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The Next Office: Why CEOs Are Paying Attention

Issue 63

Steelcase 360

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Check out the latest information on workplace research, insights and trends that will help you understand how people really work and how creating great space can make a difference.

The Next Office

Executives everywhere are being asked to deliver higher performance from every company asset. Yet they often overlook an asset that’s both highly leverageable and pivotal to the organization’s success: the office.

Like all executives around the world, Steelcase president Jim Keane is always looking for ways to gain a competitive advantage, especially in today’s tough economic climate. And he knows first-hand what others may not recognize yet – the power of real estate to help organizations create, innovate and drive growth.

This insight has been pivotal in Steelcase’s ability to face today’s business challenges: complexity, global competition for customers and talent, cost pressures and the driving need to innovate. With pressures like these, the workplace is an opportunity waiting to be discovered by most businesses today.

Keane says many executives admit that their offices haven’t kept up with the sweeping changes in business. “They know that innovation requires a more agile organization and a more collaborative workforce, and a workplace that encourages both,” he says.

When designed and equipped to meet the challenges of the new, interconnected world, the workplace can help shape the kinds of employees that leaders want most: creative and highly engaged workers, who can collaborate with teammates anywhere in the world, iterate work easily and make quicker decisions.

To meet the challenge of optimizing its own workplaces for competitive advantage and to leverage opportunities created by an interconnected world, Steelcase recently completed a series of strategic real estate projects. Each sets new standards for what the workplace can be – and, more important, what it can accomplish: a better place for people to work that enhances collaboration and innovation, attracts and engages workers, strengthens the organization’s brand and culture – and optimizes the company’s real estate investment.

Drawing insights from its extensive research and behavioral prototypes – spaces where the company tests new theories on itself in real work environments – Steelcase reinvented spaces at its global headquarters in Grand Rapids, Michigan, and at its European hub in Strasbourg, France, to deliver more collaboration, greater employee satisfaction and more agility for the future, while also reducing the amount of real estate needed to support its workforce.

At the global headquarters campus, a wing that formerly housed just one department is now home to three – Finance, Procurement and Quality. Another redo project, the WorkCafé, creates an on-site third place by reclaiming traditional cafeteria space and integrating areas designed for collaborative and individual work, creating the best of both worlds: a coffee shop vibe with the functionality of a well-planned office.

In Strasbourg, a redesigned environment now supports 340 mobile, nomadic and resident users in a varied range of worksettings designed to encourage communication and collaboration.

“We’re always looking ahead to see what the next evolution of space needs to be and we always start by testing our concepts and ideas on ourselves,” says Keane. “These new spatial concepts will work for any industry and location, and will contribute measurably to a company’s business results.”

WorkCafé

New WorkCafé space at Steelcase’s Global Headquarters

New Economy, New Demands, New Office

Business today is more challenging, tasks more varied. People move constantly from focused individual work to one-on-one meetings, project sessions to impromptu collaborations, a series of planned and unplanned interactions throughout the day, and 5 o’clock is no longer day’s end for most workers with colleagues spread across time zones and countries. A recent IBM study of human resource executives found that 80 percent of organizations want workers to collaborate more. Given the increasingly distributed and mobile workforce, however, they aren’t quite sure how to do it: 78 percent of executives want their organizations to be better at it.

Meanwhile, offices in every organization stand empty for hours each day simply because business has changed while offices have stagnated. Running a successful business requires teamwork and frequent collaboration, but rare is the office that can ably host even a two-person meeting. Technology and tools are often hard to access and operate. Teams are needed to tackle most business problems, yet workers search in vain for meeting rooms and dedicated project space.

“Space influences behavior, so if you want people to share information, collaborate better and innovate more, you have to invest in the kinds of spaces that help them do that,” says Keane.

Organizations have tried to offer choices. A recent study of businesses throughout North America and Europe by Steelcase and CoreNet Global shows that 86 percent of companies offer alternative work strategies such as home offices, hotelling and mobile work. The rationale is that technology is mobile, information can be accessed anywhere, and alternative work strategies can help support work-life balance.

Yet few workers are rushing to set up shop off-site. Nearly half of the companies reported that 10 percent or less of their employees regularly work remotely. In that same study, 72 percent of workers say the office is the best place to interact with colleagues. It’s also the place to access tools and technology.

Besides the need to choose how and where you work, people need a sense of participation in the collective enterprise, as well as a connection to the organization’s culture. The best place to meet all of these needs is the office.

Outdoor Terrace, WorkCafé

Outdoor Terrace, WorkCafé

New Ways of Working

But not just any office. Rather, an entirely new approach to it, like the office Lauren Renner uses.

A full-time employee in the Finance department at Steelcase, Renner doesn’t have an assigned desk or workspace. She commands few of the traditional trappings associated with being a financial analyst for a global company. No office with a nameplate outside the door, no shelf of family photos and memorabilia, not even her own file cabinet.

Instead, each day she chooses one of many shared desks in the open, daylight-filled Finance department, and selects the most appropriate individual and group spaces during the day as her work changes. She and her colleagues, about 75 total, are typical of today’s knowledge workers: highly connected, mobile, full-time workers doing business in a world that itself is global and mobile, and more unpredictable than ever. Having the right workspace and tools at hand is far more valuable to them than having an assigned desk.

These Finance workers are like any other knowledge workers, switching between work modes throughout the day, moving from focused work to collaboration with coworkers, spending time in meetings, learning, networking, communicating.

“People are always surprised when they visit our workspace,” says Dave Sylvester, Steelcase’s chief financial officer. “They ask, ‘Where are the enclosed offices? Why isn’t everyone in heads-down work? This is so…open. People are working in groups, moving around. Is this really Finance?’”

With three departments housed in the new space, cross-functional collaboration is easier than ever. Another big plus: The three departments now occupy a bit more than half the amount of real estate each used previously. Floor space per person decreased from 191 to 154 square feet. Desk-sharing ratios went from one desk for every person to one desk for 1.4 to 1.9 people, depending on the group. Post-occupancy surveys will address the qualitative factors after a settling in period, but recent anecdotal evidence and worker feedback has been overwhelmingly positive.

“Everyone now has more choices in group and individual workspaces, more tools, even more access to natural light, important elements that people need to be productive,” says Nancy Hickey, senior vice president and chief administrative officer.

Global Headquarters, 3rd Floor, Cafe

Global Headquarters, 3rd Floor, Cafe

Creating the Best Place

“No matter what we consider our office or home base, work keeps us moving. People can determine where and how they work best. The best place at 10 a.m. might not be the same at 2 p.m. because you do different kinds of work,” says Hickey.

“Using a strategy we call ‘Best Place”, we created a great range of flexible workspaces to meet changing needs. You have the freedom to move, to collaborate, to put your head down and focus. Freedom to seek the best experience at work, however you choose to define ‘best.’”

“‘Best place’ for Lauren and her colleagues means a range of settings so they can choose how and where they work,” says Julie Barnhart-Hoffman, design principal with WorkSpace Futures, the Steelcase research and design group, and principal designer of this new work environment. “They have a palette of place – individual and group workspaces in the department, across the entire floor, the building and the Steelcase campus. People and work are mobile. A one-size workspace doesn’t fit anyone anymore.”

The new approach fits Renner just fine. “I work in different places around the department, but I usually set up shop in the nomadic camp (an area of bench-style workspaces) because people are so accessible here,” she says. “It’s nice to be able to bounce ideas off of other people. You might work on a spreadsheet all day and can’t find something, and someone else will find it right away.” (For a typical day at work for Lauren, see “It’s all in a day’s work”.)

Financial Considerations

The planning for “best place,” of course, began with the financials. “It started for us as it does for most organizations, as a real estate issue. We had two buildings and we needed to bring people together into one so they could work and collaborate better. The question became: How do we put more people into one building but at the same time give them more of the spaces they need and better tools to work with?” says Hickey.

The factors that are easiest to measure – such as square footage, net usable space per person, desk sharing ratios, the cost of technology, etc. – aren’t always the things that add the most value to the organization. More important are issues such as encouraging mentoring to share knowledge and reinforce organizational culture, supporting a range of workstyles for healthier, more engaged and more satisfied employees, improvements in social networks for better cross fertilization between departments, and other qualitative factors. These factors lead to the outcomes CEOs seek today: new product and service innovations, talent attraction and retention, better customer support, etc.

“It’s not just about compression. Yes, there are more people in the same space, but they have more and better places to work, and many more choices. They can work more productively, communicate more easily, collaborate at a moment’s notice, and adjust their environment to their work. That’s good for business now and in the future,” says Hickey.

Sylvester believes this new type of workplace should become the norm. “This is the kind of workplace companies everywhere should be creating if they want to make real estate a competitive asset for the company.”

Question Assumptions

“Some people need a dedicated space for their work, but most people don’t. Those people who need a dedicated space have them, but they also can get up and move around, change postures, or meet with others in a different space,” says Hickey.

Any next workplace should be inherently adaptable. Gone are the days when cookie-cutter solutions could work – each organization needs its own blend of spaces, and it’s important to balance owned and shared spaces.

Collaboration shouldn’t just happen in meetings, It should happen effortlessly in informal interactions in lounge areas, team spaces, project rooms, and throughout the day as people communicate easily in this open office. Private spaces for focus or private conversations are equally important, of course, and it’s important to provide space where small collaborations can break off from larger groups.

 

Steelcase Global Headquarter

Steelcase Global Headquarter - Click on image to view larger.

Interconnected Workplace

Interconnected Workplace

Creating The Interconnected Workplace

Creating The Interconnected Workplace - Click on image to view larger.

A “Palette of Place”
A “Palette of Posture”

Workstyles, mobility and job requirements differ, so an interconnected workplace should include assigned workspaces for people considered residents, a “nomadic camp” shared by mobile workers, and a variety of places for individual and group work that anyone can use. A “palette of place” design strategy assures a range of settings organized into interrelated zones.

In addition to “palette of place,” there’s an important corollary design strategy: “palette of posture.” Steelcase research shows that workers will switch between a variety of physical postures during their work – if the space allows them to do so. Changing postures is physically energizing and mentally stimulating, and it supports different work modes. Workplace designs that allow people to vary postures help keep them refreshed and engaged, and support overall wellbeing.

The new Steelcase space in Strasbourg

The new Steelcase space in Strasbourg supports 340 mobile, nomadic and resident users in a varied range of worksettings designed to encourage communication and collaboration. Previously 80% of the real estate was private, enclosed workspaces; now just 30% is enclosed.

In the Strasbourg group’s previous office, 80 percent of the real estate was dedicated to private, enclosed workspaces; now just 30 percent is enclosed. The floorplan co-locates spaces for different types of users, which makes it easy for people to find space to work near colleagues with whom they regularly collaborate, whether they’re a resident, nomad or mobile worker.

“Research shows that if people have to walk more than 21 meters/65 feet to see someone, they’ll send an email instead. If they’re close, they’ll walk to see each other and communicate in person. Shortening the physical distances between people is one factor that helps us improve our productivity. In fact, we’re handling twice as many projects now, with the same number of people,” says Georges Roux, architect and sales consultant in the Strasbourg office.

Single-Use Spaces No More

To optimize real estate, in Strasbourg a key feature of the new workplace is Le Kitchen. “Our cafeteria space is a place for doing business,” says Roux.

Overall, the Strasbourg floorplan dedicates 10 percent of the space to Le Kitchen, coffee corners and other spaces that purposely combine dining and working. “These spaces become a crossroads, places where people socialize and communicate and do business,” says Roux.

In Grand Rapids, Steelcase’s former headquarters cafeteria had drawbacks typical of many corporate dining areas. It was busy in the morning for coffee, during lunch and again for afternoon breaks. Outside of those times it was a ghost town. Furniture was designed for dining, not working, and its basement location put it out of the main traffic flow.

Researchers examined how people were using their lunch and break times. “Free time, in North America is now used for exercise, taking meetings instead of breaks, eating lunch at the desk while you make phone calls, search on the web or catch up on work. People want more freedom to schedule their time and choose when and how they work,” says Cherie Johnson, a Steelcase design manager.

Workdays are longer, schedules are erratic. “When your client or team is in another time zone, you need to work early or late, outside of traditional business hours. When you can get food easily and work alongside your colleagues who are having a similar experience, it’s more satisfying and it’s healthier, too,” she says.

This understanding led to design strategies for WorkCafé, an on-site third place that combines dining and working. Food and beverages are available throughout the day. Focused and collaborative areas for both individual and group work are blended with areas for dining. Social and respite areas support socializing, working, networking and relaxing. Informative learning spaces help workers connect with colleagues and learn about the global company.

The space is welcoming, inspiring and well-equipped (including Wi-Fi, power outlets, media:scapes, etc.)

People now come from across the Steelcase campus and other locations worldwide to the WorkCafé to eat, work, meet, socialize, network, relax. “The space has become an attractor because you meet more people face to face,” says Johnson.

This space supports so many different activities that it’s become a busy intersection for Steelcase employees who are working in an increasingly global, interconnected company.

WorkCafé, Global Headqaurters

WorkCafé, Global Headqaurters

Management Leads the Way

“Leadership has to have faith that even though mobile workers aren’t always immediately visible in the space, they have to trust that they’re making the best choices to get the work done,” says Barnhart-Hoffman. “They also have to model the behavior they want.”

Steelcase leaders and staff were fully engaged in planning the new work environments, and many brought their own work experiences to the planning process.

For example, Sylvester, the CFO, worked in Europe before moving back to Grand Rapids and had direct reports in the U.S., Europe and Asia. “I was in Strasbourg, France, so I worked a lot via email and phone and got very comfortable with a distributed team.”

John Shull, vice president of procurement, spends much of his day moving between meetings and projects around the Grand Rapids campus. He has an office on the executive floor of global headquarters, but most days carries a backpack with a laptop, smartphone, and materials he needs for the day’s events as he picks the best place suited to what he plans to do, often in an open area. “Many times people will come up and we’ll discuss a problem or cover something that will save us a series of emails or even the need to have a meeting,” says Shull.

The Procurement department that Shull leads worked in a prototype space in Steelcase’s R&D center for three years before moving into their new space at headquarters, testing the fit between new work behaviors and different workspaces.

Change the Workplace, Activate the Culture

An organization’s culture is often thought to be hard to define, a qualitative measure with a tenuous connection to business results. Today’s most progressive organizations know the opposite is true: employee engagement in the culture is fundamental to success.

Engagement is driven by many factors, including effective management and challenging work. Today more than ever, it’s also driven by the autonomy to choose the spaces, technology and tools to get work done. A corner office used to be the most coveted workplace status symbol; today, the freedom to choose where to work best is fast becoming what workers want most, regardless of rank.

An interconnected workplace can enhance engagement by supporting mobile workstyles with a range of individual and group workspaces. It can provide the means for connection and collaboration, such as group workspaces, content-development tools and technology. People are more engaged when their space supports the predominant work mode in business today – project work – through team project spaces, content displays, etc.

For most companies, successful changes in worker mobility, collaboration, and alternative work strategies require a shift in the culture of the organization. According to the Steelcase/CoreNet Global survey 48 percent of companies believe culture change management is very important to successful adoption of a new work environment.

Steelcase began the culture change management process two years before they opened new workspaces. “Using employee surveys, we identified organizational practices that needed to change and then got management alignment around them. For example, we saw a need to make decisions faster and made it a priority. We worked with leadership to encourage employees to make more decisions at lower levels of the organization, identified the resources people needed, and worked with managers on the discipline required to support new approaches to decision making,” says Hickey.

Since more workers would be mobile in the new workplace, “we focused on helping people learn how to manage employees when you don’t have line of sight of your staff, how to set objectives and measure results instead of seat time.”

A culture change management group with cross-functional representation created a playbook with information and direction for managers.

“The playbook is one tool for helping to change the culture of the organization and ease the transition to the new behaviors,” notes Hickey.

WorkCafé, Global Headquarters

WorkCafé, Global Headquarters

Test, Measure, Adjust

Before redesigning and renovating Steelcase’s new spaces, Steelcase designers built prototype spaces. Worker feedback helped refine the spaces, and post-occupancy evaluations and ongoing observational research will not only help to further refine these spaces, but also will inform other spaces to be renovated in the future.

No workspace is ever completely finished, says designer Barnhart-Hoffman. “At the Pixar animation studio, they say they never really finish a film, they just release it. I think that’s the way we have to look at work environments. Not just because you want it to be as good as it can be, but business changes so quickly now. You can’t relax. You have to give users more options, more control over their space, and be ready to change any space, even the spaces you love the most.”

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Comments

  • I would like to know if you can share your “playbook with information and direction for managers.” I’m managing a small team (5) and we’re seldom all together at one time. I’m interested in ways to keep us connected and supporting each other as we help our customers. Great article. Thanks.


  • Jason kim says:

    Yeah I think the feel of the office definitely makes a difference on worker productivity. I’ve been in a lot of cubicles and steelcase does provide some quality workmanship as opposed to cheap chinese made cubicles


  • Moskito says:

    i think it all boils down to culture and local corporate responsibility. Most employers in this part of Asia, fail to see the connection and dare i say, logical importance, of spending money to motivate and enrich the employees. More often than not, the mentality is firmly directed towards getting the most out of workers, for the least possible expense. its an unfortunate truth isnt it? Regardless of how deep the pockets are, the arms never seem to reach too far into them.But again, to expect google’s level of extravagance is unreasonable, however, the reasoning behind the strategy should really not be so hard to grasp. bravo to companies like google and pixar, for redefining the workplace for the future.As for us, here in asia erm.. dont hold your breath :) and just order out by the way V, love the live preview when typing replies very cool. first time i’ve ever seen it used like this! hmmm maybe you should give google a call :)


  • Julie Gamble says:

    I am a social worker interested in whether this unique office has been evaluated by someone in the social sciences. While in a business/spacial sense, it is valuable, does it take into consideration those who are ADHD, have anxiety, are hard of hearing, employee ownership meaning having personal things around improves morale and investment, etc? Individual personalities may not be considered and as such, I could see this decreasing productivity for some.
    I would be very interested in your feedback.


    • Luke says:

      Thank you so much for commenting, Julie! We are very interested in the “whole person” wellbeing of people and the impact of office design on individuals of all backgrounds and abilities. Our Workspace Futures research did inform these design concepts, and many of our researchers come from social science backgrounds (see http://ethnographymatters.net/2014/01/22/a-psychologist-among-ethonographers-an-interview-with-beatriz-arantes-from-steelcase/ for example).

      You bring up some important points that we would like to explore further. In fact, Beatriz Arentes (interviewed in that article), is very interested in speaking with you about these concerns you bring up. May she reach out to you via the email address you registered with?


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