New offices for CGD: food for thought

8 November 2013

You may or may not be surprised, based on how much you follow this blog, by my choice of a quote from Lawrence MacDonald’s post on CGD’s move:

While we will increase our floor space by half, to 33,000 sq. ft., we won’t be much bigger in terms of the number of offices (about 30) or open-space workstations (40). That’s deliberate, because our president,  Nancy Birdsall,  has long believed that having about 50 to 60 full-time staff on site is a good size for an organization devoted to the creation and rapid exchange and dissemination of knowledge and ideas. That opinion is widely shared in CGD, but we all recognize that it can be hard to resist the temptation to grow. By buying a home with space for about the same number of people as we have now, we impose a binding constraint that will help us to stick by our declared intention to stay small.

I chose this quote because it addresses a few important points related to think tanks and their buildings.

The built space has an effect on people and how they interact and work. This much we know. It can also have an effect on the strategic decisions made by think tanks. But how many think tanks have the right offices? I’ve lost count of the number of think tanks I have visited and unfortunately I’ve not come across many that ‘shout out’ something like: Thinking going on here! (We could add: ideas are shared here; we like a good debate; come and see, we are open; etc.)

Maybe, if I could narrow it down to a few: CGD (its old offices, so I expect these will be even better), NESTA (the reception space itself is a mini museum to design and innovation), the Institute for Government (have a meeting on the terrance overlooking the Mall), CIPPEC (there is something about the combination of old wooden floors, modern technology, slightly crowded spaces and the buzz of downtown Buenos Aires…), IPPR (it feels as if the entire place is being used, there are desks in reception with researchers and analysts busy at their work), the Lowy Institute in Sydney (worth visiting the building), and CIGI in Canada (built on the site of an old distillery museum), BCSP in Belgrade (very small open plan offices but an excellent vibe: easy to talk to others and focus on work -except that it has a first floor that is slightly hidden away), the Budapest Institute (had a very trendy feel to it, open plan design, with room extensions in an old building block that gave it an exiting start-up feeling), and, to make it top 10, CIFOR in Indonesia (if we can call it a think tank, its campus is the kind of place one thinks of when one thinks of a place for thinking and learning).

Most offices are way too small for the number of staff; demonstrating that either the think tank does not have a growth strategy or that it is struggling to find more suitable space. Outgrowing your office space can be a sign of very poor planning and a very likely cause of low morale and even a drop in the quality of the work in the long run.

But big isn’t all that matters, either. Large offices, too large for staff numbers, feel empty. All too often, researchers with big buildings can be found tugged away in their own private offices or cubicles; or programmes or departments find spaces for themselves away from everyone else. Worse still, the executive directors are too far from the rest of the staff. Days and weeks may go by without staffers anyone who does not work directly with them.

Office space advice

How think tanks use the space they have is important. CGD has some advice:

  • First, public meeting spaces are a must for any think tank. If you have the chance to have meeting spaces for public events then don’t hesitate -even if it means getting rid of your star researchers’ on private offices:

I’m excited that CGD’s new headquarters will include a 170-seat state-of-the art conference facility and a 60-seat boardroom / ideas lab that we will use for roundtable discussions, Board of Directors and Partners Council meetings, and our fortnightly all-staff Research-in-Progress (RIP) lunch seminars.

  • Also, don’t be shortsighted: think tanks are increasingly using technology and communicating directly. Are your offices ready?

Also in the works:  a multimedia studio for our burgeoning production of short videos and my weekly Global Prosperity Wonkcast.

But there are other design ideas that might help those thinking of building or buying new offices:

  • Beware of AC: Air conditioning can kill the opportunities to exchange and share ideas within the think tanks. Staff in large offices with AC tend to close their doors and there is very little movement between offices, areas, and floors.
  • Make people walk past people: Place the kitchen or cafeteria on one side and the bathrooms on the other; allocate meeting rooms outside each department (or make them free for all); and other tricks to get your staff to see their colleagues on a regular basis. Another idea for offices where senior staff have their own offices is to avoid putting all the researchers working in one area together (so that at least the young researchers have to go to another part of the office to see their bosses) or mixing up the younger researchers’ offices or cubicle areas (so that they are next to peers working on different policy issues or disciplines).
  • Open doors policy: Think tanks are not retreats where people go to be silent. Doors should always be open and staff accessible. It should be always possible for a young researcher to ‘look up and see’ if a senior researcher is in the office and then walk over to ask him or her a question (of course, common courtesy still applies: don’t interrupt).
  • Open space can work in some cultures: But it can bomb in others. Be careful.
  • Hierarchy does not help: Think tanks want to attract and keep the most proactive young policy entrepreneurs but keeping them at arms length from the ‘senior researchers’ or hiding them somewhere in a dingy dark office far away from ‘the action’ will not encourage them to stay.
  • Empty offices are a turn off: I’ve been and worked in many offices where some researchers keep offices or desks empty because they are rarely there while the rest of the staff is forced to share an ever shrinking space. This does not help with morale and creates divisions in the organisation: virtual and real.
  • Don’t do ‘upstairs, downstairs’: There may be good reasons to keep ‘management’ close to each other but in most offices walking the distance from one end to the other won’t take more than a couple of minutes -and everyone who sits in front of a computer as much as a think tank staffer definitely needs the exercise. Mix it up a little bit. The executive director does not need to be far away from everyone else; the accounts and finance offices should be close to the project staff and to researchers so that they can get a better sense of the ‘real life’ of the think tank; communications teams should sit somewhere where they can keep and eye and an ear on the conversation and that makes them visible to the rest of the office; etc.
  • Don’t waste space on a library or resource centre: Unless you have a book collection equivalent to that of the LSE and the capacity to keep it up to date, then don’t waste your limited space on it. It is much better to donate your books to a local university or invest in online access to journals or databases for your staff. Use that extra space for meeting areas or hot-desking for your staff and visitors.

How to finance a new home?

According to CGD:

The total project cost is $18.3 million, which includes a purchase price of $13.5 million (about $400 per square foot) and $4.8 million for construction, furniture, and fixtures and various taxes, legal fees, and financing charges.

As a relatively young organization that began 12 years ago with a generous start-up gift from our founding board chair, Ed Scott, CGD has no endowment. But we have over the years accumulated a modest reserve fund. Drawing on these reserves and with additional generous gifts from our board and other supporters, we have covered the upfront costs, including a 20 percent down payment. We financed the balance through a District of Columbia program that enables tax-exempt financing for non-profits  and helped to keep the interest rate on our mortgage under 3 percent.

Like a family that stretches to buy its own home, we will be avoiding the risk of future rent hikes. While annual costs initially will be somewhat higher than leasing, they will be lower within seven to eight years, based on conservative assumptions, and all the while we will be building equity.

This question raises a few challenges for a think tank. First, I have been arguing that think tanks ought to be able to work online and don’t really need an office. At least in the future, I think, most new think tanks will be able to do without one.

This may be true for small start-ups and think tanks focused on a few policy issues and working mainly online. But I accept that as they grow, physical space may be an issue: even if this is a decentralised space.

Finding the money to build or rent the right space becomes a challenge. Few international development funders would allow think tanks to take their funds and use them to build or buy. There are too many risks associated with this.

Still, one could argue that office space is crucial to the performance of a think tank and therefore should be considered a valid investment. As valid as databases, new computers and staff. I wonder, though, how many think tanks have ‘crunched the numbers’ to show the benefits of investing in a new office?

New office space should also be considered as an opportunity to raise new income. Some think tanks may be able to buy or rent more space than they need. This extra space can be rented out to smaller organisations or projects to ‘recover’ some of the extra expenses that such an investment may imply.

Similarly, investing in real state is, well, exactly, that: an investment. The price of the property of the think tank may very well increase in value thus improving the financial position of the organisation. This may even open up the possibility of bigger and better loans should the think tank need them.

If we think of office space as an investment, with effects that range from higher morale, more productivity, increased visibility and the more clear financial returns,  then keeping this out-of-bounds from discussions with funders may not be the best of ideas.

After all:

Our real-estate deal reflects much of what I love about being part of CGD. We aim to be smart, thrifty, and agile because our mission—improving the policies and practices of the rich and powerful to promote shared global prosperity—requires that we make the most of the resources entrusted to us by our supporters.

This could offer some ideas for many think tanks in developing countries:

  • Reserves: do they have a strategy to accumulate and manage reserves? (some think tanks cannot, by law, accumulate reserves -but maybe there are other more appropriate legal options).
  • Loans and mortgages: most charities see loans as a tool for for-profit organisations, out of the question for them. But charities can use loans and other financial instruments to raise the funds they need. But do think tanks have the advice they need? Are they banking with the right financial institutions and do they have the right bank managers? Is there anyone in their boards with the capacity to help them with this?
  • Have they targeted the right sources of funding and support? Think tanks are used to going to the same sources over and over again. But there are opportunities to be found in new donors such as local councils, heritage trusts and other charitable and private organisations that manage or look after large estates. Particularly in the ‘not so trendy’ parts of town, most cities have empty office space that could be put to good use by think tanks. This would safe councils and others money in maintenance and security costs, it would generate interest in the area, probably attract others to nearby buildings, and, given that think tanks tend to be staffed by young and bright minds, attract other young bright minds to the area. Win win for all.