The New Rules of Work.

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Feature 10

Feature 10

December 7, 2022

The New Rules of Work

Ana Andjelic, brand executive and author of “The Business of Aspiration” offers her take on the future office, in all its forms.

Words by Ana Andjelic

Photography by Stocksy

“I know it’s a hassle to come into the office, but if you’re just sitting in your pajamas in your bedroom, is that the work life you want to live?” Malcolm Gladwell recently asked on the Diary of a CEO podcast. “Don’t you want to feel part of something?”

We like the future that we can anticipate, but sometimes the things we anticipated don’t become the future. We consider the bad things to be a negative externality of the good things. But innovation by necessity must be internalized. In tech terms, hybrid work is a bug that became a feature.

Given the chance to work flexibly, 87 percent of people take it, according to the third edition of McKinsey’s American Opportunity Survey. In the U.K., this figure is at 60%, per Core Signal’s trend report, and 37% of Europeans polled stated that not being allowed flexibility would be the policy most likely to cause them not to accept a job offer. In Asia, flexible working patterns are also normalizing, with 38% of companies expecting employees to be in the office full time and another 24% expecting employees to be there most of the time, according to CBRE’s new Office Occupier Survey. (In the U.S., it’s 5% and 32%, respectively.)

“Any action that is repeated frequently becomes cast into a pattern,” Berger and Luckmann (1966). “The Social Construction of Reality”

Features become institutions. Just as the pattern of working long hours in offices has been considered not only normal but normative, hybrid work, when institutionalized, becomes aspirational. Since the pandemic, hybrid work rearranged how we spend time and money, how we commute and what we do for leisure. This impacts local businesses, hotels and restaurant traffic. A report by Kastle, the security company, found that office occupancy in 10 major U.S. metro areas averaged 44% as of July 2022. In NYC, the most recent reported occupancy rate is 41.2% according to The City, a nonprofit local news outlet. The figure is similar in London, with average office occupancy rates at 40% according to CoStar. In Tokyo, office vacancy rates have increased steadily since January 2020, according to Statista.

Companies wrestle with the two intertwined narratives. Efficiency of the office (an economic narrative) is juxtaposed with office bonding, belonging and camaraderie (a social narrative), leaving organizations to figure out the right SWOT (strengths, weaknesses, opportunities and threats) analysis of the two. But the real value innovation here is in the decoupling of efficiency and socializing from one single, shared physical space. This effectively changes the meaning of “office.” In place of the office, there is a new value curve. Corporate leadership needs to pay attention to what their employees are doing right now — how they organize their days and what their work-related rituals and daily rhythms are — to successfully build and manage the office of the future.

The New Rules of Work - Image 1

Photography: Unsplash

The New Rules of Work - Image 2

Photography: Unsplash

Efficiency

Since the days of Max Weber and Frederick Taylor, companies have been synthesizing workflows, controlling resources and managing employee output to maximize labor efficiency and minimize slack. In the modern work era, efficiency has been the ultimate business goal.

Open-office plans, despite their collaboration mantras and kombucha taps, have primarily been productivity tools to pack in as many people per square foot as possible. For efficiency purposes, job tasks are divided into simple, routine categories based on functional specialization. Every employee is responsible for what they were hired to do.

In addition to specialization, mass retailers, banks, airlines and real estate firms have moved toward short-term, impersonal interactions to make themselves more efficient. They successfully inched out independent goods and service providers — known for their intimate customer knowledge and long-term customer relationships — based on the principle of lowering the cost of goods and services by giving customers one-stop-shop convenience.

Across industries, companies aspire to stay lean to keep profits high. No one wants cash sitting in their balance sheet or inventory sitting in their warehouse. Airlines, in order to make each of their trips as efficient as possible and squeeze more money from passengers, started offering a growing a la carte menu of auxiliary services, like checked bags, legroom, meals and pillows. Low-budget airlines run ridiculously short routes in the name of efficiency, with a hefty carbon emissions cost.

Short-termism, specialization, cost reduction and transactional relationships still largely apply, even in creative industries like advertising or fashion. But they are ill-positioned to solve fuzzy problems like applications of cryptocurrency, global supply chain challenges or the modernization of retail. Answering how to use blockchain to drive revenue across channels or how to change the cost model to support the new role of stores requires a holistic perspective and a versatile skill set.

The best talent doesn’t define itself through roles or specializations (like a social media manager or copywriter or PR person). They bring value to the organization through their ability to grow the company’s business, move the wider culture and help their coworkers do their jobs better.

Socializing

“The city was one’s dining room, living room, and extended home — rather than the apartment, which is just where we went to sleep at night,” writes Elizabeth Currid-Halkett in her book “The Sum of Small Things.” Even for 2017, when this book was published, this view feels dated: It’s somehow closer to the “Sex and the City” era than to anyone’s actual behavior today. Since 2016 and the onset of hygge, the Danish term used to describe the pleasures of cozying up at home, young people have come to the conclusion that going out requires “too much effort.” Instead, they started to invest in plants, cookware, meditation cushions, decorative pillows, candles and bath bombs. ”The Great Indoors” is the title of a 2017 essay that captured emerging trends like candles, baths and spending more time at home. In 2019, author and consultant Venkatesh Rao’s term ”domestic cozy” was officially elevated to the level of a coveted lifestyle.

The pandemic built upon this already existing zeitgeist and amplified it to global proportions. But the pandemic did not invent it. Younger people had already opted for a slower pace of life as a good thing. Hustle culture reached its fever pitch before the pandemic and then faced a cultural backlash. Anti-ambition became a thing. Artist Jenny Odell wrote “How to Do Nothing” about resisting the attention economy.

The New Rules of Work - Image 3
Photography: Unsplash

Before reconsidering their effort-reward ratio, generations of workers believed they were too busy to cook, exercise, sleep, watch TV, see a doctor, shop for clothes or get over jet lag. This belief led to an entire economy based on outsourcing and delivering these services.

Now they embrace a more balanced existence. The modern workforce, free of guilt, sets time aside for journaling, cooking, going for a walk and checking in on friends. They’ve realized that their social connections happen outside of the traditional office, where they used to spend all their time. The feeling of a shared identity, belonging, being needed and being part of something is a feature of their social and professional networks, which are wider than the office.

Design for the future

To develop a sustainable organization strategy around the new office, corporate leadership should consider the following four truisms:

One percent rule. There’s a famous anecdote about Sir Dave Brailsford, who was appointed the British Cycling performance director in 2002. It had been nearly a century since Great Britain had won an Olympic gold medal in cycling. Far from discouraged, Brailsford approached his charge to improve this record by breaking down every single thing he could think of that goes into riding a bike and then improving it by 1%. The nutrition of the riders, the pillows they slept on, the gel they used for their massages, the ergonomics of the bike seats, the weight of the tires: Brailsford improved it all, just by a tiny bit. By putting all those 1% margins together, or by “aggregating marginal gains,” he ended up with remarkable results. In 2008, the British team triumphed at the Beijing Olympics, claiming 70% of the gold medals in track cycling, a feat they repeated at the London games in 2012. They won their first Tour de France that same year and have since gone on to win five more. Brailsford proved that, rather than a silver bullet, there are a handful of micro, human-centered optimizations that can help create considerably more value down the proverbial cycling road.

The Tragedy of Growth. GDP growth“does not enhance life satisfaction, alleviate poverty, or protect the environment,” according to a recent research report from the UK-based not-for-profit company Positive Money.

But we still seem to come short of a viable alternative to a financially stable non-growth economy (the closest we’ve come is the ESG framework). The solution seems to be as normative as it is systemic: Modify corporate measures of economic progress by incorporating additional indicators, such as carbon emissions, robustness of the healthcare system and infrastructure, and education. Start with the growth-imperative-deformed industries like global sourcing models and product-driven value chains. The lean and overextended supply chains worked great — and yielded huge surpluses — until they didn’t. Alternatives are on-shoring production and the increased self-sufficiency of companies in terms of their reliance on both locally sourced materials and talent.

Human-centrism. Most of our institutions are built for and around individuals, with narratives and ideologies of individual freedom and competition to match. But humans are not only individuals; they also belong to communities and are members of a society. Their behaviors are shaped by those around them and by collective symbols and stories. The new social and economic targets are a community and a society. The level of an individual is seen in the context of their social and economic networks.

Longer time horizons. The behavioral economics term “hyperbolic discounting” describes the human tendency to discount future rewards compared to present ones. Psychologically, we are not primed to think in terms of abstract threats and long time horizons. Sociologically and economically, we must prepare for the longer term. During the summer of 2022 heat wave, for example, all around us there were reminders of wide-reaching and long-lasting consequences of our actions for our environment and for our communities. We need to put these reminders front and center when making business decisions.

The New Rules of Work - Image 4

Photography: Unsplash

Photography: Unsplash

Localize to win

Crises are great truth tellers. They expose organizational and operational strengths and weaknesses. They challenge leadership. They bring on business disruption, revenue drops, layoffs and the pressure to reduce expenses and find new ways of making money.

But crises also offer a creative toolbox. They force all of us to think and act differently, and they force businesses to address problems in new ways.

To save the physical office, break it up. Turn it into a portfolio of smaller working spaces: hyper localized nano-offices and micro-clubs. In this scenario a massive brand office becomes a house of smaller local offices or an office family. The biggest roadblock to our workforce getting back into the office is commuting; the key to removing it is renting a series of mini office spaces close to where employees reside.

Remote workers are remote only in relation to a specific set of coordinates. In fact, they are right where they need to be, spending their workdays locally, in their home offices, neighborhood coffee shops, coworking spaces and membership clubs. There, they work and socialize, build their community and forge their identity and a sense of belonging.

Maybe the ripped social fabric of meaning and purpose that Gladwell laments is in fact just a metamorphosis: There is no need to conform to an office identity when you can build an office around your own identity and share it with like-minded others who identify with the same lifestyle. (Offices have always been more fun once we find our own tribe there.)

This “office portfolio” approach encourages intrapre- neurship, where teams are freer to innovate, test against their customer preferences and renew their brand’s relevance and differentiation. It also reduces the giant fixed costs of running mass brand businesses through a combination of efficiencies in operations and payroll, with cost savings in real estate, utilities and technology. Breaking up one massive office into a series of smaller, local working spaces allows a company to manage it in a cheaper, more responsive and more nimble way.

This shift to micro and local has already happened across industries. There are independent bookstores, niche magazines, impossible-to-get-in-to clubs, private communication apps, “Close Friends” sharing on social media and a rise of localized neighborhood outposts of national chains (IKEA has a localized store in Paris, as does Target in NYC). Localization is powered by both the rise in nano-warehousing and a decline in private-car ownership among young urbanites, according to McKinsey research. Nano- or micro-warehousing refers to small fulfillment centers dispersed throughout urban neighborhoods. It helps retailers route orders quickly through nearby facilities and provide the handy last-mile solution that ensures speedy delivery and cheaper fulfillment.

All of these examples are the opposite of the “bigger is better” model. We seem to want to shop, entertain and socialize in the same way we did 100 years ago, before mass media, mass brands and mass offices.

Companies’ success ultimately depends on their employees and whether they find it desirable to work, live, socialize and self-actualize within the corporate construct. It is up to all of us to intentionally and laboriously weave together the new fabric of our work practices, in all the physical spaces — home offices, company offices, coffee shops, coworking areas and membership clubs — where they take place.

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