The concept of “real estate optimization” can mean many things to many professionals, but most will agree that its definition centers on the notion of maximizing a commercial property’s efficiency and productivity – of creating a space that is a contributor rather than a detriment to an organization’s bottom line.Technology increasingly plays a starring role in this strategy, but to truly maximize the effectiveness of any space the focus must remain on the people who inhabit it. In the latest installment of our leadership blog series, based on interviews with multiple dancker leaders, we look at the power of a human-centered workspace, where thoughtfully designed spaces and seamlessly integrated technology support people, not the other way around.

For generations, companies have been faced with the reality of fitting their often-dynamic workforce into an otherwise static space. Perhaps you are now visualizing an early 20th century office with endless rows of workers sitting in front of typewriters, piles of papers, and stacks of books on small wooden desks within a vast industrial space. Or maybe you’re thinking of a much more recent (say, early 21st century), bright and open workspace with long white benches shared by multiple team members and their computer screens. Both images are relevant to their times, but – as the saying goes – times change, and what worked just 10-15 years ago is increasingly irrelevant. As dancker’s Tony Cianciola describes, “real estate optimization has always been about fitting more people into less space, but today we have a better understanding over the human impact this can have on productivity, satisfaction, and retention.”

Sensors are now available to measure a space’s occupancy and usage and provide tangible evidence of its effectiveness to drive action. For example, companies often realize that large conference room space is wasted when that space is monitored by technology. When paired with modular design solutions, adjustments to the space can be made quickly so that it remains functional and effective over time. In fact, dancker has recently installed Steelcase’s Workplace Advisor technology in their Somerville, New Jersey, Experience Center, allowing dancker to investigate their own spaces, and illustrate with first-hand experience the kind of solutions available to dancker clients.

Having access to this kind of intelligence is about to become even more critical. Starting in 2019, companies must report the cost of their lease (and thus the full extent of their real estate related debt) on their balance sheets, rather than simply in the footnotes of financial reports. Because investors will have greater visibility into the numbers, companies will face increased pressure to demonstrate the way real estate is working for them, and to make changes when the numbers suggest it’s not working.

Workplace data can also support a company’s mid- and long-range planning for spaces beyond what they currently occupy, or similarly for renovations of multiple locations that might be implemented in phases. Sensor-based technology gives companies the opportunity to test and measure the results of a new design or furniture installation before implementing similar installations in other locations. This provides money savings on future real estate renovations or acquisitions.

Technology provides immediate insights into a space’s effectiveness that would previously take months to observe and interpret. It also empowers employees to do their best work in the space best-suited for that work, because – even though sensors are tracking activity anonymously and not tracking specific people – managers gain a better understanding of the when-where-what-and-how of their teams’ assigned tasks, and can leverage the tools of an agile workplace to make quick adjustments that support the team as the when-where-what-and-how evolves.

As dancker’s Don Kolterjahn suggests, “we’re working with our clients to design long-term strategies by using short-term configurations that can shift as needs evolve.” The workplace remains relevant for a longer period because it’s no longer static – as if it lives and breathes with the people who inhabit it. This takes real estate optimization to a deeper level. Kolterjahn continues: “if you don’t consider the integration of technology, natural light, wellbeing, and overall experience into your workplace strategy, then you’re not using your space effectively or engaging your employees.”

This becomes increasingly important as younger generations make up a larger percentage of the workforce. Millennials, for example, often prize experience over other more tangible rewards and know they have choices in where to work, so employee engagement is a huge factor in recruitment and retention. Employees – or even interviewees – look for a company to provide a variety of comfortable workspaces that support everything from distraction-free focus work to large-group collaboration. They want lounges or café space where they can plop down with their laptop or tablet and sip coffee. When they work in an office, they want that office to be connected to a larger community that offers a variety of food and beverage, health and fitness, entertainment and culture. Even elements like clean air and water can not be overlooked. These are details that today’s employees pay attention to.

Quality of light is another important factor in determining whether a workspace properly serves the people within it. Increasing employees’ access to natural light can boost their wellbeing and reduce stress, which in turn boosts their productivity. More companies are moving enclosed spaces to the core of their building, allowing natural light to flow through the open workspaces around the perimeter. Where private offices or meeting rooms require walls, many of those walls are now made of glass or other translucent materials. True real estate optimization has to take into account the health of the overall building, because ultimately it will impact the health of the people who occupy it, who in turn impact the health of the company as a whole.

“Environment directly affects productivity,” as dancker’s general manager Kevin Klier emphasizes. A company’s real estate is typically their second most costly asset; their people are number one. “We help our clients use their workspace to drive better business. We dig deep to understand the people involved and to determine the most effective and efficient space use of space. That solution is going to be unique to each client because it’s tailored to their specific type of work, and to the specific people who perform that work.” After all, if a space isn’t productive, how can its occupants be?