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Corporate Coworking — Is It Calculated Brilliance, or Foolishness?
Posted By Dr. John Sullivan On April 15, 2013 @ 5:36 am In Advice and How-Tos | 2 Comments
The concept of “corporate coworking” is among the boldest corporate people management concepts of the decade. If you’re not familiar with the concept, it varies from traditional coworking, which is a well-established concept where a group of startups and entrepreneurs share a facility that supports their getting launched.
There is a new model, which I call “corporate coworking,” where the employees of a major corporation share a facility that also houses startups and/or employees from another corporation.
The primary goal is not to save real estate costs, to provide space for expansion, or to provide remote work options. The objective is to generate and test new and innovative ideas.
Most corporations are risk adverse, so even the thought of placing corporate employees (with their proprietary information) alongside employees from other corporations and startups appears on first glance to be totally crazy. Crazy for no other reason than the fact that almost every corporation spends thousands of hours and millions of dollars trying to shield its ideas and innovations from everyone. Some firms like Apple go to extreme lengths to restrict employees from sharing product ideas even with other employees, no less outsiders. Given that well-established corporate practice of secrecy, you can only expect resistance from most corporate lawyers, product designers, and business intelligence professionals who have not calculated the ROI of the practice.
If you don’t live in the Silicon Valley, you might not know why so many successful firms like Facebook, Google, Twitter, and Apple start or relocate here. The compelling reason is because of the energy and the competition that exists when so many smart and innovative people work and interact in a relatively small geographic space. In fact, even if there were no interactions between employees of the different firms in the Silicon Valley, the mere presence of so many smart people working close by would be an energizer just by itself. Obviously having so many great firms so close together also creates intense wars for talent but that one detrimental factor is more than overcome by the positive value of the competition felt with employees from other firms.
The same can be said for the increased creativity that firms find by locating in major arts and entertainment areas like New York City and Los Angeles. The same increase in innovation and idea-generating can occur using “corporate coworking” when your employees are co-located with strangers from startups and other corporations. To support that contention, I offer a recent survey by Deskmag that found that 71 percent reported a boost in creativity since joining a coworking space and 62 percent reported that their standard of work had improved. Also 64 percent were better able to complete tasks on time and 90 percent of the coworkers reported an increase in self-confidence because they now worked in a supportive community.
Even though it might initially appear to be an extreme idea, you might be surprised to learn that corporate coworking is a growing concept. The biggest proponent for the corporate version of coworking has been Tony Hsieh, the CEO of Zappos. His stated goal is to make Las Vegas the “coworking and co-learning capital of the world” with his 3 C goals of collision, community, and co-learning. He is expanding the concept not just to include the Zappos offices but also to increase serendipitous meetings in the surrounding areas. The corporate coworking concept has already been successfully used by a good number of firms, including low-tech firms like PwC, Steelcase, Accenture, and Amway. Tech firms like AT&T, Ericsson, Twitter, and Plantronics have tried the concept and Yahoo has for years shared its brick house R&D building with other firms.
The primary reason for “corporate coworking” is to generate and test new ideas. Obviously, corporate employees residing in a coworking environment would be expected to “crowdsource” new ideas as a result of their increased serendipitous interactions with the employees of other corporations and startups. It is also true that the availability of individuals from extremely diverse backgrounds also would be expected to also provide an equally important opportunity to “test” new ideas and to get direct criticism of those ideas from non-employees (that are likely to have a more neutral perspective). Incidentally, if you’re wondering if revealing your ideas to strangers could result in “idea theft”, the answer is that it can but that you can minimize the likelihood of that occurring by taking advantage of your tremendous corporate resources and by designing execution processes that are extremely fast, so that you can produce the product or service well before any competitor has time to catch up.
The additional nine benefits beyond capturing new ideas and vetting your own can include:
If your corporation is seeking to expand its innovation and idea generation efforts, the first step is to fully understand the different variations or models of coworking and which ones would best fit your corporate needs. If you exclude the most common one, the startup incubator model, where major corporations are not invited, you will find that there are four basic coworking approaches left to consider.
The first is the “unrelated corporation sharing model,” in which a group of corporations share a common space that none of them own (GRid70 in Michigan is an example).
The second model is the “friends of the corporation model,” where firms that you know and have a relationship with (like strategic partners, developers, or even customers) are invited to share your corporate office space (AT&T’s 3 Foundry innovation centers  are an excellent example of this approach).
The third model is the “startup only model” where related or unrelated startups are invited to share corporate office space (Zappos is an example).
And finally the fourth model is the “startup sponsorship model,” where a company sponsors a coworking facility. An excellent example of this model is Google’s impressive “campus” coworking building in East London, where Google employees don’t actually work at the sponsored facility. However, their employees can capture ideas at events that Google sponsors there and ideas can also be captured when Google’s employees are serving as volunteer mentors to the building’s occupants. If you decide not to use your own facility, you’ll find that there are many vendors that can provide coworking space for your employees. Most operate in a single city but several including Regus, WeWork, and NextSpace operate across several cities.
As more corporations calculate the extremely high margins and profits that result from having industry leading innovations in your products and services, more executives will begin to fully appreciate the high economic value of improving collaboration by purposely increasing the number of serendipitous interactions.
Most will follow the Google approach using workspace design to increase employee interactions. Others, especially the extremely conservative ones, will realize that rather than going through a complete building redesign, they can quickly and inexpensively get a significant boost to their learning, idea generation, and idea-vetting efforts by placing a relatively small number of employees in a corporate coworking environment.
Unfortunately, before they will be able to see those results, they will probably first have to do battle with a number of lawyers and HR and business intelligence employees who mistakenly assume that the value of keeping secrets is higher than the return from increasing learning and innovation.
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 AT&T’s 3 Foundry innovation centers: http://www.att.com/gen/press-room?pid=2949
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