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Copyright © 1998 by Robert Moskowitz. All Rights Reserved
More and more large corporations are discovering the benefits of today's well-proven telecommuting and virtual office techniques. Even as you read this, hundreds of them are working hard to convert hard, rigid, hierarchical office workspaces into soft, flexible, interactive office environments the kind that have been pioneered by telecommuters and virtual organization advocates, and that have proven so effective at increasing productivity, lowering costs, and bolstering employee satisfaction. Hundreds more organizations are establishing or expanding their operations in rural areas where the quality of life seems far higher than in the urban centers they're hoping to leave behind.
Opportunities like these have arisen because today's most forward-thinking models of organizational structure take better advantage of the flexibility and freedoms provided by the information age than traditional models ever did. Because knowledge and intellect are now such a rich source of value and profit, it's possible for an organization to flourish without taking the time to build or maintain the traditional systems that support centralization and large size along with the heavy overhead expenses they generally entail that were formerly required for success.
Instead, today's flexible and virtualized organizations focus more tightly on such direct-payback activities as: cultivating intense customer interactions and the favorable customer relationships they usually engender, creating and deploying their intellectual assets to greatest advantage, outsourcing their needs for physical assets, and leveraging the specialized knowledge of their employees within and across organizational boundaries.
According to a recent article in the Sloan Management Review, about 29% of the Fortune 500 companies surveyed already provide some form of alternative working arrangement for their employees, and another 15% are looking into providing at least one alternative to full-time, in-the-office employment.
Why bother? According to the Harvard Business Review, AT&T has cut its office and related overhead expenses by some $550 million since 1991, mainly by letting thousands of employees work away from any centralized office.
When they do come in, employees are now finding the office's physical configuration far different from the acres of cubicles that once dominated corporate interior decor. Today's streamlined organizations are providing relatively small cubby-holes for private work, and relatively large, open rooms for group work. Here people can plug in their laptop computers and form themselves into ad hoc teams and task forces, fueled by nearby coffee and snack centers. Instead of large, walled-off conference rooms, employers are providing a variety of informal meeting areas more easily accessible and less imposing than "boardroom" type conference areas for smaller groups to occupy as needed, usually without signing up in advance. These areas are usually equipped with movable furniture, multiple computer ports, electronic whiteboards, fax machines and speakerphones. They're designed to let work groups gather at a moment's notice, and to support them in sharing information and documents with other groups in similar rooms around the world.
One of the hidden cost-savings in these alternative approaches turns out to be the vastly reduced need for, and expense of, relocating employees from one desk to another. When large organizations rely on traditional office arrangements, it seems they never finish moving people from one desk to another, one floor to another, or one building to another. Not only are the employees hampered in doing their work during this transitional phase, but the moves themselves require a large team of technical experts to handle the necessary changes to computer wires, telephone lines, mail routing systems, parking assignments, and so forth.
Once alternative office arrangements take hold within an organization, however, people can handle a variety of assignments far more easily and switch from one team to another without having to make changes to a permanent desk assignment. As a result, a great deal of overhead expense is simply eliminated. Southern California Edison's manager of shared facilities, Glen Donley, recently said that his organization, for example, has cut such costs by as much as 80% as a result of its advanced virtual officing techniques.
Arthur Andersen, IBM, Procter & Gamble, Hewlett-Packard, Southern California Edison, and AT&T are just a few of the big names now betting that alternative office arrangements like these can help them cut costs, increase retention and satisfaction, add to productivity, and benefit their bottom lines in other ways.
But the power and breadth of this trend should not be too surprising. It has long been obvious that letting people work away from the main office allows an organization to save serious money on real estate including reduced expenses for everything from raw square footage to the utilities and parking needed to support build-out and daily usage. And these new, cheaper working arrangements actually enhance rather than undercut opportunities to gain a better grip on problems and apply more leverage toward solutions by upgrading the team's shared understanding of the corporation's mission and priorities, strengthening their sense of loyalty, broadening the channels for information exchange, improving access to people, information, and materials, and sharpening management's allocation of resources.
There are actually five different styles of virtual and alternative working arrangements now emerging around the world: "tethering " where employees have a degree of mobility but work mainly at a fixed location, "telecommuting" where employees can work either at home or at the office, "hoteling" where employees use any available workstation instead of a fixed desk assignment on whatever days they come into the office, "home" workers who provide their own workplaces and almost never come into the office, and "fully mobile" workers like sales and field service people, who can fulfill their responsibilities only by staying away from the office and traveling widely.
Clearly the strategy has shifted away from trying to impose a "one size fits all" approach to working arrangements in hopes of meeting the needs of all employers. In fact, a whole new consulting science of "virtualizing" organizations is rapidly emerging, complete with experts who conceive plans that combine each of the alternative working styles in varying proportions to provide just the right mix of benefits for a particular organization. Employers are welcoming these answers, too, because they want to know exactly how to manage their individual employees, teams, information, processes, and facilities to maximize the benefits and minimize the costs.
Virtualizing Offices In The Heartland
Other firms are taking the virtual officing idea a step further, and moving their operations away from traditional centers of business. A recent article in the New York Times, for example, highlighted a newly emerging rush for the wilderness among financial organizations in particular. In fact, some of the most exciting and successful firms to be set up in recent years have their headquarters in such unexpected settings as log cabins in Jackson Hole, Wyoming, low-rise offices in Park City, Utah, and spare bedrooms on Nantucket Island, Massachusetts.
One reason behind this trend is that entrepreneurs of the Baby Boom and younger generations are now reaching achievement levels allowing them to set up their own organizations. And they are heading out on their own not only for the action and the profit, but to obtain a higher quality of life for themselves and their families. More and more often, they are deciding this higher quality of life is easier to find at a considerable distance from the canyons of Wall Street and other traditional urban centers of business.
Another reason financial firms are sprouting up so frequently in rural areas is that success in the industry often requires no more than a small staff of highly proficient experts bond traders, market watchers, money managers, and the like. So there are no insurmountable difficulties in trying to operate these firms in rural areas where populations remain fairly small and scattered. Sometimes, the core group moves to the small town as a unit. Other times, just two or three rain-makers start a firm, and then grow it by recruitment of additional talent from the big cities. Early successes help convince more and more young specialists to leave the big cities and join the fun in the heartland of America.
But success in rural America is not limited to small organizations. Firms that need relatively large staffs have also been successful without locating in urban centers. Data Broadcasting, for example, supplies financial and market information to investors across the country and around the world. It employs about 760 people, who are scattered in various locations throughout New York, California, and Utah. Central management comes from a small operation in Jackson Hole, Wyoming.
The same technology that allows telecommuting employees of Fortune 500 firms to phone in their work also allows a smaller organization to function as a close-knit unit despite having employees strewn from one end of the country to the other.
At this point in history we still need urbanized centers of power, of course, and there is no denying there are millions more jobs for young people in cities than in rural areas. But the trend is becoming apparent, and already the more successful players in business are finding ways to get their work accomplished without having to contribute to daily traffic problems.
Some Speed Bumps Remain
Naturally, there are speed-bumps on this road to the future. Some employees feel uncomfortable when asked to give up their permanent desk at work, and some supervisors become resentful when their corner offices are cannibalized and turned into shared workspaces for the employees they supervise. A large proportion of competent employees are reluctant to relocate to a rural area even for a dream job for fear that within a few years layoffs or natural career progress will leave them out of work, living in a region with few if any suitable opportunities. What's more, people who enjoy the faster pace and more abundant cultural stimulation of urban areas can be forgiven for their reluctance to move to a small town and trade art museums for stables, theaters for saloons, and libraries for fishing holes.
But the productivity gains and other benefits of these alternative ways of working tend to make top management fairly adamant about moving the organization away from the older models, despite mid-level grumbling. And there are apparently enough heavy-hitters with the power to work wherever they please to keep the nation's most attractive rural areas growing at a good pace for at least the foreseeable future.
The fact is that many people get used to the new working arrangements in short order, and sometimes even learn to prefer them. Those who can work in the morning and ski or hike in the afternoon, all the while raising their children in safe, relatively unpolluted environments with good schools and well-mannered friends, often vow they'll never go back to the urban centers that once dictated the way of life for people doing business in the U.S. Even those who are still tied to cities, but who now work in more flexible workplaces, report they enjoy the relative quiet, freedom, and independence of the new office designs over the old-style cubicles and offices where noise and constant interruptions tended to make working more difficult rather than easier.