The business of design

Look around your office. How many desks sit empty? With telework taking off, studies have shown that, on occasion, just 50% of desks are ever occupied. Beyond having flashy corporate HQs, it might be time to focus on making the space support the business and the people working within it, as Iain Hopkins discovers

The business of design
HR professionals are by now familiar with ‘Activity Based Working’ (ABW), a term that has stemmed from the philosophy of ‘unallocated’ or ‘non-territorial’ work environments.

In its purest form, ABW is an environment in which an employee has no ‘allocated real estate’ (a space or desk facility) other than a locker or draw pedestal for personal belongings. The employee selects from a suite of available work settings an environment/facility which will best complements or supports that day’s range of work activities/challenges.
Like all fresh concepts it takes a few innovators to lead the pack. Sure enough, companies like KPMG and IBM have embraced ABW – or at least what might be branded as ‘hybrid’ environments, which comprise elements of both more traditional (allocated real estate enabled by technology) and ABW accommodation options.
This subtle difference is important to note before the masses follow suite: ABW should rightfully be a term used to describe how people work, as opposed to a type of physical space. It’s not about having a flashy, ‘funky’ office design – although this might be a welcome side-effect of a shift towards a non-territorial work environment – but rather it’s about breaking down work tasks, defining the range of different activities that might require a range of different activities, and developing a range of different physical work settings to be most effective and efficient.

“All work can be termed activity based,” says Graham Kirkwood, managing director, Resource Architecture. “The spectrum of environments to support work activities can range from a single desk in an office to a suite of settings including meeting rooms, interaction spaces, quiet private work rooms and so on. In practice, we all move from one setting to another and we never occupy all of the spaces at any one time.”
This idea of a spectrum or scale is handy to keep in mind in any discussion about ‘readiness’ for nontraditional work environments: at one end of the spectrum are employers that do not allow people to take ‘ownership’ of any space; at the other end are employers that might allow people to have a space that they can call their own.
“The choice depends upon not only cost, but also how to get the best outcome from your people,” says Kirkwood. “If we look at the workplace as we would a factory, we would only assign a work setting on a Just in Time (JIT) way, in order to reduce the level of un-used stock.”
Taking the lead: the education sector
Interestingly, the corporate world is not the leader in this space. The education sector (particularly secondary schools and universities) has led the way, and offers some pointers for coporates. In the opinion of Simon Gunnis, managing director of design firm PCG, the modern tertiary campus is the purest form of ABW environment. Tenure is premised on a relationship of trust and success measured by outputs as opposed to inputs. The University of Melbourne, The University of Adelaide and The University of Technology Sydney are prominent examples that have embraced the ABW concept.
PCG’s white paper, The Genesis of ABW, states: “Higher education is questioning traditional methods of teaching and learning environments that have been the cornerstone of their success, and turning to new pedagogies supported by new environments. As such, they are moving towards a wider range of teaching and learning methods and a more student centred pedagogy promoting active, collaborative and problem-based learning – the very skills business seeks from recent graduates.”
The driver behind these factors is the next generation of ‘agile’ students. They bring new traits and requirements that are challenging the status quo and forcing higher education to explore and understand how students (and teachers) learn, share and work.


The business case

Regardless of the setting, in order for a non-territorial working environment to fly, it will require careful planning and analysis; a business plan needs to be built.
The first step is to determine how the physical workplace supports the business. This means acknowledging the ‘purpose’ of the business and setting what Kirkwood refers to as the “Critical Success Factors” for the workplace.
The second step is to understand the work activities and people work styles that support the business. “If the organisation is about being the most cost efficient in their industry, or the most responsive to change, or if people are very mobile working outside of the office, then a non-territorial ABW environment might be a suitable strategy.” he says. “If the organisation was focusing on people or innovation, and the people were less mobile then such a nonterritorial strategy might not be appropriate.”
Understandably, in the majority of cases, the principle driver for the adoption of non-territorial environments is the allure of an improved corporate real estate equation (less space and therefore less cost). “The CRE professional and the CFO are early advocates,” says Gunnis. “However, once the scale and quantum of associated change involved is determined, the CIO and chief of people & culture are very quickly mobilised.”
Indeed, it would be a mistake to look solely towards occupancy cost savings alone as a deciding factor. Kirkwood has been monitoring costs per employee (including average salaries and benefits, IT infrastructure and occupancy costs) of the major Australian banks for over a decade. The average occupancy cost per employee is about $14,000 perannum, whereas salaries are closer to $100,000 per employee per annum. This means that a 30% reduction in occupancy cost can be easily offset by 4% loss of productivity.
“If we compare occupancy cost as a percentage of total revenue it is only about 4%,” he says. “It is therefore far wiser to focus on supporting business revenue and worker productivity as a driver of workplace strategy than just occupancy cost alone.”

Ready for change?

From a business point of view, if a total or hybrid approach to a non-territorial work environment is justified, then the question is whether the organisation is ready for the change. The two biggest change dynamics required lie within the technology/IT and people departments.
“These two dynamics mean two things: a deep and time consuming investment in the change management process; and significant capital investment in workplace technologies,” Gunnis says.
“Taking away a person’s own desk is a very confronting idea, and like any change, a process including two way communication, exploration, and trialing is required before implementation.,” Kirkwood explains.
Some people will be more adaptable to change than others. This can depend not only on their personal work activities, but also their personal expectations and understanding of what work is about. For some, the purpose of work is to connect with other people and form working relationships with a small group of co-workers. Some people will see non-territorial work settings as a threat to their connections and personal identity.
Following a decision by the executive team not to assign desks to individuals, Kirkwood suggests the transformational process should involve all the people affected, and this process will take time and cost money.


Theory into practice

In the business sphere, the Victorian Legal Services Board + Commissioner (VLSBC) is a prime case study.
It was apparent to the VLSBC management team that more space was needed. The organisation was also looking to bring together two formally separate businesses. They had a very modest budget, but wanted to maximise the potential ROI.
During the first briefing workshop with Resource Architecture, it was clear that the focus of the VLSBC was about people: To build intimate customer relations by developing more cohesion, participation and co-operation among the people doing things.
The group then identified design Critical Success Factors that supported the vision. These covered elements such as brand, culture and systems.
Following close consultation with Kirkwood and his team, the VLSBC allocated each individual with a desk – as a home base. “A 100% non-territorial solution was not for them,” says Kirkwood. “However, they allocated a number of non-territorial activity settings to encourage people to work in different parts of the office, to work and collaborate more broadly throughout the organisation.”
The space achieves a space ratio of about 18m2 per person, which is higher than the average office, but is able to accommodate growth without compromising the space. The proportion of meeting rooms and interaction spaces is higher. While individual desks are smaller, the personal space is bigger.
The project features a number of design innovations:
  1. A central ‘Piazza’ provides a space for serendipitous two-minute conversations. This space is the major thoroughfare connecting the various groups.
  2. The CEO sits in the open at a ‘mentoring desk’ and so do his general managers. The CEO has turned the structure upside down so that the most important people to be supported are the ones interfacing with people. The role of the manager is to support and mentor these people.
  3. The organisation is implementing a new ‘electronic information management system’ that means everyone can access and update customer information. This means all information has to be digitised. One innovative feature is a physical ‘dropbox’ at the centre of the floor so all paper information comes in or goes out via this space.
  4. The workplace is designed as ‘group ware’ where private spaces line the perimeter and interactive spaces are at the centre to allow collaboration intuitively and instantaneously between the various groups.
  5. New traffic light signposting identifies whether spaces are bookable, owned or shared.
  6. Desks are arranged to maximise acoustic privacy – no one sits directly opposite another, desks are staggered but provide peripheral vision of other workers. A number of desks feature ‘sit-stand’ functionality.
  7. The design process was very people focused, from a staff survey prior to the appointment of the design team, consultation during the design and before the move, and well-being communication initiatives and communication packs during and after the move.
Kirkwood says the resulting design is not flashy, and is without gimmicks. It is all about the business, the work and the people.
“Gimmicks have become commonplace and are widely published,” he says. “They often undervalue how a workplace really contributes to business outcomes. I am often frustrated by organisations measuring the value of the workplace by only its look and feel, without also considering their work activities and people. Such gimmicks are often confused with innovation.”
For Kirkwood, the workplace drives innovation within the organisation, through its work process, products and services.
“At the Legal Services Board + Commissioner, if something cost money but added no value it was eliminated. As a result the physical workplace delivered maximum return on investment.”

This approach appears to be paying off. Some of the outcomes achieved at the Legal Services Board + Commissioner workplace include:
  • 56% overall improved meeting and collaboration space
  • 51% overall improved space to accommodate visitors, consultants and contractors
  • 36% increased stimulation of creativity and innovation
  • 21% increase in perceived productivity and employee engagement
  • 37% Improved sharing and management of resources

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