Telecommuting and the virtual office have been around for many years. Oftentimes the barriers to implementing telecommuting are managers so short-sighted, knowingly or unknowingly, that they cannot fathom how someone can be really working while at home. Perhaps because his concept of a home life is chowing on beer and chips in front of a wide screen showing cars going around in a circle.
Times are a changing. The concept of managing by project instead of time has started to take hold, and enlightened leaders understand that sitting in a cubicle for eight hours doesn’t necessarily equate to productive work. Being able to count on employees to efficiently produce while away from the office still takes something of a leap of faith, and identifying those individuals does take some attention during the interviewing process, but that’s not the point of this post.
Since many companies spend more on facilities than any other expense except people, the savings can be enormous. This warms the hearts of lean enterprise leaders. Hewlett-Packard expects to save $230 million on office space expenses next year as the result of an virtual office initiatives. Similarly Cisco Systems reduced rent and service costs by 37% last year, and companies such as Proctor & Gamble and Bank of America are also pursuing aggressive programs. The Work Design Collaborative believes that the average company can achieve 30% facility-related cost savings. Presumably this has more impact in non-manufacturing environments without specialized facility needs, but still the savings are significant.
That’s a lot of coin, but it gets better. When the concept really takes hold, traditional office segregation is no longer necessary… or desired. Rank-based square footage allotments go out the window, and all a person needs is access to a desk on the rare occasion he or she actually needs to be in the office. Although considerable collaboration can occur in a virtual environment, there is a need for in-person brainstorming or project activity. Companies like Jump Associates are implementing office systems that can be completely reconfigured on the fly to create cubicles, conference rooms, collaboration corners, and the like. Some of Deloitte’s office areas are more like hotels… mobile employees reserve office space when needed and concierges roam the halls to provide office supplies and support on demand. Cisco believes it has improved productivity by $2.4 billion through such methods.
Direct facility cost savings and helping create flexibility to attract high value employees are the primary drivers of these projects, however the oft-maligned Sarbanes-Oxley Act is also playing a part. The increased transparency required by SarBox is driving companies to get rid of idle assets. And as every lean guy knows, idles assets aren’t really assets. There are also disaster recovery and business continuity advantages to having key processes and people distributed geographically.
Implementing a virtual workplace in a hard manufacturing environment is obviously more difficult, but not impossible. There are also advantages to having all functional groups close to the gemba. But in your quest for reducing waste and creating savings and productivity, think about your office areas.