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Saturday, Dec 2, 2023

Future Designs

Tangram Interiors’ vision of what the future of the workplace will look like can be seen in a mid-rise office in Newport Beach, a little more than a mile from John Wayne Airport.

Once exiting the elevator on the third and top floor of the 1375 Dove Street office, a virtual receptionist who is working out of a Santa Fe Springs office greets a visitor.

Next to comfortable cubicles are large couches that look like they could be in a night club. Another area that looks like a living room features two couches, two chairs and a table. Nearby is another couch for watching a large flat-screen television.

A large kitchen includes a luxury refrigerator, a coffee maker that costs almost $10,000 and an island where employees can socialize. Around the corner is a mother’s room where windows automatically turn opaque. There’s also a small soundproof “box” with 8-foot-high ceilings providing privacy.

The top floor of the office building, owned by Santa Ana’s Far West Industries, was recently renovated for its full-floor tenant by Tangram, one of Southern California’s largest corporate-focused furniture dealerships, which also offers interior design services.

That full-floor tenant? Tangram Interiors, which revamped its own space, running some 12,000 square feet, about six months ago.

“These are working showrooms,” Tangram owner and Chief Executive Joe Lozowski told the Business Journal during a tour of his office, where the company’s been for over a decade.
“People like coming in and working. It’s a beautiful place to be.”

Edwards Testimonial

Tangram, with five locations in California and another in Texas, is known for furnishing workspaces. It acts as the representative of more than 700 furniture manufacturers, and is a flagship for giant office furniture maker Steelcase Inc.

It often works with tenant-improvement contractors, architectural firms and some of the best-known area corporations; customers include Pacific Life in Newport Beach, Kawasaki in Foothill Ranch and the Samueli Academy in Santa Ana.

Tangram recently helped renovate the ever-expanding Irvine office campus of Edwards Lifesciences Corp. (NYSE: EW), the most valuable publicly traded company headquartered in Orange County with a market cap of about $60 billion as of last week.

“We’re very pleased with the result,” Edwards Chief Executive Mike Mussallem told the Business Journal. “We’re going in the opposite direction of others that are getting rid of their offices.

“The way it’s built—it’s not cubicles,” Mussallem said. “It’s about spaces where people can hang out, bump into each other, have casual collisions. It’s a warm and friendly place with lots of amenities.

“The idea was if we made the place really cool, hopefully we’ll attract the best and the brightest.”

Michigan Alumni

Tangram’s Lozowski, the son of an engineer at Ford Motor Co., grew up near Detroit and earned degrees in chemistry and math from the University of Michigan. A friend introduced him to Steelcase.

After a few years in the industry, he began his own firm where he never planned to leave.
However, about 20 years ago, Tangram owed about $22 million to Steelcase, which eventually gained control of the firm.

Steelcase “came to me and asked me [whether] I’d take over this business,” Lozowski recalled. “I said ‘not really’ because I had my own business that was going really well in Michigan.”

Ironically, about the same time, he had an offer to buy his Michigan business.
“The math started to work out,” he said. “I had never planned to leave, except I had an opportunity. Tangram was in deep financial distress.”

It was a difficult decision for the father of five. He said he knew only one person in California at that time. Both he and his wife, Sonya, who was an internist and faculty member at the University of Michigan, knew it was the right thing to do.

“Moving to a huge diverse economic area like Southern California was clearly an opportunity, and I knew I could fix the business.”

Fixing Problems

At the time, Tangram was generating $60 million in annual sales but losing $5 million a year. Still, the company had a good reputation and strong client list, he said.

“It was clearly being mismanaged,” Lozowski said. “Even at $60 million a year in sales, you should be able to make money. I knew if I could get the costs in line and raise the revenue a little bit, we’d be able to make a profit and grow it.”

Since then, revenue has grown more than fourfold to about $250 million a year and nearly 400 employees.

While Tangram’s official headquarters is in Santa Fe Springs where it has a large warehouse, Lozowski lives in Orange County and often works out of the company’s local office, which counts about 30 workers.

Lozowski is active in the OC business community, including as a member of the CEO Leadership Alliance Orange County (see Leader Board, page 37).

He also sits on the board of directors of the foster home Orangewood Foundation, where he was co-chair with Susan Samueli of a committee that raised $70 million for the Samueli Academy at that facility.

Last year, the Lozowskis were honored with the General William Lyon Crystal Vision Philanthropy Award presented by the Orangewood Foundation.

His company has been on the Business Journal’s Best Places to Work for several years, including the most recent list where it ranked No. 16 for companies with more than 250 U.S. employees; see the July 4 print edition for more.

Effective Offices

Nowadays, Lozowski said the company marries design work with research on how to make offices useful.

“It’s not just about being pretty. Is it effective for your business? We show people how their space can be more effective.”

He estimates that a sizeable office renovation can cost around $5,000 an employee. While that might sound high, the investment could last five to 10 years and makes employees feel valued.

“When CEOs come in, it clicks,” he says of the company’s Newport Beach showroom. “They say, ‘I have to take care of my people.’

“Investing in your office is cheap compared to investing in your people.

“If you’re a leader and want to attract your people back, you have to give them something that they are attracted to.”

Future Planning

The current debate about the future of office use following the pandemic will take a couple more years to play out, Lozowski said. Right now, he estimates about 90% of CEOs want the employees back in the office. Surveys have shown him that ­­Gen Z and millennials don’t want to come into offices, while those above 45 years old prefer the social interaction in offices.

“This is what the new modern office should be,” Lozowski said while giving a tour of Tangram’s facilities.

“The old rack ‘em and stack ‘em in cubicles doesn’t apply anymore. No one wants to be this close to each other.

“You must have something that attracts people to come back to the office. We want to attract people to the office. Make it a magnet, not a mandate.”

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