How Virtual Offices are Transforming the 21st Century Workplace
Listen to Episode 140:
Episode 140 Transcript:
This episode is brought to you by Business Advancement Incorporated, enabling successful leaders and companies to accelerate to their next level of success, on the web at businessadvance.com. Now, here’s Pam and Scott.
Pam Harper: Thanks Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated, and right across from me, as always, is my business partner and husband, Scott Harper. Hi Scott.
Scott Harper: Hi there Pam. It’s great to join you again for another episode of Growth Igniters Radio, and as always, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders to accelerate themselves and their companies to their next level of game-changing innovation, growth, and success. Now Pam, we talk a lot about how the business environment is rapidly evolving and how this affects companies of every size and every industry. It seems like nothing stays put for very long. And it’s never been more important because of this to stay alert to signals for emerging opportunities.
Pam Harper: That’s right. Among the many trends we’re watching is the evolution of the very nature of how companies get work done. Now, our experience is that more companies of every size are relying upon the virtual workforce to accomplish significant work. While sometimes this is due to challenges in finding talent, even more, this is because agile work models enable a company to stay more responsive to the business environment of the 21st century. Important for us in the evolution of work is the evolving flexible workplace industry, including what has become known as the virtual office movement.
Pam Harper: While the concept of the virtual office is not new, it has significantly evolved. With the rise of virtual work, it is one of the forces that’s transforming the workplace and therefore a source of new opportunities.
Scott Harper: Right.
Pam Harper: That’s why we’re pleased to be speaking with one of the visionary leaders of the virtual office movement. He is Frank Cottle, CEO of Alliance Virtual Offices, and chairman of the Alliance Business Centers Network. He is a recognized expert on flexible working, the virtual office movement, and third place working. Prior to creating the Alliance brand, Frank successfully operated his own portfolio of business centers in multiple locations across North America. Frank, welcome to Growth Igniters Radio.
Frank Cottle: Well thank you very much, Pam.
Pam Harper: Tell us a bit about yourself and your own leadership journey. How did you, in fact, why did you start Alliance Virtual Offices?
Frank Cottle: Well, that journey started a long time ago. As possible you can tell in my voice, I’m probably not considered a Millennial. I started my career very early in the late ’60s really as a commercial diver.
Pam Harper: A diver?
Frank Cottle: I was working for a company, and we had a contract with one of our US Government’s federal alphabet agencies as they’re referred to, and I did what was commonly referred to as “interesting work” for a few years. That got me going, it got me thinking and got me to be quite an independent person. I’ve always been very entrepreneurial, and so I started a diving company. When I got married, my wife and I made a decision that interesting work wasn’t good odds, so I left that and started doing an additional ten years of interesting work. I raced large sailing yachts around the world.
Frank Cottle: I grew up in my career in a leadership position, making decisions that had to do with make it or break it situations − sometimes on a daily, hourly, or a very serious basis. I ended up learning how to manage a crew. I think that that’s what started my leadership journey, if you will. What it allowed me to do, because of the people I was working with, was to build what was then the largest yacht brokerage in the world.
You think through things a little bit and have a lot of fun, and I got to literally hang out with for days and weeks at a time was some of our country’s best and brightest. You get to learn to see what others have done. I picked up a lot of very simple lessons along the way, or lessons I’ve tried to keep very simple. One of them is you don’t have to be both tired and hungry. I’ve learned that if you’re gonna work, make sure you’re working for a good profit, not just to work.
Scott Harper: Right. So flexibility is the key here, along with adaptability to the environment as it changes.
Frank Cottle: Yes. That’s the key.
Scott Harper: How do you get from where you were there, racing yachts and so on, to virtual working and creating virtual offices?
Frank Cottle: I’m a very strong believer in the theory of gut reaction, gut feelings. I do believe that our intuitions and our feelings about the right and wrong way to do things, or timing is very important. I learned that to a great degree on the ocean. I was in our offices one day, and I thought to myself, “Darn. I’ll never be an owner as long as I’m a broker.” I had to quit. I had to leave the firm and start something new. I’d been investing in residential properties for a number of years − apartment projects − and had quite a nice portfolio. So I decided again, based on a little epiphany, to move from residential property investment and the yachting industry into commercial property.
Frank Cottle: We started this company as a property company in 1979-’80. Our vision was to buy the largest piece of property on the edge of a large master plan commercial development but to put the smallest amount of bricks and mortar we could on that piece of property with the greatest amount of future entitlement. Meaning we’d build a 50,000-foot building but have 500,000 feet of rights to build. There was this funny little thing − just an embryonic industry at the time − called executive suites. I’d known about this, and I talked to some friends about this, and I thought, “That’s how I’m gonna do it. I’m gonna build executive suites and put them in these buildings.” So that’s what we did. We built a portfolio of properties across California, Arizona, and Texas for the next 10 years and learned how to run those funny things called executive suites.
Scott Harper: Now looking at the things that exist in front of us in new ways is how you get to new value. We’re talking about these office suites and so on evolving; now we’re talking about virtualization of work in a new way. How has that concept evolved to where it is now?
Frank Cottle: It’s coming at it from a number of different points. Let’s define “virtual office,” so everybody’s on the same page for just a moment. In our industry − we refer to ourselves generally as a service office and coworking industry − we take people, place, and technology, three core ingredients, and we mix them into a single bundled product. And we deliver that product with a highly flexible service agreement. The value proposition of the customer is reduced operating cost and flexibility. A virtual office basically strips out the need for a full time dedicated place. You can use this facility by the hour, the day, the week, the month, the year, multiple years if you like, on a contract basis and have access to one workstation or ten workstations on demand. Think of the changes that just in time inventory is created in manufacturing. We are the just in time office environment.
Scott Harper: Okay, so it allows people then to be highly flexible in where work is done and when it’s done; they can scale infinitely to meet needs temporarily and then move somewhere else and do it some other way. Is that kind of in a nutshell what it looks like?
Frank Cottle: Add the word “globally.” If we look at our economies today, every company is an international company today.
Scott Harper: Absolutely.
Frank Cottle: If you think about it. You can have a three-person startup, but they’re gonna have an offshore supplier of something and an offshore client in some way. Today, virtual officing and our industry and the way we’re set up as a company allows you to hire the best and brightest without having to move them. If you’re in the technology development industry, maybe the very best lead engineer is in India, but the very best coder is in Russia, and the very best manager is in the UK, and the very best PR agency is in Latin America. Now, ten years ago, we had to hire that person in India, get them a visa, we had to get them moved into the US and the same with the others, get them all here. Then we had to figure out the differential in the cost of living and pay them accordingly, and this and that, and they had to disrupt their families. They had to leave the culture they love; they had to leave where they were in order to take advantage of an employment opportunity.
Today that should no longer be the case. With virtual officing and the flexibility of our industry, we can open 10 offices in 10 countries in 10 minutes for somebody and interconnect them in such a way that they all have the same communications and capabilities as if they were in the office together.
Scott Harper: Virtual officing, then, gives companies the ability to stitch together the best people in the best places in the best way that gets the maximum value with minimum cost.
Frank Cottle: And impacts the balance sheet, which impacts the shareholder value as well.
Pam Harper: There are other strategic reasons as well, and we’ll talk about more in our next segment. Right now, we’ll take a quick break. Then when we come back, we’ll talk more with Frank Cotttle, CEO of Alliance Virtual Offices, about the virtual office movement and the promise it holds for the future of work. Stay with us…
Scott Harper: This is Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. We’re on the web at businessadvance.com, and we enable successful companies to accelerate to their next level of game-changing innovation and growth.
Pam Harper: We’d like to welcome all of our listeners and our many new listeners. If you’re not already subscribed to our Growth Igniters community, you can get even more value by signing up. You’ll receive reminders of our new bi-weekly podcast along with a link to a page filled with all kinds of resources. On off weeks, you’ll receive a Growth Igniters post, just a two-minute read.
Scott Harper: So subscribe today. Go to growthignitersradio.com and click the red “sign up now” button on the top right of the page.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Scott and I are talking today with Frank Cottle, CEO of Alliance Virtual Offices about how virtual offices are transforming the 21st Century workplace. Frank, how can people find out more about you and your company?
Frank Cottle: Well, I would be grateful if they would just simply go to alliancevirtualoffices.com. If you want to learn more about our industry, you can go to allwork.space.
Pam Harper: You can also find out more in the resources section for this episode by going to growthignitersradio.com and selecting episode 140. Frank, we were talking in the first segment about the whole journey that you’ve taken, how everything comes together as it should, and about the virtual office movement. Let’s bring it to life a little bit more. Can you describe a client’s story that illustrates a successful virtual office arrangement?
Frank Cottle: We had one client, a major contributor to our US economy. They’re a legal organization that is involved in entity formation and governance and management, so they help people create companies. If the three of us wanted to go out and start a new podcast company, we might go to this group and say, “Hey, we need to form an LLC or a corporation, etc, etc. Then we need someone to govern it and manage all of its elements.”
This company had a need to have mail depots, basically, a method of managing tens of thousands of entities that they manage in each state in the United States, and have all of their mail managed. We set up a private, − I’ll call it network − of facilities for this particular client that handles all of the mail for all of the clients. It deals with all the forwarding issues, all the requirement issues, and some cases service of process issues, etc. on a national basis and materially cut their costs because of the way we’re able to set the facilities up within our own Alliance Business Centers Network locations, and we can handle it as a single source. They no longer had to had 50 contracts with 50 different providers doing things 50 different ways, getting 50 different invoices and having to retrain 50 different staffs every year.
Pam Harper: So how much does your staff get involved in setting up these arrangements for your clients? In this case, did they know exactly what they wanted or is it collaborative? How does this work?
Frank Cottle: It was a solutions challenge where that industry had a problem, and they came to us because they knew what we did and we worked quite closely with them and with others now to create an industry-to-industry solution, if you will, utilizing the virtual officing concepts and the people, place, and technology-driven facilities that we have globally.
Pam Harper: And that’s a significant difference from just I’m going to set up an executive office somewhere in the early days, now you’re actively getting involved and working together to help them to create this.
Frank Cottle: That’s sort of saying “we provide solutions instead of products” is a bit of a cliché, but really sitting down with a client, understanding their needs, going out and spending time at their facility to see how they do things, organize things and what their requirements are is very important.
Pam Harper: Now one of the things we are seeing, Frank, with the companies we’ve been working with is they’re looking at expanding into new geographies, and they’re also partnering with other companies through strategic alliances and that kind of thing. That’s when I see a lot more use of this kind of arrangement that you’re talking about. Do you see it that way too?
Frank Cottle: Yes. The expansion of companies, especially SMEs, if you want to explore a new marketplace, let’s say you’re an IT contractor and you’re based in Kansas City, and you want to bid on a contract in New York, guess what? You can’t bid unless you have an entity in New York. Just to do basic functions a lot of times, you need to have that virtual office at the least. So virtual officing allows SMEs, startups, large major corporations to explore new markets, to get a foothold in those markets until they know what they want to do and if they say well, we’ve decided we now want to put a team here of four or five people, well, then we put them in one of our coworking facilities.
Scott Harper: Frank, one of the big things that really is an impediment now for people who have dispersed workforces is this whole concept of the farther you are from somebody, the worse the collaboration, the worse the communication, and it’s a very quick decay curve. What I hear you talking about is something that is going to eliminate that distance factor so that anybody half the world away is right next door. Is that what you’re saying?
Frank Cottle: To me, if I look at eight-hour time zone increments, the further somebody is away, the more I can run a 24/7 operation. That enhances productivity quite a bit. I can keep passing work forward. They talk about pay it forward − well we can pass it forward. I can get … everybody says, “Wouldn’t it be great if we had an extra hour in the day or an extra day in the week?” Guess what? We do. Pass it forward.
When you talk about getting people from different cultures, languages to collaborate, to think of how to inspire them to do something as a team overall, you can’t think of a task anymore. A task is not very inspiring. My guidance would be to have people create a higher purpose for everything that they do.
Pam Harper: Absolutely.
Frank Cottle: A higher purpose that’s not just, “We’re Microsoft. You’ve got to go beat Google.” Who cares?
Scott Harper: Yeah. Serving a global need.
Frank Cottle: Start looking for a higher purpose and in that regard we a couple years ago created the All Good Work Foundation ourselves, and we actually provide office space free of charge to charitable, nonprofit organizations because we know that we have waste in our industry and every corporate has waste in their offices, and every commercial building has waste; it’s called vacancy factor. We know the vacancy factor in our industry, depending on the market and the market cycle is between 7 and 12%. We know this. We’ve been in the industry for almost 40 years now. Why can’t we give half of that to charity?
The teams that start thinking about how they’re doing things, they start thinking in such terms as social capital as opposed to economic capital and social good as opposed to just profitability. If you can get your team to act as a community that’s driven not just for economic good but for social good and have a higher purpose that’s well defined, you will find a lot more engagement. And all you have to do is look at global organizations that do this purely on a nonprofit and charitable basis and say, “Hmm. There are no borders. There are no cultural limits to those things.” People are just as excited to get together and continue working on those projects as anything in their life. I would say one of the keys to managing a remote workforce is a higher purpose.
Pam Harper: That’s fantastic. We agree with you 100%. We’re going to take another quick break, and when we come back, we’ll talk more with Frank Cottle, CEO of Alliance Virtual Offices, about immediately actionable ideas for virtual offices for yourselves. Stay with us.
Scott Harper: You’re listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated. We help leaders and their companies stay first, fast, and foremost as they evolve into the future, and we’re on the web at businessadvance.com.
Pam Harper: We’ve been talking about how companies can take advantage of new working concepts from the virtual office movement to be first, fast, and nimble as they evolve into the future. Along with the flexibility and speed that virtual officing brings to a company comes the need to ensure that all the moving parts come together for the greatest effect. After all, the faster your company is transforming and growing, and the more geographically dispersed your workforce is, the more challenging it can be to ensure that everyone’s visions and efforts are in sync.
Scott Harper: And that’s why we created our special assessment, five questions to ask when you need to move even faster. It’s a perfect perspective builder for fast-moving visionary leaders who need to meet current commitments and move fast enough to respond to new opportunities. Our questionnaire will help you find out where to begin to focus your energy and resources so that what should be happening really is happening faster and more effectively.
Pam Harper: Go to growthignitersradio.com and select episode 140; scroll down to resources, and click the link download five questions to ask when you need to move even faster. To learn more about our success stories, go to businessadvance.com/client-results.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments, Scott and I have been talking with Frank Cottle, CEO of Alliance Virtual Offices about the virtual office movement and its potential for transforming the 21st century workplace. Frank, can you tell us again how people can find out more about you and Alliance Virtual Offices?
Frank Cottle: The very easiest way is just to go to your search engine and search for alliancevirtualoffices.com. If you want to learn more about our industry, go to allwork.space.
Pam Harper: Okay. Again, you can find out more about resources for this episode by going to growthignitersradio.com and selecting episode 140. Frank, we’re at the point in our podcast where we talk about the three immediately actionable ideas that leaders can take out of all we’ve been talking about and put it to work right away. What would be immediately useful ideas for implementing a virtual work arrangement like we’ve been talking about for their own companies?
Frank Cottle: I’m gonna go back to what we were just discussing and let’s redefine who’s using workspace and the way they use workspace even today. Look at the way your people are using their work. Go look at the desks, look at the offices. Determine what percentage of occupancy of ours that people actually have in the offices you currently have. What you do when you do that is you start saying, well, how are we gonna accomplish getting rid of waste? So start looking at your employees or the new offices you want to build, however you’re housing people. Look at people as travelers, not as occupiers, because throughout the day, people travel. Even if they’re in a single facility, they go from their workstation or their cube or their office into a meeting and from a meeting out to an out of office meeting or across to someone else’s offices. They’re constantly traveling. Look at the flows of how people move around the office and how people move around your business environment as you’re doing business.
Pam Harper: Okay. Are there certain types of roles that lend themselves more to being in the virtual office environment?
Frank Cottle: Generally people that interact with others outside of your company. People that are dealing with others outside of your office, people that are in a sales environment, a marketing environment, any engineering environment where they’re creating products or where they can work alone as opposed to having to sit in a task-driven environment. These are all candidates. I’ll give you a simple number right now. There are 1.5 billion, billion, mobile workers today in the world.
Scott Harper: Wow.
Frank Cottle: These are people that on a minimum of two days a week permanently work outside of the office, outside of their core office space, 1.5 billion in the workforce.
Pam Harper: And growing too.
Frank Cottle: And growing. Our industry is growing at about 10 to 12% a year, year over year since 2008. That’s faster than the PC grew at the height of the dot-com era. The trend shift here is huge. It’s huge. It’s tectonic.
Scott Harper: Okay. So the first step was to look at the flow of people and materials I assume so that you can get a feeling for what you can virtualize. What’s the second tip?
Frank Cottle: The second tip is to look at your total cost of allocable overhead per workstation for the people that are maybe not in their offices very often, and in doing so, consider if there are alternative ways of officing that will materially reduce your workforce costs and then act on it. When you start shedding space, you improve the P&L, and you also materially improve the balance sheet.
Pam Harper: And Frank, what would be a third immediately useful idea? How do people make that decision about what would be the best way to select a virtual office provider?
Frank Cottle: It really depends on each individual company. If you’re in a growth mode, particularly if you’re trying to grow rapidly and you have limited resources… All companies have limited resources. Google has limited resources. Our federal government has limited resources. None of us have enough resources to accomplish all of our goals. Immediately look and say, “If I want to grow my company more quickly with a lower cash requirement or investment requirement, I think I’m gonna go virtual,” and learn how to do it. If you don’t, your competitors will, and I promise you Gen C that comes up − the first fully digital generation we’ve ever had that’s totally native digitally − they’re not even gonna think twice about it.
Pam Harper: There’s a lot of change on the horizon for sure, and we need to think future forward. This has been fascinating conversation. Any parting thoughts here?
Frank Cottle: I guess the concept that we’re talking about really has been around for a long time. We’ve been evolving these concepts ourselves in our own company since 1979. Thinking of your people as travelers is a new way of thinking overall, but it’s very, very important for the future and recognizing there are no borders when it comes to work anymore, particularly knowledge work, and create a higher purpose if you’re gonna manage your remote community.
Pam Harper: Thanks Frank. We enjoyed this.
Scott Harper: Thanks Frank, and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation, share on social media, read Frank’s bio, or open a conversation with us, go to growthignitersradio.com and select episode 140.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: And Scott Harper…
Pam Harper: Wishing you continued success and leaving you with this question to discuss with your team.
Scott Harper: What strategic opportunities can we take advantage of through virtual officing, and what are our next steps?