The Death of the Office

The outcome of value creation is shifting increasingly from the tangible to the intangible. We may be making as many locomotives or smartphones, but the recompense for doing so resides primarily with those who design, market and service them rather than with those who actually make the stuff.

One derivative effect of this is to call the nature - and even the existence - of the office into question. Real estate prices continue to rise in the world's most important commercial entrepots - New York, London, Hong Kong, San Francisco, et al - making the accumulation of talent ever more expensive.

The 24-7 mindset has also rendered the notion of traditional collaborative efforts less relevant: how to call a meeting (or even bother to reserve a meeting space) when most of the participants are physically separated. There are still good reasons to foster a cooperative, collaborative workplace - the concept of teaming to complete a task is no longer questioned and, on the contrary, considered essential to success. Those who attempt to tighten the reins on distance work are often excoriated for violating an unspoken assumption about the 'right' to work remotely as Marissa Mayer of Yahoo! learned to her evident surprise.

The question of where that partnering takes place is becoming more abstract. Do we, as humans, need a distinct home in order to be optimally effective? Should the office become as temporary, mobile and ephemeral as the economy, the value being created and the jobs that make it so have become?

Ultimately, these decisions will be less about cost and more about the degree to which value is added. One of the challenges in reaching such conclusions is that we do not yet have an effective means of calculating, let alone measuring those concepts. Until we do, the office may die a slow death, but it will not disappear. JL

Jeanne Meister comments in Forbes:

As we look to the future, we have to ask: Will the workplace be on-site at our employer’s property, or on-demand at a collaborative space? Or will work simply be a mindset independent of place or time of day?
“Everyone knows the legend that innovation starts in a garage, but sooner or later we all grow up and need a place to work.” That’s what IDEO’s Tom Kelley said in his 2001 book, The Art of Innovation, and today it applies to an even greater, and growing, portion of the world’s workforce.
As work becomes more flexible and communication more mobile, the office is turning into an increasingly complex and even abstract concept.

The workplace is evolving in a number of ways, many of which would be utterly unrecognizable to the likes of Dilbert and his cubicle-dwelling coworkers. Take for example, Google’s plans for its new London office, to be completed in 2016. The space is one million square feet and will have an open-air swimming pool, an indoor football field, a climbing wall and a roof garden. Googlers can bicycle right into the building’s bike storage room, and use the in-house showers and lockers to clean up before starting their days. And in addition to traditional sitting-desk workspaces, the floor will feature lots of open space to use for networking and collaborating with colleagues. Google considers the new space an extension of the company culture.

For those companies without the budget of Google’s purported $1 billion on hand to use creating the workspace of tomorrow, there are a growing number of more humble ways to re-imagine the workspace.  One leader in this movement is LiquidSpace , a real estate marketplace connecting people in search of flexible workspaces with over over 2,000 such spaces across 250 cities. LiquidSpace CEO Mark Gilbreath sees the real estate industry as ripe for disruption, saying, “We know when hard assets sit idle, like cars, companies like ZipCar step in as disrupters. Think about it: each of our businesses has dramatically changed in the last decade, but somehow our offices have stagnated.”

Indeed, our need to work when, where and how we want – and to take advantage of the “sharing economy,” where it is easier to access an asset than to own it – has now created a number of new entries into the office real estate market. Marriott has created Workspace On Demand, which allows anyone to “book” a space in the lobby of a Marriott hotel as easily as they can book a room overnight. Marriott began the program last year, as a pilot that used 35 hotels and 100 spaces.  By the end of next year, they plan to expand the program to 300 hotels, according to Peggy Roe, VP of Global Operations Services for Marriott.

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Marriott is certainly not alone. The growing number of companies committed to re-imagining workspace include WeWork, General Assembly, and Neuehouse, all of which offer open, collaborative co-working spaces, complete with on-site amenities and frequent networking opportunities to inspire collaboration, innovation and creativity.

Marriott's Workspace On Demand allows anyone to book "office" space in the lobby of a Marriott hotel as easily as they can book a room overnight. 

The target audience for this disruptive model is the worker who is tech savvy, mobile, and sees work as an “experience” rather than merely a place to go to every day. That type of worker will become even more common as digitally native Generation Y and soon Generation Z (ages 13-18 years old) enter the workplace. According to Wikia’s “Limitless Generation” survey of around 1,203 Gen Z-ers, this generation spends almost every waking hour online, with only 44% reporting that they even “unplug” during religious services. The bottom line is that for this generation, staying digitally connected is like breathing.
Due in part to the arrival of these new generations, mobility and telework are poised to experience rapid growth in the coming years. In fact, the market intelligence firm IDC estimates that worldwide mobile worker population will increase from just over 1 billion in 2010 to more than 1.3 billion by 2015.”
Meanwhile, for workers of all generations, working is now more than ever considered an “experience,” rather than merely the source of a paycheck. According to the MTV survey “No-Collar Workforce,” 89 percent of millennials want work to be social – and even the majority of Baby Boomers (60 percent) agree. Perhaps it was this mentality that led to the popularity of The Fun Theory project, whose YouTube videos have achieved over 19 million views while purporting the theory that the easiest way to change anyone’s behavior is to make it fun to do so.
Workplace and real estate gurus have latched onto this idea, and are accordingly building workspaces that are social and innovative enough to make productivity fun.
To consider your own approach to this trend, ask yourself these questions to examine whether your company is taking the necessary steps to get creative about how and where work gets done.
1)   Is flexibility a strategic imperative?
Do you consider the form your workspace takes is an extension of your corporate culture & strategy?  If you believe what Ericsson research predicts in the year 2020, that there will be 50 billion connected devices in the world, then it will be critical to come to terms with how these networked devices — like self-driving cars or Google Glasses — will change the way we work, learn and communicate.
2)   Do you value the new power trio?
HR, IT and Real Estate heads must start talking to each other about creating a shared vision for the organization’s workspace. After all, this is not just a “Millennial” issue. As Richard Westphal, the North American talent strategist at my former employer Accenture, said in a recent article in The Atlantic, “despite differences in age, there are more similarities than differences in what people want in the workplace and in their careers, and one of them is the ability to work when and where they need.”
3)   Do you recognize that workplace flexibility is more than a “perk”?
To make any inroads in this area, companies must recognize that providing flexibility is a strategy, not a perk akin to vacation days and stock options. Its strategic value is clear in the success of pioneers in flexi-work practices: both American Express and Aetna Insurance, for example, have seen tangible business results from making workspace innovation a strategic priority, as I discussed in depth in a previous Forbes column.  American Express’s BlueWork program has not only improved worker productivity but also saved between $10- $15 million annually in real estate costs. Aetna, which has 47 % of its workforce working remotely, shed 2.7 million square feet of office space and reaped $78 million in savings.
4)   What is your company culture? The new goal for workspaces as stated by so many innovative is to create a dynamic flexible space defined by the people who occupy the space, rather than the other way around. Think of space as the new stage in the theater of your future organization – regardless of whether it is owned or leased.
After considering these questions, recognize that a shift in corporate workspace must always be guided by a set of policies and a dynamic training curriculum. American Express knows this, and so the company uses four clear categories to guide its flexible workspace assignments: “Hub” employees’ work requires a fixed desk, and their presence in the office every day; “Club” employees have flexible roles that involve in-person and virtual meetings, so they can share time between the office and other locations; “Home” workers are based from home offices on three or more days per week; and “Roam” employees are almost always on the road or at customer sites, and seldom work from an American Express office.
“The ability to work in a flexible workspace is based on the role you have, not personal preference,” American Express’s Finance VP Jose Morabito told me last time I wrote about the company.  American Express also paired its new flexibility with robust trainings on using advanced technology and tools, tips and tricks on being a mobile worker and how to lead and succeed in a mobile or nontraditional work environment.