The business case
Regardless of the setting, in order for a non-territorial working environment to fly, it will require careful planning and analysis; a business plan needs to be built.
The first step is to determine how the physical workplace supports the business. This means acknowledging the ‘purpose’ of the business and setting what Kirkwood refers to as the “Critical Success Factors” for the workplace.
The second step is to understand the work activities and people work styles that support the business. “If the organisation is about being the most cost efficient in their industry, or the most responsive to change, or if people are very mobile working outside of the office, then a non-territorial ABW environment might be a suitable strategy.” he says. “If the organisation was focusing on people or innovation, and the people were less mobile then such a nonterritorial strategy might not be appropriate.”
Understandably, in the majority of cases, the principle driver for the adoption of non-territorial environments is the allure of an improved corporate real estate equation (less space and therefore less cost). “The CRE professional and the CFO are early advocates,” says Gunnis. “However, once the scale and quantum of associated change involved is determined, the CIO and chief of people & culture are very quickly mobilised.”
Indeed, it would be a mistake to look solely towards occupancy cost savings alone as a deciding factor. Kirkwood has been monitoring costs per employee (including average salaries and benefits, IT infrastructure and occupancy costs) of the major Australian banks for over a decade. The average occupancy cost per employee is about $14,000 perannum, whereas salaries are closer to $100,000 per employee per annum. This means that a 30% reduction in occupancy cost can be easily offset by 4% loss of productivity.
“If we compare occupancy cost as a percentage of total revenue it is only about 4%,” he says. “It is therefore far wiser to focus on supporting business revenue and worker productivity as a driver of workplace strategy than just occupancy cost alone.”
Ready for change?
From a business point of view, if a total or hybrid approach to a non-territorial work environment is justified, then the question is whether the organisation is ready for the change. The two biggest change dynamics required lie within the technology/IT and people departments.
“These two dynamics mean two things: a deep and time consuming investment in the change management process; and significant capital investment in workplace technologies,” Gunnis says.
“Taking away a person’s own desk is a very confronting idea, and like any change, a process including two way communication, exploration, and trialing is required before implementation.,” Kirkwood explains.
Some people will be more adaptable to change than others. This can depend not only on their personal work activities, but also their personal expectations and understanding of what work is about. For some, the purpose of work is to connect with other people and form working relationships with a small group of co-workers. Some people will see non-territorial work settings as a threat to their connections and personal identity.
Following a decision by the executive team not to assign desks to individuals, Kirkwood suggests the transformational process should involve all the people affected, and this process will take time and cost money.