Enabling Innovation Through Office Design

Work has become more mobile and team-based, but most organizations have been slow in changing their workplaces to reflect the new reality

by Peter Lawrence

There is a growing corporate understanding of design's role in achieving innovation, not only for products but also for services. In contrast, there is still almost no recognition of the role of workplace design in enabling innovation.

Open-plan, or landscaped, offices were introduced in the 1950s, originating in Germany with work by the Quickbourner consulting firm. The objective was to facilitate communication and workflow by locating a supervisor together with his group in an open, irregular arrangement of desks and other furniture. A few companies, including Herman Miller (MLHR) in the U.S. began manufacturing "systems furniture" that allowed these more open offices to be created without building interior walls, and providing flexibility to change.

From the 1970s through the 1990s, as the corporate use of systems furniture grew, responsibility for the design and maintenance of office space usually fell to the corporate facilities manager, who was generally rewarded on how many people could be put into the least amount of space. "Office performance" was more about effectiveness of HVAC (heating, ventilation, and air conditioning) than the people who had to work there. And "knowledge management" (how a company identifies, creates, and distributes knowledge that is important to its success) became the province of the IT department. The most efficient application of systems furniture became straight lines of cubes wired together (now neighbors could communicate by phone or e-mail rather than in person).

Ignoring the Benefits of Human Interaction

Seemingly practical, all of this ignored the importance of tacit knowledge—information that is in the heads of employees but not written down—as well as the business value of chance encounters, which a growing number of CEOs trumpet as the source of much innovation.

Today, of course, the nature of work is changing. Among other things, it's more mobile, cognitively complex, team-based, and collaborative, and new generations are entering the workplace. And yet with all of this, most organizations have not changed the place where their people work. The California Management Review recently reported that "less than 5% of U.S. corporations tie the workplace to corporate strategy or see it as a tool for improving organizational performance."

In a 1999 Harvard Business Review article entitled "The Human Moment at Work," psychiatrist Edward Hallowell points out that the anxiety many people feel at work has a simple antidote: a personal moment between two individuals in the same place at the same time. This encounter might take only a few minutes, but "the positive effects of a human moment can last long after people…have walked away," wrote Hallowell. "People begin to think in new and creative ways; mental activity is stimulated." But, he warns: "I can tell you without a doubt that virtually everyone I see is experiencing some deficiency of human contact…People feel lonely, isolated, or confused at work." Eight years later, with our overreliance on e-mail and technology, the situation has not improved.

Over the past 12 years, a small but growing number of chief executives have been involved in long-term efforts to change their companies' cultures toward being more open, collaborative, and innovative. Usually toward the end of this process, these CEOs have led an effort to change the design of the workplace to facilitate this new culture. The results have been very open workplaces with the same workstations for everyone in the company, with spaces enabling people to see each other and connect easily during the day.

Overcoming Rigidity at Alcoa

One of the classic examples of office design having an impact on every part of a business is Alcoa (AA). When Paul O'Neill became CEO in 1987, the company was struggling. Aluminum prices and profits were falling.