April 12, 2018

Why Everyone Needs a Flexible Workplace

Forecasting Trends

OppenheimerFunds, Mancini Duffy

By Elliot Felix

Every employee and every organization needs a flexible workplace. Unless of course they are in an industry impervious to technological and demographic change, in a business with surplus capital that’s not expanding or contracting, with customers who are completely satisfied, and employees who all work the same way, have no life outside of work, and want to keep doing the same forever.

Sound like a familiar company? Didn’t think so. This is why flexibility in the workplace is a such hot topic – at a time when there is so much changing and so many competing needs, everyone is seeking the ability to adapt to and accommodate change.

What’s driving this need for flexibility?

The Boston Consulting Group reports that the average lifespan of a public company in 1950 was 55 years but has declined to 32 years. Bain & Company reports that half of new leaders reorganize their people in the first year but fewer than a third produce meaningful results. The Mercer Group has found organizations are flatter with managers having an average 8 – 10 direct reports today compared to 5 direct reports 20 years ago. Maunder Taylor found companies move locations 18% more frequently, and CoreNet has found space per person has declined 33% since 2010, from an average of 225 to 150 square feet per person.

The Bureau of Labor Statistics reports that 34% of employees work on a contract or freelance basis today, and this will rise to 50% by 2020. Interestingly, the common conception that employees now work for shorter time spans is not true. According to the Bureau of Labor Statistics the median tenure in 1983 was 3.5 years compared to 4.2 years in 2016. To put this in perspective, perhaps no company exemplifies the how much is changing as General Electric, a 125-year-old company with nearly 300,000 employees that as a company has been quite vocal about their transformation to be a digital industrial company. They are working in new ways, focusing on fewer markets, and creating a new headquarters in Boston called “Innovation Point” that will showcase this direction with a GE museum, makerspace, an incubator for life-science companies, a community work lounge, and a solar veil.

GE Innovation Point, Gensler

What types of flexibility organizations do employees need?

Many different dimensions of flexibility are needed and these can be grouped loosely in terms of people, processes, and places. In terms of people, to adjust to varied demand, access the right talent, control their costs, and capitalize on a 24-hour workday that spans the globe, organizations need flexible staffing so they can rely not just on full-time employees to get work done, but contract or freelance staff, too. Organizations are offering flexible work arrangements so that people can work remotely and shift when they do their work to attract and retain their employees and enable them to be productive. For example, Jetblue’s customer support crew members work from home after an orientation program and Upwork has Work Online Wednesdays where employees work remotely.

Considering process, flexible organizations are emerging that are more flat, less formal, less structured or different kinds of structures like networks or holacracies, and different ways to make decisions. Organizations and teams are also embracing more flexible processes like lean and agile ways of working. Rather than create its product or service all at once through a slow and risky process with a big reveal, they are creating smaller cycles to create, test, learn and refine. For example, at Valve Software, employees work in a completely flat organization with no managers, choose what projects to work on, and choose where they’ll work within the office in what their new employee handbook describes as a “fearless adventure in knowing what to do when no one’s there telling you what to do.”

To accommodate changes in their size and strategy, organizations are also seeking more flexible leasing arrangements. Rather than create a new office in a new market for the sales team of a new product, it can get space from WeWork on a monthly basis and scale up if they get traction. Flexible spaces are also now the norm in most workplaces. These spaces give people the agency to adjust their own environment and accommodate different ways of working. Few organizations have the finances to have an entire portfolio of single-use space and fewer still can afford to miss out on the dynamism, energy, and serendpitious connections that come from multipurpose spaces that can accommodate meetings, dining, and events. For example, the New York City office of Intersection and Sidewalk Labs features a multipurpose lounge with stunning views, coffee and food, and dozens of different places for informal meetings, events, and dining.

Where do we go from here?

In a series of articles that follow this one, we’ll go into these different types of flexibility in the workplace – staffing, work, structures, process, leasing, and spaces, to name a few – and understand what’s driving the need for flexibility, identify how different organizations are providing it, and understand their results. It’s going to be a great journey. Just as I did with this introductory article, I’ll be soliciting input online so that I can touch on the issues and ideas that matter to you. See you next time!

Thanks to Su Lim, Cindy Froggatt, Monica McClure, Lisa Johnson, Niraj Dangoria, Alana Cowan, Kandice Judson, and Dave Collins for your comments that informed this piece.

This article was originally published in the December 2017 /January 2018 issue of Workplaces Magazine

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