From the Top Down

Fargo bank expands operations, develops culture with headquarters renovation .When leaders of Gate City Bank set out to renovate its headquarters in downtown Fargo, N.D., they wanted to do more than freshen up the building's appearance. The goal was to create a space that improved efficiency, optimized space usage, attracted younger workers and promoted relationships among staff. With renovations on its sixth floor in 2013 and third floor in 2014, both completed by Fargo-based architecture firm Wild CRG, the bank is well on its way to accomplishing its goals..Gate City's desire to create space efficiency, and to enhance its work environment and culture, aligns with trends in design. Businesses are shrinking offices in favor of open floor plans and collaborative meeting spaces. According to a 2015 study, the average amount of space per office worker in North America dropped to 176 square feet in 2012, down from 225 in 2010, according to CoreNet Global, a commercial real estate association..Gate City's goals also stem from its rapid retail product expansion. The bank introduced a mobile banking option in 2009. It added a mobile banking app in 2012, mobile deposit capture in 2014 and person-to-person payments in 2015. Over the same period it has grown to $1.9 billion in assets from $1.15 billion..Bolstering operations.In addition to digital product and asset growth, Gate City also has grown its mortgage department and added financial planning and insurance services. Operations departments – such as HR, compliance, marketing and customer service – needed to grow proportionately.."As you introduce more technology, you introduce more questions and longer calls for customer service," said Kim Meyer, executive vice president, director of administration at Gate City. "Customers used to call about balances and statements. Today it is a long conversation about getting onto online banking or for help with mobile deposit capture. Our average call length for customer service has gone from one minute to three minutes.".Gate City Bank's headquarters is a seven story, 75,000-square-foot facility. The building's ground floor is a branch; the second, third and sixth floors are offices. Half of the fourth and fifth floors are for tenants – Wild CRG and a law firm. Mechanical and storage are on the seventh floor..As a part of the project, Gate City moved its call center from an offsite location to the third floor. "We added 14 new customer service reps in the building," Meyer said. "We have 26 people in the call center today.".Since 2013, when the bank began planning to renovate, Gate City's corporate staff has grown to 143 from 106. It has added those employees, with space for more, without taking up more room. The feat allowed it to keep renters and retain rental income.."The vision here, though, was about more than rent; it was to cultivate an interactive environment," said Andy Koedem, vice president at Wild, who spearheaded the project with Meyer and Jay Krabbenhoft, senior vice president and Gate City's office services manager. "The goal was to create a next generation workspace. It was about how people need to, want to and prefer to work. We spent a lot of time making a master plan for where people would work the best, where they should be seated and who should be next to whom. Where 150 people sit and how the space allows them to interact is crucial. It can create efficiencies." .Master planning.Gate City's third floor renovation is an example of good master planning. The bank can now accommodate 80 people on the third floor, whereas before it could only fit 40..The key to that space efficiency was design based on where staff spent their time. "We found that staff has many meetings in and outside the office," Krabbenhoft said. "We calculated that only about 55 percent of the private offices are occupied at any given time. The majority of employees' time was spent elsewhere.".While staff still needed private offices, offices needed to be multifunctional or have very small square footage. The new manager offices on the third and sixth floors average 100 square feet. The new executive offices average 230 square feet. That's down from 150 square feet for manager offices and from 300 square feet for executive offices. .The third floor has only one conference room. The floor also offers an open, collaborative meeting space with a kitchen where multiple groups can meet at the same time. The sixth floor has just three conference rooms. Two are traditional conference rooms, one where the board meets. The third is the office of Steve Swiontek, the bank's chairman, president and CEO. "His office is on the [the conference room schedule] and we are able to use it to have a semi-private meeting when he is at meetings outside the building," Krabbenhoft said..Meyer, Koedem and Krabbenhoft interviewed with NorthWestern Financial Review in Swiontek's office, who was out of the bank at the time.."We have four meeting tables in the [open collaborative meeting] space on the sixth floor alone," Krabbenhoft said. "We can accommodate four meetings in less space than two meeting rooms because we do not have doors or duct work taking up space.".The new collaborative meeting spaces on the third and sixth floors incorporated insights gained from visiting university student unions and the American Academy of Neurology in Minneapolis. Like a university student union, the meeting area allows people to easily turn to one another to get questions answered quickly, an efficiency gain unavailable when meetings are held in closed rooms..Krabbenhoft pointed to a meeting he had with the head of retail banking as an example. "During our meeting, he asked me to check on something with marketing. Well, the marketing department happened to be sitting right there, also in a meeting," he said. "I turned to them, asked them the question; they answered. We asked a clarification question and got their feedback, and we finished that task right there.."In the traditional meeting room," he continued, "I would have taken that task back to my desk, emailed them, waited for a response, asked for clarifications and then taken the responses back to him. All those steps were eliminated by having them right there.".A next gen workspace.Gate City also worked with Koedem to create an attractive workspace which also promotes a culture of relationship building among staff. The bank saw that such a space would aid in attracting talent, particularly from the millennial generation..In recent years, the transformation of downtown Fargo has made it an attractive place to work, Krabbenhoft said. "At one point there was only a Subway downtown if you wanted lunch," he said. "Today, there are some 50 options. We are fortunate to have a building downtown.".Fargo has become a magnet for millennials. A college town, Fargo has more than twice as many 20-somethings than it does teenagers, according to the U.S. Census Bureau. A high ratio of 20-somethings to teenagers indicates the city is gaining Millennial-age people more than it is losing them to attend college, to get married or for a job. Fargo's ratio of 20-somethings to teens is 210 percent..One way Gate City's new design helps attract employees is the impression made by its renovated floors. Before, office walls and shoulder-height cubicle walls blocked natural light from reaching the center of the floors. The renovation added glass walls and waist height cubicle walls which greatly improved the flow of light and thereby the psychological effects of the space.."Employees can see out the windows in three directions from their workspace," Krabbenhoft said. "They can see the sunshine and the outside. The natural light makes the space feel much less restrictive.".One small detail allowed Gate City to foster relationships between top executives and the staff: the placement of the espresso machine. The only floor that has an espresso machine is the sixth floor, where the executives and other departments work. The machine's placement, however, isn't about special treatment for executives.."Maintenance personnel, our mail personnel, the tellers, anyone who wants coffee can come up to have an espresso drink with the executives," Krabbenhoft said. "We bought one for the sixth floor and we didn't add one on the third floor when we renovated. One machine on the sixth floor was a huge element in creating a culture of top to bottom relationships.".Leading change.In addition to closer quarters, lower cubicle walls and collaborative meetings areas, Gate City also went nearly paperless with its renovation of the top floor. To manage the many changes to space and culture, the bank needed strong leadership, Krabbenhoft said.."It could not have happened without Steve Swiontek behind it," he said. "As we did our research we saw that projects of this kind succeeded at creating change when the president was behind it. If the president was not clearly behind it, it failed because people naturally fight change.".When a project has as many moving parts as Gate City's did, the change initiatives need to pan out. The shift to paperless, for example, had to take place to reach the needed space efficiency. "We had 20 printers on the sixth floor alone before," Krabbenhoft said. "Now we have three printers; that change alone brought efficiency to the space.".As Gate City moved forward with its new design it did not manage the project based on staff consensus. "We took that burden off of the employees," Krabbenhoft said. "We opted to have a team of people, reporting back to our president, who selected the furniture, found efficiency and designed to foster culture.".Gate City has found that if banks want to influence culture, they have to build their space to foster the desired activities, Krabbenhaft said. As Gate City has found, motivating a culture can be as simple as the locatiopn of the espresso machine.