Where You Stand Depends on Where You Sit

Tom Peters

It’s hardly earth-shattering to claim that where you hang out and whom you hang out with determine much of your destiny. (“Where you stand depends on where you sit,” goes the old adage.) That said, it is surprising that most managers fail to give physical factors their strategic due. What a blunder!

Put the following space management issues atop your agenda, and you can initiate dramatic changes in corporate culture, even in big institutions, almost overnight:

* Encourage interaction. A new facility in Austin, Texas, is home to 3M’s electronics sector. The huge space was designed so walking from one point to another doesn’t take more than five minutes. And seating areas complete with chalkboards, called “interactive nodes,” are strategically placed near the restrooms. Approaches like these have led to a dramatic increase in productive, chance encounters among people from disparate functions.

At Imagination (Britain’s creative marketing agency), an attractive atrium in everyone’s plain view fosters social and professional interaction. A cheery cafeteria dominates the ground floor: When chief Gary Withers is in town, he drops in at 7 a.m. each morning; throughout the day, workers and clients chat cafe-style over first-class food.

* Co-locate functions. Playmobil, the premier German toymaker, spent $30 million (big bucks for a $250 million firm!) on a new headquarters building with one primary objective: bringing together designers and precision moldmakers who had been in different towns. When the building opened, constant face-to-face exchange replaced sporadic phone calls and memos.

Office furniture manufacturer Steelcase moved into a $111 million corporate development center in May 1989. The building itself is a strategic weapon. By grouping 575 designers, engineers, marketing, and purchasing people in multidisciplinary teams, Steelcase has cut product-development time in half. (Project-team work areas are felicitously called “neighborhoods.”)

* Live with clients. Three-quarters of the 70,000+ employees at EDS work on or within hailing distance of client premises. The proportion is roughly the same for McKinsey & Co.’s several thousand consultants. And architects at CRSS, the giant Houston firm, have developed highly articulated rituals for living and working with clients during key phases of project design. Such customer symbiosis is almost an imperative in a knowledge-based economy.

* Put everything up for grabs. Open offices with low (or no) walls are one thing. Open organizations, where people gravitate freely to work with teammates for the day, week or month is another. At the Danish hearing-aid maker Oticon, project team members roll their personal carts to an agreed upon meeting spot. Fitch RS, the Worthington, Ohio, design firm, is organized around a series of friendly, free-form offices called “pods.” Ever shifting patterns of interchange, as Fitch RS sees it, foster effective, imaginative, and rapid product development.

* Root out headquarters hangers-on. ABB Asea Brown Boveri runs a $30 billion enterprise from a sparsely populated, nondescript building in Zurich. Thousands of headquarters staffers were shipped out to small ABB units around the world; those who remain at the center spend most of their time on the road. Computer Science Corporation Europe went even further and eliminated its headquarters altogether!

* Keep your feet on the ground—literally. Sears’ 100-story tower has been effectively toppled by mass merchandisers like Wal-Mart and specialists such as The Limited. Is it coincidental that the two challengers operate out of no-frills two-story offices? I think not. The atmosphere tends to be rarefied on the 50th or 60th floor. On the other hand, close to the ground encourages close to the customer.

* Change your perspective. Moving near the action can quickly alter corporate thinking: What you see outside your window determines your strategy. That’s why Southwestern Bell decided to shift its headquarters from St. Louis to progressive San Antonio. Likewise, in the ’80s General Motors CEO Jack Smith quickly established a new attitude in the company’s European operation by moving headquarters from an isolated plant site in rural Germany to cosmopolitan Zurich.

* Create separate homes for independent units. The sense of camaraderie that comes from having your own facility is hard to overestimate. Boss Ben Lytle split his financial services firm, The Associated Group, into a series of small Acordia companies; nothing was more important to their success, he claims, than putting each one into its own building. The Virgin Group’s Richard Branson also divides companies when they reach 50 or so people—and religiously establishes the new operation in an entirely different location.

“It’s still typical to view offices as information factories or places that produce data,” designer Duncan Sutherland told Industry Week magazine. “But the purpose of an office is to create knowledge. That is an intellectual process, not a production process!” Make no mistake, creative space management, from the mundane to the grand is corporate strategy.

(C) 1993 TPG Communications.

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