By Tessa Curtis, Principal, Tessa Curtis Associates,
Boards often need a push to invest in a more strategic approach to corporate communications. Those still waiting to jump might ask which business they’d prefer to lead – WeWork or Regus, the latter now part of International Workplace Group (IWG).
Less than 10 years old, WeWork has just raised another $500m to fund its international expansion. This gives it a market valuation of around $20 billion, despite never having made a profit and with offices in only a fraction of the locations of Regus. The similarities between the two companies’ business models – and different fortunes – irks Regus. This summer talks collapsed between its parent company IWG and potential new investors.
So why is a business performing well apparently worth less than a smaller, loss-making competitor? In a nut, one is sexy – the other not. WeWork is young, in tune with the zeitgeist, funky and “cool”, ergo seen as sexy. Regus isn’t – but it’s got the point. Spaces, IWG’s new co-working brand, looks more like WeWork – but there’s still a big job to do.
This isn’t just about the business itself but shaping perception. IWG needs to build a reputation for being an industry leader and driving change, but also somehow become “sexy”, like WeWork. A good start has been made, using studies and thought leadership to take greater ownership of the revolution in flexible work and how people use offices.
But, in the social media age intellectual arguments alone are not enough. As the authors of “New Power” Henry Timms and Jeremy Heimans have recently argued, in a social and digital world hearts often turn the tide more than heads. This isn’t just about mass movements such as #MeToo. Regus needs to find some “wow” factor if it really wants to sway sentiment. This isn’t going to be easy because, like many established players, it has some “dinosaur dust” to shake off first.
Still, WeWork scooping up new investment and riding high with a $20 billion market tag, should focus a few minds in the boardroom here and elsewhere. Reputation has once again been shown to be a company’s biggest intangible asset but it needs investment. Not all PR practitioners are equal. Strategic thinkers with relevant experience who really can shift the dial are relatively few and far between. Getting this right at Regus and IWG won’t come cheap, but the price of getting it wrong could hardly be greater. Watch this space indeed.