Office space and telework: part 2

Office Space & Innovative office Strategies

Tough Minnesota law - telework mandatory element of building plans

Under Minnesota Statute 1994 S. 15.95 sub 10, no state agency may propose or implement a capital investment plan for a state building unless it receives approval from the state for increasing telecommuting by employees who would normally work in the building. The only way the agency can get out of this is if it can prove that such a plan is not practicable.

Mobility and the New Placemakers (We thank Dr Franklin Becker - Cornell professor, consultant and internationally respected officing expert - for writing this article especially for this website)

When I'm asked what the "office of the future" will be like, I think of wine futures. You know how this works. You talk to a friend who knows someone who read somewhere that the price of wine is going to skyrocket. So you buy a dozen cases of wine at a fixed price for the 2003 harvest - and hope the price the wine sells for in five years exceeds what you paid for it today.

Office futures are like that, too. You try to guess which way corporate life will go, and then speculate on what kind of workplace to buy as a bet against that. You may want to stick with the wine. Or you follow Peter Drucker's advice in a recent Harvard Business Review article The Future That Has Happened Already 2, Drucker writes: "....it is pointless to try to predict the future....But it is possible - and fruitful - to identify major events that have already happened, irrevocably, and that will have predictable effects in the next decade or two. It is possible, in other words, to identify and prepare for the future that has already happened."

For the last ten years interest in and implementation of different forms of alternative officing (AO) has increased dramatically. AO has, in fact, become simply another tool in the real estate and FM space planning and design toolkit. The movement of AO from fringe program to more generally accepted program has occurred, in part, because practical experience and research has helped us better understand and implement AO. That research has focused almost exclusively on the interior environment, from a design perspective; on cost savings, from a real estate and facility management perspective; and on employee morale and satisfaction to reduced and unassigned space in the human resource domain. As I survey the workplace the one single indisputable fact of the workplace that we can see today and that will transform the office of tomorrow is mobility—of all kinds.

Underwhelmed? Think about it. I am not talking about hoteling, non-territorial offices, team spaces, or any other current office design approach. I am talking about a simpler - but more pervasive - concept:

People—and organizations -- doing significant parts of their work in different places. This says nothing about office size or space ownership, just that the likelihood that most work is done from the same place each day will decline. One other critical component of mobility is unpredictability. Precisely when - and for what period of time – someone or some organizational unit will be in a particular location is not known far in advance. What's different is recognizing that:

1. Mobility is the pattern, not the exception.
2. Mobility concerns departments and whole organizations, not just individuals.
3. Unpredictability is fundamental to mobility, both for groups and organizations as well as individuals.
4. Mobility, in all its forms, will increase dramatically.

The last factor, the sheer breadth of mobile work, demands a new workplace infrastructure that explodes conventional workplace boundaries, inside and outside the "office." And it does this not just for the design of where we work, but for how space itself in procured and constructed.

The Ecology of New Ways of Working

Inside the office, we increasingly expect employees to choose to work in different settings within a building: a workstation, conference room, break area, a cafeteria wired for power and LAN. The technical infrastructure to support movement among these settings ranges from wiring every possible place to work to providing wireless communications. Just as significantly, the management infrastructure, via formal and informal policies and practices, is also changing to emphasize job performance rather than good citizenship.

But individual mobility goes beyond this. People are constantly on the go, to clients and vendors and branch offices and business partners located across the boulevard or on another continent. These mobile workers need services and space on demand, everything from paper, supplies and technical support and training to places to pickup mail or meet and socialize with colleagues, customers, and clients. Providing mobility’s necessary infrastructure creates new business opportunities while helping organizations use their scarce resources to better effect. Establishing the infrastructure to support mobile work out of the office brings into play all kinds of new placemakers:

Kinko's (originally a copy shop) now provide everything from workstations to videoconference rooms;
laces like Mailbox, Etc. provide mail and related services;
companies like Steelcase and Marriott provide "Rooms that Work" in the hotel environment;
office supply stores like Staples, OfficeMax and Office Depot offer not just office supplies and equipment, but assistance in setting up small offices or home offices.

And then there are the legion of small computer-support companies that do for the mobile worker what the in-house tech support people do in the main office. The upshot is that mobile workers - and the organizations employing them - increasingly depend on people outside their organization to support the people within it.

Space On-Demand What has not been examined as part of the alternative officing movement are new workplace strategies centered around innovative ways of procuring and constructing work settings in response to a major corporate mobility need; namely, to have high quality acceptably priced space on-demand in response to unpredictable organizational changes. This broader form of "alternative officing" is, in fact, better described as "alternative workplace strategies" (AWS), since the focus is less on the interior design of the workplace than on the broad range of workplace strategies that involve everything from new organizational alliances to innovative ways of delivering and relocating space quickly.

A pharmaceutical company wants to launch a new science program involving the immediate hiring of 50 new scientists, but is constrained from doing so because existing lab space cannot accommodate the new hires and it will take at least 18 months to build new space once plans and designs are complete.
Two companies merge and in doing so determine that a one hundred and fifty thousand square foot building in the Midwest used as a back office data processing facility is no longer needed. However, a new training center is needed immediately about 200 miles away.
A consulting firm obtains a major project which will involve 30 consultants working on-site for a period of six months. The project begins in a week’s time; but there is no space in the client’s offices for the consultants to work; and conventional leasing and fit out of space would take several weeks to months to complete, and involves a 3 year lease, which is much longer than needed.

Each of these examples typifies a need for space on-demand. The challenge organizations face as they merge and acquire new companies, as they restructure, and as they develop new programs and shut down others is to become operational fast. That means getting the type of space they need, where they need it, when they want it, at reasonable cost.

Approaches to On-Demand Space As the examples above suggest, on-demand space can be achieved physically, by new approaches to construction; operationally, by new approaches to procurement; and organizationally, by new approaches to manufacturing and selling. A typology of on-demand AWS includes:

Non-territorial space: Add/reduce people by changing staff/office ratios not by changing physical space.
Mobile/Modular space: Build units at one location and transport them to another
Turkey space: Lease for only that amount of time needed space that is fully serviced and fit out
Quick Construct space: Space built in very short time frame because of innovative design and materials.
Temporary/Recyclable space: Space designed to be recycled from months to few years; or moveable to new location.
Excess Capacity space: Use of another firm’s excess capacity space on an opportunistic basis.
Electronic space: The substitution of electronic space for physical space by changing development / distribution systems.

Issues: Making Space On-Demand Work Just as AO was widely viewed as having limited application five years ago, many of the AWS briefly described above seem that way to organizations today. Portable, temporary, and mobile buildings, for example, are not widely accepted despite the fact that technically they may perform as well as their more conventionally constructed counterparts; and customized exterior designs and interior and exterior finishes render these buildings essentially indistinguishable from conventional facilities.

An AWS Research Agenda These AWS are being used today, but we know relatively little about how these approaches work over time and in use. Whether using a competitor’s space to house one’s own work processes or building a village of temporary buildings, research is needed to help organization’s better understand and gain confidence in the viability of different AWS as a tool to help them meet their business challenges. Key issues to consider include: image and identity; cost; functionality/suitability; safety and speed.

The Lean Portfolio In Manufacturing and the Lean Portfolio 3, we introduced the concept of the "lean portfolio." Its essence was that companies needed to develop a broad portfolio of real estate options ranging from the quite conventional to others that might substitute electronic space for physical space or one’s competitor’s or supplier’s space for one’s own space. Not just the nature of the space, but who offered it is also changing. No longer does one necessarily go to a real estate broker, architect or construction firm when space is needed. One might turn, instead, to an exhibition design company, as did the Bank of America when it wanted to erect branch banks in a matter of days rather than months.

Conventional boundaries for constructing and procuring space are disappearing. Understanding which AWS works for what kinds of industries and jobs, and under what set of circumstances, will create new business opportunities for those firms that learn how to deliver space on-demand. It will also enable organizations, frustrated by the inevitable gap between how long it takes to bring a conventional building on-line and how often and unpredictably the organization changes, to create lean portfolios that use the scarce resources of the organization with greater imagination and to better effect.

If the challenge is, as Drucker argues, to recognize tomorrow's patterns in today's activities and events, then understanding how new placemakers and new ways of placemaking are creating mobility’s infrastructure is of high order. Those who do, and exploit that knowledge, will be the firms that not just survive, but thrive.

References 1 Franklin D. Becker (fdb2@cornell.edu), is Professor and Chair, Department of Design and Environmental Analysis, College of Human Ecology, Cornell University; Director, International Workplace Studies Program at Cornell University; and President of IDEAworks LLC, a management consultancy firm. 2 Drucker, P. (1997). The Future That Has Happened Already (Harvard Business Review. Sept.-Oct., 20.). 3 Becker, F. D., Joroff, M. & Stotz, D. (1997). Manufacturing and the Lean Portfolio. Norcross, GA: International Development Research Council.

Real Gold in Real Estate (Brenda Howard)

(Brenda Howard wrote this article especially for IVC): If you have ever leased commercial real estate, you know what I'm talking about. That's because you've been paying the real gold amounts to rent the valuable space. Next to the cost of manpower, commercial real estate leases rank up there as one of the largest expenses a business has to pay in order to conduct business.

This really doesn't have to be. At the minimum, this cost can be reduced substantially. Eliminating the need for much of, or even all, of your commercial real estate costs can do this. Technology has moved us to the next level in the work place. It's known as the "virtual office". We see a great deal of information about virtual offices and how beneficial they are, but there are very few practical examples of how this process works. Here are some examples, true stories, of how this works for others.

Example 1: I worked for a company that allowed me to telecommute three or four days a week. This company had one office with three desks, three telephones and some generic office supplies. There were 22 people that telecommuted. We came in as need dictated. When we were in the office, we shared this workspace. The workspace was primarily used for checking voice mail messages and possibly organizing files. The actual work had already been done and we were there to meet with people and to "pick up and drop off" any work that physically had to be transferred.

Imagine the cost to this company if they had to provide office space for 22 people--even if that office space was one large room with 22 cubicles. They would have had to incur the cost of 22 desks, 22 chairs, 22 telephone lines, 22 computers, etc. But wait a minute, they would have had to buy the computers anyway. Nope, not in this company. One of the prerequisites of employment was that the employee had to own their own computer that meet minimum specifications, i.e. PC, Win 95, 16 megs, etc. Much like requiring that an employee own a car to drive to work, they simply required personal computers instead of cars. The savings for this organization were tremendous. Telecommuting truly proved beneficial to them.

Example 2: Previously, I worked for a company that allowed me to telecommute three or four days out of five. They had an office for me. It included a computer, telephone, desk, etc. Basically, this office took up space. When I went to the office, I did not physically use the office very much because my purpose for going in to the office was to meet face to face with other managers to coordinate activities. I could have performed all the functions that I needed to without having a physical space to call my own. I didn't need the office and the company could have utilized that space by eliminating it altogether or putting other staff members in the office. While this organization did benefit from the increased work hours I derived from telecommuting, they missed out on another form of saving--one that would have saved them more actual dollars.

It's up to you to save money for your company. Let's say that you are a "doubting Thomas" and still do not believe the examples provided. Prove it to yourself. Physically walk around your office and take a look at how many of your employees spend an entire 8 hours sitting behind a computer. They might also use the telephone, but primarily, they sit behind a computer. Just about all of your secretaries and accounting staff are in this position. Now let's take a look at a general formula that will give you an approximate idea of the savings.

Take a look at your bottom line lease cost. Divide that cost by the number of people in your organization. This will give you an approximate cost per person. Multiply the per person cost by the number of people who sit at a computer for 8 hours a day. Now you have an idea of approximately how much money you could save on a lease by eliminating the cost of office space for these people. Depending on the number of people within your organization that work on computers a majority of their day, you've just received a "wake up" call to saving your company lots of gold that was going for real estate. What are you waiting for now? Without risk, there is no glory, Go For It!

Brenda G. Howard is a freelance writer and graphic artist. Read more articles at the Mining Company.