Workplace Design Is All About People (Lisa and Steve Lockwood Commentary)

The local sales office of a Fortune 500 company (name to remain anonymous) followed a corporate initiative to reduce overall operating expenses by 10 percent (cutting back on office support activities, reduced office space, doing more with less, fewer amenities, etc.). By doing so, they were able to realize an approximate annual savings of $110,000.

Surprisingly, what they did not expect from the cost-cutting initiative was an increase in other costs that was approximately equal to the cost savings as a result of the changes. The organization experienced loss of a key staff member, loss of performance from the other staff, costs to hire and train a new replacement staff member, cost of down time due to changes in the office workspace, disruption, lack of organization and a loss of staff morale. Not to mention the potential risk to the organization’s customers.

Examples of this type of cost reduction initiatives and subsequent results are fairly common throughout the country and even in Northwest Arkansas.

Over the past several years, organizations have faced some of the most dynamic, continuous, unpredictable, and demanding changes they have ever experienced. Testing every aspect of their business acumen, decision makers have had to make some very difficult choices. Staff cuts, doing more with less, added responsibility, process reengineering, new technology integration, higher levels of customer focus, mergers, growing market share, decreasing costs and improving shareholder value to name a few.

Every aspect of these changes has had and will continue to have a major impact on each organization’s most important resource — its people!

Many of the change initiatives and cost reduction efforts mentioned have not been all that supportive of staff needs and their ability to meet key business result targets. If you have not done so recently, schedule some time to visit the office of some of the organizations represented locally and see for yourself how people are working, the conditions they have to work in, and the stress level they are under. Disorganized, crowded, and unproductive office workspace that leads to disrupted workflow, inefficiencies, and low employee morale are just a few of the things you might notice quite quickly.

This article is not about chastising the many excellent organizations represented in Northwest Arkansas but to draw an awareness of how to develop a better work environment climate that allows organizations to generate and foster higher levels of worker productivity and satisfaction. Most workers do show up at work every day with an expectation and desire to contribute to an organization’s success.

So what’s different and why do organizations continue to operate with inadequate office conditions?

This is not an anomaly in Northwest Arkansas. This condition exists in most organizations around the country. Business goals and objectives have changed (pressure to reduce costs and increase revenues — better profits), higher levels of integrated technology, more qualified people with better skills and competencies, different cultural issues and worker behavior, changes in work processes with the ability to accomplish work activities faster and more accurately, new and more sophisticated product and services, and the need to respond to customer demands better. With all these changes taking place in the organizations, the only resource that has stayed pretty consistent or has even digressed over time is the workplace environment where people work.

The workplace environment represents the most misunderstood resource within the organization. For the dollars spent, it has one of the highest potentials of impacting business results.

Just as a reminder, people are still an organization’s most important resource and their related salary and benefits are the organization’s largest cost.

With all the cost-cutting efforts and the desire to fund initiatives that generate revenue, the workplace environment gets overlooked.

A very common trend that is sweeping the country, and one that many organizations are buying into, is the idea of reducing the cost of real estate expenses by deferring workplace capital projects, and remaining status quo. The basis in which this is being accomplished is by cutting down office sizes, increasing population density, and eliminating amenities like conference rooms, storage space and other less used space, often seen as unnecessary.

The perceived benefit is that the organization will save large sums of money by reducing office square footage. Financial models can validate these claims and it is easy to sell to management because it fits the cost reduction initiative. Less workplace space equals lower cost, meaning less office expense.

It seems like it makes good sense. It does only if you can also demonstrate how the new office space will help support and improve organizational and individual performance. An interesting fact, most organizations don’t understand that a loss in organizational or individual performance, due to the workplace, can have a substantial impact on increasing costs. (Example: a 5 percent decrease in a worker’s performance in a typical 40 hour work week equals two hours of lost opportunity).

So What can be Done?

Things to remember:

• People are your most important resource and also the most costly.

• HR surveys report that most workers perform at about a 60 percent level of productivity.

• The workplace environment does impact workers’ ability to perform.

• The cost of developing a good workplace environment vs. a bad workplace environment is about the same.

• Cost cutting initiatives have the potential of actually increasing overall costs.

• The workplace environment is a good tool to help support and improve organizational performance.

• Not all people work the same. Develop the workplace to support worker activities and behaviors.

• The more people density in the workplace environment the higher the chances are people may conflict with one another.

• Disorganized, crowded and chaotic workplace environments do have a negative impact on staff performance and morale.

Action Items:

• Start with your organization’s goals and objectives as the focal point.

• Consider the whole organization, not just a segment.

• Get a good understanding how your organization’s resources are linked and integrated to achieve the desired business results.

• Understand how work flows through your office. Can you identify and eliminate those pinch points?

• Is your office organized and using the amenities as they were planned?

• If you are experiencing crowded and chaotic conditions, you may need to think about planning the workplace environment differently.

• Are there things in your workplace environment that do not need to be located or stored on-site?

• Ask your staff, they have good ideas on the changes that would help them be more productive.

• In many cases, a good clean and organized work environment solves many issues.

• Make sure there is a good distribution of special space (meeting rooms, storage, office equipment, etc.).

People continue to be an organization’s most important resource and it’s most costly. Changes in the workplace are inevitable and these changes affect people. When considering workplace change initiatives, seek to determine how these potential changes will ultimately impact your people’s ability to meet the organization’s performance expectations.

(Lisa and Steve Lockwood are the principles of Lockwood 2 Creations in Northwest Arkansas, with offices in Minneapolis and Chicago. They can be reached at (479) 876-2635.)