Wednesday, May 12, 2010

T-Rex Towers: Do Offices Face Extinction? (Part Three)

In parts One and Two, I’ve described trends affecting in profound ways, over the next decade, the way offices will be developed, including their site planning, entitlements, ownership and financing and, ultimately, their leasing and occupancy. This part, and perhaps a few to follow, addresses how technology affects up-and-coming workforce members; and how, in turn, office workplaces are exploited by future “distributed” work forces. Offices are not headed for utter irrelevancy in the knowledge economy era; neither, however, are they going to perform as (in the past) 8-to-5 shelters either for repetitive-tasks performance or for machines and paper filing systems.

Here are four technology trends that augur profound changes in the workplace in the short term. (Even saying this feels absurd. When I look back at this post 3 years from now, I will scoff at my myopic vision. Perhaps all of these trends will themselves have become superseded by further innovations.) The first of these trends is cloud computing. This phenomenon makes storage of costly and bulky equipment as outdated as affordability permits. Offsite storage of data and software platforms and services means that desktop computer processing units, servers and drives are gone. Vanishing hardware in turn reduces overhead (minimizing in-house personnel to manage and maintain servers, hardware and software platforms) and enhances flexibility, since the Web-interface apparatus is accessible anywhere and at any time. Applications, together with their operating systems and accompanying services are hosted by a vendor or service provider, eliminating installation and downloading requirements. Of course, certain bandwidth availability issues remain to be resolved, but in urban areas where most offices are located, needed bandwidth solutions are forthcoming soon.

Second is the impact of virtual document repositories. Web-based repositories support businesses for external collaboration and file-sharing. In short, filing cabinets or shelving units with interminable binders/folders/envelopes containing documents stored are soon to be eliminated. Here’s an illustration: In 2008, the majority of business merger and acquisitions transactions had their due diligence processes operate from such online workspaces. Sure, there remain doubts about the security of such systems, but those anxieties will be addressed with new encryption technologies. These anxieties will be mollified further by the ability to view, upload and download thousands of documents in minutes from a variety of sources without any travel expense or the inconvenience of making multiple, physical “trips” to the currently-familiar repository buildings. Add to the cost-savings avoidance of crowding into a room or rooms with other persons to view the same physical documents, and one can see why these virtual workspaces are gaining popularity.

Third are mass-meeting technologies such as Go to Meeting and other conferencing software systems. Today’s annual subscription fee of $468 (or thereabouts) is less than the cost of a single coast-to-coast round trip airline ticket in cabin-class. Last time I checked, a corporate account on Go to Meeting allowed 25 separate loci for attendees of the same online meeting. That’s bound to be increased as competition increases and the cost of upgrading the “program” decreases. Consider the impact upon demand for conference space within the suite your office occupies. Now, consider the local commuting time-savings of your team members, not to mention the savings in petrol costs. Of course, no one imagines that in most companies, management will require the full elimination of face to face group encounters; there will always be a need, especially in the creative enterprise sectors, to “look the other person in the eye,” not to mention waving your hands or drawing as you describe with enthusiasm or vigor what you are trying to articulate on a conceptual level But routine meetings (think of the weekly staff department meeting – do you think Dilbert will miss those?) are going to be gradually phased out by those companies that master the elementary instructions of the conferencing systems to integrate graphics, power point presentations and spreadsheets into their collaborative gatherings.

Communications technologies will improve to the point where, in many industries and companies, staffing functions are entirely outsourced to online providers of goods and services such as accounting and library/source-material functions. One illustration of this advance is a British law firm, Temple Bright. The firm’s commercial practice is based in Bristol, England, but its accounts services and law library are entirely based on the Internet. The firm’s plan is to offer flexible work hours and higher compensation by shedding traditional law firm infrastructure and substituting technology, thereby offering greater value for the fees charged. Theirs is a no-staff, paperless business model. When the present generation of Internet-anxious lead partners retires, professional offices in law, accountancy, insurance and similar industries that do not feature incessant customer interaction will accelerate the transition to this custom.

The reallocation of interior space, and the shrinkage in square footage that a distributed workforce, coupled with integration of newer, more portable and less physically space-intensive technologies, will be pronounced. How will that new interior appear, and for what purposes will space be employed? More will appear in the following posts on the future of the workforce and management attitudes toward physical infrastructure. That in turn will lead to a discussion of what directions office land planning and development may take.


T-Rex Towers: Do Offices Face Extinction? (Part Two)

The last third of 2001 was significant for the concept of office development on two fronts. The main event, indubitably, was the destruction of most of the World Trade Center in Manhattan, and a large piece of the Pentagon, the world’s largest government office building. This temporarily, at least, tweaked the noses of Americans seized by the concept that “the business of America is business.” It also prompted Richard Florida, one of America’s leading urbanism thinkers, to write an article positing that the devastation might affect development of future high-rise properties altogether due to security and insurance concerns. Manhattan, apparently, begs to differ.

The second event of far quieter publicity to September 11th but significant substance was the publication of a groundbreaking study in December, 2001, by The Rand Corporation with Gartner, supported by 22 industry participants, on workplace strategies for the future. That report expressed that workplaces would need to be far more “agile” than traditional view of offices and manufacturing plants development contemplates. In contrast to the major drivers of office development expressed by Kohn and Katz (see the prior post), radically new considerations appear, primarily stemming from “globalization.” By that term, I mean: the universality of the economic infrastructure (which the recent financial meltdown has amply illustrated is truly interdependent – or watch how Greece’s economic collapse affects the rest of the European Union, starting with currency hits); of communicative work forces; of shared technologies; and of environmental degradation sensitivity.

Here are a few affects of this globalization:

First is an increase in competition from international sources and attendant economic fallout. Organizations that survive the latest global financial tsunami must continue to turn their focus from sheer outputs of goods and services to saving. Volumes of production and marketing initiatives alone will not override bottom line expense excesses. Saving money is an imperative of equal value to productivity. Massive capital expense on owned or leased workspace is counterintuitive.

Second is altering workspace social and environmental dynamics. The old model of single-purpose office buildings is non-responsive to the new, mobile ways of working. Recently trendy work methods like tele-working and job-sharing are harbingers of what urbanists and industrial engineers refer to increasingly as “distributed work.” One graphic way to illustrate the essence of distributed work comes out of a study by DEGW, an international workplace consultancy. DEGW concludes that office workers sit at their desks only about 35% of their workday. Since most office operations use only a four or five day work-week, viewed from a 24 hour clock, most office workers sit at desks less than 10% of the entire calendar week. This reflects neither cost-consciousness nor carbon-footprint awareness. In short, it’s wasteful; and the “cure” is to substitute work spaces that, in the words of Despina Katsikakis of DEGW, will be “stimulating, supportive and sustainable.”

Third is envisioning the integration of a global distributed work force. I like the visual recall of the late Peter Graves, the Impossible Mission Force team leader (from the middle 1960s and early 1970s TV series), choosing from the pile of dossiers stuffed in his briefcase (by the way, why did the other 6 candidates never get picked? But I digress.) his next, temporary unit of superspies. Work units are less likely to consist of full time employees of long tenure in a single company. Instead, project teams are likely to consist of free-lance problem solvers who, akin to tradesmen on a construction site, periodically are “mobilized” and later demobilized by a number of general contracting businesses. These individuals may be linked through professional or social networking Web sites on a continuous basis, sharing a lengthy history of overlapping, interactive shared assignments. Flexible work environments will be required for persons who enter and leave a work community at irregular intervals. Those environments will reflect the control and choice of how, when and where these “task specialists” perform. Providing physical space flexibility will be a key to organizational resiliency in future decades.

Fourth is the adaptation of communication technologies to the new, agile workplace. Indeed, the technological innovations drive the agility potentials; for one thing, they mark the obsolescence of offices as places to store heavy pieces of equipment and voluminous files. These innovations are anchored by the trend toward ubiquitous computing environments, sustained by an upcoming generation of youth who know essentially nothing else of the history of work environments. These conditions must have their own set of posts on this blog, because, well, there’s a lot there to ruminate about, starting with Cloud Computing, paperless offices and virtual data rooms. Oh, my.