The Unbundling of the Office
Adapted from Rethinking Work: Seismic Changes in the Where, When, and Why by Rishad Tobaccowala
Imagine starting a company today in which it’s unnecessary for your employees to work in proximity to customers and colleagues.
Imagine that this new company has the ability to serve customers anywhere in the world.
Imagine that you can hire talent from around the globe.
Given this scenario, would you lease office space? And if so, how much space would you require?
Would you insist your employees commute long distances to the office if they could do their work remotely?
Would you ask them to come occasionally to the office for other reasons—collaboration, relationship building, and events?
The answers to these questions reveal how much has changed in a few years. No sane business leader would adopt the 2019 default office model, one in which companies leased a lot of real estate and insisted people follow a strict, in-office regimen five days a week.
Who would sacrifice flexibility, limit the talent pool, and take on the cost that comes with the traditional office model?
Today, organizations start with a very different default model. It’s one that lacks a lot of or any office space, that requires no or few in-office days, that sets no limits on where talent is sought, that establishes no rules about the hours when work should be done.
The changes are dramatic, and they’re likely to be even more dramatic in the future. They affect not just start-ups but established corporations in profound ways. Before examining how these changes are unfolding and will unfold in the future, we need to take a step back to see how far we’ve come.
Downsizing and Reimagining the Office
It’s astonishing how quickly the less-is-more mindset has taken hold among a wide swath of organizational leaders. To grasp how quickly, visit this website: https://buildremote.co/companies
/reducing-office-space/. On it, you’ll find a long list of large companies that are reducing their office space in significant ways, including Google, Uber, and AT&T. Just as significant, more than a hundred companies, including Zillow, Coinbase, and Shopify, are giving their employees the option of working wherever they want.
Though you may be aware that office vacancy rates remain high, what you might not realize is that companies aren’t forsaking the office entirely but reimagining it in often startling ways. Organizations are taking a cue from hotels and conferences and redesigning their spaces so that they’re ideal for events, celebrations, and collaborative efforts; they’re attempting to re-create their offices to facilitate in-person interactions. In New York City, the buildings that are most in demand are the ones that are best suited for events and similar activities.
As a professional speaker, I’ve experienced one aspect of this office change firsthand. During the first six months of 2023, I did thirty-six in-person events. Almost half of them were at different companies’ headquarters, and a major reason I was invited was to bring back employees to offices for a few days. My event, like others they created, was designed to motivate people to gather together, to learn and to interact with their colleagues, and to build relationships. These organizations realized that simply ordering people to return no longer was acceptable to the majority of their employees. They needed to provide them with valid reasons for returning.
Given the transportation costs and time investment that employees need to undertake, companies must make coming into the office worthwhile.
They have to earn the commute.
But redesigned offices and less office space are just two broad trends affecting the places where we work. Here are five more highly impactful ways that offices are being reimagined:
1. Number of days people must come into the office
It varies—some companies have returned to the five-day norm after being fully remote, and many organizations are splitting the difference. The 2023 (second quarter) Flex Index report shows that in the service sector, organizations are asking for two or three days of physical presence in offices and two or three days of remote work.
Obviously, some industries will still require people to be in the office full time because of the type of work they do. The health-care industry, for instance, isn’t going to change this requirement in the near future, since robot doctors and nurses are generally not acceptable substitutes for human beings (with the exception of some robotic surgeries). Similarly, people still want human servers when they go out to restaurants, and as far as I know, tradespeople (plumbers, electricians, and so on) have not been replaced by AI.
2. Type of work done in office
Not so long ago, we needed offices to get work done. They contained the “equipment”—computers, printers, copiers, and so forth—that were necessary to produce work outputs. Today, the vast majority of this equipment exists remotely. Nonetheless, the pre-COVID presumption was that specific work tasks require an office presence, including:
- Research and analytics: looking up data and searching for supporting evidence.
- Creating documents: putting together presentations and documents for sharing.
- Sharing information and documents: working with teams to share information and build programs together.
- Learning and development: training programs and mentoring are some aspects of learning and development.
- Creative ideas and brainstorming: working together to generate ideas as a team.
- Relationship development and honing people skills: developing EQ (emotional quotient) and other soft skills and building trusted links.
- Pitching and selling clients: sharing information and finding ways to sell clients.
In recent years, however, many business leaders have shifted their mindset on this topic, recognizing that a lot of these tasks can be done outside of the office. They’ve learned that research, creation, and sharing of documents often is easier outside of the office, when concentration is key, and the internet and other digital tools facilitate the process.
Organizations have also discovered that while learning and development, creative ideas and brainstorming, and relationship development require in-person interaction, this interaction doesn’t have to take place within corporate offices. They are much more open to arranging in-person meetings in other venues—restaurants, off-site workspaces, outdoor settings, conferences, and so on.
Increasingly, companies are going to use offices for key events and other activities that benefit from people being together physically and where the offices offer advantages (central location, an auditorium or other sizeable room that can accommodate a large number of people, special equipment such as a movie-theater-size screen or state-of-the-art sound system).
3. Office design
Here is where one of my favorite sayings—“the future does not fit in the containers of the past”—is literally relevant. The big corner offices for executives, the midsize offices for middle managers, the bullpen for clerical people—this design has become an anachronism.
If people are going to be in the office only a few days each week and their in-office tasks are mainly collaboration, brainstorming, and learning, then office redesign is essential. For this reason, offices will be reconfigured to be more like schools, hotel lobbies, and conference centers. They’ll also contain smaller, private spaces for people who need to concentrate (and require quiet) and want to focus on individual projects.
An article in the May 23, 2023, issue of Time magazine quotes Steve McConnell, managing partner and board chair of the design firm NBBJ, who helped redesign the company’s space in New York’s Flatiron District: “We’re in the early stages of a deep recognition that the workplace needs to be different.” According to the article, the space “feels like a mix between an office and a social club, with conference rooms giving off living room vibes, thanks to their homey bookshelves and couches; a lab where employees can look at tiny models of buildings the company is designing . . . and rotating art projects on screens stretching towards the high ceilings.”
4. Headquarters
As work becomes more distributed and unbundled, the idea of having a giant corporate office sprawling horizontally or vertically seems hopelessly old-fashioned. Though the concept of headquarters hasn’t vanished—JPMorganChase is building a skyscraping building for its offices in Manhattan, and Amazon has two large HQs in Seattle and Virginia—many organizations are exploring other options.
Andreessen Horowitz, the big venture-capital firm, has moved from a Palo Alto HQ to basically stating that their HQ is in the cloud, with five physical locations for people to meet. In a blog post, Ben Horowitz stated: “In our firm’s new operating model, we work primarily virtually, but will use our physical presence to develop our culture, help entrepreneurs, and build relationships. As a result, we have configured the firm to be able to physically assemble anywhere in the world very quickly.”
To replace a single HQ office space, some companies are considering creating many offices closer to where talent, opportunity, and clients are. Long-term leases for massive space in a single city center is being replaced by a much more distributed, flexible, and agile model.
5. When work is done (in the office and outside of it)
No more office hours. If COVID taught us nothing else about work, it was that one set of office hours doesn’t fit all employees. Some people are more productive at night, some early in the morning. Some are more effective if they take numerous breaks throughout a long work day while others excel when they can sustain their focus for hours. By accommodating different work-time preferences, organizations maximize their people’s contributions. More than that, we are living in a global world, where more and more work gets done asynchronously versus synchronously—it makes sense to keep the office open continuously to accommodate employees working in different countries (as well as functioning best at different times). In terms of the physical office, to maximize in-person interaction and learning, most offices are likely to be busiest between noon and evenings, as people gather for meals or social events or around client/customer-related events. The hours will fit the work and the need, versus the work and the need fitting the hours.
According to a recent Time magazine article, many companies are completely rethinking the idea of a permanent office, says Prithwiraj Choudhury, a professor at Harvard Business School who has been studying remote work for years. Some start-ups are deciding that the purpose of an office is really to socialize, and they’re allowing employees to work from anywhere and then picking a place for people to meet occasionally throughout the year to get to know one another.
A workflow-automation business, Zapier, has company retreats where it invites all workers to spend a few days in person with their colleagues; the company pays for flights, accommodations, and food, and organizes ways for people in different departments to get to know one another. GitLab, which Choudhury says is one of the world’s largest remote companies, with thirteen hundred employees, allows their people to be fully remote but has at least one off-site meetup around the world each year.
It’s worth noting that employees often are unhappy when companies—Amazon, Disney, and Nike among them—mandate a return to the office. These mandates have elicited employee protests. The problem isn’t just that people are resisting a return to the office. It’s that these companies are failing to take into consideration their people’s expectations and constraints; that they’re changing their COVID-era policies without providing compelling reasons for doing so; and that they’re insisting on a one-size-fits-all policy that lacks the flexibility people have come to prize.
Wall Street leadership veteran Sallie Krawcheck; cofounder and CEO of Ellevest and the former Citi CFO and head of global wealth management at Bank of America, recently told a room of leaders at a CNBC C-suite event that thinking everything can go back to “the way it was” is a flawed mindset.
Allstate is refusing to go backward. Instead, they will allow employees to decide for themselves if they want to stay remote or work in offices. After giving employees the choice, 83 percent of Allstate workers are fully remote. Allowing employees to be remote has also resulted in a 60 percent increase in applications and a 30 percent increase in candidates from underrepresented demographics, Stephanie Roseman, vice president of people solutions and experiences at Allstate, recently told SHRM Online.
I’m not suggesting that all companies should follow Allstate’s model. But companies like Allstate, Zapier, Gitlab, and A&G are just some of the many organizations recognizing that they need to be innovative and exploratory when it comes to office policies and designs.
Rethinking Work
A sea change is occurring—a change so monumental that it is making us re-invent the traditional ideas of where work is done, when work is done, why work is done, and even what work itself is. In Rethinking Work, Rishad outlines the reasons why being proactive in this era of unprecedented change is the only way organizations will survive and thrive. Schools, banks, law firms, startups, medical offices—every sector will be affected by the current or soon-to-be-emerging trends and events that Rishad describes in this invaluable guide.