is not a thing to be waited for, it is a thing to be achieved.”

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