Four Corners of the Main Office – Part 2 | Detail-minded
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For a bank or credit union, the decision to relocate and build a new main office is not taken lightly. While in most situations, the combined wisdom of the C-Suite can be counted upon, the chances anyone on the team has been a part of this process previously is unlikely. And it’s not as if a masterclass on the subject is offered on Lynda.com. (Although we may add these Four Corners’ lessons to the curriculum soon.)
The previous article in our Main Office series, “The Big Picture” addressed the first corner, Begin With The End In Mind. This is about the vision needed by the C-Suite to plan for things like the site for the project, future expansion, contingencies, and other big picture items.
In this article, we’ll speak to more of the detail sides of the move: Space Planning, Environment, and Costs. The other three corners.
Corner 2: Space Planning
When we think of the ideal place for employees to work, it’s easy to be caught up in emotional or technology aspects. But, the functional needs of the workplace must be addressed, first (just like the branch). The best way to approach space planning is to break them down into three components: job function, department needs and organization needs. While not as fun as choosing wall graphics, color combinations, furniture or lighting solutions, it’s the dirty work that must be done.
By breaking down space planning to individual job functions, space needs for each job can be established. For example, what does new space mean for someone in the call center? What does it look like for collections, marketing, and sales? Each job function then can be amassed into department needs. So, in addition to each job requirement, the needs of the department are also included. For example, is there a need to foster collaboration? Furthermore, what about storage and conference rooms? As department needs are quantified and measured then they can stack together like Legos or Tetris (for all you Gen X’ers) to fit the needs of the organization.
Using smaller units, building into departments, and then amassing organizational components too, allows the space planning to be methodical, definitive and, well, ruthless. Ruthless in that the space planners are fanatical about sticking to the needs of the business as guiding principles for amassing space for the short-term, mid-term and long-term needs of the organization.
Corner 3: Environment
Now, onto the fun stuff. If the space plan solidifies the functional components of planning (call it the “left brain”), then the environment is the emotional piece (or “right brain.”).
Of course, few things in life (or main office planning) are simply functional or entirely emotional. When we speak of emotion, we want to address how each departmental environment (materials, selections, furniture and essential branded elements) serves the business. For example, what does the building and space say about the business’s brand? Said differently, what is the message needed to communicate to the community, the employees and the consumers of services through the building and space?
For many, the environment will also address the culture of the business. Is the space somewhere people want to work, spend time and promote the business? Will it help retain staff? And, can it be a key difference in attracting talent that will grow the business?
The aesthetic of the building (inside and out) does matter and matters a great deal. Any in many ways, the aesthetic is what brings the physical space to life. It activates the space and sets the tone for many desired outcomes for the individual worker, collaboration between teams, large meetings, and privacy to get stuff done.
Corner 4: Costs
No plan is complete without a firm grasp of costs. Two key axioms to remember:
Axiom 1: Everything is possible, it only takes money.
Axiom 2: Everything is on the table until budget sits down
But that’s the reality, right? At this point in the process, the selection of the correct partner to plan and implement the facility is crucial. Hopefully that partner doesn’t play games and actually listens. There are two key “Project Delivery Methods” in a partner selection. (We’ll help you debunk those choice in the next article. If you want to get a head start check out this Fox Article. )
The key centers of gravity for the cost of any building are three-fold:
- The Roof
- The Paving
- The Walls
All the other concerns in scoping a main office are secondary to these inputs. This is why the aforementioned ruthless space plan is a key driver to arrive at an accurate square footage. What’s more, stacking the floors efficiently will determine building configuration and materials. Material selections flow from aesthetic choices and will impact the cost of the interiors, work spaces and technology.
In total, the cost estimate cannot sink the titanic and should be based on:
- National Cost Databases – What does the industry tell us?
- Historical Cost Data – What does history tell us?
- Market Pricing – What is the local market telling us?
In Summary
These first 2 posts in our Four Corners of the Main Office series walk a bank or credit union through the planning for the facility. In the construction world, these are all pre-construction activities. A key element of a strong pre-construction team is gathering cost input from the local market to infuse predictability in the project. Pre-construction is where the business case for the project is won or lost. The entire process is about determining what the bank or credit union is willing to spend, and then aligning it with the design and supply chain. Once the plan is in place, it’s time to implement.
Now that you are better armed with the pre-construction process. The next article in this series will debunk “How to Procure” the Design and Construction Services you’ll need.
If you still haven’t read Part 1, then now is the time:
Four Corners of the Main Office – Part 1 | Big Picture
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Opening a new Main Office is once in a generation
Amazon sent shock waves throughout America with a 2017 announcement they’d be opening a second headquarters outside their home base of Seattle. City after city took part in the pitch to incentivize the company to choose their town. The fanfare involved in the search was such that Saturday Night Live spoofed it. Plenty impressive.
While banks and credit unions may not cause a similar hullabaloo when announcing plans for a new main office, it is a very big deal in its own right. The opening of a new main office may happen only once in a generation. In fact, it’s such a rare occurrence that if anyone on the bank or credit union’s team has experience in this, they are likely the exception.
Main Office vs. a Branch opening
Opening a new branch, and justifying that decision, is territory we’ve covered before here and here. The main office, however, is a journey all its own.
The time to plan and implement a facility solution tens of thousands of square feet, involving multiple floors, and technology upgrades, can be daunting. What’s more, decisions on how to optimize your workplace floor plan, to help attract new talent and efficiency can be overwhelming for a C-suite that hasn’t done this before.
That very inexperience leads many financial institutions to develop too much space, or too little. Because businesses are fueled primarily by people (and banking businesses even more so), lack of forecasting an accurate headcount can cause real headaches.
What’s your timeline?
So, what’s truly needed to help guide a team through 6-8 months of planning and 10-12 months building a new main office? Let’s walk through it together in our Main Office series, “The Four Corners of the Main Office.”
Corner 1: Begin with the End in Mind
Sound familiar: Habit #1 from Stephen Covey’s 7 Habits of Highly Successful People states that private victory comes before public victory. What he means is, you must internalize what you offer before you can offer your services to others. What works for humans also works for financial institutions: planning the main office starts with thinking long-term and putting things in the right order.
Most financial institutions will end up with a solution that addresses the next 5 to 10 years, but they must plan for even longer term. What will the business need for the next 10 to 20 years? Is a crystal ball required? It sounds like a lot to ask, but break it down into a few key areas and it’s not quite so daunting.
- Planning for Future Growth – few financial institutions have the ability to build for 20 years, but the next wave is coming, so it must be planned for. Site considerations for expansion are key in this step. (Site Selection article.) The site must have the ability to accommodate future additions, building expansion, and flexibility when growth does occur.
- Planning for Flexibility – even when planning long-term, a built-in contingency plan should be considered. What if a better facility presents itself in the future? If the bank is sold, will the building be liquidated? What if the business has to move? What if the bank or credit union is acquired by someone else? Flexible, long-term solutions provide the business options for the future that maximizes the value of the investments made today.
- Business Case – much of the above is about future possibilities. However, the need for short-to-mid-term solutions are the likely pieces that will be implemented first. So, if first things are first, then the institution has to understand and quantify the business case for the solution. They must say to themselves, “if we grow from here to there, what do we need and how much is it going to cost?”
Now that you understand the first corner, you are probably ready for the other three. This is the first post in a four part series that will roll out over the next few weeks. As you wait, we’ve written other articles about main office in our blog, so check it out.
We also have main office videos of other banks and credit unions who have walked in your shoes.
