A Chicago-based executive was facing a crisis.
A major real estate deal in Ireland was on the verge of collapsing, but he was away from his office at an out-of-town conference. He had received a facsimile transmission about the problem over the weekend.
Did he fly back to Chicago on Monday morning? Of course not.
Rather, he plugged the modem of his laptop computer into his hotel room telephone, accessed the file of the deal stored in the database of the mainframe computer in Chicago, decided what to do, then transmitted his plan of action on the laptop.
The deal was saved, and so was an airline ticket.
Increasingly, offices are not at the office. They may be at home, in a car, at a restaurant, in an airplane-even on the beach.
The office of the future is evolving today, thanks to new ideas, the need to cut costs and technological advances. The brave new world will be run by personal computers and laptops, modems, fax machines, cellular phones, voice mail, E-mail, beepers and fueled by access to the information superhighway.
Around the world, companies are redefining the workplace in order to become more competitive and more productive. The trend is away from traditional, fixed offices to more mobile, less costly facilities.
How fast change is coming was reviewed at the World Congress of the International Development Research Council (IDRC) held earlier this year in Dearborn, Mich.
The congress gazed into a crystal ball to discover the shape of the office of the future, as revealed in IDRC’s Corporate Real Estate 2000, a three-year, $2 million study that is supported by many of the nation’s blue-chip corporations.
“The workplace of the year 2000 will look very different from today’s standard office, as companies implement many of the innovative workplace strategies now emerging,” said Prentice Knight III, IDRC’s executive director.
According to Knight, the need for a fresh look at offices has been driven by global competition that has forced corporate restructuring, downsizing and cost-cutting.
“We believe that 25 percent or more of corporate real estate assets are not being effectively managed. And real estate is the second largest cost after labor,” he said.
“New office concepts are not just being talked about; they are being used,” Knight said.
Welcome to the office of the future. It will include:
– Telecommuting. Using a computer to work at home not only saves on corporate office space, but also on the employee’s commuting expenses. The earthquake in Southern California demonstrated the value of telecommuting.
– Virtual office. Portable computers mean that the office can be a moving experience. The virtual office is virtually anywhere. The office is where you are.
– Non-territorial office. Workers are not assigned permanent desks or workstations. Rather, these generic offices make “hoteling” possible.
– Hoteling. Employees “book” space through a company “concierge.” Hours spent in the office may vary from person to person and day to day.
– Universal plan office. Everyone gets the same amount of space, no matter how high up they are on the executive ladder. Equating status with office size is out the window under the universal plan.
– Team office. Teaming is the hallmark of the new work process, and special areas are designated for team interaction.
“Ninety percent love the new workplace environment once they try it,” said Franklin Becker, professor in the College of Human Ecology at Cornell University and one of the authors of IDRC’s Corporate Real Estate 2000 report.
“New technology will send people home, and this can reduce office space substantially,” said Jean Bellas, president of Interior Space International (ISI), a Chicago-based office-design firm.
One of the 1,300 participants at the IDRC World Congress, Bellas commented: “When companies make audits of their existing space, they find they can reduce space 20 to 30 percent. Even file cabinets, which take up 7 to 10 percent of an office, can be eliminated by going to electronic storage.”
Bellas noted that U.S. West, a regional phone company based in Denver, is currently reducing square footage from 5 million to 3 million in 18 months.
“In the ’80s, big executive offices were in vogue, but in the ’90s firms can’t afford them,” she said. “Every smart company is asking, `What can we do, how can we use real estate better?’ About 20 percent of firms in the nation already are allocating dollars for change; almost all the others are thinking about it,” Bellas said.
“Many companies already are jumping off into the abyss of change,” said Michael Joroff, director of research in the School of Architecture and Planning at Massachusetts Institute of Technology and one of the authors of IDRC’s Corporate Real Estate 2000 report.
But Joroff recommended that they put as much emphasis on human infrastructure as on innovative offices. “Success will be determined by how we combine flexible space with flexible management.”
Even the U.S. government is, in effect, encouraging telecommuting, flexible working hours and compressed work weeks. The federal Clean Air Act, which takes effect in 1996, is intended to reduce the number of employees driving to work in heavily air-polluted urban areas.
According to “Understanding Work Process,” a booklet put out by Steelcase Inc., the Grand Rapids, Mich., office equipment maker, “The office as a factory is an artifact of the past. Restructured corporations make possible totally redefined offices.”
Many U.S. corporations already have subscribed to the advantages of change.
Martin Pospeshil, manager of alternative office stategies at AT&T, said 3 1/2 percent of the workforce now is either telecommuting or using a virtual office. “But the goal is 15 percent of the workforce by the year 2000,” he said.
AT&T also hopes to decrease real estate and operating costs by 15 percent in the next three years.
H. Bruce Russell, director of corporate real estate for Eastman Kodak Co., said: “We’ve embarked on a cost reduction program. Kodak is looking at sites worldwide to reduce costs. The goal is a $100 million cost reduction in two years. We’re reprogramming our space requirements.”
Sean Connellan, operations manager of business empowerment and integration with the Xerox Corp., said the company plans to shrink its office space. “The average workstation in district offices is now 321 square feet, but the new model is 170 to 190 square feet,” he said.
Jack Brophy, vice president of USG Properties Inc. in Chicago, said USG is an “old-line conservative company, but we’ve started flexible hours.”
He noted that the biggest adjustment was to get beyond the traditional mentality: “If I can’t see you, how do I know you’re working?”
Brophy stressed the importance of social interaction. “Feeling isolated from other human beings is the downside of working away from the office.” But the upside of the new technology is that “you’re never out of touch,” he said.
R.G. Jackson, president of the Ford Motor Land Development Corp., said the teaming concept has come to Ford at the new $150 million Research Engineering Center in Dearborn, Mich.
“At the new center we are able to put everybody who is developing a new car in the same place,” he said. “We’ll do 75 to 80 percent of Ford’s new products at the center.”
“The office of the future is already here-the key is getting the guys to work together,” Jackson said.
In the Chicago area, Bellas’ ISI designed an open, universal-type interior for the Sears Merchandise Group’s 2 million-square-foot headquarters in Hoffman Estates that opened in 1992. Perkins & Will was the architect.
Another futuristic plan was devised by ISI for Spiegel Inc.’s corporate headquarters in Downers Grove, which includes workstations with movable partitions and free-form, visually interesting desks.
However, not all experts agree that the office of the future has moved into the mainstream.
David Binswanger, president of the advisory group of the Binswanger Companies, believes the office revolution in corporate America “is still in the cradle, but the baby is starting to grow.”
In the long term, Binswanger predicts a nationwide reduction in office space. “The new type of office will absolutely affect vacancy rates. Offices are overbuilt anyway.”
Mahlon “Sandy” Apgar IV of the Baltimore-based corporate real estate consulting firm of Apgar & Co., agrees with Binswanger.
“New workspace options are chosen to match the needs of the workforce. This trend will have a major effect on the commercial real estate industry. Demand for traditional office space will decline, but new, more innovative solutions to workplace needs will be called for,” he said.
Bill Yontz, vice president of facility management for the Prudential Insurance Co. of America, predicted that the office of the future will be available to a maximum of 30 percent of the workforce by the year 2000.
The office revolution is also a worldwide phenomenon.
Liisa Joronen, president of SOL, a Finnish cleaning company with 2,400 employees, reports that seven years ago her company began asking questions: “Why must an office have to look like an office? Why can’t an office have home-type furniture? Why must work always be during normal work hours?”
The answers to those questions transformed SOL.
“We have established certain freedoms, such as freedom from status symbols, freedom from working hours, and freedom from the workplace,” Joronen said. “It is not important where you work, but that good results are achieved. Under our new system, quality has improved and we are making a better profit.”
An American firm that did away with the traditional office is the California-based advertising firm of Chiat/Day. “For success in the future, we had to embrace change,” said Laurie Coots of Chiat/Day. She explained that the environment had to change to make people work differently.
“There were no sacred cows. We did away with personal offices, though everyone has a personal phone. We judge our employees on their results, not on keeping a chair warm,” she said.
The bottom line: Chiat/Day added $30 million in new billings since the first of the year, and cut its real estate holdings by 40 percent.
But one aspect of change-working at home-is not for everyone.
ISI’s Bellas estimated that some 20 to 30 percent of workers need the structure and social environment of the office to be productive. “Some people are not efficient working at home. They may be bothered by noisy kids or other distractions.”
Gaining weight is another potential problem of working at home. “You’re always just a few steps away from the refrigerator. AT&T is one firm that offers weight counseling to telecommuters.”
Bellas said that working at home seems to work best in these jobs: sales, customer service, data processing and writing.
AT&T’s Pospeshil said telecommuting has become a union issue. “Unions have coined the term `electronic sweat shop’ for working at home,” he said.
Unions are concerned about employees overworking and not getting scheduled breaks and lunch hours.
This is a valid issue.
“A lot of people who volunteer for telecommuting are workaholics. There is a problem of overworking, which could lead to burnout,” said Cindy Froggatt, associate director of the facility management program at Hellmuth, Obata & Kassabaum (HOK).
She noted that other personal implications of working at home include: Who pays for the furniture, electricity, insurance and technical support for personal computers?
On the plus side, she said that telecommuters have become “no-collar workers,” since they can work in comfortable sweatshirts, and save on business clothing.
