The New Definition of “Office”

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Over the past year or so, I have been researching office environments and particularly the paradox of the “Open Office.” The “Open Office” concept has expanded to include other attributes, influencers and characteristics (more than just cubicles) and has become more of a state of mind in the work place. The “Google-ization” of the office environment introduced concepts that would make Don Draper and Roger Sterling run into their offices and lock their doors. “Open Office” now encompasses the image, the branding of a company, the workflow process of an organization, the technology prowess of a company, the hours of the company and even to a point, the age of its employees and managers.
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IN THE BEGINNING: The origins of the current Open Office trends began somewhere in the early 1970’s with the introduction of “The Cube.” And actually, not much has changed in the physical cube in 40+ years – partitions of varying heights, open and enclosed overhead storage, box/box/file, and etc. have remained the standard. Some accessories have come and gone like pencil drawers, keyboard trays, articulating arms, monitor stands, etc.  And to keep products fresh and current, “innovative” accessories have been added like automated sit/stand surfaces, led task lighting, window panels and “doors.” Not much has changed over time in the initial rationale of the use of the cube either. Primarily, it was a quick, inexpensive way to reduce the size of employee work spaces, densify the workplace and thereby reduce the overall area required for a company and reduce the cost and overhead of the spaces. In the past 10-15 years, the average area per worker has continued to drop from 250 SF to 185 SF – a 26% reduction. Predictions for the future are trending even lower – down to the 100 SF range.

02THE JUSTIFICATION AND THE HUMANIZATION OF THE OPEN OFFICE: There are some very apparent reasons for the shrinking size of space – less and less paper files, technology replacing files and research, laptops replacing full CPU’s and keyboards, etc. And then there are all the unmeasurable reasons for open environments – flexible space, flexible hours, co-working space, managerial/worker equality, and probably the most recognizable (albeit overused) word – collaboration. Many companies have adapted and justified smaller work spaces by taking away assigned work spaces and adding other spaces (hoteling stations, benching areas, open collaboration areas, enclosed individual quiet areas, expanded break rooms, etc.). Other companies have taken the concept to embrace culture, lifestyle and generational differences (No I will not use the “M” word). These spaces include game rooms (what’s an office now without a foosball table or ping-pong table?), exercise rooms, private (cool) niche work areas, varying sizes of meeting rooms, break rooms with food service and so on.

PROS AND CONS: There seems to be a little more reporting on the negative side of the “Open Office,” so I’ll start with the positives.03

  1. Less space with more employees. Example – A typical 10,000 SF office at 250 SF per person would house 40 employees while at 185 SF per person it would house 54 employees. Or, at 185 SF per person it would only take 7,400 SF to accommodate the same 40 persons.
  2. Less Expense: Example – A 10,000 SF office at $2/SF costs $240,000 a year while a 7,400 SF office at the same rate costs $177,600 a year – a $62,400 savings a year.
  3. Culture: Tenants today want collaborative work spaces that promote in-person interactions, take advantage of natural light, utilize technology, and allow for a flexible work environment. The argument for more communal space is that open offices foster communication and accidental creativity — that serendipity is a plus, if serendipity is defined as bumping into co-workers and chatting about projects they may not necessarily be assigned to. The constant intermingling not only generates a sense of camaraderie among personnel, it also enhances the flow of information and teamwork.04
  4. Fun: Corus Quay (Toronto, Canada) has an open office environment with multiple social spaces, including a five-story atrium with a three story slide and lounge above a couple of TV studios. The building is all about having fun and bringing the entire work force of a company together in one place to create a boost in productivity, helping the company to continue to grow. Bright colors, big TV’s, boardroom tables shaped like ice hockey rinks – this building really has it all.
  5. Dogs – enough said.
  6. Space Utilization: A new wave of cost cutting and efficiency has ripped through the economy since the financial crisis and Great Recession. Older office designs and corporate hierarchies with assigned offices and desks see utilization rates around 50%. These types of floor plans didn’t survive the economic upheaval of the past decade. Firms that have transitioned to shared space and open floor plates see utilization rates jump as high as 95%
  7. Creativity: There is a growing increase in creative office design with the use of vibrant colors, and visually impressive designs, to reinforce business branding and culture. (Google, Facebook, Zappos, etc., etc.)

05As for the negatives, it is too easy to Google “open office environments” and get 31,400,000 results – of which about +80% are negative articles and comments. The following list cites the most predominate comments on the list of the top negatives.

  1.  A decrease in productivity. Exeter University showed a 15% reduction in worker productivity generally associated with distractions. Workers can lose an average of 86 minutes a day due to distractions (noise, interruptions, lack of privacy, etc.). An average open office worker gets interrupted every 11 minutes and it takes 23 minutes to get back into the task at hand.
  2. A decrease in worker satisfaction. A Steelecase study noted that 95% of 10,000 interviewed workers said working privately was important, but only 41% could do so. An Adobe survey found technology to be the most important aspect of worker satisfaction in office environments. 81% of the respondents valued technology as number one – but only 25% felt their organization offered them the technology the needed.
  3. Engagement: Gallup’s recently released report on the State of the Global Workplace found that 11% of the workers around the world are engaged and inspired at work and 63% are disengaged, unmotivated and unlikely to invest time in corporate goals. This engagement aspect is directly tied to environments that are saturated with stimuli.
  4. Health: A study by Queensland University of Technology found open office environments cause high levels of stress, conflict, high blood pressure and a high staff turnover. The New Yorker recently reported that companies with open offices experience employees taking 62% more sick leave.
  5. Turmoil: There are usually always a few enclosed offices in an open plan and an inevitable struggle to secure one. Some studies show that employees in open-plan offices have shorter and more superficial discussions because of fear of being overheard or interrupted. Some workers in open offices feel that it is a thinly veiled way for micro-managers and managers in general to monitor their every movement.
  6. Creativity: While a positive may have been creative environments, these environments may actually stifle worker creativity. “Groupthink” has emerged as people’s natural inclination to succumb to peer pressure and go along with others. Senior (and higher paid) staff have found open plans challenging or impossible to focus on intensive, complex and analytical tasks.
  7. Higher overall costs: Example – If I use the same 40-person office mentioned previously, the savings was $64,000 a year in rent. If I assume the average salary for the 40 employees is $50,000 per year, salary cost would be $2,000,000/year. If we lose 15% productivity in the open office (a “productivity tax”) it would be a loss of $300,000/year. The overall net would be a loss of $237,600 a year (or 4+ employees’ salaries).

CAUSE AND EFFECT?

There are obviously pros and cons on both sides of this discussion but perhaps the biggest take away is that there is no one set solution. Furthermore, there are subtle nuances and customization’s that need to be addressed in any plan and each decision has its own cause and effect on the outcome and the performance of the space

07At SH Architecture we have been using our space as a sort of lab to experiment with different concepts. We have 30 employees in 5,264 SF (175 SF/employee). The layout is very open with 48” tall work stations (with glass panels at some locations), multiple stand-up collaboration work areas and a large central open conferencing area. We have 5 doors in our plan – the conference room, restroom, janitor’s closet, server room and storage room – no enclosed offices. We are a hybrid of a creative and intense, analytical environment and we offer flexible work hours and technology to work remotely. When we first moved in we were 10 employees and everyone sat together with principals intermingled with everyone. As we grew, we found the need to migrate the principals and anyone with sensitive conversations to the exterior perimeter and into more private corner areas. As we grew larger, we found noise and distractions to be the major concern and (accidentally) introduced white noise via low volume music and a quiet hour twice a week. We are now looking into additional sound baffles on the walls and ceiling to further mitigate sound. We also found that glass enclosed conference rooms are very distracting for participants and sometimes not practical when there is sensitive information on display that other clients shouldn’t see. We have frosted the glass at the main conference area and enclosed a second work area for a conference space. We also found that as we grew, the first spaces we lost were the “fun” spaces as they succumbed to cubicles.

It is obvious that any business needs to consider what kind of a business they are, what they represent and how their people work. It is important to look at the elements that define a company’s culture: brand, product and generation. It is also vitally critical to look at the perception and reality of employees’ needs. The upcoming workforce of the “M-word” generation will have a profound impact on what shapes the office of tomorrow.  There has to be a balance of privacy and interaction spaces, options for alternate working locations, and the technology to support the employees and spaces. It takes a lot of careful planning and thought to get it right.

 

About Curt Carlson

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