Offices and Office Work: Retrospect and Prospects, by Dr Bruce Lloyd
It might surprise many, that over thirty years ago there was much talk about 'teleworking' and ‘the future of offices and office work’?
For example: a couple of Harvard Business Review articles: ‘Your office is where you are’ by Philip J. Stone and Robert Luchett, March 1985 and ‘A company without offices’ Interview with Steve Shirley, January 1986; also there was a DTI questionnaire on ‘Telework and Telecommuting: Management Opinion’ 1992-1993.”
I was fortunate, at that time, to be involved at the edge of some of those discussions.
My interest in this area started with a one page article in Financial Decision in 1987, which concluded: ‘Over the longer term ... most offices will become part of the new industrial wasteland of the 21st century’.
That articles suggested that between 25-50% of the workforce in the UK – and the rest of the industrialised world – currently work in offices. And that in terms of resources the figures are enormous, with perhaps one-third of the nation’s GDP involved with this activity in one form or another. Yet the whole sector, while providing vital basic functions was grossly inefficient and wasteful.
My background is Chemical Engineering in the oil and chemical industries, where core assets were operated 24 hours and day, 7 days a week, stimulated my questioning. Why didn’t 24/7 operation happen for office assets? In practice, it was frequently the case that an office building was only actually occupied for only about 25-30% of the year. And, if an estimate is made of the amount of real productive, added value, work then a figure of around 10% is probably nearer the mark? No one running a factory, oil refinery, or power station, would be allowed to operate at those levels of use.
This quick calculation raised fundamental questions, such as: What goes on in an office? Essentially it is a combination of social activities, and ‘office politics’ / running the building / organisation itself, as well as real ‘added value’ work. Split roughly in equal parts. Why has this ‘under-utilization’ been allowed to happen? The answer to that question is basically that management could afford to let it happen.
Essentially the difference between an office building and a factory was that over most of the second half of the twentieth century the value of office property appreciated, while the value of a factories depreciated.
The core questions asked in the 1990’s, were: What is really going on in the office? How can offices activities/buildings be undertaken, and used, more effectively? How can flexible work being managed more effectively? What is the nature of the underling work and what are the specific needs of the individual needs of the people involved. (And it needs to be emphasised that these individual needs vary.) These questions are as relevant today –if not more so - as they were in the 1980/90’s. Answers to these questions, will change over time and, ultimately, it is that will determine the long term sustainable success of many organisations.
But what is the real content of office work? How much of it is routine administrate work? And how much of that is not place dependent? (The area most likely to be automated.) How much of it is creative work? – usually place independent. Although the role of team building and other meetings have to be considered, the growth of hotel facilities in this area is an attempt to provide for some of the demand for this activity. In addition, the growth of the coffee shop industry has partly taken place because they are used as an ‘away from home’ office. In contrast ‘pubs’ found it harder to capitalise on these changes.
Overall, it has to be recognised that flexible working puts greater demands on line management, at it involves greater focus on work content and outputs.
Why did it require Covid, to catalyse change? Essentially Covid meant companies had little choice. But what has changed? The traditional approach had survived because of combination of corporate inertia, bureaucracy (health and safety, security etc issues) and the continued ‘profitability’ of the office dominated sectors, as well as the inflow of overseas demand and investment. For most of the second half of the 20th century – and up till very recently - few organisations lost money by owning property assets, although this point was obviously less relevant if the office assets were rented or leased.
It was originally argued that change would take place because of the advent of new technology at that time, such as ‘computers, fax machines, and car cellular phones’, but that was before mobile phones and Zoom. In retrospect, greater caution over the nature and reliability of the technology that was available at the time, might have been appropriate, but the technology now available make the arguments for change much more relevant.
My original interest in the subject was expanded into PhD on ‘The Future of Offices and Office Work: Implications for Strategy’ in 1995/6. One of the conclusions of was that Corporate Strategy needed to include all the assets of the organisation, and not just be pre-occupied with products
It is worth mentioning that many organisations in the past – but not so many today? – considered that they were essentially in a business driven by their products, which generated their income, when they were actually often in the property business, when their physical assets were also included. This was the driver behind much of the activity known as ‘asset stripping’. (Even today many out-of-town retail parks are now worth more for their car parking space than for their basic retail business.)
Some companies even undertook the extra indulgence of designing their corporate logo into the building (NatWest Tower). This not only makes it almost impossible to change the logo, but it probably reduces the value of the building to other potential purchasers.
A ‘Sounding Board’ article in Management Today that I wrote in May 1990, argued that: “Despite the continual pre-occupation with productivity in manufacturing, it is the office sector that is likely to be the main source of productivity improvement in the future” ... For what it’s worth, it is my view that about 50% of office space in the UK is likely to be potentially redundant in the next decade.
Today, it is even more important those constructing office buildings recognise that they are really constructing space, and that the long term value of the buildings are likely to be dependent on how easily they can be converted from what might historically be defined as an ‘office’, into alternative uses, such as residential or hotels?
In summary, the key messages in the 1990’s emphasised the importance of exploring critical - interconnected - questions:
Key questions:
1. What is actually going on in the office? What is the nature of the work going on in them? (Repetitive / creative). And (Social activities? Managing the organisation/the office building? Real added value work?) --- Often people go into the office to then spend the day working on the computer? It is useful to think about what we mean by 'work'? (Rarely discussed in books on ‘The Future of Work’) It is also important to re-think what we mean by ‘retirement’?
2. What are the management processes involved in 'managing work'? There is a need for much greater focus on work output, than the traditional ‘managing time’ approach. What new management styles and organisational structures need to be considered? Why does more flexible working appear so difficult? What do the people involved want? What are the individual situations of those involved? Including commuting issues? And what other 'office' alternatives are available – including ‘home-working?
3. What are the things that are best done on a one-to-one basis personal basis - Teambuilding etc. And it is quite possible that many (all?) of these can be undertaken outside the 'traditional' office.
4. The Covid pandemic resulted in (/catalysed in overcoming?) the previous constraints on more flexible working, such as security/ health and safety / technology support, being overcome, or given a much lower priority - but these issues cannot be ignored. and need to be addressed.
5. Defining productivity is a challenge? Especially where 'creative activity' is involved? It is often also to difficult define 'hours worked', when ‘flexibility’ is involved?
6. The whole subject of the impact of these changes on motivation also needs much greater research?
7. How do the property assets actually support the core business? How much are offices costing in assets and in operating expenses? Who is responsible for evaluating these issues in the organisation? This needs to involve both top and line management.
8. What will be the impact of the greater use of AI on these issues? And of other significant changes in the external environment?
9. Overall, how is the 'office' industry which undertook such vast expansion in previous decades likely to change in the coming decades?
Most of these questions are not new, but they are now becoming much more urgent, for organisations in coming decades. It is essential that they are asked, and answered, as well as researched, urgently, especially as the future of the economy is increasingly dependent on the answers. But how far are they actually being explored effective in the office industry today? These questions need to be explored both generally, as well as in the context of a specific organisation. It is worth mentioning that it is not just offices that face new property utilisation challenges, universities, and other educational institutions, will also be increasingly forced to deal with these issues. Greater flexibility is the key. But how can the whole area be more managed more effectively? At last, there is some sign that change is beginning to happen – but, in my view, this is long overdue and these changes are likely to be far-reaching in the decades ahead.
Below some of the articles I did decades ago on the topic, now beginning to happen?
Office blocks should follow the dodo, Financial Decision, 1987. p80.
An Underutilised Asset: The Future of the Office, MBA Review, December 1988, p2-8.
Office Productivity – Time for Revolution? Long Range Planning Vol 23, No1. 1990, p66-79, ISSN 0024-6301
Corporate Challenge, Premises Facilities Management, April 1991, p14-19.
An Effective Property Strategy: The Key Corporate Challenge for the 1990's in The Intelligent Enterprise, July 1991, p12-17
Utilising Property Assets, Private Investor, Summer 1991, p120-126, ISSN 0957-0659.