WHY BUSINESS LEADERS ARE CRYING OUT FOR A 4TH OFFICE

WHY BUSINESS LEADERS ARE CRYING OUT FOR A 4TH OFFICE Fast-growth businesses say they want to build the next generation of amazing companies by embracing flexible working. But are they too busy worrying about losing culture and control?

WE KNOW YOU’RE BUSY... GOT 5 MINUTES? Read pages 4 & 10

GOT 10 MINUTES? Read pages 4-10

GOT 15 MINUTES? Read this back to back

TECH STARTUP? Read what Scanomat has to say on page 12

FAST-GROWTH CREATIVE AGENCY? Read what Earnest has to say on page 15

Find out how to bring your team together | 4thoffice.com

2

THIS IS WHAT BUSINESS LEADERS LIKE YOU THINK ABOUT REMOTE WORKING...

CHRIS BAGNALL MD & founder, Pulse

Trying to attract young people who are influenced to work for cool companies with a reputable culture and great perks can be a massive challenge for people like me trying to get talented people to take a leap of faith and join smaller, less established companies.

DAMIAN KIMMELMAN Founder & CEO, Duedil Working from home, or other locations, is driven from employers as much as employees. Offices are really expensive, if you can build trust with your employees you can reduce costs while offering freedom. It’s a win-win situation.

DAVE ERASMUS Founder, Givey I hate email as it turns you into a responsive person rather than a productive person – there’s something really wrong with that system.

PHIL LEDGER MD, Ledger Bennett DGA I think satellite working is great for diversification. The ideal scenario for me would be a strong core culture that’s stretched across diverse people and diverse environments to shape and moderninse the business. For me, it’s all about enriching diversity – keeping our core without going stale.

SARAH PETTINGER MD, Omobono We’ve got a very strong culture. I think the big challenge is maintaining that culture as we grow and our team becomes more spread across offices and remote locations.


3

The proliferation of devices and ubiquitous connectivity means we’re working in a world where remote working is easier and more effective than ever before. Gemma Huckle, head of content at Rooster Punk investigates the office of the future…

or forward-thinking businesses today, the notion of going to work doesn’t translate to physically being in the office. Advances in technology and innovative working practices are helping to liberate the workforce from the traditional cage of the 9-to-5 week. We are experiencing a new movement that’s far away from the outmoded concept of ‘work’, where collaboration is now king to getting things done irrespective of whether staff work from the office, home or a coffee shop. This pace of change is certainly getting harder to escape as customers, employees and stakeholders demand access to information and tools at the touch of a button. In the UK alone there is an estimated 34 million smartphone users, and by 2016 this is projected to reach 42 million. And laws around flexible working are now reflecting this new model. On 30 June 2014, the Government rubber stamped the right to flexible working for all employees who have been with their company for 26 weeks, meaning any employee can now submit a request to their employer to change their working patterns without explaining why they need to. But this change isn’t just driven by employees wanting to juggle life responsibilities alongside their careers, it’s also being backed by employers looking to create the next generation of attractive and flexible companies where everybody doesn’t need to be in the same room to work together. As well as catching the attention of top talent, leaders of small companies – startups in particular – recognise the cost benefits of having a small core workforce, together with a satellite team to enable growth without expanding brick-and-mortar offices. This growing trend is highlighted from the success of Oyster card-style desk rental space company NearDesk, who secured funding on crowdfunding site Seedrs. Citrix also predicts organisations will reduce their physical workspace by almost a fifth by the end of 2020. But leaders continue to worry about the impact flexible working could have on company culture and control. With this is mind we partnered with the 4th Office, an agile cloud workspace, to explore how progressive companies are adopting new ways of working. Our research, conducted with 100 leaders of small UK tech startups and creative agencies, uncovered some fascinating insight into this new working movement.

4thoffice.com

4

97%

Email 71%

Mobile phone 62%

Video conferencing

Most used collaboration tools 58% Question: Which of the following tools do you regularly use to communicate/collaborate with your virtual team?

Online office suite

55%

Instant messenger

(Please select all that apply)

48% Shared calendar/project plans 45%

Enterprise social network

42%

Landline phone

35%

Social networking sites 25%

Online forums 3% Other

A FLEXIBLE LANDSCAPE As a starting point, we sought to find out if email use is starting to wane 43 years after the first email was sent. Unsurprisingly, the survey revealed email is still the dominant tool respondents rely on day-to-day; something Chris Bagnall, MD of B2B content agency, Pulse, identifies with: “I don’t think we’ll ever get rid of email. People are slaves to it, including myself – it’s my to-do list.” But what the survey doesn’t tell us is that some startups loathe email and are actively trying to lessen their reliance on this channel for internal communications. Dave Erasmus, founder of donation platform, Givey, says he’s using email out of necessity for clients rather than out of choice: “I hate email because it turns you into a responsive person rather than a productive person. There’s something really wrong with working with that system.”

“I hate email because it turns you into a responsive person rather than a productive person. There’s something really wrong with working with that system.” Dave Erasmus, founder, Givey

4thoffice.com

5

It’s encouraging to see more mobile tools and technologies being embraced, suggesting that remote working is being more widely supported and enabled to bring virtual and office-based employees together. Over 70 per cent of respondents reported frequently using mobile phones, followed by video conferencing tools (such as Skype) at 62 per cent, with online office suites, such as Google Drive, being used by 58 per cent, and instant messaging software being used by a similar number. It’s also apparent that the culture of ‘presenteeism’ – where employees are glued to their desks for prolonged periods – is dispersing, with a quarter of respondents claiming their whole team works remotely either full or part time. This figure is a reflection of the fast-growing startup landscape, where an increasing number are adopting remote working to keep overhead costs down when cash flow has to be pushed elsewhere.

“For me, the future of flexible working will be all about enriching diversity – keeping our core without going stale.” Phil Ledger, MD, Ledger Bennett DGA

This finding was also strongly backed by 87 per cent of leaders who agreed or strongly agreed that ‘everyone doesn’t need to be together all the time to work together’. Maybe this figure is so high because they believe tech is now advanced enough to make fragmented teams feel like they’re in the same room. It’s notable too that 67 per cent of respondents believe virtual team working has improved their organisation’s competitiveness in the market. For Simon Bracken, MD of Scanomat, remote working has given his business the edge over competitors when it comes to talent, as he cites the lean and nimble nature of his company structure attracts the brightest employees. And many small businesses are taking advantage of the shifts in culture and technology to create a core team with a larger network of remote contributors, enabling growth without committing to extra overhead costs. Phil Ledger, MD of demand generation agency Ledger Bennett DGA, has high hopes of creating this satellite working model for his agency in the near future: “I think flexible working is great for diversification. The ideal set-up would be a strong core culture that’s stretched across a diverse set of people in diverse environments helping to shape and modernise the business. For me, our future will be all about enriching diversity – keeping our core without going stale.”

4thoffice.com

6

A PERIOD OF RE-EVALUATION Nearly half of leaders said they are becoming increasingly frustrated with the traditional ways of working, a similar percentage also indicated they frequently think: ‘There’s got to be better ways of working’. Both these statistics highlight a significant number of businesses are re-evaluating how they work, and how they can do things differently to improve efficiency. On the other hand, many have eradicated these frustrations by dropping most conventional work tools, instead allowing new technologies to dominate day-today. George Christoforakis, founder of iOS dating app Rendeevoo, says he doesn’t dictate what tools his team must use as he likes to give them choice. Further to this, he explained that his team likes to use a Whatsapp group where everyone can have informal discussions and do their homework before fleshing things out face-to-face and loading projects formally on to Basecamp. Christoforakis thinks embracing the newest tools empowers staff to unleash their talent by giving them freedom to communicate with each other anywhere, anytime. Tapping into a larger talent pool is clearly one of the biggest drivers motivating leaders to adopt flexible working practices in their organisations. Forty-one per cent said a flexible working model had evolved naturally for them, unsurprisingly a third attributed working remotely to a ‘cost reduction strategy’ as many startup ventures need to cut the expensive cost of office space, and a quarter said they wanted to facilitate more flexible working for employees.

4thoffice.com

7

Top challenges of managing a virtual team

39%

Difficulty leading teams remotely

36%

Managing information overload

24%

Getting everyone to use the same systems/practices

21%

Technical/cost issues

20%

Difficulty managing team productivity

18%

Security of information

Other

No problems managing a virtual team

16% 14%

Question: Please select which of the following are the primary challenges of managing a virtual team. (Please select up to three)

CHALLENGES So on the whole it’s good news for flexible working, but it’s also evident that many leaders feel more structure is needed for flexibility to work in the long term, with 90 per cent of leaders saying their operating environment has changed in the last three years (Vodafone UK). Two thirds of respondents said it’s crucial to set clear goals for remote working to be successful. Choosing the right team members took second place with 48 per cent, followed by creating a clear sense of ownership of projects and goals (42 per cent), getting team members to meet each other face-to-face at least once (39 per cent), and having the right tools in place (29 per cent). These selections are all very much clearly related to one another. That they were cited as the main contributors to productive remote working shows that leaders are acutely aware of the processes they need to put in place to reap the benefits flexibility can offer them.

4thoffice.com

8

In terms of the biggest challenges that come with managing a virtual team, difficulties with remote leadership was attributed as the biggest (39 per cent). Whether this is an issue around it being tough to motivate teams from a distance or one surrounding trust, it’s hard to ignore the fact that virtual working takes staff out of leadership and business conversations as they happen, often getting told things at a later stage. Other barriers included managing information overload (36 per cent), and ‘getting everyone to use the same systems and practices’ (24 per cent). An open answer field to this question was a lot more revealing, with example responses including: ‘Ensuring teams feel part of the bigger picture to unify our vision’, and ‘Having the right balance of communication and control without feeling I’m spying on people.’ Giving employees freedom and trust is instrumental to retaining the smartest individuals that need a strong sense of responsibility and purpose. This view is echoed by Surrey-based Erasmus of Givey: “I give my team in Newcastle distance as well as lots of freedom to do their job. I try my best to avoid micromanaging them as I’d rather put my energy into aligning my vision for the company with the of leaders cited diffculties with remote leadership as their team so we’re working towards the same goal. biggest challenge If you’ve got a strong vision, alignment and when managing a virtual team talented people, you can forgo structure.”

39%

Tellingly, nearly half of respondents displayed little concern when it came to information and data security with their increasing use of cloud storage apps – this may be because many of companies profiled consider themselves early adopters. But some say those who do have concerns around this issue are using it as an excuse to delay working in the cloud. There could be ramifications for those not working on a system that creates a record of work, as Ledger of Ledger Bennett believes having a lack of consolidation and multiple accounts across numerous apps is a problem waiting to happen. But these barriers are easily overcome for many forwardthinking businesses, with over 60 per cent claiming they either have no issues rolling out a new system or that they only experience minor hurdles with roll out.

4thoffice.com

9

THE 4TH OFFICE It’s clear from the research that leaders are looking for smarter ways of working, and that they don’t want to restrict flexibility and mobility in their organisations, yet they are also yearning for structure to oversee operations and keep their businesses growing rapidly. These conflicting requirements mean leaders are struggling to know where to turn to meet their needs. Further to this, over a third of respondents expressed the desire for one online space where everyone can connect, share and create a record of work. Work has shifted from the traditional office, to the home office and the coffee shop, but the new space on the tip of everyone’s tongue is being coined as ‘the 4th Office’. This agile cloud workspace is a dynamic online work hub that all progressive ‘The most important innovations leaders will want their employees to use don’t just come in the guise of to collaborate. technology, but in embracing better working practices.’ According to the CBI/KPMG infrastructure survey, over half of business leaders employing fewer than 50 people stated that digital infrastructure has a significant impact on their investment decisions, as smaller firms need strong digital links to reach customers in the absence of extensive operational networks and premises. And in these tough economic times, forward-thinking business realise the most important innovations don’t just come in the guise of technology, but in embracing better working practices. If they can do that, their organisations will not only become attractive places to work for tomorrow’s talent; they will become more efficient and valuable to their customers.

4thoffice.com

10

THE GLUE THAT BINDS YOUR ENTIRE COMPANY My Desk Imagine email without all the spam and distraction. Every conversation you have in the 4th Office is recorded and organised by the work you are doing, so you can find what you need at lightening speed.

My Office

My Apps

Create projects and get the people you need to complete the tasks you assign to them in a calm, focused environment.

It combines the best of apps like Dropbox or Google Drive, but all your files are brought together in one place to help unleash productivity. What’s more, storage is unlimited.

What is it?

The 4th Office is a huge breakthrough in making the idea of remote working, less remote. It’s an agile cloud workspace where every single member of your team comes together every day, wherever they are – in your normal place of work, at home or in a coffee shop. Think of it as the organising glue that creates a useful and sticky connection between your entire team, the work you do and all the files, documents and IP that form the backbone of your company. It combines and integrates the best of: 1: Collaboration tools like email, newsfeeds and messenger – all wrapped up into ‘My Desk’ 2: Task and project management, productivity apps and to do lists – all neatly organised in ‘My Office’ 3: Document and file sharing – seamlessly integrated into ‘My Apps’ To find out more, go to 4thoffice.com

4thoffice.com

11

BUSINESS CHALLENGER VIEWPOINT:

SIMON BRACKEN Remote working is the most liberating experience

SIMON BRACKEN Co-founder & managing director, Scanomat

Did you know? With the 4th Office, you have the flexibility to upscale or downscale your business as you need

We don’t have an office at all as it went out of necessity three years ago when we found ourselves becoming a really efficient business without it. For us, an office is a distraction that takes us away from our customers. We aren’t tied to an infrastructure, we’re very nimble, and for us that works. We’re investing in mobile technology so we can provide adaptability to keep us efficient – once you’ve invested in mobile tech the ongoing costs aren’t too bad, so that means we can transfer overhead costs into customer engagement programmes, which is good for business. When it comes to offering my employees flexibility and freedom, my view is the modern way of working doesn’t involve clocking in and out – I don’t check up on anyone as it’s obvious how hard they work by the outputs they produce. On the other hand, there are challenges that come along with freedom. As a remote team you all have to make more effort to communicate and support one another to all be on the same page. I also think the bigger we get, the harder it will become to manage a remote team but I’m sure it will evolve naturally for us as we’ve grown into this way of working. For those considering adopting more flexibility I’d say you’ve got to believe in agile working – we get more from our employees, and our customers love that we’re lean and nimble. The way I see it is bright talent is already coming to my company – we’re ahead of those only just beginning to embrace this way of working. It’s the braver companies adopting flexibility that will stay ahead of the game.


12


SARAH PETTINGER Good tech means working smarter, not harder

SARAH PETTINGER Managing director, Omobono

Did you know? The 4th Office acts as the organising glue that binds your team together wherever they are

As a business we are now questioning how we work. Email is still core for us but it’s got to the stage where it’s overwhelming, so we’re trying to reduce our usage of it internally. We are constantly looking at how we can do things differently to cope with client demand and reduce the pressures everyone faces dealing with multiple tools and channels. Over the years, we’ve had to offer our staff more flexibility to fit their differing circumstances. It makes you stop and think about how we work, and how we can change as a business to facilitate more versatility. I think the more you can give your employees the choice of flexible working, the better. Nowadays it’s important to allow your staff to work from home when they need to, in return you’ll get a lot of employee loyalty. Even though we have a very strong culture at Omobono, I think the challenge for us in the future will be maintaining our culture as we grow and our team spreads across multiple offices and remote locations. I still believe coming together is really important in the creative industry where you need to bounce ideas around. The challenge of getting everyone together can be detrimental to business but a good collaboration platform can help when it’s not possible for everyone to meet. There is also the pressure for everyone to be online all the time in our always-on world, and it’s challenging to find the right balance of flexible working that doesn’t intrude on people’s personal lives. For me, it’s about making the most out of technology so we work smarter, not harder.


13


DAMIAN KIMMELMAN Transparency engineers better business decisions

DAMIAN KIMMELMAN Founder & CEO, Duedil

Did you know? The 4th Office provides the perfect helicopter view for leaders wanting to find out what’s happening in their business without having to be in the office

We started the company with a work-from-home policy, and this really works for us so I don’t need to be sold the virtues of flexible working. But with liberal culture comes responsibility, and selecting the right people to hire is crucial as it’s a tough balance to strike flexibility and structure. It’s true that you can’t hire impressive people and not give them freedom – they get bored easily. We coach our staff to give them a trajectory for their careers to grow and educate them. Lots of organisations put up the guard rails when it comes to flexible working, but I would say use your best judgement and decide what works for your culture and team. The only things people get disgruntled by are lack of transparency or illogical bullshit – if you can avoid these then you’ll eradicate a lot of frustration that exists in so many businesses. At the same time for freedom to work everyone needs to be respectful of everyone else – don’t rock up to a meeting late or fail to deliver against a deadline, it hurts the team. Over time, I think our business will evolve into a more professional structure, but that doesn’t mean it has to get more boring. I’m trying to build a company culture based on being informed on all decisions to reduce politics and engineer better business decisions.


14


CHRIS WILSON Structure is needed to deal with growing pains

CHRIS WILSON Managing director, Earnest

Did you know? In the 4th Office, you can enjoy unlimited cloud storage that’s secure

New technology has shown me what’s possible when it comes to flexible working. It means I can go off and hide where people can’t bother me so I can get more done. When it comes to Earnest, flexibility is more challenging as we’ve created a really good culture and I want my team to have lots of face time to really soak it all up – osmosis is what it’s all about. If we started getting employees that didn’t want to come into the office, we’d be doing things wrong. I want people to come to the office as ideas are born from interaction. It’s a cultural thing in the creative world to come together, but flexible working from time-to-time is available for trusted staff. I recognise that as we’ve grown our biggest challenge has been to maintain culture – believe me, it’s more time consuming to hang onto your culture. As we get bigger and the business matures, we’ll have to add more structure to manage the growing pains. Many businesses are worried about storing their files on cloud-based apps but it’s a fallacy that people can hack into systems and leak data. I also think there’s a perception problem about security issues, but this huge irrationality about an insecure cloud will disappear with that generation. I hope that in the future we can all adopt more video conferencing technology as I’d love to get clients together anywhere in the world to share and collaborate using interactive tools.


15

About the 4th Office Challenger Series

The Challenger Series is designed to help fast-growth businesses in the creative and technology sectors find better ways of working. Researched independently, the series provides you with fresh insight into the world of work, and what it means for today’s forward-thinking companies.

Methodology

The survey results in this report are based on 110 online and phone interviews with leaders of small UK tech startups and creative agencies. Interviews were designed, conducted and analysed by Rooster Punk in July 2014.

Disclaimer: Respondents to the survey are not necessarily customers of the 4th Office. © November 2014, 4th Office