While it’s unlikely that anyone would attribute all of Research in Motion’s troubles to corporate geography, it’s worth noting that RIM’s two chief executives, both now gone, were located over the last few critical years in offices about a 10-minute drive apart. And, according to former RIM executives, meetings with both of them present were rare.
In the early years the co-CEOs started out sharing an office, then moved to offices next to each other, and finally ended up across town. RIM’s explanation: "As RIM grew, they each took offices closest to those areas each supervised in order to stay close to their teams." Makes sense, right?. "At all times, they had an efficient, professional working relationship and were in close communication." Or possibly not.
It is not uncommon for organizational dynamics to follow geography. “Buildings influence behavior by structuring relationships among members of the organization. They encourage some communication patterns and discourage others. They assign positions of importance to units of the organization. Buildings (also) influence behavior by embodying messages. They tell people how the company operates, what it values, and where it has been and is going.” (Seiler, J. A. (1984). Architecture at work. Harvard Business Review, 62 (Sept-Oct), 120.)
In helping law departments and law firms understand their internal productivity or morale issues, an analysis of the firm layout, the geographical location of individual offices and their occupants, and their personal styles provides valuable information.
The Divided Firm
Not long ago one of our New York City clients asked us to help address a productivity problem–teams were not working well together–and a morale concern–attrition had stepped up fairly dramatically for seemingly no reason. The firm was roughly 100 lawyers and, to accommodate its growth, the year before it had taken an additional floor on a different elevator bank than the one that serviced their existing two floors. The new floor could be reached by switching to the other elevator bank on a nearby floor. The management committee had timed the cross-over–at most a mere 3 minutes to the new floor.
There were of course many good reasons to lease the new floor–the rate was good and it was in fact quite close to their existing space with a landlord they liked, obviating the need to locate a new building and negotiate a new lease. Everyone at the firm seemed enthusiastic, we were told.
Until we got them in a room alone.
Then the suspicions and concerns became evident–none was left unvoiced. Why had their practice group been put on the "distant" floor and what did that say about the future of their practice in the firm? What did the floor assignments say about the state of the personal relationships between those on the old and new floors? The number and identity of management committee members on each floor was carefully scrutinized. The ease of getting to the library, the small cafeteria, the conference rooms was analyzed. Was it true that some secretaries had refused to move to the new floor? Did anyone else have veto rights? Each person knew of someone at the firm who had read the tea leaves to mean that they might as well look elsewhere.
Separating firm members onto different floors brings some obviously tough decisions. And requires some corresponding moves to make sure everyone feels integrated. It was apparent to us that what had been a cohesive, tightly-knit firm suddenly felt, after the addition of the "distant" floor, very different to many there.
Since the lease was signed and the space built out, we suggested to our client some simple solutions: have regular coffee hour for all early arrivers and occasional, short lunch or late day events that got the entire firm together in one place, scattering the events throughout the floors. After analyzing their clients and proposed business expansion, we moved some of the practice groups, explaining to everyone why they were being located near their neighboring practice groups, and we made sure the associates’ committee members and partners were well and appropriately distributed throughout all the floors. "Floor captains" were given the authority to gather and voice concerns going both to the Management Committee and from it.
The good news is that morale improved and attrition decreased. In fact, the firm members just liked being in closer contact with each other. And the obvious concern by management for the various reactions probably played a big part in allaying people’s worst fears. That conclusion is consistent with a study in the 1990s that found that whether office lighting levels were raised or lowered, worker productivity improved. Interviews found that workers believed the change in lighting was evidence that management cared about them and their workplace dissatisfaction and were trying to help. (Baron, R. A. (1994). The Physical Environment of Work Settings. Research in Organizational Behavior, 16, 1-46.)
What’s the Best Layout Design?
We know, and have known for over a decade (see Ed Reilly’s "Influencing Behavior through Office Design"), what kind of office layout seems to both promote loyalty and produce the best work–one that gives some private space to those who are in the office most work days, and that also encourages individuals to move around and interact so that collaboration and teamwork are facilitated.
Google is famous for having large inviting open spaces and distant community spaces like cafeterias, coffee stations and copy centers that lure people out of their offices into hubs that allow for healthy interaction among unlikely people. There are similar layouts at Apple and the Gates Foundation.
But the tech guys are not the only ones embracing this sort of open office geography. The corporate trend for some time has been to have fewer individual offices and more open space–two-thirds of American office space is now configured in some sort of open arrangement. And the latest twist has been to further reduce the amount of private offices and add more shared work places, in some instances with no assigned space.
Saving Money and Improving Results
Of course, shrinking an office’s overall footprint by reducing the space allocated for individual offices also has the advantage of saving millions of dollars annually in rent and energy expenses. And since traditional office space has a utilization rate of just 50% due to sick days, vacations and travel, there is a strong incentive to do so. Some companies are going further than just reducing offices in size, or to cubicles or desks–many are instituting shared workspace that is unassigned.
American Express, GlaxoSmithKline and PricewaterhouseCoopers are among the more traditional companies shifting large groups of workers into shared spaces. And the new configurations have brought some unexpected benefits—from encouraging workers to collaborate to reducing internal email.
At American Express, roughly 20% of the 5,000 workers at the company’s New York headquarters come to the office just a few days a week and work at unassigned desks. The company is reconfiguring its 51-story U.S. headquarters building to shift more workers over time to unassigned workspace, and has begun a similar transition in London and Singapore.
GlaxoSmithKline says it has saved millions annually in real-estate costs by shifting employees in the U.S. and and over 20 foreign offices to unassigned seating. Employees work in "neighborhoods" defined by job function, such as marketing or finance, so workers sit near those they interact with regularly in the course of a workday. Glaxo found email traffic dropped by more than 50% among those who switched from assigned offices, while decision making accelerated by some 25% due to workers meeting informally instead of volleying emails across the office. Perhaps that is part of the reason why RIM was more successful when its CEOs shared an office or had offices next to each other.
PricewaterhouseCoopers has long had a desk-reservation policy, allowing employees who visit other offices to use vacant desks. In Denver, San Diego and San Jose, workers who come into the office regularly still have their own offices, but when they are out of the office for work or on vacation, other employees can reserve their spaces, either through an online system or at a computer terminal in the office.
And unassigned work space is a trend that is accelerating. In a survey of 950 companies, the International Facility Management Association, a trade group for office-facility managers, found 60% had some unassigned work spaces in their offices, and about half said the number of employees using the unassigned space had increased in the past two years.
What About Law Firms?
Law firms definitely feel the squeeze to reduce real estate costs, reluctantly leaving behind those huge corner offices, offices with a window and even single-lawyer offices. Brokerage firms report that individual law offices in the U.S. have shrunk by 20% to 25%, so that partners now have 225 square feet on average and associates get about 150 square feet, often shared with another lawyer. Even corporate law offices which have been more likely to follow a traditional layout are succombing to the more open-minded open layout of their compatriots on the business side.
"A lot of us have too much space," said Greg Nitzkowski, managing partner of Paul Hastings, so as its leases come up for renewal, the firm plans to downsize lawyer offices. "It’s such a big line item," he said. "It’s a natural place to look for efficiency."
But changes in layout are not an easy sell. "Lawyers, their whole mind set is based on precedent," said Barbara Dunn, a principal and co-chair of the law firm practice group at Gensler, a global architecture and design firm, which designed offices for Holland & Knight and Proskauer. "None of them want to be first…but they’ll all get in line to be second."
Nonetheless, law firms, particularly in the UK, are starting to experiment with more open and even shared floor plans. Such layouts are more flexible and make it easier to train younger lawyers, according to Lee Ranson, managing partner at Eversheds, which switched some offices to open-plan as early as 2002. "We were very keen to get people communicating a lot better," he said. "Senior partners sit in the same space as junior lawyers…They’re not isolated." The early RIM strategy again?
The Down Side of Open
Of course, open or shared space offices aren’t for everyone. Kimberly D. Elsbach, a management professor at the University of California, Davis, who has researched the effects of non-territorial offices on workers, found that some workers felt they had lost part of their identity because they weren’t able to personalize their space or felt less organized, having to unpack and recreate a personal space before getting started. Tuft and Lach Law, a small law practice in St. Paul, Minn. opted for open, shared office space, but ended up hating it. Too many distracting conversations that were easily overheard.
A 2009 Swedish study published in the Journal of Architectural Planning and Research concluded that employees were least satisfied with open-plan workspace design, with those in medium-size and large open offices reporting the most dissatisfaction. A survey from the American Society of Interior Designers found that 70% of workers feel they’d be more productive in a less noisy environment while research from the University of California at Berkeley found that 72% of workers are unhappy with the level of speech privacy they have. A study from Bosti Associates found that 59% of employees’ time is spent on quiet, focused work rather than collaborating with others.
And lawyers are the first to claim they need a more private, quiet place to work than most. Susan Cain, author of “Quiet: The Power of Introverts in a World That Can’t Stop Talking,” is skeptical of open-office environments for introverts (which the majority of lawyers are) because they suffer the most from noise and bustle.
But most law firms are laid out in ways that do not promote communication and interaction and that stifle creative problem-solving. Everyone sequestered in their own small office with the door closed certainly fosters those introverts’ preferred work style but it doesn’t naturally encourage the kind of culture, connection and communication that promotes loyalty to the firm or even the best legal work. And when laterals are added into the mix, the situation gets even more challenging–integrating laterals requires very specific office placement in terms of neighboring personalities, practice groups, mentors and cross-selling potential.
The Roles of Individual Personalities and Alliances