Architecture that builds value

When the giant German conglomerate thyssenkrupp needed a new tower to test its lifts technology, the company originally planned to go the simple route, with an industrial, utilitarian design. It made financial sense: After all, the buildings used to test lifts' capabilities are purely functional structures that are rarely viewed by the public. There's no reason to invest in their appearance.

But then the company's leaders had a change of heart. The new tower would be located close to a historic German town, and the leaders didn't want to erect an eyesore that would mar the landscape. "We talked about it and thought, 'Why don't we do it as impressive architecture?'" remembered Katrin Hünger, CFO, Innovation Center of thyssenkrupp Elevator AG. It was a hard decision and a new one for the division, she said, but ultimately the senior staff were all open to trying something different.

That was around 2012. Five years later, in the historic town of Rottweil, Germany, thyssenkrupp held an opening ceremony for its new, striking 246-metre-high tower with an unusual helical design. That's when the senior staff had a realisation, recalled Hünger: "We noticed that the tower had the potential to become an icon, a symbol for thyssenkrupp with a certain marketing benefit."

That observation was an understatement. Since its opening in 2017, the tower has received enormous media attention, attracted hundreds of thousands of visitors, and potentially shifted public perceptions of thyssenkrupp itself. In short, the tower's distinctive architecture now serves as a strategic and highly public calling card, allowing thyssenkrupp to rebrand itself and illustrate, in the most tangible way, the strengths and values it wants to promote.

Obviously, not every company has, or needs, a soaring tower to show off to the world. But for those considering an upgrade to their physical facilities, architecture can be a remarkably strategic decision. Experts and businesses that have gone that route say a building's unique design can help a company stand out to clients, appeal to customers, and — particularly important at a time when talented workers are a precious resource — attract potential employees.

A soaring helical tower

A blue-chip manufacturing company with a February market cap of €9.8 billion ($11 billion) that started out as a steelmaker in the 1800s, the company is undergoing a major restructuring with a planned split between the industrial and materials groups. Thyssenkrupp had already begun strategically thinking about how architecture informed its reputation in the early 2000s, when it contemplated building a new headquarters. Generally perceived as solid, reliable, and perhaps a bit staid, the company was looking to create a new image for itself.

In the end, the business invested in an environmentally sustainable, architecturally distinct low-rise campus in Essen, Germany, that opened in 2010. The hope was that the modern headquarters would help shape a new public perception of thyssenkrupp as an innovative, dynamic, and technologically savvy business.

So the construction of thyssenkrupp's test tower had a precedent, although leaders in the lift division say their decision was made independently. While not particularly well known, the company's lift division is large — it earned €866 million ($980 million) before interest and taxes in 2017—2018 — and remarkably high-tech. The division builds the ropeless MULTI lift that can move sideways and diagonally, as well as up and down. But those newer forms need towers where they can be tested at high speeds.

Formerly, all of thyssenkrupp's test towers were indistinct and somewhat hidden away. "Our industry used to build elevator test towers in industrial zoning areas where hardly anybody would notice them," said Hünger.

But the company's leaders felt that the tower planned near Rottweil — which is the oldest town in that part of southern Germany — should somehow complement the area's historic architecture. In response, the lift division's leadership decided to create something different, "something very special that is capable of gaining attention internationally," Hünger said. Thyssenkrupp's leaders had a hunch it could also pay off by shifting the business's image. With an innovative tower, "we can show we're a tech-driven company", Hünger said.

After soliciting bids from architects, the company chose Werner Sobek and Helmut Jahn, who produced a design for a 246-metre tower clad in a unique glass-fibre "skin" and with an observation deck at the top. In December 2014, thyssenkrupp held a ground-breaking ceremony.

"Of course, it's not always easy to talk with [architects] — you have to find a way to have imagination, but it has to also be very industrial," Hünger said. Once construction began, the company's project managers had to stay on top of the building's progress, which required intense coordination; at the peak of its construction progress, the tower grew by four metres a day. "The construction of the tower was a challenge for everybody involved. We hadn't done anything like this before."

But the project finished largely on time, at a total cost of €40 million ($45.2 million). Hünger, who is in charge of the lift division's finances, estimates that the tower's spectacular architecture added 10% to 15% to the total cost.

It's an investment that has paid off in multiple ways since the tower opened in October 2017. First, there's an overtly financial aspect that took Hünger and her colleagues by surprise. "The tower has become a tourist attraction. Visitors come from all over the world," she said. Thyssenkrupp had originally estimated attracting 100,000—150,000 visitors during the tower's first couple of years. In fact, in the first 12 months after it opened, 230,000 people paid the €9 entrance fee to ascend to the viewing platform and look out over the countryside.

It has also paid off in media coverage. According to Jasmin Fischer, head of media relations for the lift division, almost 2,000 stories about the building appeared in print and online publications in 91 countries in the first year after the opening. The articles mention the unique tower, of course, but many also describe the company's innovative lifts. Media attention has been so strong that thyssenkrupp didn't have to spend a single euro advertising the tower or the lift division's products in the first 12 months after the tower opened, Fischer said.

Having a physical presence also supports the sales process. Before, thyssenkrupp's lift division lacked a single building where it could demonstrate the range of its products. Now the tower serves as a showroom: Potential buyers can come to Rottweil, ride to the top, and examine the lift options in person. And the tower also earns money as an event space; local businesses frequently book the rooms at the top for meetings and activities.

However, Hünger said that the most profound benefits of having invested in an iconic tower aren't so immediately apparent. "What you cannot assess by looking at these numbers is the enormous image boost for thyssenkrupp as a brand," she explained. Formerly, the company's lift division was largely invisible to the public. ("You go into an elevator and ask yourself if you've seen the brand there," Hünger pointed out.) The test tower's unique architecture has given the division a very public identity, one that's bold and forward-looking. "We love the fact that the tower fosters our image as a technology company and elevator manufacturer, instead of presenting thyssenkrupp solely as a steel supplier, as we are often perceived by the public."

And that also improves employee pride and helps to attract new talent. "It's a hard competition here in Germany for all the engineers," said Hünger, who also oversees the division's research and development wing. "It's a good way to show that we are innovative and investing in the future."

The company has been so pleased with the outcome that it is planning something similar in the US. Thyssenkrupp has already broken ground on its North American headquarters in Atlanta. The campus will be accompanied by another architecturally distinct test tower, and thyssenkrupp hopes it will receive a similar level of attention and acclaim.

The messages architecture can send

There's nothing new about companies' use of architecture to gain visibility or convey a particular set of values. Big corporations have long employed impressive buildings to highlight and elevate their status; those entrusted with the public's money, such as banks and insurance companies, have often constructed imposing facades to indicate their seriousness and reliability.

Iconic corporate architecture became particularly popular in the 1960s. In the US, for example, technology companies such as IBM and Bell Labs employed big-name modern architects such as Eero Saarinen and Charles and Ray Eames to design their buildings, underscoring the companies' future orientation.

Today, tech companies are still driving some of the trends in corporate architecture. Open plan offices, exposed brickwork, and whimsical features such as slides, for example, originated in IT offices and have now become so ubiquitous as to be clichés. More broadly, companies from a range of industries feel pressure to appear innovative and forward-thinking at a time when new technology influences ideas and products around the world.

But there's been a key shift. These days, companies create distinctive facilities not simply to appeal to consumers, but to attract and retain key talent.

"The architecture does need to convey a sense to the broader public, but the real focus is the user," explained Paul De Santis, project designer for Zurich Insurance Group's North America headquarters and partner with Goettsch Partners, an architecture firm with offices in Abu Dhabi, Chicago, and Shanghai. "The idea that you'll be able to attract the highest-quality people and retain high-quality staff is a massive thing, no matter whether you're in Germany or China or the US. And architecture plays a very big role in that. There's a generation of people looking to work for best-in-class companies, and they expect to be in best-in-class facilities."

Indeed, the US, Europe, Japan, and many other places are suffering from intense labour shortages, particularly in industries that require specialised technical knowledge. Companies are competing for skilled workers — many of whom are seeking more than simply a nice paycheque.

"People want to be proud of the place where they work," said Matthias Hollwich, principal and co-founder of the New York-based architecture firm HWKN. "It's not just about making six figures and driving a BMW — nobody cares about the BMW anymore, and with six figures it's like, 'OK, but what else do you do?' [The job] is also about lifestyle, quality of life, purpose." And it doesn't hurt, Hollwich added, if all of that can be documented on intensely image-focused social media.

Standout architecture can fill many of those roles. That's what the leaders of Suzlon Group, a global renewable energy company based in Pune, India, had in mind when they built a new headquarters in 2009. Named Suzlon One Earth and with a capacity to house 2,300 workers, the 10-acre campus boldly advertises the company's values: It is LEED Platinum-certified and completely powered by renewable energy, with rainwater harvesting facilities and on-site waste conversion.

The company designed the campus to appeal to employees' emotional and intellectual needs in order to inspire creativity and innovation in the workforce.

But an inspiring facility can appeal to other important players as well: potential partners and clients.

The benefits of a modern glass cube

"You cannot have the same showroom you have had for 20 years and then tell people about the future," said Oliver Kleine. The director and fifth-generation owner of Glaskoch Corporation, a German glassware company, explained why the 160-year-old business built a new headquarters and showroom in 2007.

Around 2003, the company — which operates under the brand name Leonardo — began thinking about becoming a lifestyle company, with a broader product line that included furniture, tabletop items, and jewellery. That led to questions about the space that the company was using to show off its goods. "We started to think about architecture because I don't want to only speak about the future and the vision, but to show that people really can live it," Kleine said.

Kleine met the owners of 3deluxe, the architecture firm that ultimately designed Glaskoch's new space, at an exhibition and quickly felt a connection with them. At that time, 3deluxe was a young company that hadn't yet created any permanent buildings. Kleine was willing to take a risk on its architects. "Somehow, I knew that when they were working on something for the first time, they would give much more of their passion than well-known architects, where you pay for the name," he said.

The result is the Leonardo Glass Cube, a 1,200-square-metre building in Bad Driburg, Germany, that combines naturalistic lines — think of a turtle shell's design — with a lot of glass. It's a stunning, unusual-looking facility that ultimately cost Glaskoch about €10 million ($11.3 million).

Kleine said it has been worth it. "I think everybody is quite proud of having such nice architecture," he said, referring to Glaskoch's 280 employees, who can enjoy the facility's gleaming terrace on nice days.

Just as important, the building has attracted a huge amount of public interest that — as in the case of thyssenkrupp — has benefited the company financially. "Every year, we have three or four commercial things happening here," Kleine said. Movie scenes and advertisements have been filmed in the glass cube, bands have held concerts, and other companies have used the space for expositions. Fees for use of the space, particularly in the case of crews shooting scenes for film and television, nearly cover the building's overall operating costs, including heating, cooling, and electricity.

But perhaps the greatest benefit of having an ultramodern building is the impression it immediately conveys about the business. Kleine explained that back in 2009, the company was aiming to expand into furniture, and he and his colleagues met with other brands to discuss Glaskoch's plans.

"The first companies asked why we wanted to do it. We had to find a way to show them what our philosophy was, so we showed them this glass cube. And after that, there were no more questions," he said. "It's a very nice tool for new business development. They see the building, they like it very much, then they go inside and see what we're doing, and very often they're impressed. I don't know how it would've been if we didn't have the cube."

Of course, Kleine has been lucky: Even after ten years, the building still looks modern and fresh. Aside from cost, that may be the other big downside to investing in unique architecture as a branding tool: Although not always true, a contemporary design could look dated after a few years and may no longer appeal to potential employees and clients or to the public.

Still, for those that put in the time and calculations to get it right, great architecture can seriously pay off.

Amanda Abrams is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Drew Adamek, an FM magazine senior editor, at Andrew.Adamek@aicpa-cima.com.