This past summer, just six months after investors valued WeWork – a New York-based coworking space provider – at $5 billion, the firm’s valuation doubled to $10 billion. The Wall Street Journal put that into perspective:
“At the current valuation, WeWork is larger than all but three publicly traded office landlords, and more than half the size of Boston Properties Inc., the largest by market capitalization with a value of $19 billion.”
WeWork’s success comes in spite of a growing weariness of telecommuting among top managers. Executives from Best Buy to Bank of America to Yahoo have put telecommuting policies under the microscope, reported USA Today.
“Last month, [Yahoo CEO Marissa] Mayer said she would end Yahoo’s work-at-home policy to foster collaboration and innovation by bringing employees physically together,” the article added.
Gretchen Spreitzer, a professor of management at the University of Michigan’s Stephen M. Ross School of Business agrees with Mayer: “So Marissa Mayer was right, in a sense. Without interaction, you’re going to have lower productivity and less collaboration. But I think there’s a happy medium. There are solutions that don’t require everyone to be in the office all the time.”
One solution, concluded Spreitzer – along with her Michigan colleague Lyndon Garrett and Pete Bacevice, a researcher at HLW International LLP – is coworking spaces. Much of their work is done as part of the Center for Positive Organizations at the University of Michigan. The trio found that these employees not only held their own, but thrived in coworking spaces.
They summarized the results of their study in the Harvard Business Review: “As researchers who have, for years, studied how employees thrive, we were surprised to discover that people who belong to [coworking spaces] report levels of thriving that approach an average of 6 on a 7-point scale. This is at least a point higher than the average for employees who do their jobs in regular offices, and something so unheard of that we had to look at the data again.”
They found that three factors accounted for this phenomenon:
- Employees in coworking spaces see their work as meaningful. This wasn’t just because many coworking users are freelancers who care about what they do. Members reported that with little direct competition or internal politics in the workplace, they focused less on fitting in. That lack of competition also meant people were willing to help each other out more, coworking users reported. Members also reported feeling like they, as a coworking community, were a part of a social movement, one that espoused values like “community, collaboration, learning, and sustainability.
- They have more job control. Since most coworking spaces are open around the clock, people make their own hours. They can also choose what kind of environment they want to work in – a quiet space or a boisterous-by-design shared table
- Members feel like they’re part of an intentional community.Culture is key in coworking spaces. Managers of coworking outfits say they try to cultivated unique vibe in each space. Importantly, the writers say socializing isn’t forced upon users: “Members can choose when and how to interact with others. They are more likely to enjoy discussions over coffee in the café because they went to the café for that purpose – and when they want to be left alone elsewhere in the building, they are. And while our research found that some people interact with fellow coworkers much less than others, they still felt a strong sense of identity with the community. We believe this comes from coworkers knowing there is the potential for interactions when they desire or need them.”
So what can conventional offices learn from coworking spaces?
“Our advice to traditional companies who want to learn from coworking spaces is to give people the space and support to be their authentic best selves. The result will be employees who feel more committed to your organization, and are more likely to bring their best energy and ideas to the office each day,” the researchers concluded.