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Why you need to rethink your office space – again – for digital transformation

Innovation Executive Forum | Posted on November 19, 2019 by Erika Van Noort

When the leadership of Telenor, a Norwegian telecommunications company, wanted to improve collaboration between sales and the rest of the company, they went for an unconventional solution: Coffee.

Or, more specifically, the location where coffee is made available to employees. As reported in the Harvard Business Review, the company had roughly one coffee machine for every six employees. Employees used the same machines every day, leading to silos and cliques, where sales chatted with sales, marketing chatted with marketing, and so on.

So, the company paid hundreds of thousands of dollars to rip out the old coffee stations and build fewer, bigger ones – just one for every 120 workers. It also created a larger cafeteria for all workers to meet in one place at lunch. In the quarter after the coffee renovation was complete, sales rose by 20%, or $200 million. The CEO credits the coffee-approach with the telco’s massive growth into a multinational brand with 150 million subscribers.

Time for a physical office space revolution (again):

This story highlights the growing importance of physical office spaces in the digital age. Not only has workplace engagement reached crisis-level lows, but the stakes of improving it have never been more critical to employees or your bottom line.

This isn’t the first time the office has faced major upheaval. The open office floor plan was supposed to end everything wrong about cubicle culture and give employees a bright, creative and collaborative place to thrive. By 2014, about 70 percent of all offices had an open floor plan – and everything was terrible.

Studies show open offices reduced face-to-face interactions by about 70 percent, and have driven an increase of email usage by about 50 percent. Others found that 90 percent of employees working in an open floor plan office had high levels of stress, conflict, high blood pressure, and more job turnover.

Today, only 15% of the world’s workers say they feel engaged at work. And an overwhelming majority of workers, 87 percent, say they would ditch their current employer if a competitor offered them a healthier workspace environment.

Despite these daunting numbers, fixing the problem has a major upside. According to the MIT Center for Information Systems Research, increasing employee engagement can help double customer satisfaction and innovation, as well as drive 25% more profitability.

A holistic approach is needed:

While it’s tempting to go out there and rip out your coffee machines, there are a few considerations to make, first.

While modern offices require a new approach to physical space, they also demand a new approach to your people, your processes and your technology landscape. As the MIT report showed, 96 percent of senior decision-makers agree a successful workplace transformation requires a holistic approach across technology and physical workspaces, operations, culture, and employee experience.

Here are just a few tips for doing so:

  • Start with why: The first step is to stop thinking of your office space as simply real-estate. It’s a tool – or a series of tools, each with a purpose. The question: What is the purpose, or purposes, of your workspace? Is it to create new ideas? Boost production? Improve customer experiences? Get clear on the target before you aim.
  • Design Thinking: From there, you can start to figure out what is working, what isn’t and what needs to change. You need to take an employee-first approach here – observing how work gets done, what gets in the way, and what the biggest frustrations and distractions are in their environment. Face to face interviews, and data-backed observation is helpful to create an accurate picture of challenges and opportunities.
  • Creating a culture: Your workspace should represent your company values – and be a physical representation of the culture you promise your employees and customers. Do your employees expect flexibility? Is your company moving quickly and breaking the status quo? Or is it about trust, privacy, responsibility? Do you believe in the need for lots of face to face meetings, or as few as possible? Questions like this will help clarify what your office should look like.
  • Integrating technology: Collaboration tools and modern platforms, such as Microsoft Teams, are a big piece of the puzzle. But they shouldn’t be treated in isolation, or as an alternative to dealing with physical office space issues. Your job is to determine how digital technologies support and integrate with your wider vision of the workplace. They are about making physical and digital realities collide. Whether you should invest in artificial intelligence, wearables, immersive conference rooms, or new communications and collaboration platforms will all depend on the vision and obstacles you’ve identified above.

We’ve spent decades talking about the need for a new kind of office. And while the open office revolution was well-intended, the results were mostly a failure. With today’s incredibly noisy and distraction-prone digital workplaces, a new approach is needed, again.

But, this time, we can’t simply rearrange the physical space. We need to rethink what it is an office is supposed to do. And, from there, create a balanced solution using fresh approaches to our people, our processes and our tools.

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