Productivity is the seeming Holy Grail of real estate/workplace consulting. A never-ending wave of MBAs come crashing through businesses spouting their ability to design real estate standards and strategies that will improve your company’s productivity. Every ounce of these pitches is snake oil. There has never been a study that can effectively link workplace design to actual, real-life productivity over time. In my opinion, there likely never will be.
This should not be a surprising realization to anyone either in the business or in real estate. The two worlds live together by necessity but have never been perfectly aligned. Business productivity is ultimately measured in revenue or profits. While real estate can play a role in this measure, it will always be tenuous at best.
Real Estate is not an optimization function. Every minute of commute is a loss of someone’s productivity and there is no way we can put a corporate office outside everyone’s house. By definition, we cannot optimize real estate location, we can only minimize the downside by where we place it and how many we place. Similarly, Workplace is the art of predicting how people will work best today and into the future. We cannot build all the types and quantities of spaces that might be needed, we can only estimate based on history, activity, or ideals. It is not a matter of optimizing, it’s a matter of making it as good as possible.
Similarly, business needs and productivity measures change continuously while real estate changes in steps. We in real estate can build the most optimal environment today but in five years, it will be aged and the needs of the business will have drifted. Sure, we can try and predict that drift but that means sub-optimizing further today and potentially being wrong with our predicted path.
The closest example you can find of real estate driving “productivity” is in the retail space, which if you squint enough could apply to offices. But even in retail, it is impossible to optimize for each SKU, item, customer demographic, and potential employee. The best we can do is target to maximize revenue and/or profits. This still comes with trade-offs and downsides.