Korn Ferry

Office of the Future: Where we’ll work

Glenn Rifkin

In the 1980s, aided by the predictions of such futurists as Alvin Toffler in his best-selling book The Third Wave, the office of the future seemed likely to be at home, or at least partially so. Telecommuting was the topic du jour and Toffler’s “electronic cottage” set off speculation that the most productive workers would be allowed flexible strictures around their corporate lives. The office itself, reshaped by advances in technology, would likely remain physically unchanged but white-collar employees would become far more productive if they could avoid time-draining commutes and the distractions of crowded offices.

Though Toffler was prescient in terms of the emerging popularity of telecommuting, the long experiment in the concept of work-at-home seems to have come full circle. Flex time has become an accepted corporate benefit—an estimated 45 percent of today’s workforce works at least occasionally at home—but forward-looking companies such as Bell Labs, Apple, Google, Samsung and Facebook, have come to realize that innovation rests largely on effective collaboration of smart, motivated and creative workers bumping into each other at the water cooler and in the halls. If ideas are the currency of innovation, the most effective way to share ideas becomes the blueprint for the office of the future.

In fact, technology is now capable of measuring such outcomes. Ben Waber, CEO of Humanyze, a Boston-based company founded out of Professor Alex “Sandy” Pentland’s Human Dynamics Laboratory at MIT’s Media Lab, believes the data confirms the point. Humanyze makes “sociometric badges” that capture interaction, communication, and location information for employees. The resulting data is analyzed to determine just what workers are doing during their day in terms of time spent with colleagues and resulting actions

“We’ve learned that face-to-face interactions are by far the most important activity in an office,” Waber said. “For example, we can look at all the people who just got promoted and see what they do differently. That’s really powerful.”

While Waber’s technology has demonstrated intriguing promise, the path to the office of the future is littered with broken promises and diminished expectations. Variations on the “office of the future” have emerged repeatedly over the past three decades. Glassed-in offices were replaced by cubicles; cubicles gave way to open environments; assigned spaces morphed into rotating desk assignments; audio conference calls evolved into sleek video conference rooms that allowed virtual face-to-face meetings of colleagues around the globe. Despite all these modifications, productivity levels remained stagnant. Facilities managers continued to be rewarded for reducing costs and increasing usable square footage rather than for creating more productive work spaces.

But now, things may finally be shifting. Companies are employing artificial intelligence solutions, data analytics, robotics, natural settings replete with flora and fresh air, and a renewed focus on human nature to rethink how employees work most productively. The modern work-space is being reshaped as much by psychology as technology and the ceaseless quest for innovation has spawned a wave of dramatic thinking about how best to create an innovation-prone environment. Tony Hsieh, founder and CEO of Zappos, is a proponent of “collisionable hours,” the idea that smart people bumping randomly into other smart people is the optimum source for idea exchanges that lead to innovation.

Hsieh is reportedly investing $350 million in the area near Zappo’s new headquarters in Las Vegas, in order to foster entrepreneurial activity. The idea is to bring employees together with area residents and independent workers to share ideas and create new ventures. Early on, the new virtual office space created a 42 percent increase in face-to-face encounters, a 78 percent increase in participant-generated proposals to solve specific problems and an 84 percent increase in the number of new leaders who emerged to work on various parts of the project. If he meets his goal, Hsieh hopes to generate 100,000 collisionable hours per acre in the neighborhood.

Not surprisingly, face-to-face has re-emerged as a foundational requirement for successful companies.

“Even though the Internet provided a tool for virtual and distant collaborations, another lesson of digital-age innovation is that, now as in the past, physical proximity is beneficial,” wrote Walter Isaacson, author of the best-selling book on Steve Jobs, in Entrepreneur magazine. According to Isaacson, Jobs fixated on every detail of the physical layout of his offices. “When Steve Jobs designed a new headquarters for Pixar, he obsessed over ways to structure the atrium, and even where to locate the bathrooms, so that serendipitous personal encounters would occur. Among his last creations was the plan for Apple’s new signature headquarters, a circle with rings of open workspaces surrounding a central courtyard.”

According to Isaacson, places like Bell Labs unearthed the advantages of face-to-face collaboration as far back as the 1960s and little has emerged to demonstrate that such meetings in the flesh can be replicated digitally. “The founders of Intel created a sprawling team-oriented open workspace where employees all rubbed against one another,” he wrote. “It was a model that became common in Silicon Valley. Predictions that digital tools would allow workers to telecommute were never fully realized.” When Yahoo named Marissa Mayer as its new CEO in 2012, she immediately dictated that employees needed to work on site rather than at home, saying, “People are more collaborative and innovative when they’re together.”

A recent report called Smart Workplace 2040 from CBRE Global Workplace Solutions, the Los Angeles-based energy efficiency giant, took a crack at predicting the office as we might find it 25 years from now.

“Corporate organizations are still considering the workplace as delivering a strong identity and more than ever as a marketing weapon, creating and sustaining their corporate identity,” the report—hypothetically written in 2040— stated. “The intensity of performance level improvements increased significantly over the past ten years, accelerating the pace of work through the combined power of technology and personalized, choice-based software solutions. The presence of technology in every aspect of our life in 2040 is predominating our way of living. The workplace of 2040 is far more agile, the presence of technology is ultra predominant and human beings are highly reliant on it.”

In other words, the more things change, the more they are likely to remain the same. And of course, the seeds of that future are being sown right now.

No Longer Static

For Hasier Larrea, a mechanical engineer from the Basque region of Spain, the office of the future is likely to be a dynamic and intelligent space, a new twist on the Internet of Things that will transform everything we currently think about physical locations. Larrea recently graduated from MIT’s Media Lab where he did breakthrough work on creating dynamic spaces as part of the Lab’s Changing Places research project. Though he remains a research affiliate with the Media Lab, Larrea donned an entrepreneur’s hat and is starting a company called MorphLab to deploy some of these ideas into the marketplace.

In Larrea’s research, he noted that the static nature of our work and living spaces has not evolved very much for more than 2,000 years. Architectural layouts today are virtually the same as when the Romans built their cities. Nearly all of the improvements in office space depend on large spaces divided into private and public areas. A meeting room might be used for two hours during a day and be wasted space the rest of the time. But what if those spaces were dynamic and intelligent (see the video: https://youtu.be/ 3Z8rGrjILX0)? What if the technology allowed the walls, the tables, the chairs and the floors to hold enough embedded intelligence to reconfigure themselves and react to a person’s individual needs, turning a single workspace into three different workspaces, or taking several individual spaces and transforming them into a meeting room? What if individual devices such as laptop computers would automatically notify the system of a low battery and a charger would wheel itself over to be plugged in? What if such a system would notify a user that they had been sitting too long, hunched over a computer screen and suggested a break?

“Suddenly all these things become more malleable and are transformed effortlessly,” Larrea said. Through the use of robotic technology that already exists, an office space will transform itself automatically when people enter the space. Larrea noted that smart thermostats and utility technology already allows users to control spaces with mobile phone apps. But that is just a beginning.

With vast numbers of people moving into the world’s biggest cities, available real estate becomes more and more limited and spaces grow smaller and more cramped. Creating an environment that not only shifts and changes with a user’s needs, but does it without human intervention is going to be increasingly valuable as office space becomes more restricted.

“Think about the chair where you are sitting or the desk where you have your notebook,” Larrea said. “We think all these spatial elements are the key. They are going to bring new applications and new ideas to really improving the efficiency, wellness, and health of our work environment.”

Ultimately, enough intelligence, using sensors and data, will be imbedded into a person’s computers or chairs or desks so that they will be able to judge a person’s emotional state. Your chair might feel increasing tension in your back and shoulders and read those stress levels and react accordingly. “All of a sudden, your office can effectively understand how stressed you are and trigger action,” Larrea said. The smart office of the future will be filled with what a fellow Media Lab researcher called “enchanted objects.”

The key to Larrea’s vision, he explained, is that this revolution will not require a breakthrough from a single innovative startup. Instead, it will be customizable based on a vast wave of app development from countless developers, not unlike the world of smartphones. “You and I may have the same iPhone but the experience we have is totally different because we customize it with different hardware and with different apps,” he said. “The moment you allow developers to create apps for these office furnishings, you unleash the potential of this concept.”

Instead of one company dictating the evolution, the office of the future will be a platform with malleable capabilities. Once that happens, a new eco-system is born and creative developers will start flooding the market with apps. “It will be your office app store,” Larrea said.

Tracking Productivity

If the office of the future is a self-regulating, shape-shifting entity that encourages face-to-face encounters, how will CEOs actually measure the value of these encounters? Anecdotal evidence can carry an executive just so far. Real data to support the findings makes the investment in such technology feasible.

Ben Waber of Humanyze acknowledges that most companies are capable of measuring little more than cost per square foot. According to Waber, companies now have the means to measure whether the design of a space helps or hurts performance.

With Humanzye’s badges, the idea is to shape the design of the office of the future in terms of “density, proximity of people and social nature.” The early returns demonstrate that face-to-face interactions are indeed by far the most important activity in an office.

The badges, worn just like a corporate ID badge, but equipped with radio frequency sensors, have been used in several Fortune 100 companies already—hospitals, pharmaceuticals, finance and software companies—to measure social signals from speech and body movement and Waber pointed out that the results are uniformly positive. “We’ve gotten 100 percent positive feedback not only because we deal with the data in the right way but I can point to literally tens of thousands of people at companies like Bank of America who measurably like their jobs better.”

In the current office environment, facilities and real estate managers are evaluated by cost per square foot rather than how useful a space actually is. “People who work in real estate should be evaluated based not on how many more people can be crammed into smaller offices but much more around how the physical space affects collaboration,” Waber said.

By monitoring where people spend their time, who they are talking to and how they react, and analyzing the results of these movements, Waber said that individual companies can measure the actual impact of face-to-face encounters in the workplace.

At Bank of America, for example, Humanyze outfitted 80 call center employees with badges and then monitored their movements and activities. A call center is a fascinating petri dish of the workplace, Waber said, because they have been managed essentially the same way since the 1960s. The employee sits at a desk all day answering calls from people who are angry about an issue that is not that employee’s fault. A call center person on a break is considered a negative because they aren’t answering the phones when they are not at their desk. A company can’t allow a large group of call center operators to take a break together because too many calls would go unanswered.

With giant call centers around the world employing millions of employees, the metrics for measuring outcomes have always been simple and clear. How long does it take to complete a call? How many calls can you handle in an hour, in a day? Given those measures, outcomes should be uniform regardless of geography. But Bank of America was noticing something odd. With call centers across the country, organized exactly the same way with operators trained uniformly, the bank was noticing very different performances. It was assumed that the culture of that particular call center was at the heart of the differences but the bank had no way to isolate the cause of the problem.

Humanyze came in to one such call center, deployed its badges to 80 employees and began to measure how people communicated with each other, how they talked to customers on the phone and how those two factors impacted performance and turnover. This office of the future effort might have felt too similar to a Big Brother invasion of privacy. But the response was remarkable.

“Before the data started coming in, I assumed when it came to performance, what was going to be the most important was how people talk to customers,” Waber said. “You have certain people who communicate in a certain way to customers and that would impact how fast they complete calls. But it turned out that when it came to performance, the most important factor was how you talk to your co-workers. If you had a really tight-knit network—people who talk to each other a lot—those people completed calls in half the time as those with the least tightknit networks.”

Not only did the tightknit group complete calls more efficiently, they were also a lot less stressed, an outcome the badges helped to measure. In a tight-knit group, an individual’s feelings and needs become known quickly; telling one person usually means that news spreads quickly and inevitably there is some support system to help that person cope.

In addition, in most call centers, there is competition among co-workers to reap the bonuses and promotions which are limited in number. If only the top 10 percent of performers get a bonus, that means that an employee is unlikely to share effective techniques and methods for solving customer problems. If it took one hour for a call center operator to solve a customer problem, sharing that experience with a colleague who can then solve the same problem in five minutes using this new information, makes the first employee look worse in comparison. But if they are friends and don’t fear being sabotaged, sharing is far more likely to occur and performance across the board is improved.

According to Waber, when he looked at all the data from the badges it became clear that 80 percent of the interaction among colleagues took place in the 15 minutes when people’s lunchbreaks occasionally overlapped. Noting that, Bank of America decided to reconsider the group’s 15 minute coffee break. Instead of staggering the breaks, the entire team would take its coffee break at the same time. To control the experiment, the bank changed the breaks for only half of the call center teams. The other teams continued to take staggered breaks. Nothing else was changed.

The bank waited three months to go over the resulting data. They expected the teams that got the group breaks to become more cohesive and they did. But in addition, people reported a 19 percent reduction in stress levels. They found that by being able to share trying experiences immediately with colleagues, stress was reduced.

But more important, the experiment had a dramatic impact on productivity. People completed calls 23 percent more quickly after the change was made. In the groups where no change was made, call times didn’t change. On top of that, turnover in those groups dropped from 40 percent to 12 percent a year. All this from instituting a group-wide 15-minute coffee break.

“What this is showing is that if you can find the social levers that people are responsive to and you can act on them in the right way, you can get the biggest results,” Waber said. Such tools, while strategically powerful, bring up a plethora of issues for the office of the future. While measuring the impact of social interaction, are these kinds of tools crossing the line as too invasive?

Privacy, Waber said, is central to Humanyze’s efforts. Individuals must opt-in and agree to wear the badge. It is entirely voluntary and the data is confidential. Conversations are not recorded and a person’s boss does not get to look at the data. “If someone doesn’t want to participate, they can say so and we just give them a fake badge so that no one can know they are not participating,” Waber said. Indeed, in its contracts with customers, if a company tries to compel an employee to give them access to the data, they’d be in violation of the contract and the company can be sued.

If companies can successfully assuage fears of individual rights being compromised, the net results are likely to turn conventional office wisdom about productivity on its head. Executives have always assumed that a person sitting at a desk answering emails or writing reports is being productive. Coffee breaks and social chat around the water cooler were the bane of efficiency experts. But what if it is just the opposite?

“If you spend six hours of your day helping ten people you work with become 20 percent more effective, now that should be your job,” Waber said. “Before this, it has been essentially impossible to show the impact. There was just no data. Now, we can put some hard numbers on these things. That’s where this becomes incredibly powerful.”

Face-To-Face

Companies that specialize in managing and enhancing office spaces, such as CBRE Global Workplace Solutions, have been challenged for the past couple of decades with the infusion of technology into the workplace. Working with Global 1000 multinational companies, CBRE is focused not just on managing buildings but ensuring that these buildings are transformed into spaces that attract, retain and house productive workers.

Hannah Hahn, CBRE’s Global Workplace Innovation Manager, pointed out the firm is focused on a road map that it calls “high sense emergence,” which refers to the influx of technologies such as Waber’s badges, that touch more senses and make collaboration, even remote collaboration, more effective.

Though the technology already exists in corporate meeting rooms to bring together even the most remote workers, Hahn believes that no technology will ever replace physical proximity.

“It will always be important to have a face-to-face communication and real human interaction,” said Hahn, who is based in Cologne, Germany. “In our research looking out to 2040, the digitizing of the workplace means more mobility and collaboration. But the focus is also on employee health, wellness, and well-being.”

Authors

  • Glenn Rifkin

    Managing Editor, Korn Ferry Briefings

 

Content