Tuesday, February 4, 2014

Why do we work in offices and what if there were no offices?

This is a reposting of two articles I wrote in 2012, together with Sari Stenfors.

Part I: Why do we work in offices?

An average office worker spends a total of about 80 000 hours in an office during his/her career and that does not include commute time. Why is it that we work in offices? Why has the office become a pinnacle of work life? It seems like collecting masses of people in one place and having large amounts of money invested in real-estate is not so efficient in the 21st century. How did our work life get set this way?

We all know the history of the industrial revolution and its impact on the way companies started to extract value from organizing production lines in large factory buildings in order to optimize manufacturing processes. At that time it was a radical shift from traditional patterns of cottage work and farming. We also know that the steam engine, together with the exploding demand for products in the first global economy made that development possible and feasible. But when and why did companies decide to gather people in large offices for what was originally clerical work, and what were the technological innovations and logic which supported this development?

The beginning of the modern office work started from small clerical quarters. In the 1820s, "the Equitable Society of London--then the largest life insurance office in the world--was entirely managed by an office staff of eight clerks" (1), and still in the 1840, in the office of a leading mercantile firm in New York City "There were two or three copiers, a bookkeeper, a cash keeper, and a confidential clerk who handled business when the partners were not in the office" (2). The first offices were just small highly efficient administrative places.

Towards the end of the 19th century, the size of offices, and the number of people working in those offices exploded. "In 1896, the Metropolitan Life Insurance Co. of New York's audit division alone had 550 clerks. The central filing system was maintained by 61 employees. Checks were processed by 32 clerks. In 1914, the company had 3,659 white collar workers at its headquarters building. The audit division had 1,000 clerks. The actuarial division had about 490." (3) This development was led by industry sectors such as investment banks and insurance companies who needed to crunch large amounts of numbers. Also having non-production workers tightly working side by side lowered the transaction costs of information, which at that point were very high. At the same time rising land prices and innovations in the building industry affected the way office buildings started to take their shape. Large towering office buildings became the most efficient way to house large numbers of office workers. The final boost to vertical office building was provided by Elisha Otis who invented the first successful elevator safety brake in 1852 and installed a steam passenger elevator with a safety brake in a five-story store in 1857. (4) Office buildings as we know them today were shaped only 150 years ago.

The ultimate invention for the interior of the modern office space was the cubicle. In 1960, Robert Propst, once a graphic artist and sculptor, became president of Herman Miller Research Corp. He investigated how the world of work operated, and came to the conclusion that "today's office is a wasteland. It saps vitality, blocks talent, frustrates accomplishment. It is the daily scene of unfulfilled intentions and failed effort." Furthermore, in his landmark book The Office: A Facility Based on Change, he wrote, "We find ourselves now with office forms created for a way of life substantially dead and gone.” (5) Propst proceeded to solve the challenges of the office life by developing the cubicle. His thinking was that cubicles give privacy and decency to office employees and yet are flexible and low-cost.

Another rationale for erecting office towers took origin in a very human characteristic: the strive for displaying power and importance. Office buildings are symbols for the supremacy of large corporations. Many of the early 20th century office buildings are still known by the companies that built them, such as the Chrysler or PanAM buildings in Manhattan, even if the company itself does not exist anymore or has moved on to other hotspots of the global economy. This hasn’t changed much, although today’s monuments made of glass and steel are more often the expression of governments of emerging economies, showing off against the traditional economic and political global power holders.
Given that technology, transaction costs and the human psyche facilitated the development of large office buildings, the way we work in offices in general was shaped mainly by advancements in the discipline of administration. Architectural and design elements played only second violin to the changes in the organizational structures and managerial systems. Offices only really became the pinnacle of work life when an entirely new social class emerged – the managers. Their sole raison d'être was to make sure that the organizational goals were implemented. Scientific control mechanisms were invented and these new organizational systems could easily be implemented only when all workers were under the same roof and managers could administrate direct control. Office life - as we know it - was invented and has probably never been portrayed so sharply as in Terry Gilliam's movie "Brazil":



If we now look back at the logic behind the rise of office culture, four separate needs can be pointed out:
  1. large amounts of numbers needed to be crunched;
  2. information needed to be collected efficiently;
  3. the office building became a status symbol for corporations; and
  4. business needed to be managed and people needed to be controlled.
Because people were needed in crunching numbers, information transaction costs were high, corporations wanted to show off, and businesses were centrally managed, the obvious solution was to set up offices.

However, conditions in the modern day society are very different and we cannot but conclude by asking “What if we worked differently?”

References:
(1) Martin Campbell-Kelly and William Aspray, Computer: A History of the Information Machine, 1996, p. 16.
(2) Alfred D. Chandler, Jr., The Visible Hand, 1977, p. 37
(3) and (4) http://www.officemuseum.com/offices_large.htm
(5) http://www.hermanmiller.com/Products/Action-Office-System
Photo 1: archive image from Life magazine, hosted by google
Photo 2: http://www.strawberrieschocolategift.com


Part II: What if there were no offices?

When I hear the word “office” a picture of many busy people working at desks inside an ascetic looking building appears in front of my eyes. The word “office” in my vocabulary has meant “the place where work gets done” , “controlled environment where more work hours spent at the location create achievements towards organization’s goals and larger remuneration”, and “place to separate work and leisure time”. However, just writing these definitions here, and thinking about some episodes of the TV series Office (1), makes me realize that my concepts of an office are at best naïve. In addition to general jokes about life in the office there seems to be abundance of hard evidence against the definitions I gave above and re-evaluation is needed.  Just the thought of 80 000 hours of my life spent in a Spartan style office is motivation enough to take a fresh look at the concept of  “office” space and the relation of it to modern work processes.

Old concept: Office is the place where work gets done.
New concept: Work itself is in the center – not the office. Different types of spaces are needed to effectively support different work phases.

More and more people are finding that much of their work is actually done outside of their office. Most people check their e-mails at home or on the road, and a growing number of people have become full time or sporadic telecommuters. According to the US Federal Bureau of Labor Statistics, in 2011 24% of all employed workers did some work from home (2).  Accounts like this are becoming commonplace:  “I’ve been telecommuting for several months now after DECADES of fighting terrible rush hour traffic which robbed me of time with my family. I have been feeling so guilty lately, simply because I am comfortable in my yoga pants and the temp in my home is perfect and because I can feel a breeze and hear my wind chimes while I work. Yes, I throw a load of laundry in during my break. Yes, I have the TV on as background noise when I am doing data entry only. Yes, I drive my daughter to school twice a week before I clock in. But I put in 8 hrs or more per day, I clean and organize my office off the clock, I haven’t take a single sick day, and I am productive because I am happy and not distracted by lame office conversation.” (3) You may think that telecommuters are a special breed, but those people who still are full time office workers do not think that work gets done efficiently in an office (for more information See Jason Fried’s comprehensive summary of why efficient work is not taking place:



Even people who work at the production line or in the service business are less attached to the location where the service of product is created. Advancements in Mobile and Internet Technology have changed all types of work.  Just think of the last time you contacted a tech support center and ask yourself “where did the service take place?” or how robots, automatic control systems and cameras have removed workers from direct production lines. Work is not about a certain building anymore, but about different types of virtual and physical spaces that allow possibilities to have peace and quiet, be connected, or access information – all depending on the needs that our work creates at different work phases.

Old concept: Office is a controlled environment where more work hours spent at the location create achievements towards organization’s goals and larger remuneration.
New concept: Goals, values, motivation and responsibility make work happen, not a set number of hours in an office.

Offices were set up 150 years ago with the idea of harnessing people to work towards common goals.  While our lives have evolved much since, the idea of organizations having common goals still holds. What has changed though is the cost of computing power and the cost of information transaction costs. Before  World Wide Web and mobile Cloud computing people needed to be gathered in one place in order to keep those two types of costs low, but computers have changed that and it seems like the only reason for collecting people into offices now is for the purposes of control.

Do people work better towards common goals in an office setting? The assumption, which has persistently survived from the old office culture until now, is that people need to be kept in a certain place and controlled from short distance to work efficiently towards a common goal. Let’s examine that reasoning a bit and also look how that assumption is related to spaces and locations.  In the days of slavery, slaves were traditionally kept in shackles to control their whereabouts and their work was closely monitored at all times. There is much to say about how slaves were treated, but it cannot be denied that they did accomplish much.  In the case of slaves there was much control and little motivation. In today’s world monetary remuneration has been added to create motivation for individual workers. The most common way to justify the amount of monetary remuneration is to tie it to the number of hours worked, which is used as an estimate for accomplishment. However, that leaves still the challenge of having to control the number of hours worked and also the problems with working hours being a poor estimate for accomplishment. To answer to these challenges, organizations have created an array of motivation systems, but they still all have in common the combination of motivation with some sort of control, which tied to location and short distance. Is that necessary in the society where it is common knowledge that virtual workers work longer hours and have less sick days?  And there are more reasons that show the advantage of telecommuting over traditional office work, e.g. reduced real estate and parking costs, a more effective recruitment from a larger pool of applicants and the higher chance of retaining employees if their life circumstances change (5). It seems like managerial control in offices is only an illusion and office workers already find intrinsic motivation to do a good job.

Perhaps it is time to let go of the idea of control and concentrate on the other side of the coin – motivation. Building virtual and physical spaces and systems where goals, values, motivations and responsibilities can be created and discussed instead of building control systems seems to be more effective in the modern organizations.  In virtual settings top-down control can easily be replaced or augmented by bottom-up and peer systems. New ways to align the purpose of the organization with the needs of the stakeholders to create motivation are a valid option.

Old concept: Office gives people a possibility to enjoy free time
New concept: Work and free time intermingle and boost creativity

The emergence of labor laws and unions over hundred years ago, created an eight hour work day. It was a great social advancement which helped people to have a balanced life but it also advanced their careers.  Offices were a place to keep business and personal life separate. But that is not the case anymore. Most people do not set up out-of office notifications on their emails anymore and there is even a term for working during holidays “worlidays” (6).

Offices are not so popular anymore for many reasons. Organizations are geared towards saving money and offices are a big cost for real estate and facilities management. Employees of global organizations reside in different places of the world and travel also is a significant cost at a time when technologies exist from people to work from anywhere and anytime.  In addition, people want to align private life and work and spend less time commuting. However, they still want to maintain social relationships with their working peers.

What will happen to offices?
This all doesn't mean that offices will cease to exist but their forms and functions will change. "The office of the future will be chaotic and hyper-connected" (7). Offices will be places for human interaction. Offices will be places, which motivate people to meet and to bond with their colleagues (maybe they won't be called offices anymore). Yes, offices will also have meeting rooms (although many meetings of the future will be virtual) but meetings can be hold at other places as well - in specialized meeting facilities but also in all other kind of venues. Face-to-face meetings will be designed to fit the purpose, and this includes creating engaging spaces . Office buildings might have certain rooms which people can lock from inside and where they can work undisturbed and chose from a variety of entertainment options, hot and cold drinks. Where there is now one dedicated office space for each employee, companies will scale their real estate down by 50 per cent or more. "As employees become more mobile and less tied to their desks, the average amount of space per employee nationwide, in all industries, has dropped to 250 square feet from 400 square feet in 1985 ... Within 10 years, that is expected to drop further, to 150 square feet." (8). Large companies have started to redesign their offices: "In the last two years, Intel has quietly been trying to inject a little more fun into its offices and make them places where employees can be more collaborative." (8) All in all the challenge will be to support "efficient, intuitive, user-oriented and ‘human-centric’ work environments where technology is aligned to organisations and human behaviour, enabling people to work together irrespective of constraints in location and time" (9).

One example of new ways that offices have evolved is the very popular co-working spaces, which again come in different forms and shapes, as CNNMoney article  describes (10). These co-working spaces are mainly used by start-ups - but it is just one expression of the freedom of choice that a new generation of workers are demanding.

What if we worked differently?

References:
(1) TV series Office on CBS: http://www.tv.com/shows/the-office/
(2) http://www.bls.gov/news.release/atus.t06.htm
(3) Reader's comment on a blog post Why the 9 to 5 Office Worker Will Become a Thing of the Past
(4) Jason Fried’s comprehensive summary of why efficient work is not taking place in the office. http://www.youtube.com/watch?v=5XD2kNopsUs
(5) http://freelancemom.com/blog/2007/10/03/9-advantages-to-companies-who-let-their-employees-telecommute/ . See also an article from 1996 (!): Six Organizational Benefits of Telecommuting. Paul C. Boyd, Ph.D. http://research-advisors.com/articles/ttorgbens.html
(6) Switch off and stay on through worlidays. By Lucy Kellaway. Financial Times, July 31, 2011 http://www.ft.com/cms/s/0/f0a90578-ba28-11e0-b313-00144feabdc0.html#ixzz1Wh8Yl7pZ
(7) Future Office. Sydney Morning Herald. Feb. 4, 2011. http://www.smh.com.au/executive-style/management/blogs/management-line/future-office-20110130-1a97r.html
(8) Office Work Space Is Shrinking, but That’s Not All Bad.  New York Times, January 18, 2011.
(9) Hans Schaffers, Torsten Brodt, Marc Pallot, Wolfgang Prinz: The Future Workspace. Perspectives on Mobile and Collaborative Working. 2006, MOSAIC Consortium. Download as PDF .
(10) Berlin's 'poor but sexy' startup hub. CNN Money. August 9, 2011. http://money.cnn.com/2011/08/09/technology/startups/berlin_soundcloud/
The cartoon is copyright of http://www.cartoonstock.com/

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