The End of the Office

Summer 2009 By KATHIE VON ANKUM

Times change. So should the design of your workplace.

KATHIE VON ANKUM is an associate editor in The Conference Board’s publishing department. She sits in a cubicle, on a fitness ball.

You worked hard to get that corner office. Now get ready to give it up.

Ever since Michael Bloomberg brought the layout of the trading floor to his corporate offices and, ultimately, to New York’s City Hall, it seems de rigueur for organizations to move toward an open plan, unless they want to be seen as hopelessly backward and uncreative. But surely this egalitarian scenario—in which top executives commingle with their lesser colleagues and share private space with other managers—can’t be optimal for each and every business, can it?

Generation Y-ers, those tech-savvy employees who will define most corporations’ not-so-distant future, generally support the trend toward open, collaborative workplaces—but only up until a point. Almost half of all professionals across all age groups still consider the private office to be the gold standard, according to a Knoll Workplace Research study. Yet as you probably know from looking around your own floor, those coveted private spaces frequently either stand empty, their designated occupants off on business trips or in meetings or at home—unless, that is, the office is doubling as a conference room.

It’s safe to say that most companies operate differently than they did a decade or more ago. Globalization and technology have impacted what work looks like, along with where, how, and by whom it is performed. And attitudes toward work and work/life balance have shifted, making the workplace not only more diverse but less hierarchical.

But office design has failed to keep pace with these changes and with the flexibility necessary to function today. As you go through the process of rethinking the scale and operations of your department or business unit or entire company, don’t neglect the space where it all happens. Whether reconsidering your rows of cubicles or starting with a blank blueprint, it’s worth the effort to bring together work and workplace.

How you plan your layout depends on your company’s unique culture and objectives, but here are some thoughts to get you started.

“A lot of the time, organizations don’t know what it is they’re looking for” when it comes to optimizing office space, says Chris Congdon, manager of corporate marketing at office-furniture manufacturer Steelcase. “But when you ask them what they really need their space to do to support their business objectives, they quickly realize that they have more space than they need and that their existing space can—and needs to—deliver more.”

At Procter & Gamble’s various workplaces, managers continually move employees into open spaces as business requirements change and leases expire. “Whenever we need to create more space in the same footprint, we knock down some hard-wall offices and increase seating by three or four times,” explains Bruce Williams, associate director of HR at P&G. “Everyone knows it’s going to happen; it’s just a matter of time.”

Meanwhile, DuPont intends its newly redesigned open-space R&D facility to serve as a model for the company’s other locations. “If you have existing buildings,” asks Richard Vintigni, DuPont’s senior diversity and work/life consultant, “why would you go to another if you can get more people in by going to completely open space?”

While such a layout sends a strong message about corporate culture, any cost savings may well destroy value in other areas. According to a study by the British Council for Offices think tank, the jury remains out on whether a causal relationship exists between increased use of open space, enhanced communication, and improved productivity. “Whether the outcome of the balance between the benefits and costs will be positive or negative cannot be predicted beforehand,” says Theo van der Voordt, a senior researcher at the Delft University of Technology’s Center for People and Buildings, in a 2004 article in the Journal of Corporate Real Estate.

Furthermore, organizations must also consider the “cynicism that can come about when a move to an open-plan office is poorly reasoned or mishandled,” Stephen Beacham, associate principal of Daroff Design’s corporate-interiors practice, wrote in a 2005 Real Estate Weekly article.

While some firms move toward open-space workplaces, others are encouraging hoteling, which provides employees with space on an as-needed basis. For example, while global consulting firm Accenture maintains office locations in thirty-nine U.S. cities, it considers itself completely “virtual,” without traditional corporate headquarters. “When we took a close look at our corporate real estate,” explains Sharon Klun, Accenture’s director of work/life initiatives, “we discovered that it was costing us a huge amount of money to provide employees with a place where they could pick up an expense envelope.” Locations provide employees with meeting rooms, a set of unassigned enclosed spaces, open cubicles, and support equipment such as photocopiers and fax machines. The company leases space—preferably in buildings with restaurant facilities—to accommodate client meetings. The CEO still has a designated office, but it’s no longer stadium-sized.

Accenture also reduces real-estate costs by sharing office space with organizations with similar needs. A web of satellite workplaces extending beyond a city’s main office provides even shorter commuting times for workers. Managed by third parties, these offices bill Accenture and other participating companies based on the hours the employees use the space. Picking up an expense report becomes as easy as picking up a latte at Starbucks.

Just like employees who use screensavers to individualize their space, companies rethinking their workplace layouts will still have to find ways of using their space to communicate their corporate culture to clients and workers—one reason why corporate headquarters are unlikely to disappear completely. “Organizational culture is what your brand is all about,” Congdon says. “It needs to be consistent and authentic. It needs to permeate the organization all the way through to the back office.” In other words, seating a receptionist behind a sleek, logoed counter won’t establish trendiness any more than a huge flat screen in the lobby will convey state-of-the-art advisory services if your accounting personnel look as if they’re still working in 1975.

Prominent examples of thoroughly and authentically branded spaces are typically found in creative industries such as advertising and in high-tech firms. The headquarters of Google and ad agency TBWA\Chiat\Day (designed, incidentally, by the same architect) apply a college-campus model to a corporate setting. Their brands are not just reflected in a color scheme or a particular use of materials—they are expressed with a commitment to employee comfort and creativity that permeates the corporate culture.

The virtual office—hoteling—may breed the antithesis of this approach, since bare workstations with phones don’t convey much of a corporate culture. When crafting their spaces, organizations must take into account the fact that most people still want to come into an environment where they feel comfortable and can work productively. “You see all these companies pushing people out, having them work from home. That’s probably going to work for a year and a half,” Klun says. While technology does make it possible to perform almost all work-related tasks remotely, human nature can get in the way. “Not everyone is cut out for working from home, and it’s not because you can’t achieve your goals,” she notes. “It has to do with isolation.”

At Accenture, first-year employees typically take full advantage of the opportunity to work remotely, she says. The second year, they start coming into the office a couple of times a month to meet their colleagues for lunch or just to get away from their refrigerator (indeed, Klun has noticed considerable weight gain among employees working from home). “The third year, ‘I’m going to the office for personal-hygiene reasons, because I need to clean up my act, and because of the voices in my head!’” she quips. “So from the human-capital perspective, you need to consider what type of office design will keep people emotionally and physically healthy.”

Klun adds that a relative handful of Accenture employees still come into the office daily—understandable considering that today’s thinning laptops, ubiquitous wi-fi, BlackBerries, and other gadgets have created one virtual inbox. Indeed, the list of devices and innovations designed to support mobility and make the need for permanent personal space at the office obsolete grows ever longer. But how are humans fitting into this brave new virtual world?

Giving up one’s personal desk and, thus, the basic human needs for privacy, territoriality, personalization, and visible status, some envision, will be offset by a more aesthetically pleasing and technologically advanced work environment—except that most of us remain wired with a need for staking out and defending our own territory and elevating our own status. Williams reports cases at P&G in which executives usurped shared “huddle rooms” to make up for lost private office space. Meanwhile, live conferences still win out over the most advanced videoconferencing technology.

“The virtual office is the natural evolution of the beast,” comments product-design consultant Patricia Moore. “We’re all aware that we will be George Jetson, talking to our boss on a screen, but we’re not quite there yet. We ruthlessly hang on to vestiges of our past.” It seems that people still need people. For example, earlier this year, NPR’s Marketplace reported on Carrboro, N.C.-based Creative Coworking, a venue designed to lure freelancers and consultants out of their home-based, high-tech isolation by providing them with not only desk space but the opportunity to play Wii baseball in an open conference room.

While people will always find creative ways to make their space work for them so they can work in their space, it’s important to keep in mind that the only fixed cost exceeding corporate real-estate expenditures is human capital. Staff turnover is expensive, and research has shown that keeping employees physically comfortable increases productivity and engagement by 25 percent. Just like star athletes, employees need to be able to breathe, see, and hear properly to perform at the top of their game.

With millennials entering the workforce and boomers staying on, the need for companies to provide flexibility and choice will only increase. Giving employees as much control as possible over their work environment by providing spaces to collaborate, concentrate, and contemplate will be essential for recruiting and retaining the most desirable employees.

No one has pinned down the perfect one-size-fits-all workspace. But creating balances between privacy and social contact, opportunities for spontaneous interaction and communication and focused work, and stimulation and space for respite are essential ingredients of the mix. While companies can learn important lessons from early adopters of new organizational concepts and design solutions, each business will have to devise its own solution to support its unique strategic goals.

And as with any other aspect of life, there will always be pioneers, and there will always be stragglers—as illustrated by a forward-thinking manager at Blue Cross and Blue Shield of Florida who loaned a colleague the fitness ball on which he was sitting at work. The co-worker returned it within the hour, afraid she might fall off. Her workstation was right outside of the worker’s-comp office.