Why the Corporate World is Embracing Coworking

by OrtusClub on 26th October 2017

Millennials, Innovation and the IFRS

Coworking spaces used to be dominated by young college grads working for early stage startups. Now, as some our guests at the Kaia dinner in Singapore mentioned, larger companies and multinationals are jumping in on this trend. Why? More companies are starting to see the benefits in terms of expenses, corporate culture and work-life balance, as we explain below. Overall, coworking can make a company more flexible and improves its employer value proposition. 

coworking

1. Goodbye Landlord

With low or zero fixed costs, using coworking makes it extremely easy to scale up an office as companies grow. It allows affordable flexibility–whether for temporary staff in a project, business travellers in a new city or workers trapped by traffic in a neighbourhood in Manila. The basic purpose coworking spaces served to entrepreneurs apply to most other companies. It’s cheaper than getting a new office and doesn’t lock you in into a 2-year contract. With IFRS 16 coming into effect in 2019, joining a coworking hub might even have positive impact on your balance sheets.

 

2. It’s always millennials.

Millennials need to work somewhere with a pingpong table. But actually, besides being a trendy topic, coworking has a strong psychological rationale. The social structure of a coworking space gives both a sense of community and collaboration while maintaining a sense of individual autonomy. The fluidity of people at a coworking space makes your duties as an employee one of the few constants. In addition, the physical design—roundtables and open spaces—lends itself to more freedom in the style of work, which can boost productivity. Moreover, the space encourages a flatter hierarchy, encouraging communication and innovation, especially with younger employees. All of this lessens the struggle for work-life balance without requiring extra time away from the office, and brings an overall improvement to corporate culture. 

coworking

3. Networking

Companies might want to be careful with this one, but coworking can be useful in terms of connections. The drawback is obvious. The public nature of coworking poses a risk for confidential information. The providers of these spaces must do more to address this issue. For example, coworking companies could limit membership to their spaces in order to prevent conflicts of interest amongst clients. Dealing with networking requires prudence, but if done correctly it can boost business development.

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OrtusClubWhy the Corporate World is Embracing Coworking

Ortus Round Table: Green Building and Creating the Office Space of the Future

by OrtusClub on 25th October 2017

Is there a future to green building in the Philippines?

Over the past decades, green building have evolved from a niche, high-cost market to achieving a mainstream status around the world. Singapore continues to push its Garden City vision and the Taipei 101 skyscraper became the tallest to achieve LEED platinum certification. Demand for green buildings is growing in the Philippines too, especially in places like Makati and BGC. But is the Philippines keeping up with the rest of the world in terms of the eco-friendly construction?

Guests from a variety of sectors discussed this matter at the recent Tera Dinner, hosted in the Terraz Restaurant in Manila. While there was unanimous support for green construction as a long-term goal, attendees clashed on whether the situation in the Philippines was favourable to immediate action. Government policy, employee expectations, and general affordability of eco-friendly construction were some of the issues guests debated.

Tera dinner - green building

The Greenish Building Code

The Philippines Green Building Code, approved in 2015, was a big, necessary step. However, the code merely states the requirements to be classified as a green building. There is no accompanying legislation that enforces it or even specify how it should be implemented. Instead, each municipality implements the code base based on their local legislation and own interpretation.  This means developers need to deal with over 10 codes in just Metro Manila.

For eco-friendly construction to happen at a mass scale in the Philippines, change needs to come from the top. To begin with, this means a unified code for the whole country. Environmental standards and regulations, as well as government incentives, are crucial to trigger a green movement. Even in the greenest cities in the world, where eco-friendliness is now embedded in customers’ mindsets, it all started with a big legislative push.

Who cares about green building?

With limited governmental support to this initiative, what is driving the trend of green construction in Manila? According to many guests, it’s the employer value proposition. With low employee retention in the BTO sector, companies must offer quality work spaces to attract workers. Everyone agreed on that. But is quality the same as eco-friendliness? Not always.

One guest recalled how her company had to go through a journey, as she described it, to understand the importance of a green office. Her company came to realise that it was key to having an “energising environment.” The company initially focused on other aspects of office quality such as parking, location and office size. But being in an eco-friendly building was the tipping point. The green spaces were invigorating and employees felt proud of their company.

Perhaps not all aspects of green construction help in terms of employee attrition. But to a great extent, a green environment can improve workers’ productivity and quality of life.

Tera dinner - green building

Does Green Pay Off?

The benefits on employee satisfaction are unquantifiable. We can’t correlate how a single aspect of office quality affects employee retention. So are there any measurable benefits of eco-friendly construction? Without a tangible return to eco-friendly features, investors find it hard to support this movement.

The cost benefit analysis of green building is contentious. The US Green Building Council claims that “owners of green buildings reported that their ROI improved by 19.2% on average for existing building green projects.” The figure for new projects was lower but still significant at 9.9%. However, this increase in ROI, driven by long-term savings on water and electricity bills, varies across industries and geographies.

Some guests pointed out the benefits of CSR spending. The evidence on this too is mixed. Some claim that CSR has inherent value for a company, even if it is hard to measure. Others find the effects of CSR to be sector-specific and generally not rewarded by markets. In either case, the Philippines has potential to differentiate itself through eco-friendly construction. Foreign BTO clients, for different reasons, often do have environmental concerns as part of their CSR standards.

Whether it’s employees, investors or regulators who are driving green construction in the Philippines, the green movement needs to step it up. The various drivers of eco-friendly building we discussed are not enough to address the long-term need. Green construction needs to become feasible and individually attractive at a mass scale. Improving technology will help, but we need changes in policy and a shift in attitude and behaviour.

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Ortus Round Table: Reassessing Financial Leadership in Light of Global Trends

by Arian Espiridion on 16th October 2017

Traditionally seen as back office accountants, CFOs are making a leap to get involved in business growth and strategic decisions. But has this observed trend been driven by necessity? Guests at the Kaia dinner acknowledged the increasing presence of technology in the finance function and the risk to jobs that it entails. The consensus, however, was that automation of the auditing role should not be perceived merely as a threat. Rather, with the correct capabilities CFOs should be able to embrace this technological change.

 

Changing focus 

CFOs have started to assume bigger roles in their companies for more than a decade—not just a few years—as many attendees pointed out. While much of the current discussion focuses on automation, this trend started with the need for cost-cutting. Anecdotal evidence of this included attendees’ roles in responding to crises around the regionCurrently, many companies manage data centres around the globe which allow regional offices to pass on auditing to more cost-effective units and focus on higher value generating activities.

“If you are spending more than 50% of the time on audit, you need to delegate that to teams that are better able to handle it and focus on making the business grow”

 

The CFO will go the same way as the dodo

This trend, initially driven by global pressure on cost-cutting, has been accentuated by digitalisation. Attendees mentioned that for a few years now technology has increasingly been incorporated into financial analysis. For example, machine learning is allowing automated analysis of customer behaviour using data on accounts receivable. This makes predictive technology for transactions closer to becoming a reality. For many CFOs this isn’t a direct threat. Automation might replace some jobs in an organisation, making their roles as leaders more important.

Paradoxically, automation will increase the importance of the role of the CFO in human resources management. Some attendees made a parallel with the pressure Singapore faces with outsourcing. An attendee emphasised the need for balance between cost-cutting and creating opportunities for Singaporean employees. Cost-cutting and replacing Singaporean workers alone is a short term solution. Skilling employees and broadening their responsibilities, instead, increases a company’s competencies and future profitability.

For automation to be a sustainable tool in finance, its leaders and employees must be able generate comprehensible business insights from all the data. This will increasingly require critical thinking and problem solving skills, rather than technical knowledge.

 

Big Data

Big data in accounting epitomises the need for such skills. Using data to address the necessities of the organisation requires a generalist mindset. This will make collaboration across the C-suite and amongst different business functions crucial.

For example, the data gathered by the finance function will be vital for marketing decisions, such as pricing, product development and client relations. Predictive technologies could be vital for operations too. Amazon, for example, is developing a predictive shipping service. Speakers pointed out that dependence on data will increase exposure to risk. Cybersecurity will become central to all strategic decisions as data becomes a growingly valuable and risky asset. Addressing this threat requires C-level collaboration too.

“You’ll have so much data that you will need more collaboration to make decisions”

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Arian EspiridionOrtus Round Table: Reassessing Financial Leadership in Light of Global Trends

Ortus Round Table: The Future of Customer Experience in Singapore

by Arian Espiridion on 16th October 2017

Omnichannel, big data, machine learning, IoT. A lot of buzzwords are coming into the world of marketing, promising to revolutionise customer experience. Businesses gather more data from customers than ever before. Technology allows iterative interactions between companies and their clients making co-creation possible at a mass scale. Despite the huge potential, many organisations are struggling to obtain tangible results.

At the recent CX dinner in Singapore we discussed how business are exploiting data to optimise their delivery of products and create unique customer experiences. An overwhelming majority of attendees had already started to consider integrating data analytics into their marketing teams. However, the discussion revealed how this is still uncharted territory, and that the required responses to this trend will vary across industries. 

 

Customer loyalty is dead. Sometimes.

There was no consensus in the CX dinner on whether brand loyalty remains a significant driver of consumer behaviour. Tech companies predominantly argued that rewards programmes are inefficient ways of achieving growth. Others, however, claimed that their businesses thrived due to returning customers. Overall, the verdict seems to be sector-dependent.

Take ride-hailing apps for example. Given a limited supply of drivers, companies are better off allocating the available drivers to new customers than old, loyal ones. Getting a customer to have a positive first-time experience translates into continued demand. Moreover, new users are intrinsically valuable because of the data they provide. Companies that are able to monetise this data should focus on building a mass database and educating consumers about their platforms, rather than focus on customer loyalty.

On the other side, companies with direct personal interaction with clients still found customer loyalty to be a significant part of their businesses. Hotels, clothing stores, and restaurants, for example. This is probably driven by the psychological forces of face-to-face interaction.

There’s lessons to learn from about customers loyalty from both the “old” and “new” industries. Data acquisition is important, and focusing on the existing client base might not yield the benefits of big data. But people still feel more comfortable with repeated social interactions.

 

Privacy in the 21st Century?

Privacy concerns were once a barrier for companies wanting to customise customer experience. Some years ago, as guests recalled, people rushed to delete the Facebook Messenger app from their phones over privacy concerns. But what has happened since? Everyone is using it again. Facebook won its users’ trust by using personal data in a non-intrusive way to deliver a superior product with a customised experience.

While privacy concerns have always been less prevalent amongst millennials, consumers from all generations are becoming more trusting. According to both polls and anecdotal evidence from guests, people are becoming more willing to share information as they recognise the benefits of allowing advertisers to use their data in the right way. Customers give extra personal information to insurance companies in return of a small discount, for example. Fears over spam and unsolicited phone calls are fading as people begin to see a tangible effect of sharing data.

What does this mean for Heads of Customer Experience? It means that customers want and expect their data to be used to customise their experience. But it only takes one company to misuse the data to create a backlash in terms of privacy concerns. This puts a great deal of responsibility on delivering an improved customer experience. Customers are expecting a more personalised treatment from companies, so companies that continue to use data inefficiently (spamming for example) are bound to fail.

An Ecosystem for Big Data

Should pioneers of the sharing economy become insurers? Or should Target be my doctor? A few companies excel in gathering data, many times to a level beyond what they should handle. Target was allegedly able to detect a teen was pregnant before her parents knew about it. Some companies would like to expand into all sectors, but eventually they’re going to hit diseconomies of scale. Not all the data companies gather contributes to their core strategies.

How can we connect data with companies that can truly exploit it? Guests at the CX dinner emphasised the need for improved data marketplaces and data ecosystems. A marketplace could in theory result in the most efficient way of allocating data. As mentioned, however, companies must be cautious with their use of clients’ personal information. A way to get around potential data breaches could be to create a secure ecosystems around data, as a guest phrased it. This would involve data sharing among organisations, perhaps through long-term alliances. The key is to prevent anonymous or strictly arm’s length transactions that might cause customers to become reluctant to share their data. After all, businesses and customers want the same thing: to personalise experiences according to customers varying needs.

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Arian EspiridionOrtus Round Table: The Future of Customer Experience in Singapore