In the wake of WeWork’s failed IPO, IWG, the parent company of leading workspace brands including Regus and Spaces, continues to extend its industry leadership. Mark Dixon, who founded IWG in Brussels 30 years ago, explains how the group’s business and culture differs from that of its high-profile rival.
How does IWG compare with WeWork?
At IWG, we believe that business success is underpinned by the effectiveness and happiness of its people, so we are all about helping millions of people have a great day at work.
Mark Dixon (IWG): The dependable giant in the workspace market
To do this, we offer choice: a range of brands (Regus, Spaces, Signature by Regus, HQ and No18), locations (we are in 1000s of cities around the world), and price to suit all budgets. This model means we can support our diverse customer base with the right workspace, in the right location with the right services for them worldwide. What sets IWG apart is our decades of experience in this exciting industry and the tremendous flexibility we offer businesses, placing a huge emphasis on delivering consistent high-quality service everywhere. We believe the culture of the workspace provider should be focused on customer service and is complementary to the culture of the clients that use our space. Start-ups or individuals may be happy to dive into someone else’s culture, but larger companies and serious professionals do not want their company culture to be dictated by their workspace provider.
“Serious professionals do not want their company culture to be dictated by their workspace provider.”
How would you assess the current co-working boom?
It’s worth clarifying that co-working is simply a type of flexible office space, which has been growing rapidly for 30 years and we are the largest provider in the world by a large margin. It is just that now people are starting to become more aware of it. We are already a £3bn+ company with consistent double-digit growth and operating in countries as diverse as Madagascar, Peru, and Azerbaijan as well as every major economy in the world. The important shift is that we and others in the real estate industry are expecting this sector to ultimately become around 30% of the total commercial real estate market. Today it is about 2% worldwide. It’s been booming because even more people want the service, cost, and flexibility benefits the model has to offer.
Which risks and opportunities do you identify?
The long-term opportunity is incredible. For more than a decade, annual growth in the global flexible workspace market has averaged 13% and this is set to accelerate. More and more large enterprises are embracing the clear financial and strategic benefits of a flexible workspace policy, and the recent IFRS16 accounting changes that puts real estate commitments on the balance sheet is already making these businesses rethink their real estate strategy. All of this is pushing us beyond the tipping point of flexible workspace becoming the new normal. In our industry there is always risk. We operate in over 110 countries and so we have lived through many different recessions or periods of political unrest – we operate several centres in Venezuela for example. You have to always be prepared for things to go badly. We actually grew through the 2008 crisis, growing from 1,000 to more than 3,300 locations today since then. Our next goal is 20,000 locations, so we are looking at all opportunities and we are focusing on franchising as a way to accelerate the next stage of our growth.
How important is technology in your sector?
Technology is an enormous driver and enabler of flexible working. We invest heavily in technology to support the platform we operate. Today you can use our app to book a room with a click, accessing our facilities anywhere in the world with a digital key sent to your phone when the booking is validated. Buildings themselves are becoming ‘smarter.’ Tech is already a major factor in the ability of IWG and our industry to scale fast, but there are three additional success factors. First, you need critical mass - which is why one of our core strategic objectives is to operate the largest national flexible workspace network in each major country. To serve a big company in the US, for example, you need to offer locations in every town and city. Secondly, we invest a lot in keeping our centres across all our brands up to the latest standards of design and equipment, as you could see during your visit at Spaces in La Défense, Paris. Finally, one thing you cannot code or buy is how your team ensures the details of good customer service such as great coffee, reliable high-speed internet connections, whiteboard pens that work, and a smile that greets you when you come into work. That’s why a major focus is reinforcing and sharing our culture across all our teams. Tech, critical mass, quality and culture is what keeps us sprinting ahead of our competitors.