Forget Foosball: You Can’t Rely on Games and Gimmicks to Create a Collaborative Workplace

To win as a digital business, skip the workplace gimmicks. Organizations must create work environments that promote engagement, collaboration, and flexibility.

Mars Drinks’ new West Chester, Pennsylvania, headquarters features working spaces that resemble dens, kitchens, and living rooms, as well as conference rooms. While there are no private offices, there are places to get away for a phone call or other work requiring privacy. Floor-to-ceiling glass along each side of the building offers employees—the company calls them associates—views of the surrounding lawn and landscaped walking paths. As befits a company that  supplies  other  businesses  with  coffee,  tea,  hot  chocolate, and brewing equipment, hot drinks are always close at hand.

The company invested US$29 million in the renovation, which includes a new coffee-roasting operation and expanded research and development facilities. It aims to promote closer collaboration among associates and foster product and service innovation. “Much of the space is organized into neighborhoods, where people feel a sense of alignment and connection with their colleagues,” says Tracy Brower, global vice president of workplace vitality with the company, a division of US$33 billion Mars Inc. “You feel like you’re empowered to do the work, like you’re a part of something bigger than yourself, and that your work matters.”

20 Apr 2013 --- Tables in open office dining area --- Image by © Spaces Images/Blend Images/CorbisIt can be tempting to view such investments as a fad, a way to split the difference between two common and frequently criticized workplace designs. The warren of cubicles surrounded by private offices and punctuated by conference rooms with large tables discourages interaction; the open-plan expanse, with its lack of quiet spaces, thwarts concentration. A layout that offers the best of all worlds—private spaces where employees can work without interruption, public spaces where they can meet and mingle, meeting rooms that support teamwork among groups of any size, and wireless connectivity for everyone’s laptop—accommodates a spectrum of work styles and makes employees productive and happy.

But to digital business leaders, researchers, and others who study workplace trends, there is more to these office transformations than a once-every-few-years update to the furniture. Forward-thinking companies are responding to how the nature of work itself is changing. Today, employees must be able to access information quickly, interact with each other easily, and collaborate across large distances. The workplace design and the equipment provided can make the difference between engaging and empowering the best employees, and losing their expertise and contributions to another firm.

Five Factors That Are Changing Work

The spaces where people work are evolving because the nature of work itself is changing. Multiple factors are driving these changes:

Digital business models.
Oriented outward toward relationships with customers, rather than inward on processing transactions, digital business models require more integration among business functions and greater connectivity outside the corporate walls.

Shorter product cycles.
Digital products and services undergo continuous iteration. Physical products, too, are developed and managed according to shorter life cycles. Employees must be able to access information and interact with the right colleagues easily to meet market demands.

A new wave of automation.
Automation of routine tasks has extended far beyond traditional manufacturing to highly skilled jobs. Writing for the Deloitte Review, David Schatsky and Jeff Schwartz observe that as companies deploy emerging artificial intelligence technologies, they have an opportunity to refocus people’s jobs on higher-value tasks that require judgment, creativity, and negotiation. But they’ll need to interact with tools, whether robots or algorithms, that perform the newly automated work.

Across industries, employees expect to be able to work in places other than their assigned company office. A global survey of 5,400 workers and executives by Oxford Economics and SAP SE in 2014 found 44% of employees consider a flexible work location to be important. That number is even higher in North America (52%) and Latin America (54%).

Distributed teams.
Employees increasingly find themselves working on virtual teams and reporting to bosses located elsewhere. In a 2015 study by Singapore-based strategy consultancy Organisation Solutions, of 30 multinational companies in Asia, three-fourths reported their use of virtual teams had increased compared to two years earlier. Almost as many said that employees were more likely to be reporting to a manager in another country.

A Tailored Fit

To succeed as a digital business, companies must align workspace design choices with their business strategy, the work that needs to be done to execute it, and where that work is occurring around the globe. And they must be able to adapt these choices as business priorities and employee needs change. A human-centered work environment that is flexible and connected is becoming critical to attracting and retaining a talented, engaged workforce, conclude experts who study workplace trends.

For example, according to a study by Luxembourg-based The Regus Group, which provides flexible corporate real estate and office solutions in 120 countries, 68% of global companies reported that having flexible working arrangements led to increased revenue.

“This is a fundamental shift that reflects the nature of the digital economy,” says Kristine Dery, research scientist with the Massachusetts Institute of Technology (MIT) Center for Information Systems Research (CISR). She is studying the link between digital business success and the work environment. So far, Dery is finding that “companies that are successful or gaining value in the digital environment are doing so by making some of these fundamental shifts.”

Creating the right environment requires business leaders to understand who is using the space, what they’ll be doing there, and the mindsets and culture the company must foster to achieve its goals.

23 Apr 2005, California, USA --- Mixed race man using laptop at dining table --- Image by © Trinette Reed/Blend Images/Corbis

Work Is Different

It would be a mistake to think of a workspace with comfortable furniture and ubiquitous videoconferencing policies that let employees choose their own technology, or the opportunity to work from home as merely the latest in a set of escalating perks. Though the value employees place on these and similar amenities varies by region and country, they’re not just enticing treats. They’re essential for creating business value.

“The vast majority of workplaces in the past 30 years have been dull, demotivating, and incapable of effectively supporting collaborative or concentrated knowledge work,” observes a 2014 study by property development company Genesis and the real estate management company CBRE.

Thanks to modern communications technologies, including mobile devices, social media, personal videoconferencing applications, and SMS, interacting with a colleague no longer depends on that person being in the same room or at the desk where their corporate phone rings. And in most companies, the work can’t wait. Talent is distributed across cities and countries. A manufacturing design problem has to be resolved without requiring the product engineer in Asia to travel to a factory in the United States to consult with machinists. A product manager, launching into a new market, needs to build a team quickly.

These same technologies enable employees to access data and documents from anywhere, which means knowledge workers don’t have to come to an office to do their jobs. Meanwhile, emerging technologies, including wearable devices, are providing access to data for employees who can’t use laptops effectively, such as doctors in hospitals, safety inspectors, and field workers in numerous industries.

Just because people have the ability to work with anyone, from anywhere, doesn’t make the office building obsolete, but its purpose has changed. The traditional office “was a place of utility,” observes Jacob Morgan, an author, futurist, and co-founder of the Future of Work Community, a membership organization for companies strategizing about the workplace and employment. For knowledge workers particularly, Morgan says, “We’re shifting toward the idea of offices as employee experience centers.” This means creating spaces where employees want to be, even though they can accomplish their work—including having in-person meetings—elsewhere.

Executives want to encourage employees to congregate because doing so establishes and cements the social relationships necessary to form cohesive teams, as an extensive body of research shows. “We’re trying to figure out how to leverage the ability to work everywhere but still answer the innate need we have for that social connection and the trust that’s built with teams in the physical workspace,” says Amanda Schneider, a consultant and workplace trends blogger.

What is becoming clear, however, is that the one-size-fits-all traditional office no longer works. Instead, the workspace of the future needs to do it all: Enable employees to communicate with colleagues anywhere, facilitate relationships across geographic boundaries, and provide access to information wherever and whenever employees need it.

“Large corporations talk constantly about wanting to be like a startup. What startups do really effectively is make life as simple as they possibly can to be able to deliver complex, digital products and services,” says Dery. An important part of that is empowering employees to decide how they should work. In a newly published paper, The Digital Workplace Transforming Business: The Case of Deloitte Australia, Dery and CISR colleagues Ina M. Sebastian and Jeanne W. Ross detail how Deloitte Australia quadrupled its revenue over 10 years by digitizing business processes, deploying cloud-based applications, allowing employees to choose their own devices, improving data access, and establishing social tools as the means for interacting with colleagues. “This is the big change for the digital workplace. We need to be giving employees a lot more power over the tools they use, how they get the job done, how they work together.

Traditional Work Spaces Don’t Work

The dominant workspace designs of the 20th century—cubicles and open-plan offices—may be equally despised. The inventor of the cubicle, Robert Propst, proposed them as an antidote to the open-office plan, which served to cram as many workers as possible into a given space (think secretarial pools). He envisioned providing workers with more independence, letting them configure and reconfigure their areas as needed. But eventually, Propst himself despaired that “crass people” had turned cubicles into “barren, rat-hole places” again, trying to cram as many people into a space as they could.

Open offices became popular again in the ’00s, as companies aimed to encourage more interaction among co-workers. The downside? According to a 2008 analysis by Australian researchers published in the Asia Pacific Journal of Health Management, the constant exposure to colleagues can lead to illness, low productivity, and poor job satisfaction.

“If you aren’t providing inspiring workspaces for your teams, you’ll find yourself not competing for the best talent.” —Sande Golgart, senior vice president of corporate accounts with The Regus Group

Now workers aren’t showing up at the office, either because they don’t like to be there, they’re traveling, or they need flexibility. More than half of the assigned desks in the typical white-collar office space are empty at any given time, says Sande Golgart, senior vice president of corporate accounts with The Regus Group. “This not only impacts operational efficiency, but if you aren’t providing inspiring workspaces for your teams, you’ll find yourself not competing for the best talent. Why wouldn’t employees prefer to work for a company that has a great working environment and that provides great work-life balance, flexible options, and good amenities that support their needs and help them do their jobs better?”

In fact, a 2013 survey of 2,035 U.S. knowledge workers by the design consultancy Gensler found that employees perform better and are happier with their jobs when they work in environments that balance collaborative and private spaces and that offer choices about where people work.

The Human Factor

In other words, one reason traditional office spaces aren’t working is because they don’t accommodate the different ways that individuals are most productive. They aren’t human. “People are obviously very diverse, and they work in many different ways,” observes Mars Drinks’ Brower, a sociologist whose job at Mars involves researching how employee collaboration, engagement, well-being, and productivity converge to create what the company calls workplace vitality. “In order for them to feel productive, they need to have a sense of choice and enough variety in the space to accommodate it.”

Brussels, Belgium --- Business executives at entrance of an office building --- Image by © Fabrice Lerouge/Onoky/CorbisTraditional workspaces are also limited because they assume that most people who are working on a project together will come to the same office every day. Both the cubicle setup and the traditional open-plan office were devised in an era before companies routinely assembled teams of people who are based in multiple locations and before laptops, mobile devices, and videoconferencing made distributed teams and flexible work arrangements possible.

As a result, traditional workspaces leave people out. When employees and contractors who are based off-site come to visit, the places they’re given to work may not be integrated with the area occupied by their peers. Stuck in conference rooms, areas reserved for visitors, or in desks that happen to be empty that day, they miss out on opportunities to strengthen relationships with their colleagues by joining in casual interactions.

And as anyone knows who has struggled through a conference call, wasted the first minutes of a meeting getting remote colleagues connected to video, or tried to collaborate on documents in real time, many companies still do not provide the tools necessary to fully support the work that needs to be done, nor do they help people become fully connected.

A recent survey by publisher IDG Enterprise found that at most companies, employees are much more likely to be using decades-old communications technologies such as phone, e-mail, instant messaging, and SMS instead of newer, more immersive tools, like desktop videoconferencing, enterprise social media, and telepresence.

At many companies, the virtual workspace also leaves a lot to be desired. When Oxford Economics and SAP asked 2,700 employees in 27 countries about whether they have the technology necessary to do their jobs, only 53% of respondents answered affirmatively, and only 48% said they received the training they needed to use it. Most employees globally are also seeking greater access to a wide variety of data, with many respondents reporting that the lack of it will soon impede their ability to do their jobs.

Executives, surveyed separately, concurred. The same business leaders reported that refining or adapting their business models is among the top three strategic initiatives driving their company’s growth.

A Vision for the Modern Workspace

In a connected, human-centered workspace, the virtual and physical environments aren’t at odds. Whether a company is developing digital business models or improved kitchen knives, employees have flexible spaces that support group collaboration, private work, and presentations. They can pick the tools they need in the moment to access information and connect with colleagues, whether or not they’re in the same location.

To get it right, employers will have to let employees’ needs drive decisions about the space and the tools they use, rather than forcing workers to adapt to a generic environment and the company’s predetermined tools. It’s conceivable that every physical workspace will look different, depending on where it is in the world, the type of work that is done there, the prevailing corporate culture, and the business strategy. The same factors will likely determine how, and when, people interact virtually and the tools that they use to do so. An R&D group developing new products and services will have a different type of space and different tools than a call center.

Applying Design Thinking to the Connected Workspace

The process of designing a new product starts with a question: what problem is the product supposed to solve? To get the right answer, designers prototype more than one solution and refine their ideas based on feedback.

Similarly, the spaces where people work and the tools they use are shaped by the tasks they have to accomplish to execute the business strategy. But when the business strategy and employees’ jobs change, the traditional workspace, with fixed walls and furniture, isn’t so easy to adapt. Companies today, under pressure to innovate quickly and create digital business models, are confronting the challenge to develop a more flexible work environment, one in which employees have the ability to choose how they work in the office.

Within an office building, flexibility may constitute a variety of public and private spaces, geared for collaboration or concentration, explains consultant and workplace trends blogger Amanda Schneider. Or, she adds, companies may opt for customizable spaces, with moveable furniture, walls, and lighting that can be adjusted to suit the person using an unassigned desk for the day.

Flexibility may also encompass the amount of physical space the company maintains. Business leaders want to be able to set up operations quickly in new markets or in places where they can attract top talent, without investing heavily in real estate, says Sande Golgart, senior vice president of corporate accounts with The Regus Group.

Thinking about the workspace like a designer elevates decisions about the office environment to a strategic level, Golgart says. “Real estate is now beginning to be an integral part of the strategy, whether that strategy is for collaboration and innovation, driving efficiencies, attracting talent, maintaining higher levels of productivity, or just giving people more amenities to create a better, cohesive workplace,” he says. “You will see companies start to distance themselves from their competition because they figured out the role that real estate needs to play within the business strategy.”

At MIT, the Sloan Office of Executive Education includes staff and contractors who establish and run programs overseas. The headquarters team is used to working with colleagues in remote locations. But until a portion of the core team had to move out of its home base at the Sloan School of Management in 2013 for a building renovation—to a space three-quarters of a mile away—local employees in Cambridge, Massachusetts, came to the office every day. After moving, staff frequently traveled across campus to meet with colleagues.

“We ended up running, without really formalizing it, an organization where people were spending a lot of time out of the office,” says Peter Hirst, associate dean for executive education. “It seemed a bit artificial to be resisting the requests that we were increasingly getting from people to have more flexible work arrangements.”

Hirst and colleagues responded by rethinking every job, starting with the idea that no job required an employee to be on site five days a week if they could work better elsewhere. Then they looked for ways to keep everyone connected. The solutions included mandating one day per week that the entire team comes to the office, requiring everyone to share their calendars, and deploying new communications technologies, including telepresence robots that enable remote workers to “visit” colleagues in their offices by driving a videoconferencing-enabled iPad around the building.

Because the education programs that the team develops increasingly employ digital-delivery models (including virtual classrooms, where students participate as avatars), using a variety of collaboration tools for meetings when employees are off site helps everyone understand how to apply them. “We’ve been quite successful in creating these environments where people really feel immersed,” Hirst says. “It helps when we use those platforms for innovation meetings.”

Now Hirst is contemplating what type of space—and how much of it—the team will need in the future. With competition for space in the renovated building, the team isn’t likely to get all of its old space back. “The team would love to have a base of operations that is 10 yards away from the nexus of activity in the school,” he explains. “So how can we leverage these flexible working arrangements? If we don’t ask for a more traditional-type space, maybe we can get workspace that is closer.”

For instance, although some people work best if they have a permanent desk to come to every day, others won’t care where they work as long as they have access to all the information and systems they need. “My ideal would be that we have a flexible enough space that everybody will be able to find a way to work most effectively—that we recognize that we are a very diverse team and that diversity is one of our strengths,” Hirst says.

For many companies, the transformation to a flexible, connected workplace is a leap, just as it has been for Hirst and his team. A lot can go wrong when you shake up people’s work routines, whether it’s their morning conversation with colleagues in the coffee room or where they plug in their laptops. “Don’t be fooled into thinking that you can simply put in a slide and soft seating and it will drive productivity and collaboration and make the workplace more fun. Productivity drops because it’s not part of the core values or strategy,” notes Regus’s Golgart.

07 Aug 2014 --- Unconnected computer leads on desk --- Image by © Kathleen Finlay/Corbis5 Steps to Creating a Flexible, Connected, Human-Centered Workplace

 Evidence is emerging that investments in the work environment improve business outcomes, says Mars Drinks’ Brower. “We aren’t having to choose between investing in the people and investing in the business,” she concludes.Here’s how business leaders can increase the odds that they will succeed in their efforts to create a human-centered workplace that is flexible and connected and that aligns with their digital business efforts.

1. Set an example.

In creating new spaces, management sets the tone. Employees won’t leave their desks and bring their laptops to meet in the coffee room if they never see the boss doing it. Nor will they develop practices for using social, video, and other collaboration tools unless managers engage with them too.

2. Get multiple perspectives.

If facilities managers run a workspace transformation, companies may miss opportunities to think beyond their physical environment, suggests Dery. Business leaders need to consider the behavior they want to encourage, the flexibility employees need to get their jobs done, and the tools they need to make it easy. For that, they need input from IT, human resources, and finance. The Genesis/CBRE study suggests that companies appoint a chief of work to lead work environment efforts.

3. Connect workspace decisions to strategy.

If you need most employees to spend a certain amount of time in the office, you’ll make different decisions about your investments in office space and technology than if your employees are distributed around the globe, working from home, or setting up in alternative places like coffee shops or co-working spaces.

4. Manage interaction actively.

When employees have choices about whether to work in private spaces, public areas, or outside a building altogether, it falls to managers to set new expectations for interaction. Companies shouldn’t leave it up to employees to decide whether to share their current location on their enterprise social media profile or hold a videoconference instead of an audio-only meeting.

5. Don’t think you’re done.

The nature of work is changing so quickly that companies can no longer build a space, wire it up, and wait a few years to think about it again. “Technology is speeding up the pace at which we must adapt,” says consultant Schneider. “You’re trying to create a space that can adapt much more quickly than the 10- or 20-year life of a lease now.”

“What we teach about innovation,” says MIT’s Hirst, “is rather than spending two years agonizing over how to design the entire system, just figure out what experiments you can do and learn as you go. That has certainly worked for us.”

See more from SAP on the Future of Work and join the conversation.


Executive Quarterly, Q4 2015, Cover Story