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Is a Cool Office Worth It?

Sure, they're fun places to work. But when you actually have to foot the bill, is a cool office financially worthwhile?

One & Co.

In our search for the World's Coolest Office, we've come across some pretty flamboyant digs. We've seen offices with indoor gardens, offices with (and in) tree houses, and offices with half-pipes and skateboarding bowls. We've even seen an office with a built-in shooting range.

And although there were moments of sheer awe (and jealousy, truth be told) we were left wondering: Is it worth it, financially speaking, to invest the funds to design cool workplaces? And maybe more importantly, is there a way to look at an office not as merely an asset, but as a revenue-generating investment?

We're certainly not the first ones to struggle with this question. Product designers, for instance, have struggled with putting an ROI on a "cool factor" for decades. After all, how can you judge the financial return on something so aesthetically subjective.

"It's incredibly difficult to untangle design's contribution from all of the business drivers—engineering, manufacturing, distribution, marketing—that ultimately fuel a product's performance in the marketplace," writes Bill Breen for Fast Company. "Then there's the accounting problem: Design investments are immediately written off as expenses. Months (or years) later, when a product finally hits shelves, companies are loath to retrieve the data necessary to calculate returns."

The same goes for offices. Obviously, there's a difference between expensive and cool, and so it would stand to reason that if you could increase the "cool factor" while decreasing the cost, you'd maximize the office's ROI. 

But in some industries, especially in creative, architectural, and design fields, having a cool office isn't so much a question—it's a rite of passage.

Claude Zellweger, a principal of the industrial design firm One & Co., (and honoree in the 2010 World's Coolest Offices contest) has experienced this effect firsthand.

"As much as we don't like to say it, appearances in our industry are extremely important," he says. "[Designing a cool office] helped us to grow up as a company from a small-time boutique and to have the confidence that we could work with larger companies."

But what about non-design start-ups that don't cater to a design crowd? Is a cool office really worth it?

Zephrin Lasker, the CEO of Pontiflex, a mobile advertising start-up based in Brooklyn, New York, thinks so. Lasker says that office design was a major consideration. The company ended up spending about $75,000 to create a space with an open, airy feeling, no individual offices, and a giant communal table.

Lasker also paid particular attention to one area in the office: the kitchen.  

"I think just like home designs center around kitchens, office designs are increasingly shifting its focus around kitchens too," he says. "We have a very large kitchen with a long counter that we use for a daily meeting…That big communal space becomes a place to relax, but it also becomes a place for sharing of ideas. We found a huge amount of ROI and value there."

Impressing potential clients and inspiring employees are honorable—and perhaps financially savvy reasons to invest a little bit extra into making an office cool. But is there really a formula?

Ben Kunz, author of the blog Thought Gadgets, broke it down like this:

"So what is the ROI of a cool office? Say it costs you $20,000 to do something really funky in a small organization, about one-fourth the cost of a full-time employee. Assume you have 10 employees, and this cool thing gets each of them to boost performance by 10 percent. You've just gotten the work results of one entire full-time employee (10 current employees x 10% = 1 employee equivalent) for a quarter of the cost ... plus ancillary benefits of better morale, reduced employee churn, lower recruitment costs, and potentially happier internal clients and external customers."

Before you run the numbers on your own office, we're curious to know what you think. Let us know in the comments section below if you think spending extra on a "cool" office is—financially speaking—worth it.

 

Eric Markowitz reports on start-ups, entrepreneurs, and issues that affect small businesses. Previously, he worked at Vanity Fair. He lives in New York City. @EricMarkowitz