Issue #

-minute read

Coworking Was Never About the Space

Why the future of innovation depends on breaking down walls between your team and the outside world.

Industrious recently complimented my role in developing their future of work perspective and shared Vibe Officing in their newsletter. My last article about big, empty buildings sparked comments about the Bell Labs campus, now a coworking site (and, perhaps more fun, filming location for Severance).

So I've been thinking about coworking a lot recently, but it's frustrating that most executives don't understand its true business strategy.

It was never about the space. Read on to discover what happens when you stop severing connections and start creating collisions.

I'll see you down the line.

-Phil

The rise and fall of shared workspaces has leaders asking the wrong question. When execs hear "coworking," most think real estate, e.g., fewer square feet, flexible leases, faster move-ins. But they're missing the point.

Coworking was never really about space. It was about collision—the deliberate blending of people and perspectives that happens when you remove the walls between “us” and “them.”

Unfortunately, walls are natural for us.

At Running Remote, Harvard's Raj Choudhury discussed homophily—the human tendency to surround ourselves with people who are like us. Microsoft’s 2021 Work Trends Index report showed that employees’ social capital suffered during lockdown; we lost our “weak ties.”

Microsoft graph about weak ties — Source: Microsoft Work Trends Index (2021)

Both of these dynamics are innovation killers hiding in plain sight. In the Microsoft report, researcher Dr. Nancy Baym said:

When you lose connections, you stop innovating. It’s harder for new ideas to get in and groupthink becomes a serious possibility.

This isolation problem is acute for organizations racing to integrate AI. Digital transformation requires cross-functional collaboration, but many companies are trying to solve AI challenges with the same siloed teams that created their current innovation gaps.

Executives cite reduced innovation as a reason to call employees back to the office, but sitting next to the same team day after day doesn't expand the surface area of your ideas.

And this is where coworking comes in.

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Coworking’s Real Value Isn’t Space

JLL published a report in 2016 called “A new era of coworking,” which included a framework that I loved but may have been ahead of its time.

The report identified four coworking models:

Internal collaboration: Shared workplaces for employees, e.g., Smart Working. When I helped build this program at Credit Suisse, two-thirds of participants said that moving around the environment helped them meet and interact with new people.
Coworking Memberships: Drop-in access to external spaces, e.g., Allstate's flex working program.
External Coworking Space: Teams working outside with partners, e.g., Barclays Rise, which was recently closed after a decade.
Internal Coworking Space: Teams working inside with partners, e.g., Ford Motor Company’s Michigan Central redevelopment.

JLL coworking models — Source: JLL New Era of Coworking (2016)

Serendipty Labs CEO John Arenas called #4 “permeable coworking”:

This is a Private Coworking facility that allows some outsiders in, subject to specific rules. For example, Zappos Headquarters in Las Vegas is experimenting with bringing the public deeper and deeper into their headquarters to work for enhanced vibrancy, energy and opportunities for serendipitous interactions.

Research shows physical proximity increases trust and knowledge exchange, but it's rare to see this implemented across organizational silos.

Rachel Robinson wrote "Looking for Ideas in Shared Workplaces" in the WSJ in 2012, which mentioned one of these elusive examples:

Atlassian, for the past two years, has let data-management start-up WibiData work out of its San Francisco office space free of charge. In exchange, WibiData shares its expertise analyzing large data sets.”

I believe permeable coworking presents an untapped strategic opportunity, especially as the pace of change accelerates.

It’s a way to break the physical homophilly cycle.

Don't Let Security Isolate Ideas

Security concerns for permeable environments are real but solvable with layered access design. Just like a good network firewall has permissions and protocols, so should your physical space.

The bigger risk isn't letting the wrong person in—it's failing to design for interaction at all.

You don't need a massive renovation to start. Subtle approaches matter: invite-only startup demos, faculty-in-residence programs, and customer advisory boards meeting in your space all signal openness to collaboration.

When I wrote about future banking HQs at McKinsey, the former head of strategy at a major bank supported this concept:

It’s important to work closely with start-ups and even bring them into the building. If you are a start-up physically working and sitting in a bank’s headquarters, you will be less likely to work for a competitor.

Even without letting the public inside, I still encourage hyper-local business trips: purposeful movement between work settings based on opportunity, not obligation. The next evolution involves opportunity flexibility: AI-powered systems that surface unexpected collaboration chances and make acting on them effortless.

Imagine your workplace app notifying you that a visiting expert in your field is working from a nearby innovation hub today, then offering to book a conference room and coordinate introductions. It's like Netflix recommendations, but for engineering serendipity.

Phil's Content and Connections

I am participating in Density's "Does RTO Actually Work?" webinar on Tuesday, June 17 at 11am PT / 2pm ET.

If you missed Hubstaff's AI productivity shift webinar, where I was on the panel, you can watch the replay here.

I attended CoreNet ERS and Charter's New EVP summit this week, and will be at FOW USA next week. Expect to hear about all of them soon.

I will be a keynote speaker at Tradeline Space Strategies in San Diego in October and have other speaking slots to announce soon.

Thanks to Jeff Frick for this interview at Running Remote, where I got to explain why I started The Workline and talk directly about my Forces Diagram, Vibe Officing, and Business Rhythms articles.

Finally, welcome to new subscribers! You can see past issues here.

Build for People, Not Policies

If you're planning new workplace construction, permeability needs to be part of the initial design brief and not a retrofit afterthought. But design alone won't create the magic.

You need what hospitality- and community-oriented workspaces do naturally: hosts or community managers who organize social events, introduce people to each other, and spot collaboration opportunities.

Real community building requires operational commitment, not just architectural features.

If you're responsible for workplace or innovation, ask yourself:

Have we created any intentional spaces for external collaboration?
Do our physical layouts support different types of engagement?
Are we missing energy and insights by walling ourselves off?

Then bring your cross-functional team together—e.g., HR, IT, Real Estate, Security, Partnerships—and design a permeability pilot.

Start small: a seasonal program with local startups, a rotating fellowship with university partners, specific places where guests are allowed to linger and work after meetings, or a "collaboration corridor" for specific projects. Don't worry about scaling yet. Test, measure, and iterate.

Blend to Build the Future

In a world where presence is optional, we can't mandate attendance. We have to make it worthwhile. The companies that figure out how to create magnetic environments will win the talent wars and accelerate innovation.

Coworking's real promise was never flexible leases or trendy amenities. It was access to collisions that wouldn't happen otherwise.

So the next time someone asks about your coworking strategy, don't point to your vendor list. Point to your people. And then the outsiders you’re inviting in to inspire them.

You don’t need a massive renovation to start. Sometimes, the smallest doors, left slightly open, unlock the biggest breakthroughs.

Because in the future of work, the most valuable real estate won't be the space you control. It will be the connections you create.

What collision opportunities are you missing in your current workplace design? Please get in touch to tell me about experiments you're running or considering.

Phil Kirschner
Future of Work Strategist & Advisor