The Future of the Workplace: Designing the Experience

Every day, millions of people around the world go to one place: the office. Why?

The office began as a factory for processing information. If you were building ships, teaching children or caring for the sick, you had to go where the work happened: to shipyards, schools and hospitals. But if you were a clerk or a civil servant, a lawyer or an accountant, you just needed a place to sit and write, somewhere to store papers, and access to colleagues. So you went to an office. As the machinery of companies swelled, offices became larger and more specialized, swallowing up more space in towns and cities, and more and more of the people who lived there.

Today, computers have made many of those processing jobs obsolete — and it’s only a matter of time for the rest. In the years to come, advances in artificial intelligence will see machines take over even highly sophisticated activities. According to McKinsey Global Institute, around 50% of current work activities are technically automatable by adapting currently demonstrated technologies.^[1]

The office is now a factory for “knowledge work”. Knowledge workers are those who “think for a living”. Their work is characterized by creativity, problem-solving and developing new ideas and resources — roles that computers cannot take on so easily.

The term “knowledge work” was first coined by management consultant Peter Drucker.^[2] He defined knowledge workers as autonomous: they begin by defining a task themselves and are responsible for their own progress. Continuous learning, continuous teaching and continuous innovation are intrinsic to knowledge work, and output is judged on quality, not quantity.

“Knowledge-worker productivity is the biggest of the 21st-century management challenges” ^[3] Peter Drucker

No one has their best ideas at their desk. So why do we still go to the office?

In the 20th century, people had to go to the office because that’s where the tools of their trade were: telephones, fax machines, computers. That’s not true any more. With laptops, smartphones, wireless networks and cloud computing, people can work anywhere. When they do go to the office, they’d rather access company networks using their own computers: 53% of workers feel they’re more productive when they use their own devices,^[7] while six out of ten companies now have a “Bring Your Own Device” IT policy.^[8]

People went to the office because that’s where everyone else was. That’s no longer true either. Companies are often diversified, global networks, with as many contractors and freelancers as permanent staff. Team members don’t work in the same place or even in the same time zone, and they may choose to structure their hours differently.

They went because employers told them to. But in the 21st-century knowledge economy, the power balance has shifted. Employees have a greater say in how they do their jobs. “The number one success factor for many organizations will continue to be talent management,” says Tom Carroll, director of corporate research at JLL in EMEA. “That’s only going to become more pronounced as automation chips away at the more process-driven activities.”

In 2013, 7% of meetings in US workplaces involved a virtual participant. By 2016, this had almost doubled to 13% ^[11]

As companies compete to attract the best talent, they are having to rethink traditional approaches to work. Younger workers are much more mobile, says Carroll, both within the office itself and in the places where work is done: “That could be client offices, home, co-working spaces, airports.” A JLL survey of more than 7,300 employees in 12 countries found that 54% worked from home at least once a month, and 34% worked from third places such as cafes or co-working spaces. This is driven by millennials: 47% of under-35s worked from third places, compared to just 27% of over-35s.^[9]

Gensler’s US Workplace Survey 2016 found that in the most innovative organizations, employees only spend 74% of their time in the office, the equivalent of 3.5 days a week, compared to 86% at the least innovative companies. Those who spend 80% or more of their time in the office are significantly less satisfied with their jobs and workspace and find less meaning in their work.^[10]

Social media start-up Buffer decided to close its San Francisco office in 2015. With a fully distributed team spread around the world, spending so much on a base stopped making sense. Now its 70+ staff work from home, co-working spaces and coffee shops, travelling to meet up just a few times each year.

Will there be anyone left to go to the office?

“We are seeing a change in the way organizations think about a big chunk of their workforce,” says William Kerr, a professor at Harvard Business School and co-director of its Managing the Future of Work initiative. “Rather than lifetime employment, companies are working towards lifetime employability. Now the view is, ‘we want to make sure you value your time here, that you’re productive and constantly learning new skills. But at some point you’re going to go somewhere else, and we want you to look back and say this was a great part of your career’.”

The “dark matter” of the economy is temporary help, as companies have outsourced non-core activities such as maintenance and catering, and support functions such as accounts and customer relations. Historically large companies would directly employ hundreds of thousands of people. “Today we hear more about ‘superstar firms’ that are much smaller in size, but have an enormous impact and generate enormous economic rewards for those who are part of the company.”

The rise of the gig economy will fragment organizational structures even further. Digital platforms and smart devices enable companies to access a vast global pool of talent, and allow footloose workers to pursue new kinds of portfolio careers. “Every single business is having its operations transformed by automation and by access to digital talent platforms — the human cloud,” says Carroll.

The gig economy is a good fit for knowledge work: both prioritize autonomy, measure performance rather than attendance, and judge results, not the process that is used to create them. Upwork, the largest platform for knowledge work, claims to have 12 million registered freelancers, from designers and creatives to marketing experts and accountants.

McKinsey Global Institute estimates that 20-30% of the working age population of the US and Europe engages in independent work.^[13] The vast majority are engaged in selling their labour. For some, gig work is a poor, insecure second choice to full-time employment. But MGI found that a significant proportion would prefer to be freelance: if everyone could pursue their preferred working style, 40-50% of the working-age population in the US and Europe would be independent.

That’s one reason why companies still need offices: as an embodiment of their brand and culture. As companies rely on a smaller number of short-lived employees, they must impart their culture and values more powerfully, more quickly. Offices have always been a physical manifestation of a corporate ethos. That’s even more important when some team members may never visit them.

Kerr studied the ultimate superstar firm, Finland-based Supercell, one of the world’s most successful mobile game developers. “There are only about 200 employees at the corporation, but they also have more than 1,000 outsourced player support personnel. Even though the outsourced vendor is a different company, Supercell paid to decorate the facilities of the outsourced vendor to look like Supercell’s own offices.”

The office is the embodiment of company culture. But what kind of culture is it embodying?

Things move slowly in office design. Since the dawn of the 20th century, there have been three distinct waves, says Jeremy Myerson, director of WORKTECH Academy and research professor at the Royal College of Art in London.

The “Taylorist office” has rows of desks and very little else. It was based on the principles of American engineer Frederick W Taylor, whose system of scientific management broke every task into its individual motions and timed factory workers with a stopwatch. The modern industrial office was conceived of as a machine: “People are cogs in the machine, and organizations are giant pieces of engineering, and it’s all about economy and efficiency,” says Myerson.

Things loosened up after the Second World War with the “social democratic office”, a place of human interaction and social relations, where getting on with other people was key to getting the work done. “This is the era of the corporate campus,” says Myerson, “It’s a much more place-based approach, that introduced urban planning principles to create a more pleasant environment and involved people collocating to the same physical space.” Like mini-cities, campus layouts featured streets and boulevards and green spaces, and desks were in clusters rather than in rows.

Since the turn of the millennium, place has become increasingly irrelevant and the “networked office” is the model du jour. “Gathering everybody in one physical place is no longer possible,” says Myerson. “Work is more distributed, collaboration is often between companies rather than within one company. Innovation involves a lot of partners.” It means the end of presenteeism too: “The reason people sat at desks in a Taylorist office is so managers could keep an eye on them. But everyone leaves a digital trace now, so you can see exactly what people have done.”

Networked office layouts are much more fluid and workers more mobile within them. Management hierarchy is much less apparent and many of the desks have been replaced by a range of different spaces for activities such as brainstorming in groups, more focused teamwork, quiet concentration or confidential calls, in recognition that open-plan layouts do not suit every worker or every task. This is activity-based working. “Networked offices, in theory, give people choice, more opportunity to move around the network and more agency over their work.”

All three office types are still with us, says Myerson. “For organizations who have still got Taylorist offices and social democratic offices, the more fluid, flexible pattern of the network is difficult to manage. We’re in a period of restless improvisation and experimentation. We’ve moved away from efficiency to effectiveness, but now we’re trying to understand what effectiveness means in a knowledge economy.”

The networked office will be the dominant model for some time to come, believes Myerson, although it does have limitations. “People are already talking about fluidity rather than a network, because the network itself is bounded. But networks take different forms, some are well-defined, and some are organic and unpredictable, and then there are networks within networks. So I think it’s quite a good model for looking at what’s happening right now.”

The Uberization of everything: all companies are tech companies now

Distinctions between business sectors are collapsing. Banks, car makers, professional services — for every company, digital technology is now the key to success and growth. “It’s no longer about specific technology products that a company might use or not, but technology integrated into the business model,” says William Kerr at Harvard Business School. “Every leading bank is no longer thinking of themselves as a bank, but as a technology company.” On Harvard’s Managing the Future of Work course, Kerr includes a case study of bank ING Netherlands, which reshaped its working practices and offices using the Agile methodology to emulate tech firms such as Spotify, Google and Netflix.

The Agile methodology originated in software development, but is now being adopted by firms in many fields. Not to be confused with “agile working” — the ability to work where and when you choose — it is fast and flexible, with the emphasis on collaboration between small, self-directed teams. They are created for a specific purpose, evolve over time and disband when their work is done. “So instead of breaking down marketing from distribution from R&D, you have an Agile team that’s devoted to mortgage and loan applications, which includes everyone from customer support to development to how it’s being distributed to customers,” says Kerr. “There are now 300 self-directed teams working at ING. That’s a tremendous change from an organization that had seven or eight hierarchy levels.”

Agile favours a fluid layout. “ING moved entirely into open concept space. There are few walls and no offices — even the CEO doesn’t have an office. Instead, there are long working tables throughout the building and there are whiteboards everywhere and flipcharts.” ING is now rolling this out around the world.

Tech companies have led the way in new kinds of office space: they are naturally disruptive and they have a young workforce. Non-tech firms are following suit in order to attract that same talent, says Kerr. “Many traditional companies are moving into the heart of downtown in order to observe the very punchy ideas that are bubbling up.”

Factories for creativity

A high-quality workplace is essential for attracting and retaining talented people, and for supporting them to do their best work. Designers have long known this intuitively, but Gensler’s US Workplace Survey 2016 made the link explicit. It asked more than 4,000 office workers in 11 industries a series of questions about innovation within their organization, and about the functionality and effectiveness of their workplace. The correlation between the two was even stronger than expected, says Janet Pogue McLaurin, principal and co-leader of its workplace sector. Employees with a Workplace Performance Index score of 90 or more had an average innovation rating of 4.4 out of 5, while those with a WPI score of 50 or less averaged just 2.6 for innovation. “We saw that the most innovative top quartile behaved very differently and had better designed workplaces,” she says. “They spent more time collaborating and more time away from the office.”

In the most innovative workplaces, employees can choose from a diverse mix of spaces for focused work, virtual and face-to-face collaboration, learning and particularly socializing. “By moving around, you’re building social networks and touching base with people across the organization, not just who you sit next to. Those impromptu conversations spur connections and ideas that may not travel as quickly in a traditional set-up.”

But crucially, there is a balance between encouraging collaboration and supporting the individual work that remains essential to employee performance: “To focus effectively, you should not have distractions or interruptions, you need to get into that groove. That’s the direct opposite of collaborating,” says Pogue McLaurin. “If people are trying to do the two next to each other, that can be a misalignment.”

A JLL survey found that 69% of employees believe a work environment should facilitate “happiness” their number one priority for a unique workplace experience ^[17]

Autonomy is important — respondents in the most innovative companies were twice as likely to be able to choose where and when they worked as the least innovative. The choices available to respondents appeared to have narrowed since the previous survey in 2013 — but Pogue McLaurin suspects this may be down to our increasing expectations, as technological freedom becomes the new normal. “What employees are looking for is always changing. We don’t just settle for the status quo any more, we’re striving for that new experience or the latest, greatest technology. The physical work environment always needs to be evolving, always in beta.”

The office is no longer a place, but an experience. “We do a lot more ‘day in the life’ scenarios,” says Gordon Wright at HOK. “For example, we talk about what you want the arrival experience to be like. Do you want visitors to have to walk up to a desk and be sent to sit in a chair off to the side, or do you want to make it more informal and welcoming, like ‘come in and get a cup of coffee’? It’s about designing the space from the user perspective and creating an amazing place for them to be.”

Amazing spaces tap into all of our senses, including smell: “We’re talking about creating sensory experiences that go beyond just branding. Space should be the physical embodiment of what a company’s culture is.”

As office environments become more high-tech, there is a corresponding desire for “high-touch” maker or MEMO spaces (“maker environments, mobile occupants”). At AOL’s Toronto office, HOK created casual, interactive spaces in a rustic, brick-and-beam interior, designed to feel like an oversized living room. “It’s more hands-on,” says senior project interior designer Caitlin Turner. “You can move things around and tinker and play and get your hands dirty, almost like a scrum space or extended project rooms. We’re seeing this ‘garagification’, to support more agile, creative, beta-innovation type spaces.”

Innovative workplaces are 2.5 times more likely to offer specialty coffee on site ^[19]

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Hybrid species

The office of the future will encompass different types of space from many sectors

“The next big innovation in workplace is not going to come out of the blue, it’s going to come from taking elements of what we already have and combining them together,” says Gordon Wright, director of workplace at HOK. “Corpitality” fuses the office with hotel-style lobbies or lounges. Workplaces are borrowing from retail with tech bars — inspired by the Apple Store’s Genius Bar — and juice counters and coffee bars staffed with in-house baristas. Sweeping staircases or gathering spaces echo college campuses, and presage a requirement for lifelong learning, as knowledge becomes obsolete ever more rapidly.

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Footnotes

^{[1, 4]} MGI, “Jobs lost, jobs gained: Workforce transition in a time of automation”, Dec 2017 ^[2] The Landmarks of Tomorrow, 1959 ^[3] California Management Review, Winter 1999 ^[5] JLL estimate, based on Global 650 Cities database ^[6] Based on 151ft² per worker in North America, CoreNet Global 2017 ^[7] CITO Research, 2016 Executive Enterprise Mobility Report ^[8] BYOD Usage in the Enterprise, Syntonic, 2016 ^[9] Workplace — Powered By Human Experience, 2017 ^{[10, 11]} Gensler US Workplace Survey 2016 ^[12] The Quarterly Journal of Economics, 2014 ^[13] Independent work: Choice, necessity, and the gig economy, 2016 ^[14] Latest figures, December 2017 ^[15] Freelancing in America: 2017  ^[17] Workplace — Powered By Human Experience, 2017  ^[18] Washington Post offices by Gensler. Photo by Garrett Rowland  ^[19] Gensler US Workplace Survey 2016  ^[20] AOL Toronto by HOK. Photo by Tom Arban ^[21] RSA Toronto by HOK. Photo by Richard Johnson  ^[22] Fidelity Investments