A recent trend in the financial services industry has been the acquisition and in-house development of digital businesses. This initiative enables companies to hone their market research and product development capabilities and apply more precise analytics to spur innovation. The return on their investment is a more competitive edge in the marketplace. As a result of this trend, financial services companies are challenged to develop office environments that can support two highly disparate working cultures.
Digital businesses are comfortable in lofty, warehouse-type space. They thrive in organic, collaborative environments that are designed with inherent flexibility to support inspired thinking. Financial services companies are typically developed in traditional, Class A office buildings where interiors programs are bottom line driven and designed under the watchful eye of corporate governance. Theirs are classically subdivided environments intended to accommodate multiple businesses and minimize the necessary structural changes associated with flexibility.
- Financial Services: Generic, uniform, standardized, densified, inflexible
- Digital: Organic, bespoke, eclectic, spacious, flexible
Financial services companies seeking to develop in-house digital businesses need to embrace their niche industry colleagues. They must provide unique environments that foster creative thinking while honoring the more structured work styles, regulatory requirements and culture of their primary business. This is not a straightforward task for senior management or their real estate program managers!
Financial services companies seeking to develop in-house digital businesses need to embrace their niche industry colleagues.
I have met this challenge as a project manager specializing in real estate development for Fortune 500 financial services clients. The "digital lab" was the solution - a non-traditional workspace developed in real estate segregated from the balance of the portfolio, the design of which was significantly influenced by regional leadership in their respective marketplaces. Even with more than 30 years of experience, this was a first for me!
I recently worked with a team of project managers that were charged with delivering several such digital labs in the U.S. for a financial services company with offices around the world. The first challenge faced by the team was to obtain approval to lease space at a premium cost per square foot in fashionable neighborhoods not typically inhabited by established, corporate entities. Naturally, this provided some interesting real estate feasibility discussions at the senior management level, but we made it over the first hurdle and shifted our focus to project development.
The digital lab has many unique architectural features given the intent to creatively inspire its occupants.
Our task was to find architects and designers who were experienced in developing boutique workspaces and whom were also comfortable working with corporate clients. The digital lab has many unique architectural features given the intent to creatively inspire its occupants. "Step-away" spaces designed with specialized materials and finishes; for example, lofts and tree houses, "think pods", and game areas for tabletop sports are standard program elements. Amenity spaces such as fully equipped kitchens and staff lounges are also required to support overnight and weekend hackathon conclaves, networking events, and software testing.
With emphasis on commutation for impromptu collaboration and clearing of the space for events, the FF&E and technology programs had to be flexible and their application a deliberate departure from standards programs. Stand-up type, adjustable table desks on casters with stools for seating and modular sofas that can convert to individual seats or be easily whisked away into storage closets are baseline furniture program components. And when developing a digital lab, don’t look for traditional, localized voice and data network services! Workers in digital labs are not tethered to a specific work area by the cords and cable infrastructure associated with rigid desk configurations. Digital teams use wireless, cellular voice and data services to maximize their flexibility in reorganizing their workspaces.
With emphasis on commutation for impromptu collaboration and clearing of the space for events, the FF&E and technology programs had to be flexible...
Once architectural and engineering resources were identified, senior management had to decide whether or not to retain one team to develop the nationwide program or to retain multiple teams regional to each project. Contrary to standard procedure we were released to retain regional resources. This unusual step ensured that a measure of individuality would be brought to each of the labs by giving lab directors an opportunity to more actively participate in the design process, thus enhancing their recruitment capabilities. Senior management was coming along!
Next step – development of the project budgets and schedules. The eclectic nature of the digital lab design translates to build-out costs that can top out at more than 400% higher than typical interior office fit-outs. One of our labs was built in a building governed by the NYC Landmarks Preservation Commission, with all of its attendant design approval encumbrances and schedule trials. Construction schedules ultimately ran up to four months longer than the schedule templates that our client was accustomed to working with for their strategic planning purposes, and expectations had to be managed accordingly. These were challenging discussions with senior management for this is where the insertion of the digital lab business into the real estate portfolio converts from a concept to a reality! Rigidity had to be pushed aside to make room for unfamiliar, iterative processes.
...our projects were successfully built and the businesses are thriving and growing as intended.
Creative spaces and premium amenities in non-traditional real estate are becoming essential for firms that are looking to develop in-house digital businesses. Though the digital lab program represented a departure from both standard design protocol and traditional budget and schedule benchmarks, our projects were successfully built and the businesses are thriving and growing as intended. With years of experience in the financial services sector and hands-on experience delivering modern workplaces, Faithful+Gould can help clients to strike the balance between tradition and desired innovation in a competitive marketplace.