Matt Schuyler, Capital One’s executive vice president of human resources (he also oversees real estate), says he was “startled” by just how true that was after his team and the company’s finance department surveyed how office space was being used and calculated how much could be saved by reorganizing.
Research showed that employees were working somewhere other than their offices and cubicles more than half the time. “Some people were using their offices only 5 percent of the time,” Schuyler says. By eliminating most dedicated workspaces (administrative assistants got to keep their own desks), the company has sharply reduced its needs. A building that once accommodated 650 employees, for example, now serves 1,200. Schuyler declines to say how much the company has saved, but real estate professionals say that such actions can produce savings of up to 40 percent.
Another factor pushing companies to reconsider office space is the widening gap between what workers need and what workplaces provide. At one time, office employees labored primarily in solitude; today, they spend two-thirds of their time collaborating, according to Gartner. But offices are still set up for the old style of work. “In most companies, you find that conference rooms are overbooked while offices and cubicles are empty,” says Mark Golan, Cisco’s vice president of worldwide real estate and the chairman of CoreNet. “It’s insane. Not only is it wasteful, it doesn’t suit the needs of your workforce.”
Like Capital One, Cisco’s response has been to turn the old design on its head by making the office a home away from home. “You don’t go home to a cubicle,” Golan says; “you move around the house depending on what you’re doing.” When Cisco’s employees aren’t on the road (they’re on the road about 20 percent of the time), they usually work together, so the space was reconfigured to provide open areas where employees can have quick, informal meetings, while work teams can gather in a range of small and large conference rooms outfitted with video-conferencing equipment and digital whiteboards. When employees need what Capital One refers to as “heads-down quiet space” they can move to a library, where conversation is minimal and cell phones must stay on vibrate mode.
The goal is to augment the savings on real estate with enhanced productivity. Measuring productivity is never easy; as Cisco’s Golan notes, “It’s hard to isolate the effect that any one variable has on worker output.” But he says that a pilot project in the company’s call centers resulted in “very significant” improvements. Capital One attempts to crack the productivity code through worker surveys, and says that three-quarters of employees surveyed say they are now working as productively as possible, while just over half say that group productivity is up. The company also found a 24 to 31 percent reduction in the time needed to get input from managers and peers, which it says leads to faster decisions.
Making It Work
The good news is that alternative workplaces are much easier to set up than in years past. For many knowledge workers, work is almost synonymous with Internet access, and with laptop computers now powerful and inexpensive, wireless networks proliferating, and various conferencing technologies maturing, “office space” can be created virtually by using the tools that workers would be supplied with anyway.