Our economic system is ready for a ‘hard system reset’ or even a ‘restore to factory default’ because only a ‘refresh’ is not enough. If the saw has become dull, do not cut through with even more effort, but insert a stop and sharpen the saw or buy a completely new saw. As an entrepreneur, you are part of the economic system and you are faced with the same dilemma. Adapting and modifying existing methods or reinventing yourself with products and services that meet the needs of the new economic reality.
However, this is easier said than done because there are painful choices involved. Do you stick to building horse carriages while cars are already rolling off the assembly line? Are you increasing the rates/prices to absorb the declining turnover or are you looking for cost reductions? However, both financial adjustments are not a structural solution. Sooner or later, a more fundamental adjustment to the changed economic reality will have to take place. Popular wisdom says that it is best to repair your roof when the sun is shining. While there are still financial reserves, use them to develop a new strategy and then regroup the troops.
Accommodation should be in alignment with the business strategy of the occupant, but it is also supportive and facilitating. From a benefits perspective, the learn/work environment can be one of the catalysts to initiate and sustain the necessary change. Group people differently so that there is more and different collaboration. Providing the sense of togetherness to put the shoulders to the wheel to get the job done.
To show the market and society that you are moving with the times and what you stand for as an organisation. Communicating the organisation as a brand through the learn/work environment, as in the case of shops the retail formula is clearly given shape in the physical retail building. Accommodation is basically a 3-dimensional billboard.
From the cost side, there is always an ounce or even a few kilos too much fat on the accommodation. There is therefore nothing wrong with organisational downsizing, in order to optimise costs. However, I am concerned that slimming gradually turns into weight loss and then anorexia. You will not find out until you have passed the tipping point. Slimming down should therefore take place from a better alignment with the (new) organisational policy instead of ‘only’ cost reduction. For social real estate, costs and fees must be market-compliant to keep third-party ownership and rent comparable, but their aim is merely not to generate a financial return. The social purpose and return should always prevail.
Can money saved on accommodation be used in the primary process? How serving is or can accommodation be to the primary process; to facilitate the people who work there? Because occupancy costs are on average ‘only’ 8-12% of the annual budget, while personnel costs easily make up about 70-80% of the annual budget. It is people who make the organisation and keep it alive and competitive, accommodation is like clothing. Dress to inspire your employees and your market.