« We Are What We Repeatedly Do | Main | Fever of '57 »
July 27, 2007
World’s End
About 20 years ago, global financial markets were buoyant and real estate prices were soaring. Edelman’s London office had been a phenomenal success since its inception in 1967. Its offices, located in a former royal’s home near Hyde Park Corner, overlooked the park and were right in the middle of the action. The then chief executive of the unit, confronted by a rent review that would have escalated costs by 50%, made the decision to relocate the firm’s 100 people to Chelsea, well out on the King’s Road, to a neighborhood known as World’s End. It was a 15 minute ride to the closest subway stop and certainly far away from clients and the media. In the decade that followed, the business shrank to half of its former size and Edelman dropped out of the Top 10 in the market.
It is facile to suggest that our problems in the UK during that period were exclusively related to real estate. But for PR firms, decisions about location that are based solely on cost are simply not intelligent. We are in a people business; attracting and retaining the best and brightest is the whole game. If premises are shabby and badly overcrowded, the company will not be able to compete.
I know this from bitter personal experience. While I was general manager, Edelman NY moved in the early 80s to 1775 Broadway. We grew far more quickly than expected and by the end of the lease term, we had people sitting on each other’s laps. We lost promising talent because they could be more comfortable elsewhere. My personal low-light; mice ate the chocolate covered cholesterol lowering tablets that we were to send out to media for client Warner-Lambert (may their arteries be unclogged forever).
We are at a point in the real estate cycle where rents are climbing inexorably, to unprecedented levels. This is forcing companies to behave irrationally. For example, Ernst & Young has decided that its PR professionals should be relocated from the Midtown Manhattan headquarters to suburban New Jersey. This will not work. Nor will “hoteling” where multiple professionals utilize the same work spaces because of frequent travel, tele-commuting and work at the client’s location.
Our business relies on proximity to media and the ability to interact with culture. We will not succeed in a suburban office park because our product is intangible. Mitch Markson, our global creative director, just walked in here with an idea for a client campaign. I gave him two or three more concepts in a five minute interaction. My mind is influenced by events of the last 12 hours, including going to an the avant-garde production of Richard III in which a disabled man plays a sympathetic villain, my early-morning subway ride, what I see out of the window in Times Square and my discussion with an Italian PR man teaching at a US university. We are part of the world of expression.
I know that we all have to make money at the end of the day. So we will have to face a future of smaller offices, less square foot per person and more open plan architecture akin to a newsroom. Where we work is as important to the end product as how we work. I would appreciate your comments as always.
Posted by Edelman at July 27, 2007 12:58 PM
Trackback Pings
TrackBack URL for this entry:
http://www.edelman.com/mt/mt-tb.cgi/408
Comments
yes, it is location, location, location. Or martini media....being in the right place, at the right time with the right client. I don't think the future is more people working in a smaller space. I think the industry is moving to fewer people working in the premium space - at least that's how it is panning out in Holland, where we have enough connectivity via broadband to do a lot of things, but nothing beats face2face brainstorming. Hotelling and banning to the suburbs is simply false economy.
Posted by: Jonathan Marks at July 30, 2007 1:40 PM
It is people, people, people. Not just how many work in the office, but how many (and how many different onces) are around.
Enjoyed this post.
Cheers.
Rajesh
Posted by: Rajesh at August 12, 2007 2:08 AM
A reciprocal issue that I am worried about is where will the young employees, artists, writers, actors and academics that fuel our experience and ideas in midtown Manhattan be able to find affordable housing ? Increasingly employees are facing 45 minute to 1 hour+ commutes on crumbling and unreliable infrastructure in order to have somehwhat affordable housing and an interesting job. I wonder if when my firm's lease is up if there is value in looking at places like Williamsburg not to save money but to be more convenient for new talent and closer to new ideas.
Posted by: steve rabin at August 13, 2007 6:06 PM