How do you sell workspace when nobody can go to the office? This has been the dilemma that WeWork's new CMO Roger Solé has faced since taking over the role from ad man Maurice Levy in April. Yet, as Solé explains, this tumultuous period has given WeWork some time to reflect on what the future of work will look like in a post-pandemic world.
It’s now been one whole year since WeWork’s month from hell.
Amid concerns from the investment community over the real estate giant's financials, September 2019 saw it postpone its planned IPO and say goodbye to co-founder and chief exec Adam Neumann. Soon after, its principal backer SoftBank injected $1.5bn as part of an emergency bailout, before thousands lost their jobs.
It was clear at this point that WeWork needed to take a long hard look in the mirror.
“Back in September, there was all this noise about WeWork that was not really related to the experience of our members or our core service. It was really about the IPO,” says Roger Solé, WeWork's recently appointed chief marketing officer.
Solé joined the company in April, replacing interim CMO Maurice Levy whose own, surprise, arrival last November inevitably caused a stir. Could the 77-year-old Publicis patriarch really leap into the flames and pull WeWork out of an operational disaster through marketing?
The answer was regrettably, no. After just three months and one print ad campaign, by February the news had broken that Levy (who was always destined to occupy the role only temporarily) was to hand over to Solé. Months later, Levy told The Drum that he enjoyed his brief stint, "enormously. It’s a great concept with great people, and even if it was a problematic situation with a lot of people in a difficult situation and the financial situation was not easy, the concept was – and is – great."
Cue Solé, best known as the CMO that turned around the telecom brand Sprint and helped it navigate a merger with T-Mobile. "There are a lot of parallels. Sprint was a subscription business, that sold different plans to enterprises and consumers," Solé explains. "We were exactly the same business model if you think about it, even if its a totally different sector."
Tasked with turning around WeWork after a tumultuous year that saw it burn through $1.4bn in the last three months of 2019 (pretty much all the money that Softbank provided) would be unenviable enough. But to make Solé's task at hand even harder, he joined the office space company at the exact moment everyone began retreating from offices. As he acknowledges, existential questions soon abounded.
"Beyond the noise, we then had Covid-19 on top of it. And there was a lot of discussion on the future of work. Are offices even relevant? Is WeWork even something that makes sense as a business?"
Unsurprisingly given WeWork's business model essentially ceased to exist throughout lockdown, its second-quarter financials showed membership fell in the quarter. However, this hasn't put if off adding new locations to its already expansive roster of 828 office spaces, helped by a dedicated SoftBank, which has pledged an extra $1.1bn to help prop up the beleaguered brand.
But how do you sell space when people are still hesitant to return to the office? Recognising the accelerated demand for flexibility, Solé feels the post-pandemic return to the office could create new opportunities and intends to position WeWork in the ground between working from home and returning to the traditional office environment.
"We've been working hard on designing what we think the future of work is and why and we think that WeWork is more relevant than ever, which is why we wanted to make a statement and say what we work stands for now. As part of this thought process, at the start of this month, WeWork launched a global marketing campaign titled 'That's How Tomorrow Works' that spells out its flexibility to potential users while enticing businesses that are looking to downsize.
"Our biggest business opportunity is with our biggest competitor... the traditional office space. We can actually help them reduce costs and more importantly, offer a more flexible scheme. So our competition isn't really a competition, its a transformation."
Enterprise companies now represent 48% of the total 612,000 WeWork memberships. It accounted for more than 50% of WeWork's core revenue for the first time in Q2 2020, with large companies accounting for 65% of its new customers in June.
Beyond this, WeWork has joined the list of brands turning to subscriptions to drive growth. Earlier this month, high street favourite Pret a Manger announced it was to offer customers up to five coffees a day if they sign up to its monthly subscription service.
Competing with co-working spaces like Soho House and Hoxton Hotels' Working From_, WeWork has introduced its own subscription service called 'All Access' that gives members entry to all of its 828 locations. This is one of its "answers" to the pandemic, Solé says. "Large enterprises can buy these black cards for their employees so they can go work wherever they like."
WeWork has also trialled an 'On Demand' option, which will afford non-members the option to book workspace or conference rooms on an hourly or daily basis.
While WeWork is using this time to reconsider the future of work, with a second wave looming over the Western world, a major concern will be the return of lockdowns. But, it's important to remember that one day, Covid-19 will be a thing of a past and it is the businesses that used this time to adapt their product that will come out on top.
"If you need office space (beyond being healthy and flexible for your needs) it should provide with you with tools for working together so you can be innovative, collaborative and productive," Solé concludes on the future of WeWork. "This is what we're set towards in 2035."