TRANSFORMING CORPORATE CULTURE THROUGH THE WORKPLACE

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1 CBRE Workplace Strategy Whitepaper TRANSFORMING CORPORATE CULTURE THROUGH THE WORKPLACE 2015

2 CBRE Workplace Strategy Whitepaper Introduction 1 Defining Corporate Culture 2 Setting the Project Vision and Goals 3 Embarking on a Change Management Program 2

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4 CBRE Workplace Strategy Whitepaper If we imagine our business as a vehicle that moves forward through the world, then our physical workplace environment is the fuel that gives the vehicle its momentum CBRE Japan President & CEO, and North Asia President Ben Duncan. 4

5 Introduction On April 7, 2014, 550 CBRE employees moved from a fixed desk work environment to a 100% free-address Activity Based Work environment. Six months later, CBRE s Tokyo HQ employees had this to say: 90 % feel the current environment reflects the CBRE brand and promotes a positive image of the company. 88 % prefer the new environment and way of working over the old. 78 % believe the current office reflects a reinvestment in employees, process, and technology. 76 % note they are more productive in the current environment. In the first year since opening, more than 16,000 visitors toured the space. The office was recognized by the US Green Building Council which certified the space as LEED Gold, by the Japan Facilities Management Association who gave CBRE its highest marks for innovation, and by Nikkei Inc. and the New Office Promotion Association who presented CBRE with a New Office Promotion award. 5

CBRE Workplace Strategy Whitepaper Often we see companies relocating or renovating for cost saving

But changing the workplace can have so much more of an impact, from increasing productivity, showcasing

6 CBRE Workplace Strategy Whitepaper Often we see companies relocating or renovating for cost saving purposes. But changing the workplace can have so much more of an impact, from increasing productivity, showcasing the company brand, providing tools to enhance performance, attracting and recruiting the best talent, and shaping the way we work. By gathering the right data, analyzing it, establishing a new workplace strategy, and diligently guiding employees through the change, any company can successfully transform all while saving cost. This is the story about how CBRE turned an idea into its vision of the Office of the Future. 6

The workplace is not necessarily about saving

utilization of space and better productivity

There isn t a right or wrong in the workplace;

for different situations and it s not one size

7 The workplace is not necessarily about saving money or saving space; it s about better utilization of space and better productivity through creation of the right environment. There isn t a right or wrong in the workplace; there are a number of scenarios and solutions for different situations and it s not one size fits all. CBRE Japan President & CEO, and North Asia President Ben Duncan 7

8 CBRE Workplace Strategy Whitepaper The Facts We started out with 4 offices Fixed Seating Tokyo HQ (Hamamatsucho) Saitama Shinjuku Nihonbashi Consolidated into 1 office free-address seating for all employees (including CEO) Tokyo HQ (Marunouchi) 635 employees (November 2015) 550 employees (before move) 1,145 tsubo Optimized by 18% of footprint 45cm Work Style Options 45cm 45cm Personal Storage from 2 types to 15 types 300 traditional desks 300 work positions 600 seats in total 8

9 What we achieved 15 % Have achieved headcount growth without changing layout Employees say office performance* improved by -25 % lighting required than energy 40 % standards 3 Reduced 37 to 10 printers Follow me printing Saving annually US$200, % reduction of on-site paper storage 28million pages saved -84 % reduction in cabinets more open meeting seats (compared to previous office) UP 9 % working with less paper is becoming easier from 58% (1-month after the move) to 67% (6-month after the move) 20+ phone booths 20 % of work positions are focus desks significant investment in technology (new laptops, better wireless access, improved booking system) * Office Performance stands for the performance of individual spaces, meeting spaces and technology attributes. 9

CBRE Workplace Strategy Whitepaper 1 Defining Corporate Culture Culture Engagement Recent research shows that culture and engagement is the most important issue companies face around the world.

10 CBRE Workplace Strategy Whitepaper 1 Defining Corporate Culture Culture Engagement Recent research shows that culture and engagement is the most important issue companies face around the world. 87 percent of organizations cite culture and engagement as one of their top challenges, and 50 percent call the problem very important. Japan particularly has one of the lowest engagement levels, where only 7% of company employees feel engaged in their work. How would you describe the office you work in to your friends and family? Each of us forms our own perception of the company we work for. From work itself, teamwork with colleagues, a sense of achievement and a sense of belonging, the physical work environment, and everything else combine to create our perception of corporate culture. Corporate culture is created, cultivated and sustained by employees. While we all have a hand in it, sometimes there are opportunities to re-evaluate and significantly re-create a business culture. One of these opportunities surfaces when considering office renovation or relocation. 10

In May 2013, CBRE s business in Japan set out on an 11-month journey to redefine its culture through relocation and adoption of what it calls Workplace Strategy.

11 In May 2013, CBRE s business in Japan set out on an 11-month journey to redefine its culture through relocation and adoption of what it calls Workplace Strategy. CBRE wanted to create a workplace that promotes cross-selling and collaboration, that would bring the company closer to its clients, that showcases the brand and its leadership in the industry, that enhances ability to attract and retain talent, and that creates a working example of CBRE s view of the Office of the Future. INITIATE FIND FACTS + OPPORTUNITIES STRATEGIZE IMPLEMENT EVOLVE We were ambitious. We had the opportunity to lead, and be a leader in the real estate industry. We needed more than just an improvement of our existing environment we needed a new canvas. Ben Duncan, CBRE 11

CBRE Workplace Strategy Whitepaper 2 Setting the Project Vision and Goals The physical environment can have a lasting and tremendous impact on the company image, the way people work, and its

When considering a workplace change, senior leaders should consider the following: > > How can I use the workplace to enable and support our business strategy?

12 CBRE Workplace Strategy Whitepaper 2 Setting the Project Vision and Goals The physical environment can have a lasting and tremendous impact on the company image, the way people work, and its corporate culture. A workplace change project is a great opportunity to re-shape the culture and way of working for any company, regardless of size or industry. When considering a workplace change, senior leaders should consider the following: > > How can I use the workplace to enable and support our business strategy? > > What value do I want to get out of my workplace? > > How can the workplace reflect and support the core values of our company? Once ample thought has been given to these considerations, the process of establishing the project vision and goals can begin to take shape, addressing every element of the following: Company Brand Company Assets What is our brand? And how do we express it? What are the impressions we want to make to our clients and to our employees? What are we known for: Professionalism, Services, History, Innovation and Creativity? What is our biggest asset that makes our business successful? What do we, and must we, most invest in for future growth: People, Products, Process? 12

Work Style Behavior What type of work style will best suit our employees?

Do we want to encourage more collaboration, sharing of knowledge, communication, focus, productivity, and effective processes?

Are there core values to our corporate culture that need to be reflected in the daily business activities?

Infrastructure Economic Value What are the tools beyond the physical environment we need to provide to our employees to do our best

13 Work Style Behavior What type of work style will best suit our employees? What type of environment will bring out the best performance from each individual and from the teams? Do we want to encourage more collaboration, sharing of knowledge, communication, focus, productivity, and effective processes? What is the code of ethics our employees abide by? Are there core values to our corporate culture that need to be reflected in the daily business activities? How do we want our employees to treat our clients, business associates and colleagues? Infrastructure Economic Value What are the tools beyond the physical environment we need to provide to our employees to do our best work? What is the IT/AV equipment we need to prepare? What is the supporting infrastructure we need to invest in? What type of performance improvement do we want to see: speed, security, connectivity? What are the economic improvements we want to see: real estate savings, energy savings, performance (e.g. revenue produced) per employee, retention rate, more efficient back-office processes? 13

CBRE Workplace Strategy Whitepaper 2 Diagnosis: CBRE In formulating CBRE s own considerations for each of these areas, the Workplace Strategy team hosted four

Company Assets Being a Leading Real Estate Firm in Japan, and Recognized as a World Class Company After moving, 90% said My current work environment reflects a

14 CBRE Workplace Strategy Whitepaper 2 Diagnosis: CBRE In formulating CBRE s own considerations for each of these areas, the Workplace Strategy team hosted four focus groups, conducted more than 20 leadership interviews, administered an online workplace performance survey, and arrived at the following: Company Brand Company Assets Being a Leading Real Estate Firm in Japan, and Recognized as a World Class Company After moving, 90% said My current work environment reflects a world class organization inside and outside the real estate industry. Our Talented People After moving, 79% said The current office is a great tool for recruiting talent. 14

Work Style Behavior Activity-Based-Work-style (ABW), to better support collaboration across business lines while also

In the previous office only 22% felt they had convenient access to space for easy collaboration compared to 72% after.

CBRE s corporate values - RISE (Respect, Integrity, Service, Excellence) After moving, 90% said My current work environment

After moving, 78% said, the current office reflects a reinvestment in employees, processes, and technology.

15 Work Style Behavior Activity-Based-Work-style (ABW), to better support collaboration across business lines while also enhancing focused-work when necessary. In the previous office only 22% felt they had convenient access to space for easy collaboration compared to 72% after. Previously only 33% felt they had access to space for concentrated work without interruption compared to 61% after. CBRE s corporate values - RISE (Respect, Integrity, Service, Excellence) After moving, 90% said My current work environment reflects the culture and values of CBRE. Infrastructure Economic Value Heavy investment in new technology. After moving, 78% said, the current office reflects a reinvestment in employees, processes, and technology. New laptops, Wi-Fi, and Follow-Me printing allows our employees to work from wherever, and whenever they want. 18% reduction in overall real estate space, 92% reduction in on-site paper storage, and room to grow headcount by more than 10% without needing to change layout. 15

16 CBRE Workplace Strategy Whitepaper 3 Embarking on a Change Management Program Workplace Strategy is about defining the right workplace through collection and analysis of research data, and best practices. This is done at the onset of a project and structures how the future environment (design, technology, usage) will look. Change Management is all about the people, this is the soft part of a project guiding those that are going through a period of significant change. Although small incremental changes can easily be achieved and are a natural process with most organizations in Japan, many of the larger changes require more preparation, support, and monitoring. If ignored or not properly made, changes often fail. before As-Is 16

17 With a proper change management program, the following results are typical: Changes are clear and employees are well prepared for their future work People participate in defining the future and naturally get ready for it (resistance is minimized) There is limited or no drop in productivity There is greater readiness and motivation to accept and support the changes Change Managed Productivity Curve after To-Be Productivity Curve without Change Management We believe the key factors for a successful change initiative are: An on-the-ground presence and often more time and energy than expected Over communication is necessary need to repeat messages several times through different channels Senior leader commitment is critical to successful transformation Employees need to understand the benefits to them Employees need to have opportunities to ask questions and voice concerns 17

18 CBRE Workplace Strategy Whitepaper 3 Will I have enough storage? Examples of concerns often heard by Japanese employees and managers when moving to a free-address environment are:? What s in it for me?!!! Why are we changing? Some people were very nervous about our project thinking is that really going to work in Japan? We were also worried about Day One with 550 employees all arriving in the office at the same time. How are we going to handle it? But my advice to clients and other people thinking about doing this is to go all out. Although there was some anxiety attached to some of the things we were trying to do, we tried to cut through what was just the natural human fear of change. I think really going for it while shifting through the resistance of why we were doing it is how we made it a success. People in Japan are so terrific, when they ve bought into a target or a goal, they just move towards achieving that goal. CBRE Japan President & CEO, and North Asia President Ben Duncan 18

19 [?]! How do I manage my team?... How do I maintain confidentiality??????? How do we find each other? 19

20 CBRE Workplace Strategy Whitepaper 3 Change Management requires the following steps: Assessment Planning Implementation (and monitoring) Understand what s changing, who is impacted and the level of impact (gap analysis). This helps define what activities to plan and implement - e.g. complex changes will require more face-to-face interaction. Define and plan what change management and communications activities to conduct, when, to whom and how. An initial plan is created and adjusted as the project progresses. Deliver the planned change management and communications activities. Activities will vary depending on assessment, and content and timing are adjusted as the project evolves. 20

21 If you are going to have ambitious goals, you have to have an ambitious team who s going to help you achieve those goals. CBRE Japan President & CEO, and North Asia President Ben Duncan For CBRE, change management and communications consisted of an 8-month intensive program before the move. Key activities at a glance: 15 First Fridays (town hall sessions) 6 Purge parties (disposal parties to help reduce individual and team storage) 23 updates, to prepare employees before the move 198 Frequently asked questions on Intranet website (blogs) 5,000 views per months 7 Change champions sessions 45 ABW Training sessions 35 IT demonstrations 3 Memos from our CEO In our Tokyo office, we continue to monitor the use of spaces and behaviors, especially as we recruit new people (over 40 new employees joined in the past 6 months). Further communications and training sessions are planned to sustain the change. 21

22 CBRE Workplace Strategy Whitepaper 3 Here is a checklist recommended for any CEO and senior leader looking at implementing a large change: Set clear project objectives aligned with corporate goals from the start Identify an engaged sponsor team Collect facts in a structured way before deriving a solution Establish the business case Challenge the solution to include new ideas and be different Involve key support functions, including information systems, human capital Listen to and engage with all layers of the organization Develop and implement a clear change/communication plan Develop a consistent messaging using a multi-channel approach Establish training and protocols for employees and managers (how to manage flexible teams) Evaluate and identify key successes and improvements to promote the solution internally 22

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Key Contacts CHINATSU KANEKO Workplace Strategy Director chinatsu.

24 Key Contacts CHINATSU KANEKO Workplace Strategy Director LAURENT RITEAU Workplace Strategy Director

Knowledge for your next job

Knowledge for your next job Author Melanie Franklin Director Agile Change Management Limited Contents Executive Summary 3 Initiative 1 Building the skills for change 3 Initiative 2 Creating added value