Cost Efficient, Open-space Office Designs: Ditching Desks — and Privacy

Things you will find upon arriving for work each morning at GlaxoSmithKline in Philadelphia’s Navy Yard: A tranquility room for prayer, a rooftop perch with city views for impromptu meetings, work stations that allow for typing at a keyboard while simultaneously walking two miles an hour on the treadmill, and a fairly good chance that at some point during the day you will bump into the CEO.

What you won’t find anywhere in the 208,000-square-foot space: a desk of your own.

GSK’s office design reflects a new approach to the workplace, one that embraces an open-space philosophy and uses a concept sometimes called “hoteling.” All workers, even top management, are assigned to “neighborhoods” — areas of workers engaged in related tasks — but no one has a permanent desk. Personal belongings go in a small locker.

Many employees work at computer terminals standing. Everyone is encouraged to float — in the cafeteria, on top of the deck beside a green roof filled with indigenous plants, on a sofa in a quiet room or in the lobby. The idea is that chance encounters will spark conversations and collaboration that would not happen when creative minds are moored to a single assigned desk. In GSK parlance, it’s called “smart-working.”

It might also be called smart cost containment. The new design allowed GSK to fit the same number of employees — 1,300 at this facility — into square footage that is a quarter of the size they previously occupied.

Open-space ideals began immigrating to this country from Europe in the 1950s and 1960s and have cropped up periodically since. But with the opening of some recent high-profile headquarters — Google, Facebook, Apple — many are once again embracing the movement. Two other large pharmaceutical firms have come in to study the GSK facility and are considering something similar, say GSK officials. “It was a trend in the 1980s and then it seemed to go away. Now it’s coming back again,” notes Wharton management professor Nancy Rothbard. “I think there are a lot of benefits to it, and then also some costs.”

More Collaboration, More Stress

GSK has been in its new home just 90 days, but the space is already turning heads. Management has not yet done a formal study to gauge indicators such as productivity, attendance and general satisfaction, but anecdotally the early signs are good.

“On a global basis, GSK is transitioning to collaborative workspaces whenever possible to foster better communication and idea sharing. GSK is taking down office and cubicle walls so employees can see and talk to one another,” says spokeswoman Jennifer Armstrong. “Five Crescent Drive [at the Navy Yard] is the first GSK building built from the ground up to meet the company’s needs for a collaborative and sustainable building.”

The goals, according to Armstrong, are to enhance collaboration and trust, break down hierarchical barriers, reduce emailing and formal meetings, help decisions get made more quickly, promote more physical movement during the day and “ultimately enable us to better serve our patients.” Some employees working in GSK suburban facilities are requesting a move to the new building, she notes, even if it means additional commuting time and an extra city wage tax.

Still, many observers say that open-space offices sometimes put additional burdens on workers, and suggest that corporations must consider the costs as well as the benefits. “I was recently speaking to someone working for a major accounting firm, who [told] me that they have a hoteling arrangement for their employees, but they hate it,” says Rothbard. “It may depend on the company and what you’re trying to do. It can be very stressful not to have your own space, your own routine, not to know where you are going to be sitting. Some people are able to create routines that they enact in different spaces, as long as they are able to get their cup of coffee or tea. They have their ritual and it doesn’t matter what the spatial arrangement is. But for other people, the lack of deep relationships can be stressful.”

Being untethered can also be an inhibiting factor. “Recent research documents a link between personal office space and confidence,” says Wharton professor of operations and information management Maurice Schweitzer. “In a negotiation study, negotiators enjoy a home-field advantage. They do better than visitors, and confidence is the mediating mechanism. People feel more comfortable — and confident — in their personalized space. For many tasks, including negotiations, they may perform better in their own office.”"

Human Contact – and Cost Savings

The reasons why some corporations decide on open-floor plans and hoteling vary. “It depends on what the goal is,” says Rothbard. “What’s interesting in the current work environment is that we get a lot of information electronically, and we have accessibility to a great number of people and data that we never really had before. So I think what this may be is a backlash against that, where you are working in isolation and connected electronically.”

In other words, after conquering the virtual world, workers are rediscovering the value of being in each others’ physical presence, making eye contact, smiling — “reconnecting with people,” Rothbard says.

“The more you are wandering around, the more likely [you are] to have a casual conversation with someone who has an expertise that you didn’t know they had [and] that you want,” says Bloomberg architecture critic James S. Russell.

Adds Jim Williamson, workplace strategist/global practice leader at Gensler, the architecture and design giant: When architects and interior designers meet with clients, the impulse to move toward open-space design can come from either side of the table. “Most companies are seeking more collaborative environments now and are asking for our expertise in developing a workplace strategy that [meets] their specific needs and that can [evolve] over time,” he says. His company frequently is hired to do just the workplace strategy, one that “better supports their work modes: focus, collaboration, learning and socializing. The key to success is developing a strategy that is flexible enough to address today’s issues and [that can] evolve over time as the company and its workforce evolve.”

Scott Erdy, principal with Erdy McHenry Architecture and a lecturer at Penn’s School of Design, notes that when his firm designed the new headquarters for the Southern Poverty Law Center in Montgomery, Ala., the civil rights organization’s founders– Morris Dees and Joe Levin — recalled that “the most creative and lively times” the Law Center experienced was when it “set up temporary office space on folding tables in a downtown warehouse after the Ku Klux Klan fire-bombed their previous facility … because everyone knew what everyone else was doing. [They] allowed us to create for them a completely open-office facility — primarily for lawyers — that promotes interaction, collaboration and enhanced problem solving.”

The other way of looking at open-space design is that getting rid of cubicles and other kinds of fixed arrangements can save money: You can fit more people into a space by hoteling, having people work at home or “benching,”

in which workers find a spot at a communal table.

“There are financial advantages,” says Michael Useem, Wharton management professor and director of the Center for Leadership and Change Management. “But more generally, the way people have managed over the past 20 years has [evolved] from a more hierarchical, traditional approach of putting people in prominent offices to a much flatter relationship. The open-office concept … reflects a different way in which management gets its job done; it’s more informal, more accessible and there is less social difference between people of different ranks.”

While open-space design is getting a lot of attention for the splashy visuals it creates at young tech companies, Useem sees open-space concepts across a wider spectrum of industries — sometimes working well, sometimes not. At a large New York financial institution where glass walls were used to create greater transparency, a fish-bowl phenomenon made workers uncomfortable. At the headquarters of McDonald’s, which used an open-space design, glass pods were created for those moments when private conversations were needed. “But through lip-reading and nonverbal communication, people could figure out what was being said,” he notes.

Spaces not designed well may ultimately undermine any anticipated savings in the facilities line item. “If you don’t do it well, there is a lot of resistance,” says Russell. Many companies “are saying, ‘If we put all these people in benching, we can reduce our costs.’ They will find that they won’t get the benefit they thought they would get, because if the environments aren’t good, they will lose good people and pay the price.”

Different Mode of Working

GSK spent a decade on the whole process of planning and then moving from a traditional office to an open-space plan, says Ray Milora, project executive for the firm’s Navy Yard site, who acknowledges that the new setting created some challenges. “No one likes change, and certain people were not excited about losing an office,” he notes. But training sessions held well ahead of the move prepared workers for how to pare down paper files, study how the unfamiliar office furniture worked and learn what kinds of changes in office etiquette would be expected.

Getting interrupted is a big concern, although in well-managed spaces, different techniques for dealing with that are available. “To be a leader in an open plan can be exhausting — you’re front and center. It’s a real test of a leader. You can’t hide,” says Milora. Indeed, as he was speaking during a recent tour of the building, Deirdre Connelly, GSK’s president of North America Pharmaceuticals, walked in and sat down at a generic desk among a group of others in her “neighborhood.” A little while later, she was sitting in the sunny center atrium chatting with another group. “You do see people just walking up to Deidre and saying, ‘You have a minute?’” says Milora.

Rothbard points to a study by Leslie Perlow, a professor at Harvard Business School, that looked at a group of engineers working in an open-space environment. ”The engineers were struggling with the fact that they were being interrupted all the time, and there was a sense that these interruptions were decreasing productivity,” she says. The study describes how Perlow instituted an intervention called “quiet time,” a pre-scheduled time when no one could interrupt anyone else. Productivity increased.

GSK found other tools. Quiet rooms of various sizes exist for solitary acts like writing and private conversations involving sensitive or proprietary subjects, and larger rooms are available for group meetings that are not meant to be interrupted. Each floor comes with a concierge who helps to manage the use of spaces both discrete and shared. As for heading off unwelcome conversational advances, three clip-on signs send a clear message: green for “Come on over,” yellow for “I’ll be right back” and red for “Please don’t disturb.”

Noise can present problems in some open offices. A new, more open space for the Philadelphia Inquirer on the vast selling floor of a former department store made no allowances for noise seepage, and reporters and editors who previously had cubicles now complain about lack of privacy and an inability to focus when writing.

A 2007 analysis of office acoustics by the University of California’s Berkeley Center for the Built Environment cited sound as a significant barrier to concentration. GSK is staffed with phone workers fielding calls from doctors and patients, and so the company has blanketed the building with sound-masking devices on the ceiling that emit a continuous white whoosh not unlike the sound coming from air conditioning vents.

One major social change that accompanies open-space plans is the feeling of always having to be “on,” notes Rothbard. How workers process this change depends very much on individual personalities. Jennifer Wolfe, GSK’s director of strategic capabilities and communication in the medical affairs department, says she can often get more business done by chance encounters in the hall than by putting meetings on schedules

In short, office dwellers might want to get used to the idea of being ready for anything. “Things are very in much in flux,” says Russell. How this settles out — at home versus working in the office, for example — has so much to do with the kind of job an employee is doing. “Instead of call centers, companies are contracting with people who work out of their homes. For these rote jobs where you have a way of ensuring productivity, working at home makes a lot of people happy. As long as you can achieve measurable goals, there is no problem. Everything will be going on at once — it’s not going to be everyone at home, it’s not going to be everyone in cubicles. The days of pure anything are over.”

Useem agrees that the workplace is forever changed. “Just to conjure up an image, I have walked into many executive floors that are almost a replica of what Hollywood would have created as an executive floor a couple of decades ago — 10 offices on one floor, each occupied by a CEO or CFO, and outside each office was an executive secretary…. These days, some [managers] even remove the door to their office to encourage people to come in.”

Is open-space evolution going to go away? “I doubt it,” says Useem, adding however, that “right now, the pendulum is moving toward flattening the hierarchy. It’s more accessible. It’s a better way to get information about what’s going on. But if management philosophy is transformed once more, it could yet again lead to different configurations. One possibility is that management becomes more of a virtual enterprise. With fewer people in the office, and more all over the world, there might not be anyone around for 20 square miles. It’s here to stay — until the next management philosophy takes hold.”

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