Strategic Work-Space Planning

Space, buildings, and architecture are not the first things a company thinks about when it is “transforming work.” Yet changes to space and time are basic to evolving concepts of what work means. Employee empowerment, reengineered work processes, organizational learning, and the elimination of work-family barriers do not seem to be connected conceptually to a company’s accommodation, yet companies looking forward to growing and thriving — to more than just survival —are learning to examine their work spaces in new ways.

Corporate trends toward outsourcing and downsizing, reducing overhead, and consolidating all have space design implications — not just for real estate, but also in terms of the physical space in which employees perform their tasks. In this article, I examine attitudes toward space design and accommodation in light of two objectives: (1) to reduce costs and (2) to increase worker effectiveness. Not enough companies are taking advantage of the opportunity to “right size” their space, first, by using their real estate dollars more effectively and, second, by using the streamlining of accommodation expenditures as an opportunity to transform the organization. (I use the term “accommodation” to refer not only to the physical space an organization inhabits, but also to the elements of the work environment that make the space function, such as office technology, furniture, building services, and ambient environmental conditions — lighting, noise, ventilation, and so on.)

There are information, tools, and technology available to give white-collar workers a physical work environment that actively supports their task performance. A company does not need to pay for uncomfortable work space that slows work down, makes change difficult, or is less than optimal for work performance. By attending to the human aspect of space use, managers can gain more from money spent on office accommodation. In cases such as Apple Computer, Digital Equipment Corporation, and the NMB bank in The Netherlands, where “office of the future” concepts have been implemented, CEOs have found that strategic work-space planning — the integration of space-related decisions for work and workers with an organization’s business objectives — can potentially empower employees to take responsibility for and make cost-effective decisions about their own space.1 Strategic work-space planning can facilitate and, in some cases, drive reengineering of work processes, and can encourage teamwork, help flatten hierarchies, and instigate other organizational changes. Once this new way of looking at accommodation is part of a company’s culture and employees have adjusted to it, “organizational learning” occurs, and the company has a new, better way of solving problems.2

Why Space Is Important

Companies are increasingly concerned with reducing overhead and keeping costs down to maintain a competitive position in the marketplace. At the same time, employers want to increase the effectiveness and productivity of their work force. The proliferation of “total quality,” “customer-driven,” and employee empowerment strategies address the latter objective, namely, increasing organizational effectiveness. Techniques of strategic planning, ROI analysis, and straight cost cutting, including reducing square footage, are generally considered ways to meet the first objective. Accommodation costs, usually seen as overhead, are typically reduced by:

• Shrinking occupied square footage.
• Negotiating more favorable lease terms.
• Moving to cheaper premises.

But little is known about the effects of this “cost cutting” on meeting the objectives of improved employee performance. In fact, there is evidence that these tactics, while reducing accommodation costs, are actually counterproductive in increasing employee effectiveness. Therefore, the money a company invests in accommodation —which includes lease or mortgage payments, building management services, furniture and interiors, maintenance, utility bills, renovation and repair, and moving —is only partly effective, even if reduced. That is, a company can reduce costs by cutting the amounts spent in these areas, but does not add value in terms of the impact of work space on improving work performance.

Like random downsizing in a company, unplanned cost cutting can backfire. If corporate decisions on how to reduce square footage for workers’ accommodation are not made strategically, the money saved is reduced by the negative effect on employee productivity. Employees may react to an uncomfortable, poorly planned work environment with low morale, increased absenteeism, lack of creativity and innovation, increased error rates and machine downtime, and poor manager-employee communication.

A manager in a once-thriving rail transportation company going through hard times moved his group from 100-square-foot offices into 50-square-foot workstations, saving 100,000 square feet of prime downtown office rent.3 One team operated a piece of highly complex equipment and had achieved an error rate of .2 percent. After moving into the new space, the error rate averaged 6 percent. The manager determined that the smaller work space alone was not responsible for the efficiency loss but admitted he had not consulted or prepared employees for the change. The cost of the error rate after moving far exceeds the money saved on square footage, but a better managed process could have both reduced occupancy costs and maintained or improved work performance.

Typically, CEOs and CFOs or their real estate or facilities managers (who do not always provide adequate information to executives for making accommodation decisions) do not see that physical accommodation is critical to corporate success. As a result, companies are ill-informed about the development of strategic approaches for reducing occupancy costs while maintaining or increasing productivity. A strategic approach to accommodation planning includes:

• Ergonomic workplaces.
• Group and team work space.
• Nonterritorial and shared workstations.
• Telework and “hoteling” (when employees who work outside the office most of the time occupy shared office space on a “reservations only” basis).

These and other tactical initiatives can reduce accommodation costs and, at the same time, increase organizational effectiveness. Technological innovation and creative space design together make solutions possible. Their potential is often overlooked as a result of some deeply rooted misconceptions about space allocation and use, some of which I review later. In the remainder of the article, I examine examples of companies that have benefited from strategic accommodation decisions, and I will draw recommendations from these examples to help companies use work space to add value to their organizations.

By strategically tailoring the accommodation provided to the technical, functional, interactive, and psychological requirements of employees’ tasks, companies can offset the possible adverse effects of smaller work spaces, fewer amenities, or moving by designing better work space and a work environment for human needs.

Current Misconceptions

When manufacturing was predominant, work space was part of “plant” and was a key element in the strategic planning of location, size, maintenance, and replacement decisions.4 Because white-collar and “knowledge” work does not depend on fixed equipment as factory work does, accommodation decisions tend to exist in a limbo between “dollars” and “image” — a trade-off that a few senior executives and their favorite architect usually make. Companies often base decisions about accommodation on a combination of financial and image considerations. For example, law offices have to look like law offices, corporate headquarters have to project a corporate image, and government offices should not look “expensive” because they are paid for with taxpayers’ money. Planning new accommodation or space changes is not usually incorporated into strategic business planning. But, in fact, current circumstances — computer-based work, broadband communications technology, groupware communications software, investment in restructuring and reengineering, and the proliferation of knowledge work —together offer an unprecedented opportunity for companies to shift their thinking about space, and to use it as a tool to increase an organization’s effectiveness.5

Typical misconceptions about corporate accommodation, based on an outdated and traditionalist view of work space, can limit opportunities.

Misconception 1: A company generally makes accommodation decisions to improve its functioning.

There is widespread, implicit acceptance in most organizations that the space-related decisions either business or facilities managers make are based on a perceived need to solve a problem or improve organizational effectiveness. In fact, accommodation decisions are more often based on a need to cut overhead costs or as a follow-up to organizational restructuring, and are unrelated to improved employee functioning. Some accommodation decisions err in the other direction, namely toward spending excessive sums on high-priced accommodation without paying attention to the long-term functionality of the work space. In cities throughout North America and Europe, there are large, expensive, image-conscious buildings that were designed more to create a splash than to improve organizational effectiveness. L’Arche de la Défense in Paris, for example, is a dramatic architectural monument in which government workers struggle with insufficient air quality and acoustic insulation, long, monotonous corridors prevent casual meetings and socializing, and a single cafeteria in the basement overflows at noon even when the elevators are too full to carry employees there.6

The Intelsat headquarters in Washington, D.C., is a striking series of low glass towers strung around a linear atrium. Designed to admit natural light, it is prone to significant heat build-up, necessitating massive air-evacuating fans in the atrium and window screens to allow people to stay cool and work at their computers without glare.7 During its first three years of operation, the much-publicized State of California’s Bateson building in Sacramento, built to be energy efficient, had a malfunctioning heating and ventilating system and such poor air quality that workers walked out in protest.8 Lloyd’s of London — the much-heralded futuristic headquarters of the venerable insurance company — had to be completely replanned inside because staff could not function in the new space. The value to a company’s image that these and other new office buildings add has clearly been outweighed by their high operating costs and functional inconvenience —costs that increase over the life of the building.9

These examples indicate the close relationship between a company and its accommodation. If, for example, improved employee performance, greater efficiency, better communication, and more creativity were the basis for accommodation decisions, then unintended costs associated with making decisions unrelated to improved functioning could be avoided.

Misconception 2: Facilities and building professionals in large companies should maintain a respectful distance from business units and business unit managers.

Those who make accommodation decisions for a company are often unwilling or unable to relate space planning and accommodation issues to a company’s business objectives, much as business managers tend to regard work space as unrelated to their business goals. Despite the proliferation of training and professional certification programs for real estate and building professionals, many companies appoint executives with no building-related experience to senior real estate positions, thereby reducing the likelihood that the company will develop a coherent accommodation strategy to support business goals.

Often, facilities and building managers separate themselves from business units “where the real work is done” and become service providers. A “good” facilities team responds to clients’ demands if money is available for space and furniture and assumes a policing role when money is scarce, for example, enforcing smaller space standards, controlling furniture purchases, and reducing hours of mechanical system operation.

In an enlightened organization, real estate professionals give business units the expertise necessary to help managers make the best accommodation decisions for their groups within their budgets and according to their business objectives. This expertise might include:

• Information about telecommuting, hoteling, and other office alternatives.
• Insight into the psychological impact of physical environmental conditions on work performance.
• Guidance through a managed participatory process involving employees in work-space design.
• Detailed knowledge of the cost of work-space options.
• Access to architectural, engineering, and ergonomics expertise to facilitate implementation.

In assuming these responsibilities, facilities and building professionals function as a major resource to business managers in space-related decisions, rather than taking a backstage role as service providers to the business units. This increases their value to the company and thus the company’s competitive advantage.

Misconception 3: Space design and the physical attributes of the work environment have only a minimal effect on employee effectiveness and morale.

In most companies, decisions about work-space design and floor layouts are first based on the logistics of costs, numbers to be accommodated, moving schedules, building limitations and opportunities, and space standards before they address issues of employee effectiveness and morale. Typically, managers impose personal design choices or leave work-space decisions to designers and facilities managers. The latter tend to rely on published standards of conditions for human comfort rather than analyzing how to make employees more effective.

Misconception 3a: Employees do not need to participate in decision making on space issues because building professionals know what users need in their work environment.

Although one might expect employees to have a voice in how environmental conditions affect their work, more often they are assigned a passive role. The company expects them to accept the spatial layouts, furniture, and space allocations it gives them. Sometimes they have a chance to respond to new work-space proposals or, less frequently, to give space designers feedback on new layouts. Although their comments may be integrated into space planning, employees are not empowered by these brief consultations and therefore take no responsibility for the outcome.

As a result, employees tend to lodge complaints only if their work environment is uncomfortable. Those who do not complain may simply adapt their behavior to the environment, often reducing their performance and efficiency. Moreover, employees may resort to sabotaging their work environments deliberately or inadvertently —for example, by placing paper over air vents, disconnecting bulbs in fluorescent fixtures, or putting their computer monitors against windows and then complaining about glare.

Partly because of their dissociation from business activities (Misconception 2), building managers are often ineffectual in persuading people to care for their work environment. Consequently, employers lose accommodation value in several ways. First, people work less efficiently than they are able because they are hindered by poorly designed work space. Second, employers spend money on building changes and renovations when people complain, making building management reactive rather than proactive by responding to rational accommodation priorities and planned deployment of facilities budgets. Third, sabotage costs money in increased energy costs, more maintenance and repair, and equipment downtime.

A company would derive more value from office accommodation if Misconceptions 3 and 3a were replaced by involving employees in space-related decisions that affect them and by increasing skilled building professionals’ and business managers’ knowledge of the importance of work-space conditions in increasing employee effectiveness. For example: Is the lighting causing glare and slowing down work at computer screens? Is the lack of meeting rooms preventing teamwork and reducing communication? Are high partitions around workstations causing people to stand up to talk to each other, raising the overall noise level? Once identified and understood, these problems and others can easily be solved. Their effects — slowing down work, and, in extreme conditions, driving employees to take long lunch breaks, leave early, and take sick days — could be avoided if managers used available knowledge and tools to analyze and improve physical space conditions.10

Encouraging employees to take some responsibility for space-planning decisions in a managed process, rather than simply asking them what they want, increases employee empowerment and makes managers aware of the interaction between space and human behavior. By developing ways of making employee effectiveness and morale a priority criterion for space planning and design, managers play a more forceful role in helping people derive maximum advantage from their physical work space. More informed, responsible employees and managers not only make better use of space, but also save money by relying on themselves to solve problems instead of lodging complaints with the building staff.

Misconception 4: Accommodation decisions do not need to be part of a coherent, long-term strategy, even though they are prone to costly, last-minute reversals.

Responsibility for building-related decisions is often spread over a number of individuals and groups. The result may be inappropriate costs both for long-term repairs and changes to a badly built building or, more simply, for onetime changes needed to correct mistakes, such as too bright overhead lighting for people working on computers. When no single person or group takes responsibility for mistaken decisions that later cost the company money, there is no possibility for improving the way these decisions are made.

Companies large enough to have their own design and construction personnel often spend large sums on tailoring a new work environment to employees’ needs and expectations, only to find that a business decision or executive edict means spatial changes as it moves people around. One large telecommunications company with 45,000 employees in owned and leased premises spends more than $18 million a year on space layout changes alone. This is so common that many companies are turning to a transfer pricing policy that obliges business managers to pay for their accommodation from operating budgets. Even a careful and time-consuming participatory design solution can be compromised by last-minute changes and adjustments that reduce users’ comfort and efficiency, although the scheme they participated in and agreed to was designed to optimize their comfort and efficiency. For example, meeting rooms become offices, and computer equipment takes over an office. In one case, a manager acquired the adjacent visitors’ area because he decided the approach to his office was not imposing enough.

Lost meeting space or work space and inadequate reception areas are typical of space-use compromises that not only slow workers down, but also add up to wasted effort by space designers and planners. This is partly the result of the adoption of a service role by space planners and facilities managers, who feel it necessary to make costly alterations when management changes its mind. And it is partly due to passively “giving” their work space to employees instead of having them take responsibility for creating it.

Eliminating Misconception 4 means linking the long-term implications of accommodation decisions to business goals. Companies seeking to gain more from their real estate expenditures not only give employees and their supervisors more responsibility for their accommodation budgets, so that accommodation decisions respond to strategic business goals, but also embark on participatory design processes that go beyond seeking out users’ opinions. The process of informing managers and empowering employees generates a greater sense of involvement in and responsibility for space and reduces wasted effort, revised decisions, and costly changes.

Misconception 5: Using space to reward status in a company and using size and type of work space as symbols of rank are cost-effective practices that improve employee performance.

Traditionally, employees advancing through an organization are assigned larger spaces, corner offices, and more imposing furniture. As in the case of the manager I described above, the office area can also include the approach to the office and the visitors’ waiting area. This tradition is so ingrained that even now, when it is axiomatic that the more senior the manager, the more time he or she spends elsewhere — in meetings, in employee work areas, or with clients — managers still expect and receive larger, more enclosed offices than their employees. This practice affects the whole hierarchy, from the team leader, who has a slightly larger cubicle than team members or is located by a window, all the way to the executives who have their own floor with vast offices and boardrooms and a few lonely secretaries scattered about.

In reacting to this misconception, some modern companies are questioning this approach’s efficiency. Not only are managers’ offices empty most of the day, but in the interests of flatter hierarchies and more team spirit, some companies have provided a uniform office space for all employees, regardless of their seniority.11 Besides contributing to space inefficiency, work space as a symbol of organizational hierarchy is reminiscent of traditional authoritarian work environments and does not mesh with current work transformation. Even companies moving slowly toward cultural change — with employee empowerment, teamwork, telecommuting, and nonhierarchical management — still retain the symbolic cultural value of authoritarian space use, inadvertently reinforced with standards based on rank and enforced by building design and management personnel.

A task-based approach needs to replace the status-based approach to space planning. A task-based approach derives criteria for spatial layout and design from task requirements, communication patterns and separation needs, and conditions affecting employee effectiveness and morale, not from individuals’ status, rank, and seniority. An ever-growing number of companies whose CEOs want not only to maximize the efficiency of their accommodation dollars but also to optimize employees’ work performance are adopting this approach. In the context of constant change, they need to be able to make space-use adjustments and alterations quickly and cheaply without a lengthy space planning process or costly furniture layout changes.

In sum, these misconceptions prohibit companies from realizing fully all the advantages of their accommodation, creating a net loss in terms of employee effectiveness and real estate expenditures. Pressures on companies to increase efficiency, coupled with the transformation of employees’ responsibilities, are generating a new definition of corporate accommodation and causing new techniques of planning, designing, and assessing work space to evolve.

One company that has taken advantage of the right-sizing work-space opportunity is the Bank of Boston. This bank initiated an office-relocation process by seeking ways to improve the profitability of certain uncompetitive business units. Close examination of these operations showed that work processes were inefficient, that several groups replicated each other’s tasks, and that key personnel were leaving because of their uncomfortable office environment. A series of strategic business decisions — including updated and improved software, a shift to just-in-time work processes for which all employees, management, and staff received training, and consolidation of seven different work groups under one roof — led the company to move all employees into a new building.12 The building selection (with access to demographically appropriate regions for the bank’s labor needs) and interior design (to facilitate the just-in-time procedures) constituted a series of decisions by the bank’s business managers. The process was guided by — but never relegated to — facilities and design staff.

The new building, although leased, required extensive interior renovation to accommodate the regrouped business units. The bank hired designers for the building’s interior, while consultants worked with employees to streamline their work-flow processes. The new offices incorporated innovative design solutions to facilitate work-flow efficiency and flexible work-group planning; it cost some $9 million to build. After the employees moved in, the improved efficiency of work-group operations resulted in a 30 percent reduction in the amount of space required to perform the same work. The bank also reduced the number of employees by 25 percent. Another work group occupied the space vacated in the new building, reducing lease costs on premises the bank rented elsewhere. The overall savings to the company in space and payroll terms was more than $9 million within two years of occupancy. Moreover, despite their fears about the move, employees love working in the new building, and the bank has been able to use the facility as a showpiece to attract new clients. This has further increased the business units’ profitability.13

Bank of Boston used space-related decisions to reduce operating losses and overhead costs while investing in the quality of its building and adding value to its products.14 It defined work space as a strategic resource. It saw the money spent on accommodation as an investment, and improvement occurred not only in bottom-line cost savings, but also in reduced employee turnover, better work performance, and an innovative and streamlined image to clients. This example shows how work improvement and dollar savings are possible through relating accommodation decisions to business goals, through careful, thoughtful space planning, and through tailoring work space to employees’ task requirements.

Comparison with IT

Work-space design can be compared to information technology. CEOs have to make decisions about information technology (IT) without clearly measurable output or results; the same is true of decisions about space. As with work space, their opinions about IT are typically “polarized between those who see IT as a strategic resource and those who see IT as a cost.”15 Typically, senior managers are more likely to see accommodation as a cost than as a strategic resource, whereas business managers who are watching the bottom line may have more advanced ideas about the strategic implications of accommodation decisions; they may see work space, similar to IT, as a work tool.

In their article about the value that IT executives generate, Earl and Feeny comment, “A recurring concern of the last several years has been how to connect IT investment to business strategy.”16 Although relating space decisions to business strategy is a relatively new idea in facilities management (FM), it is fast becoming a concern, perhaps best expressed in the evolving financial model of FM presented by an MIT team studying corporate real estate trends.17 This report traces five stages through which corporate financing FM has typically evolved — from a provider of “accessory services” at the first stage to a protector of corporate standards at the second stage, when costs have to be reduced. At the third stage, FM is a service provider with its own budget, and at the fourth, a service provider with a budget funded by business units. By the fifth stage, FM has to face external competition for its clients and functions best as a strategic business partner to business units, where value is added to FM services through their familiarity with clients’ business goals.

The advice Earl and Feeny offer to CEOs seeking to add value through their IT decisions can easily be applied to CEOs wanting to add value through their work-space design and accommodation decisions:18

1. “Position [FM] and the [facilities executives] as agents of change.” Space design and accommodation must be seen as “part of the solution, not part of the problem.”
2. “Focus on achieving effectiveness, not efficiency, from [FM].” Exploit spatial change to deliver some element of business transformation and substantial benefits; “major gains come from . . . ‘doing the right things,’ not [from] ‘doing things right.’”
3. “Institutionalize business values for [FM].” Focus on transforming attitudes toward accommodation issues and on teaching people to incorporate space considerations into their strategic thinking.
4. “Build an executive team that includes [facilities executives].” The director of facilities or vice president for real estate should be part of the top management group and know about accommodation issues such as property management, asset management, the impact of space decisions on work performance, and alternatives such as “the office of the future.”
5. “Manage [space design] as integral, not as adjunct, to the business.” Rather than putting space use and accommodation into a special planning group or steering committee, make it a legitimate responsibility of the business team.

Using Space Change to Transform Business

If a CEO takes these radical steps toward making more informed, responsible space design decisions, what can a company do to take advantage of an opportunity for corporate accommodation to add value, reengineer processes, and transform work?

At Bell Sygma, a medium-size programming and accounting software company in eastern Canada, a senior vice president decided to use a reduction in space and increased outsourcing to drive a large-scale cultural change and business transformation.19 The company had a high proportion of long-term employees with traditional bookkeeping and accounting backgrounds. They were slowly responding to the company’s increasingly competitive orientation with a more flexible, customer-driven, teamwork approach led by the computer programmers (many of them contractors) who were beginning to outnumber them.

To effect change, the company put aside the conventional architectural approach to designing office space. The well-established, habitual space-planning practices that fail to encourage either employee responsibility or environmental empowerment include:

• Assigning individual work space on a permanent full-time basis (regardless of how much time employees occupy it) and encouraging employees to regard of it as “their home.”
• Employing a system of space standards that may allocate more space than people really require and that need to be policed by facilities managers so that widespread discontent is generated when space is inevitably reduced.
• Basing the business case for alternative work space on real estate savings from vacated space, rather than on the advantages of accommodating a larger number of people in the same office space and increasing their efficiency.
• Using space allocation and design to anchor traditional corporate values of permanence, visibility, and advancement rather than — as with IT — as an enabler of business transformation and a tool for work.

The company implemented an innovative process in which trained facilitators augmented the design process with group learning sessions. The sessions taught the design team how the company worked, helped employees think about their use of space, and determined how space use might change in a denser, less spacious environment. Employees did not always welcome these discussions; people normally want to retain personal territory that symbolizes their position. Their considerable resistance to change was balanced partly by those who favored the new space design and partly by the learning that occurred as employees opted for innovative, “virtual” ways to work. The techniques of the design/facilitator team included environmental feedback surveys, participatory planning workshops, site visits and walk-throughs, and environmental simulation (three-dimensional models, videos, and so on).

Involving employees in planning their new space gave teams a chance to reengineer their tasks to eliminate inefficiencies, including excessive storage and unused space. Although the process was time consuming, it saved time later because the facilitators were members of the design team who could integrate the results of employees’ group sessions directly into the architectural design process. Unlike a conventional space-planning process, in which space programmers (if they are used at all) base their design recommendations on what workers say they do, this change-oriented planning process required the design team to use employees’ input about what is to create something new designed for what will be. The process enabled designers to generate plans and drawings of innovative space-design concepts directly in response to employee input.

This process did not mean that employee input alone dictated the design of the new work environment; managers also engaged in goal-setting sessions, and each group’s business objectives were made explicit. Managers needed the flexibility to add and subtract people in response to project requirements, without, on the one hand, creating overcrowding, and, on the other, holding on to space that they did not always need. The company’s senior executives tracked the process carefully, approved the business case for the new furniture and construction of the new layout, and shared with business managers the costs and expected returns in increased employee productivity.

The design team generated a solution that responded both to management’s business goals and to employees’ work-space needs and priorities. The space at each desk was dramatically reduced, but a markedly larger number of shared group and team areas were created. People were encouraged to use different spaces and zones according to their task requirements, rather than to sit at one desk identified as their own. They were also invited to participate in a telework program so they could work at home or at clients’ offices when appropriate.

The new work space is completely flexible, comprising movable furniture and networked computers. It has distinct work areas — open team meeting areas, enclosed group meeting rooms, desks and worktables for individual occupancy, enclosed “concentration” offices for one or two people, a shared relaxation and coffee area with plants and a window, formal conference rooms, and a staffed library-documentation center — all available to everyone according to their varying task requirements at different times.20 This required a major change in attitude for many staff, who were accustomed to enclosed spaces with some privacy, to all possible documentation at or near their desks, and to the “perks” of fancy conference room chairs or a window view. They have had to learn:

• To see the whole floor as their “office.”
• To depersonalize their occupancy of individualized work space.
• To make space-related as well as business decisions with their coworkers and team members.

To facilitate this change in cultural values (seeing work space as a tool rather than as territory), the design team and facilitators remained with the project after the design was accepted, seeking users’ input, disseminating information about design decisions and project status, establishing an area to test new furniture, and making necessary refinements and adjustments. As employees became comfortable with the new environment, they began to take over the refining and adjusting, moving furniture, changing places when appropriate, adding or eliminating file cabinets, and so on.

Once the change was effected, the rate of occupied square footage went from more than 200 square feet per person to 126 square feet per person.21 Communication, teamwork, and client responsiveness measurably increased. Slightly more than 10 percent of employees began some form of telework and share work space when they are in the building. The productivity gain is built into each business unit’s budget during the next fiscal year and is expected to more than cover the cost of the new accommodation. On the basis of the environmental empowerment initiative’s success, the CEO has asked employees for an across-the-board reduction of 50 percent in all administrative (including real estate) costs.

The new work space is still evolving. As the process of business transformation extends to the whole company, different work groups are adapting and improving on both the participatory planning process and the work-space design outcome. One characteristic of work-space planning as an enabler of business transformation is that there is no clear end — so beloved by architects and facilities managers — when they can point to a completely installed scheme and say, “Look, it is done!” In handing over space to empowered employees, the designer functions as resource and facilitator, but the users themselves determine when the work environment best suits them. As a result, the relationship with facilities management has also changed: no longer reacting to complaints and demands for change, the FM team is free to plan and budget to support the company’s long-term business objectives. It can also act as a resource and support for business unit clients, assuming information dissemination and strategic planning roles that support business managers in defining accommodation for their units.

The leaders of change at Bell Sygma replaced common misconceptions about work-space planning with the following conditions for the success of work space as an effective driver of organizational change:

1. Explicit business goals, which all participants know and share.
2. Deconstruction of people’s work processes, so that task requirements, not individual needs, become the focus of space planning decisions.
3. Employee buy-in based on empowering employees with regard to their space and making them active participants in design.
4. A clear understanding of the limits and opportunities of the building that is being replanned (ventilation capacity, cabling systems, window size and placement, construction budget, etc.).
5. An explicit, guided, facilitated process that brings these elements together and ensures that a coherent, cost-effective, and feasible work space emerges.

Adding Value

A new way to look at space planning is becoming obvious to forward-looking CEOs and CFOs. Decision makers increasingly see that no space change should be made simply to reduce square footage or dollar costs: every change represents an opportunity to increase worker effectiveness by improving work-space quality. Moreover, in some situations, a space change also represents an opportunity for business transformation. Accommodation changes that senior management approves should always meet two criteria: reduce costs and increase productivity. The business case for investment in new accommodation should, in fact, incorporate a predicted increase in the effectiveness of reaccommodated employees, which can be taken either as group operating budget reductions or as graduated revenue increases from more effective client relationships.

To be effective, decisions about space planning need to be integrated with decisions about technology. Computer and communications technology have liberated employees from time and space constraints. Work-space alternatives can replace the proliferation of partitions, cables, computer screens, and enclosed offices typical in today’s offices, which, in current economic conditions, are under pressure to shrink. As individual cubicles are being replaced with various spaces tailored to occupants’ needs, work-space alternatives such as telecommuting, “flexi-place” programs, “hoteling,” and mobile offices are becoming a reality.

The global economy means that project teams can comprise employees and contract workers, can be located in Hong Kong and Paris, and can be changed overnight. In other words, where people work is decreasingly important as companies increasingly emphasize how people work. Enlightened managers want results: they allow employee teams to decide how best and most cost effectively to get them. Keeping employees in a fixed location for a fixed number of hours per day can eventually be counterproductive to rapid, effective production. Companies and government offices are trying telework pilot programs; most participating organizations agree that worker productivity increases, space occupancy costs go down, and manager-employee relationships are changed.

Innovative work-space planning illustrates three themes of the accommodation opportunity and the role of space design factors in transforming work. First, an obvious key to using the work environment to increase effectiveness is to listen to users. There are techniques to make employees more aware, more responsible, and more active in defining and designing work space.22 Employees aware of employers’ needs to reduce occupancy costs can engage constructively in making cost-effective work-space decisions, preferably on the basis of team rather than individual needs.

Most people are aware of their environmental needs and their impact on work behavior but lack a formal opportunity or forum to express their understanding and share their knowledge. Facilities managers preoccupied with cost cutting are not committed to initiating occupancy feedback processes or participation that, to them, risks generating more environmental complaints and demands. As a result, the environmental empowerment of employees does not add value to FM services as much as it does to business managers, whose workers’ effectiveness increases with a suitable, functional work space.

A second theme in using work space to add value is high-level support for empowerment. Facilities staff responsibilities vary enormously, from setting up preventive maintenance programs and purchasing carpet to making major asset management decisions. Real estate executives often lack the status necessary to initiate and execute a corporate accommodation strategy on the scale needed to add value to the company’s product. This requires broad-based senior executive involvement.

Third, facilities managers and business managers need to share business goals and strategic business planning. As strategic planners, they can develop tools that enable employees to participate in work-space design — not simply in making demands and expecting service, but in being responsible for appropriate square footage allocations, ensuring the quality of ambient physical conditions such as sound and light levels, and making the adjustments to ensure that employees’ space is working for them.

In return for investing in work-space innovations, CEOs will see benefits from reduced real estate costs, more effective real estate expenditures, better worker performance in more functional work space, and a shift toward employee empowerment and teamwork. As more companies move toward strategic accommodation, building developers, furniture companies, property management companies, and other suppliers will be more responsible and more responsive to their clients’ better defined and articulated needs.