Walls are falling as the ``office of the future'' finally takes shape

WITH ITS DIMPLED aluminum facade and TV-screen-shaped windows, Pittsburgh's Alcoa Building once exemplified the power and pizzazz of the classic corporate skyscraper. When it went up in the 1950s, 2,000 company employees streamed into the 31-story tower every morning, each to work in a private 12-foot by 15-foot office.

But go looking for Aluminum Company of America Chief Executive Paul H. O'Neill in his office these days and you discover that he doesn't exactly have one. The executive suite has no permanent walls or doors. All of Alcoa's senior executives work in open cubicles and gather around a ``communications center'' with televisions, fax machines, newspapers, and tables to encourage impromptu meetings. O'Neill's own favorite hangout is the kitchen, where he and his staff nuke take-out food, huddle, and talk work. ``It's like being at home in your own kitchen and sitting around the table,'' he says happily.

This experiment has taken place only on Alcoa's top floor. But O'Neill will soon bring kitchenettes and open offices to the whole company. Alcoa is abandoning the aluminum tower for a new three-story complex on the banks of the Allegheny. ``We're going to have an opportunity to do things with the way people relate to each other. It will be freer and easier,'' O'Neill says. With escalators instead of elevators and plenty of meeting rooms, ``there'll be a lot of places where people can gather.''

Alcoa is eager to solve an increasingly urgent workplace problem: After having downsized, reengineered, customer-focused, shattered old hierarchical structures, and reorganized work around teams--all the things that were supposed to make companies more responsive and competitive--corporations such as Alcoa aren't getting the results they expected. They are, quite literally, running into walls, because the new work styles don't work in buildings designed for the old top-down corporation. ``Companies feel work processes need to change, and physical environments can get in the way,'' says Karen Lalli, senior associate with the Hillier Group, an architectural firm based in Princeton, N.J.

Hence, the much prophesied ``office of the future'' is finally taking shape. From Manhattan towers to Silicon Valley tilt-ups, from behemoths, such as Mobil, IBM, and Procter & Gamble, to tiny startups, business is embracing new office designs for the 21st century. Privacy is being replaced with productivity, hierarchy with teamwork, and status with mobility.

Work anywhere, anytime is the new paradigm. Your car, your home, your office, even your client's office. Work alone, coupled, teamed. Work in real space or in cyberspace. It amounts to a massive disaggregation of work, spinning outside the walls and confines of the traditional office.

If the office of the future is a bit tardy in making its appearance, it's because technology is just catching up with economic trends. That ``seamless'' web of voice, fax, and phone is only now making teamwork and mobility a reality. And it took business time to grow comfortable with tools such as voice mail and E-mail, the World Wide Web and private ``intranets'' that link far-flung workers.

Corporations are putting their money into computer networks and other technologies that can boost efficiency and effectiveness, while cutting back on bricks and mortar. At many companies, says Lalli, technology is already surpassing facilities and real estate as the second-biggest corporate operating expense, after salaries and benefits.

Increasingly, architects, interior designers, facilities managers, and furniture companies are assuming a new role: strategic consultants familiar not only with blueprints but also with human behavior and organization. Corporations are using them to boost productivity, not stroke executive egos. ``The forms of organizations that achieve competitive advantage are exploding,'' says Gene Rae, a principal with Studios, a Washington-based firm that has created innovative workspaces for General Electric, Silicon Graphics, and other major players.

DOING AWAY WITH OLD PERKS. Design of the office of the future is rushing simultaneously in two directions: One is reorganizing the space of employees who must still work in offices. The other is shoving everyone else out the door. For people involved in product innovation or development, for example, cutting cycle time is key. The need for speed makes it imperative for employees to team up and share information.

Consider the ``cave and commons'' design. The idea is to balance individual work and teamwork, privacy and community. At Minneapolis-based advertising agency Fallon-McElligott, when it's time to brainstorm, art directors, space buyers, account managers, and copywriters can now wheel special desks equipped with an employee's computer, files, and phone into what they call ``virtual'' or ``flexible'' space. The room may hold 30 employees on Monday, none Tuesday, 10 for a marathon session on Wednesday, depending on what needs to be done. Group members may all be typing silently and furiously at their stations or meeting at a center table. ``It's a wonderful solution for businesses where teamwork is everything,'' says Rob White, director of planning.

Then there is ``hoteling.'' As more companies rack up huge bottom-line savings (and improved customer relations to boot) by outfitting mobile workers with laptops, cell phones, and other tools, the legions who spend most of their days out of the office--telecommuters, sales personnel, consultants, and auditors--are growing. These folks still need a place to have the occasional meeting with the boss or gather for team-building. So companies are providing buildings where offices or meeting rooms can be reserved in advance. Just like a hotel.

If you haven't seen any of this at your company, you probably will soon. According to a 1995 survey by the International Facility Management Assn., 83% of companies are embracing so-called alternative-office strategies, from cave and commons and hoteling to telecommuting and open-plan office designs.

While they may not look vastly different from conventional offices, the new workplaces repeal rules that have governed corporate office design in the past. No perk has been more sacrosanct than personal space, no status symbol more significant than big, heavy mahogany doors sweeping across deep-pile carpet and sealing executives into remote lairs with a smug ka-chunk. In many companies, when employees congregated in neutral zones such as lunchrooms, hallways, and patios, managers cast a dim eye and mentally added names to their list of slackers.

New workplace design reverses all that. Take Procter & Gamble's gleaming new $280 million, 1.3 million-square-foot building tucked into a wooded knoll 20 miles north of Cincinnati. The need to promote product development dictated the space, not trendy architectural forms or status symbols. ``The facility had to become a competitive advantage,'' says J.P. Jones, P&G's research and development vice-president for over-the-counter health-care products. ``We went about it like we were developing a new product.''

CHAT-ZAPPING ELEVATORS. Project groups were the central design theme. Members of teams work in open cubicles, grouped together, and can all see each other, regardless of rank. File cases are literally on wheels, and offices are designed in ``bricks'' that can be reconfigured in short order if a team needs to get bigger or smaller. P&G personnel travel between floors by escalator, instead of conversation-zapping elevators. So-called huddle rooms are strategically placed where teams can come together to brainstorm. P&G also equipped spaces within the building, such as lunchrooms and lounges, with electronic whiteboards that can convert scribblings to E-mail. Corridors are deliberately wide and have couches where workers can stop for a quick chat. The building opened last July, and Jones is thrilled. He's convinced it will deliver 20% to 30% productivity gains because ``data sharing is immediate, and higher-quality decisions are made faster.''

Linda Dudek, 33, a P&G engineer, says she was leery when she heard private offices would be verboten in the new digs. Today, she's a convert: ``Things get accomplished a lot quicker because I can stand up and see everyone on my team, my manager, my manager's manager.''

P&G is also among those companies using design to help dual-career families while still boosting productivity. When planning its new building, the company specifically designed in a dry cleaner, a shoe-repair shop, and a cafeteria that prepares food that employees can take home at night. It hits home for Dudek, the mother of two. ``The freedom I've felt being here is incredible, and yet I'm leaving the building a lot less. I take my breaks in the fitness center. I'm having weekly meetings on the stair-steppers. It's cool.''

Then there are those working either from home, a moving car, or both. These telecommuters need space and support when they tether up to home base. Hoteling gives it to them. At Ernst & Young's Washington office, when employees call, they're asked for a personal I.D. and the dates they need space. Within 30 seconds, the system confirms whether a workstation or a meeting room is available.

Like any good hotel, this one has a concierge to take care of guests. When workers arrive, their name is on a door, and any files or supplies the employees have requested will be there, too. Their phone numbers have been forwarded--even a digitized photo of their kids may be bouncing around the computer as a screen saver. ``Once people get used to it, they never want to go back'' because they like not wasting time traveling to and from the office, says Larry Ebert, national director of real estate for Ernst & Young. E&Y has hoteled eight offices and will soon convert seven more.

REDUCING CYCLE TIME. The longer workers ``hotel,'' the less they seem to focus on the office and the more they focus on the customer. Deborah A. Lis, a 33-year-old, Los Angeles-based marketer from IBM, is equally comfortable in her home office, her car, or even a client's office. Since her operation shifted to hoteling two years ago, she says she has cut the time commuting on L.A. freeways in half; she spends more time with customers, and she starts work earlier, calling customers and colleagues from Tokyo to Torrance, Calif. ``My customers are happy, and I'm selling,'' she says.

IBM now has about 20,000 sales and service professionals nationwide using shared offices--and according to a study in the Harvard Business Review, by shifting to hoteling, closing underutilized offices, and moving to cheaper locations, Big Blue has shaved about $1.4 billion off its real estate expenses.

Traveling salespeople, of course, have long hoteled in real hotels. And Silicon Valley pioneers such as Intel Corp. and Hewlett-Packard Co. have long favored large, open cubicle spaces to limit hierarchies and promote interaction. But the recent emphasis at the corporate level on project teams has demanded refinements in older schemes. For example, even the modest walls of conventional open-office cubicles can be too much of a barrier for some companies. That's what management discovered at In Focus Systems Inc., a Wilsonville (Ore.) maker of computer-projection systems. Vice-President Allan Alley was determined to shorten product-development times but says his engineers and marketers just weren't communicating. Open cubicles were ``the worst of both worlds,'' he found. ``There were no impromptu meetings and a lot of wasted space.''

The answer for Alley turned out to be perhaps the priciest and purest form of the ``cave and commons'' concept available today: Steelcase Inc.'s Personal Harbors. Each $7,000 Personal Harbor is like a small, cylindrical booth with a door that can be closed, and because it's curved, it actually seems to increase the interior space. There's enough room inside for a flat work surface, computer setup, phones, a file drawer, and other standard desk items. There's also a whiteboard and built-in CD player.

But the key is that the harbors are grouped around a large puzzle-like table that can be broken into several pieces. When harbor doors are open, people move in and out of the group space to talk to colleagues, participate in meetings, or just listen in. ``People will never leave a [traditional] meeting room,'' says Alley, but with this system, they stay in a meeting just long enough to contribute and go back to work. ``Personal Harbor creates an atmosphere where we can rapidly develop products,'' he says.

Steelcase and its rivals in the $9.5 billion office-furniture industry--Haworth, Herman Miller, and others--are scrambling to crank out the right products for the new workplaces. They're adding mobility--putting wheels on desks, tables, and file cabinets and trying to manage the spaghetti of cables that office equipment can generate. Furniture used to project an image of stability. Now lines such as Haworth's Crossings furniture, which feature large wheels, speak directly to the need for flexibility.

Designers and companies complain they still have to do a lot of custom work to get just what they want. When Fallon-McElligott wanted to create its flexible space, it couldn't find the right equipment. So interior designer Gary E. Wheeler created award-winning ``free-address lockers'' that resemble armoires on wheels. They hold a computer, files, phone, and a desktop, as well as a special universal plug to simplify ``docking'' all the electronics. Employees literally wheel them around to create a wagons-in-a-circle effect for teams scrambling to make a deadline.

Some of these new office designs don't win awards--but they do address nitty-gritty business goals quite dramatically. Inhale Therapeutic Systems, a tiny Palo Alto (Calif.) startup working on novel drug-delivery technology, is one example. In a previous job, CEO Robert B. Chess served as a White House staff member in the Bush Administration. He observed firsthand the ultimate form of ``office politics.'' His colleagues were obsessed with their ``proximity to the President,'' he recalls.

From the beginning, Chess decided Inhale couldn't afford such nonsense. Everyone--which includes his 65 employees and himself--sits in large cubicles that he calls ``bullpens'' with four other people of various ranks and functions--no walls or barriers of any kind between them. ``It forces everybody to talk to each other all the time,'' he says. Chess says the lack of private space also limits gossip, reduces the need for memo writing, and gets top managers scattered among the troops. Every nine months or so he even stirs the pot, reshuffling everybody.

Questioning ancient assumptions has also allowed Mobil Oil Corp. to save big bucks and help employees work better. After a companywide study, Mobil realized existing office-space guidelines, which assigned space largely by company rank, were obsolete and occasionally even counterproductive. When company geologists achieved a certain rank, for example, the rules demanded they move to offices with windows--which they hated. Turns out, geologists refer constantly to big seismic charts and maps, and windowed offices give them less space to hang them.

Mobil reformulated guidelines by job function instead of rank, and the company settled on basic space sizes that were interchangeable. For example, 75 square feet is now the standard, one-person office; 150 square feet is a two-person office or a manager's office; 300 square feet is a conference room or a file-storage office. That replaces a half-dozen more staggered sizes just for personal spaces. The changes will likely cut Mobil's costs by $100 million a year.

Sometimes, a big up-front investment in redesign pays off in unexpected productivity. At West Bend Mutual Insurance Co., Senior Vice-President Ronald W. Lauret says the extremes of his local Wisconsin prairie climate make personal comfort a huge issue for his workers. Surveys show that trait is shared by 15% to 30% of office workers nationwide, who say they are uncomfortable during the day. So West Bend invested in equipment from Johnson Controls Inc. called Personal Environment Manager that lets workers adjust the temperature, fresh air, and even ambient noise in their cubicles. Researchers from Rensselaer Polytechnic Institute have studied the impact of the PEMs on West Bend's productivity. They found workers with PEMs were at least 3% more productive than other workers. Lauret thinks the gain may be more in the range of 5% to 10%. Plus, Lauret says, the novel workstations have become an asset for recruiting and retaining workers. He believes the fresh-air component of the systems may be keeping workers healthier, too. ``To make our customers happy we have to give that level of satisfaction to our associates,'' Lauret says.

OVERSTIMULATED EMPLOYEES? One element of West Bend's experience that all companies would do well to heed is the value of listening to employees and trying to understand how they actually work in today's fast-changing world. At Sun Microsystems Inc., Chief Information Officer William J. Raduchel feels that American business has finally become comfortable enough with technology to make more radical office schemes possible. He and his colleagues travel constantly, often using Web pages in lieu of face-to-face meetings to keep tabs on projects. When he looks around Sun these days, he claims, ``nobody's ever in their office.'' So why should Sun pay to provide them, heat them, and keep them clean? The company is wrestling with just those questions, Raduchel says, by providing hoteling in Europe and various team-oriented designs in new constructions.

There are still many unknowns and a few rough spots in many of these new designs. Any change, notes Ann Bamesburger, who is implementing alternative-office schemes at Sun, ``can enable you and disable me.'' Open-plan office designs may facilitate so much interaction that some employees feel overstimulated and distracted. ``Sometimes you've got to put your hand over the phone and say, `Hey, hold it down,''' admits a sales manager at Inhale.

And what makes perfect sense today could quickly be eclipsed by changes in technology tomorrow. Bill Moggridge is a principal with industrial-design leader IDEO in Palo Alto, Calif., which is helping Steelcase integrate technology into new workplace tools. Moggridge notes that the sheer physical ``volume of technology is now halving about every five years,'' and that will have many implications for the workspace, some unpredictable. Think about it: Roomfuls of machines once contained less computing power than a single laptop has today. Telephone switching equipment now requires only small, chip-laden panels. Elaborate videoconferencing rooms are fast giving way to desktop conferencing power. And centralized network capacities are growing much faster than the wires into homes and hotels, meaning some wired telecommuters may feel like second-class network surfers unless they're in the office.

The good news, however, is that those involved in forging the new workplace realize there is no ideal, no cookie-cutter workplace template they can plop on top of organizations. And it's a rare alternative-office space that doesn't get adapted as trial runs reveal elements that don't work or could work better. Says architect Rae: ``One thing we've realized is that not only must we assess what's possible but how far and how fast it can move.'' That would seem to signal an end to the age of the corporate ``edifice complex'' and a new era of workspaces that work.


Most companies are embracing the idea of PROJECT TEAMS. But individuals still need a private space in which to read and think and accomplish their tasks, as well as a place to collaborate with their colleagues and hammer out strategy. Furniture makers and office designers are trying to create these combination ``CAVE AND COMMONS'' environments by grouping private work areas around larger communal team space.

Office-furniture companies are designing TOTAL WORK ENVIRONMENTS that are all-in-one mini-offices, with accoutrements including computers, phones, files, faxes, and any other high-tech equipment that individuals need to perform their work as the 21st century approaches

Sales- and service-based companies such as IBM, AT&T, and the major accounting firms increasingly are doing away with private offices and embracing ``HOTELING''-a system to provide temporary spaces for workers when they are on-site. That saves money on rent and gets employees out spending time with customers. To accommodate employees' needs for meetings, or private desks, hoteling facilities allow workers to reserve an array of FLEXIBLE SPACES-from soundproof cubbyholes to conference rooms. They may even have a ``CONCIERGE'' to keep reservations straight and things running smoothly.

Companies don't talk about ``work at home'' programs anymore; they talk about ``WORK ANYWHERE, ANYTIME'' programs. Laptops, fax machines, cellular phones, networks, E-mail, and voice mail are making TELECOMMUTING a way of doing business that satisfies strategic goals of spending more time with customers and using commute time better. After all, does it matter whether that critical voice-mail message you received was sent from a client's office, an airport, or a traffic jam?

By Joan O'C. Hamilton in San Francisco, with Stephen Baker in Pittsburgh, Bill Vlasic in Detroit, and bureau reports


Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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