Dear Friends and Colleagues,
Einstein was onto something when he concluded that space and time, rather than separate and unrelated phenomena, are in fact interwoven into a single continuum that spans multiple dimensions. As we, perhaps like you, face our first lease renewal of the post-Covid/Work-From-Home era and strive to balance the competing demands of future plans for growth, present desire for flexibility and a fourteen-year past at our existing premises, never have issues of space and time been more interconnected.
Allow me to explain.
First, a disclaimer. This is the classic case of the shoemaker’s children going barefoot. When called upon to advise our clients on balancing the competing retention and recruitment-related tensions of allowing their teams to work remotely with the need to curate culture, maintain productivity and ensure knowledge transfer, we are confident in our counsel. Yet, when confronted with having to wrestle with our own such issues, we crumble like a cookie; afflicted with an uncharacteristic bout of self-doubt. Understandable, perhaps, given the gravity of a premises lease to a professional services firm such as ours. Though gone are the days of a Personal Guarantee securing the lease, that contract with our landlord remains the single largest liability we own, a-once-every-five-to-ten-year decision where the pressure to get it just right builds with each passing day of its term. A heaviness borne less of trying to time the market and more from feeling the burden of setting up future generations of the firm for success by not tethering them to a bad deal in the wrong space.
Second, some history. We have resided in the same office – unique and beautiful character space in the old Alberta Hotel Building with its exposed brick and sandstone, rich history, and resident ghost – for nearly 14 years.
With our lease set to expire in March, nostalgia and distinctiveness are giving way to more practical considerations of safety (anyone wandered down Stephen Avenue Mall recently?), amenities (landlords are getting wise to the needs of their tenants — if you want people to stop working from home, then make the office feel like home) and economic reality (high vacancy rates continue to place the leverage in the hands of the tenant – but for how long?), and here we are – smack in the middle of our own space-time continuum.
And a multidimensional one, at that. For when you layer in the desire of most of us to work from home, though only some of the time, and not at the same time, and most of us reticent to ‘hotel’ or allow someone to use their office when they’re not around, and most of us not wild about cubicles or open concept, unless everyone is, which everyone isn’t, the owners are left to do the math, consider their options and run in circles. To hear my long-time partner and member of the underwriting syndicate, Ranju Shergill, and me debate this issue is to listen to an old married couple bicker.
Why bother moving out at all? Why would we leave an office we love just to eat the expense of a buildout only to then have a shiny new office sit half empty much of the time?
We don’t even need an office! We can just use the Petroleum Club and coffee shops and Teams.
How can we really call ourselves a ‘firm’ if we don’t have an office?
What about WeWork? WeWork?! How’s that going to work? You just said we don’t even need an office! No, you said that. I did?
Where’s Einstein when you need him? Forget that. Where’s Dr. Phil?
The calculus seems straightforward enough. Stay put, costs go down, and we can continue to offer maximum flexibility. Move out, costs go up, but you’d better darned well be in that shiny new office. There’s a golf simulator! A dog run in the foyer! What’s that? You don’t have a dog?! Well, you’d best get one! That’s why we moved here!!
We think we’ve distilled it down to this: If employees wish to maintain their flexibility and work from home some of the time, okay. After all, doing so hasn’t impacted our bottom line so far and, candidly, the owners like it too. We renew the lease, perhaps on better terms, lobby whomever to do whatever about the safety issues on Stephen Avenue Mall, work with our landlord to encourage some enhanced amenities and stay put.
OR, we move out. We have already commenced the process of touring suitable spaces and there are some great options out there. But the calculus changes. To move out, disrupt the business, buy new stuff, build out new space costs lots of money. The resulting expectation is if employees want new space, they’d best be in it. Once the flexibility piece falls away, math matters less than philosophy and the question becomes: are you willing to forego flexibility in exchange for a mandated return to a much shinier office? Put another way, which do you value more — flexibility or facilities?
Of course, it’s not that simple. That binary. This isn’t an ‘eat your veggies if you want your dessert’ type bargain. We’re talking multi-dimensional here, people. Keep up. If we picture four quadrants with the scenarios in each being:
Or is there a Fifth Dimension? Apparently so, defined as having a “seamless tie between gravity and electromagnetism” perhaps there’s a scenario where the new set up is so irresistibly appealing – so electromagnetic – that no insisting will be needed; the gravitational pull of our incredible new set up will literally suck the team back downtown. In quantum physics, maybe. In reality, unlikely. We’ve toured spaces that look more like LEED Gold Certified frat houses than offices replete with beer taps and table tennis, pinball machines and massage chairs and you know what? The offices are still empty.
Compounding our conundrum is our retention problem. Far from experiencing a turnover challenge, as we see at so many of our national and global competitors, ours is the Hotel California of search firms, except you can neither check out nor ever leave. A consequence of people staying is we’ve grown top heavy, and our senior people have too much talent to do junior-level tasks. To remedy the situation, we resolved at our recent strategic planning retreat to build out the base by hiring more juniors. The best and brightest, expert researchers, digital savants and Gen Z’s who can hold us accountable, add (even more) diversity and hopefully save the planet on weekends. More people means more space, but it also necessitates those senior people to lead by example and be in the office more often. This almost certainly means moving out. Unless we work from home. Well, some of us. But only some of the time. But not the juniors. Unless it’s Friday. Fridays we can all work from home. That much is settled.
You see the challenge.
So? Which do you want? Depends who ‘you’ is. No doubt, employees would love beautiful new space AND the ability to continue to come and go. Owners, though they might like that too, would understandably wish to amortize those new digs by seeing humans in them. And what about clients? And candidates? For those stakeholders WeWork Won’tWork but do the people who pay our bills have a stake? Will those bills go down if our rent does (hint: nope) and why not just use coffee shops, Pete Clubs, and the like? And if so, for how long? Is this just a phase? Or is this it? And if this is it, what does it all mean?!
There was a time when our space defined us. If we couldn’t be the biggest firm in town (we were once, in fact, the smallest) we could compensate by having the coolest office. That’s no longer the case. Nearly 15 years and over 1000 searches in, I dare say if we are relying upon our premises to compensate for our shortcomings, we likely have bigger problems. But while it no longer defines us, it still matters. But what is matter? Einstein says there’s no such thing, that matter is just energy, “whose vibration has been so lowered as to be perceptible to the senses.”
Right again! Perception matters. And in a city whose tagline is Be Part of the Energy, we need that too. And we may just get energized by a move. A new building in a new neighbourhood, with room for growth and a new era for the firm. One that energizes and inspires the team, feeds our culture, and benefits our clients. Nostalgia and history will only take you so far; sometimes a change of scenery is the best move to get the most out of a team. Just ask the Calgary Flames.
Yes, Einstein, was right. Space and time, rather than separate and unrelated phenomena, are in fact interwoven into a single continuum that spans multiple dimensions. And we’re just trying to understand the universe of options before us.
Regards,
Adam
