It is commonly assumed that the critical moment in Google's ascent to global search hegemony came in October 2000, when Larry Page and Sergey Brin first deployed the AdWords system that made their innovation worth an absolute fortune. And this, certainly, was an important step along the way. But there's another persuasive analysis that suggests that in fact, the most significant foundation for the company's success was laid about a month later, when a dilapidated Del Monte canning factory in California was bought by one Steve Jobs.
Jobs spent $5.8m on the building when he needed a new home for Pixar, which he had acquired in 1986 when it was primarily known for its work producing commercials. He said he thought the place was “haunted and creepy,” but it didn’t really matter. Initially, the plan had been to house computer scientists, animators, and managers in separate facilities, but its new owner had other ideas. He configured the old factory as one enormous space, centred on an atrium, which you couldn’t traverse the building without crossing. He put the mailboxes in the atrium. He put the café there. He put the gift shop there. He put the only set of toilets there. And that was about it. All in all, it didn’t seem like the sort of masterplan that would still be making waves more than a decade later.
But – although some were more than a little annoyed to have to traipse to the lobby every time they needed the loo – something remarkable started to happen. Instead of working closely with their immediate neighbours and never getting beyond a nodding relationship with anyone else, Pixar’s employees started to bump into each other. They shot the breeze. Sometimes, the chatter would yield something useful, and one of the participants would head back to her desk with a new idea.
“We wanted to find a way to force people to come together,” Jobs said in 2001, “to create a lot of arbitrary collisions of people.” It worked. “The bathrooms in the centre initially drove us crazy,” Brad Bird, the director of Ratatouille and others, told McKinsey Quarterly later. “But [Steve] realized that when people run into each other, when they make eye contact, things happen.” In 2006, Jobs sold the company he had bought for $10m to Disney for $7.4bn. Over the course of the studio’s history, Pixar films have won 27 Oscars.
It would, of course, be too simple to suggest that a simple trick of building design – a gentle behavioral nudge - was responsible for that extraordinary success. But it wouldn’t be much too simple. For Steve Jobs’ insight about what makes for an effective workplace – which is, basically, the polar opposite of the traditional office – has since been backed up by cold, hard, and remarkably compelling data that ingeniously processes the minutiae of human behaviour and spits out seating plans and break schedules. And now everyone else, from Google downwards and on this side of the Atlantic as well, is playing the same game.
The application of that data is cementing companies like Google at the top of the hi-tech tree. As smartphones and tablets make us all able to truly work from anywhere, other kinds of technology are also playing a part in finally making straightforward what people like Jobs understood all along. In turn, more traditional businesses are being forced to follow Silicon Valley’s lead. And all of this is posing remarkable – and sometimes troubling – questions about how we will work in the future. “There is now a perfect storm,” says Philip Ross, a consultant and author on the future of workplace design who has worked with many major corporations. “We’re seeing the application of these ideas in almost any industry, anywhere. We are just at the inflection point.”
On a recent Monday morning, as office workers across Britain crawled to their desks and wished fervently that it was still the weekend, about 200 freshly tanned employees of Innocent were gathered in an astroturfed canteen, overlooked by a plastic sheep, standing with their eyes closed and remembering their favourite moments from the minibreak they had just spent together in Marbella.
It was the conclusion of the weekly company-wide meeting, which you could have been forgiven for mistaking for a freshers’ week induction session. The canteen, which occupies a double-height space on the ground floor of Innocent’s West London headquarters, was full to overflowing. There were a number of bean bags, and a table football table, and an enormous wooden banana. Nearby a cheerful poster suggested that only grown-ups should use the stairs.
A few minutes earlier, after a man called Tim with a microphone and no shoes had clambered over a picnic table to begin proceedings, several members of the young, implausibly healthy-looking staff had modelled ‘Juicy Water’ bikinis and swimming trunks to the whooping satisfaction of their colleagues. Everyone had waved at the new ‘chief taster’. Also, a man from IT had explained that routine server maintenance would be causing some minor disruption on Thursday. Even he got a cheer. The whole place seemed like a benevolent, juice-obsessed cult, teetering on the border between charming and insufferable; that is, like an Innocent smoothie bottle with desks in it. I couldn’t see anyone over 40. Now, as the brief secular prayer broke up and staffers opened their eyes, they were exhorted to high five a near neighbour. “Let’s go upstairs,” said Will, the grocery controller, “and have an excellent week together!”
All of this may appear indulgent. Imagining the prospect of working there, likeable though it was, I felt roughly as I would contemplating a karaoke session before my fourth drink. But Innocent is not an extravagantly wasteful company; its juice and smoothie business grew by 42 per cent in the UK last year, when it sold 180m bottles worldwide. That vast canteen is an integral part of a culture that Innocent believes is essential to its success, and which closely mimics the Pixar model.
“It’s simple stuff, really,” says John Durham, the company’s head of environment, who was responsible for the bold – and expensive - decision to knock out most of one floor so that the canteen would be more appealing. As he speaks, a number of small meetings are going on around the room, and a couple of staff are chatting by the toaster. “We didn’t put fridges or really nice coffee machines on each floor,” he goes on. “Just instant and tea bags. That was enough to encourage people to come down here. Circulation is important to us – the CEO expects to be interrupted as he walks up the stairs. We get a lot more good business done a lot more quickly than we would in a more traditional set-up.”
To the same end, when it moved into this building in 2010, Innocent broke up departments, instead distributing employees around the building next to people working on entirely different projects. That was an unpopular move at first, even amongst the true believers who dominate the place. “We were breaking linkages from the old office,” says Durham, “and the new ones needed time to form. But now it really works. People have a whole other network. The principle is: it’s better to have to get off your backside and go and have a conversation than it is to send an email.”
Innocent is still relatively unusual here – and its approach, it should be noted, is not universally beloved: one disgruntled former employee who worked there for six months told me by email that the environment was ‘all a bit fake and forced’, and bemoaned average pay and hours despite which ‘people at the bottom acted as if they were working for a charity’. On the other hand, the capacity to make workers enthusiastic without much regard for their remuneration might be considered a powerful argument for any business strategy.
In the US, certainly, it’s increasingly commonplace to believe that what John Durham calls ‘circulation’ makes a significant difference. Consider, among many other examples, the new chief executive of Yahoo, Marissa Mayer, who caused a stir when she stopped employees working from home. “People are more productive when they’re alone,” she explained, “but they’re more collaborative and innovative when they’re together. Some of the best ideas come from putting two different ideas together.”
A study released last week seems to support that view. Participants said that the space to focus was important, but overall the workplaces most prized by employees were those which gave them a range of options as to how and where to work – the ones where they bumped into each other, too. Gensler, the architects behind the study, suggest that achieving that mix will necessitate a radical overhaul in workplace design. The company’s executive director, Diane Hoskins, said: “I don’t think it would be going too far out on a limb to say we are at the beginning of a new era.”
In the vanguard is Google’s new 1,000,000 square foot campus in San Francisco, where every employee is within a two and a half minute walk of every other one. (I find this mindboggling. I swear it takes me about that to walk around the Independent office, which is rather smaller than a million feet.) The company is obsessed with serendipity: that is, the production of new ideas by happy accident. But, like Pixar, its more important obsession is with what it takes to make those serendipitous moments more likely. Famously, many of its most successful innovations – like Gmail, Google News, and Google Earth – are the products of engineers’ ’20 per cent time’, the day every week set aside to work on pet projects that fall outside of their job description. And, as Philip Ross puts it, “for 20 per cent time, you need 20 per cent space.”
In Britain, one evangelist for the company’s approach is Lee Penson, the man who designed its offices in Covent Garden. “This sort of design makes a huge difference on a number of levels,” he said, when I visited him in his own studio (featuring an electric guitar, a vintage record player, and a curious hula hoop with abdominal stimulators). “Companies like Google realise that a boardroom doesn’t have to have a board room table. They realise that a comfortable chair completely changes the way you behave. It’s like I always ask: why are the offices the really awful spaces when the really nice spaces are the bars and restaurants where we spend a fraction of our time? It should be the other way around.”
In Penson’s view, an office that feels spacious and relaxed encourages better work. Given an unlimited budget, the only change he would make to his own set-up is to redo his meeting room as a lounge. “It just loosens the hierarchy,” he says. “We’re a family here. And a business the size of Google should see themselves as a family too. They do, and that’s good, but a lot of other organisations don’t.”
On a recent visit to the search giant’s Covent Garden headquarters (which Penson, rather alarmingly, had lobbied to call a ‘Unification Unit’), I was greeted by Claudine Beaumont, a PR manager sporting a pair of Google Glasses. As she introduced herself, a dog ambled past, heading in the direction of the canteen, where free food (healthy options encouraged) draws just about every employee for at least one meal a day. There are snugs carved into the walls, and a library, and low-slung garden chairs perched on the terrace. People are typing or talking in all of them. “I do still spend most of my workday at my desk,” says Beaumont, whose job is driven by the phone and email more than most others at the company, for obvious reasons. “But actually it’s really helpful to have the chance to move around. You work better.”
If Steve Jobs was willing to back a hunch and see it confirmed in anecdote, Google has taken a rather more empirical approach to the construction of its empire, primarily through its People Analytics team – said to be the world’s only data-driven human resources department. Amongst that group’s innovations are an algorithm that predicts which employees might soon be looking to leave, allowing managers to intervene before they do so; the PiLab, which runs controlled experiments to see which environmental tweaks – smaller plates, bigger armchairs – make the biggest difference; and Project Oxygen, which statistically identified eight key characteristics of good managers and used them to figure out who to promote. Anyone who scoffs at this as managerial mumbo-jumbo should consider the fact that the average Google employee generates $200,000 in profit for the company each year.
Even if they don’t have quite those resources to play with, other businesses that wish to follow the same path now have a remarkably powerful set of tools available to do it. The experts call their emerging field sociometrics: that is, the study of how individuals and groups relate to each other. In an era of big data, their approach is almost unique in its ability to extract useful information from simple human interactions. Sandy Pentland, a pioneering academic at MIT’s Human Dynamics Lab, calls his work ‘reality mining’. “Data mining is about finding patterns in digital stuff,” he told Forbes. “I’m taking data mining out into the real world.”
Along with his former PhD student Ben Waber, Pentland is one of the founders of a company called Sociometric Solutions, which has had eyepopping results in finding ways to make offices more efficient. Among Waber’s starry clients, the most striking case is probably that of Bank of America, which asked him to investigate one particular strand of their business. “They had noticed that their call centres across the country had very different levels of performance,” Waber said on the phone recently. “The best performers were completing their calls in half the time. So they thought that culture might have something to do with it.”
BoA is not the sexiest workplace in the world, but Waber took to his task with aplomb. He had about 90 workers don tracking devices, no bigger than a normal work ID card, which harvested a remarkable – frightening, really - range of data about their behaviour: over 100 pieces of information a minute that track things like their movements, their body language, and the tone of their conversations. The call centre workers wore these tags for a few weeks, and then Waber and his colleagues examined the results. What they found was compelling: more than any other single factor, the strongest predictor of success was found in the workers’ level of social engagement. Even call centre workers – whose working days are not generally blessed with the same opportunities for creativity as their counterparts at Pixar – did their jobs better when they were talking to people.
In the light of this evidence, Waber recommended some changes. Bank of America was staggering its workers’ breaks through the day; instead, he suggested that groups take them at the same time. Three months later, those groups were 18 per cent more cohesive, according to the tracking devices. And – more importantly for BoA – they were 10 per cent more productive. The bank estimated that a wider rollout could save about $15m a year.
There are, says Waber, many other examples of how useful this data can be. Workers who eat at tables designed for 12 tend to be more productive than those who use tables for four. Cubicles with blinds that can be lowered when the occupant needs to talk can also make a difference. “Even just a coffee machine is very important,” he says. “I want to put wheels on it and I want to situate it in different parts of the office, and I can measure very accurately how it effects collaboration. As an organizational tool the physical space is much more important than anything else. The companies who don’t realize this are going to get crushed.” Sure enough, Sociometric Solutions has just got its first British client, a retailer that wants to use its trackers to teach its least successful sales assistants the habits of its best ones. Considering the prior evidence, I’d bet that the people who talk to each other are at the top of the leaderboard.
Of course, this is a fairly new discipline, and there are limitations and caveats galore. To begin with, the experiments only go so far: as with economics, the one thing the researchers lack is a pure petri dish where the will to test is not compromised by the bottom line. Without that sort of method, it’s sensible to be skeptical about the suggestion that tricks like reorganizing the space are necessarily more powerful than balder financial incentives. “There are a lot of experiments I’d like companies to run,” says Ray Fisman, director of Columbia Business School’s Social Enterprise Programme and co-author, with Tim Sullivan, of The Org: the Underlying Logic of the Office. “They never run an experiment where they say, fine, perks probably have gross benefits, but they also cost a hell of a lot of money, so let’s just shut down the Foosball and see what happens when we pay you $10,000 more a year. It’s not crazy to imagine that in a well-meaning way they are throwing money down the drain.”
Sullivan, editorial director of the Harvard Business Review Press, strikes a similarly cautionary note, drawing a distinction between changes that make a workplace more efficient and those which are mostly to do with retaining employees tempted by the trampoline in the foyer down the road. “As an employee I think it’s all fantastic,” he says. “And there is some evidence for that serendipitous theory. But there’s not a lot of evidence to support the idea that happier workers are more productive. It’s making small steps towards a concrete goal that makes workers feel satisfied. Not Foosball.”
Besides, there are still plenty of successful businesses with a cheerful indifference to the happiness and social welfare of their employees. One entertaining example is Dish Network, a US satellite TV provider of almost legendary unpleasantness, which was voted the worst company to work for in America last year.
Its founder, Charlie Ergen, is renowned for his obsessive attention to detail and penny-pinching tendencies. In sharp contrast to Google’s work-how-you-want regime, Ergen had his 26,000 employees badge in when they arrived at the office until he realized that some were having their colleagues do it on their behalf, at which point he switched to fingerprint scanners. Businessweek magazine reported that he publicly berates senior executives who are late no matter what time they left the night before, and once asked employees to stay in nearby hotels at their own expense to avoid being kept away from the Denver, Colorado HQ by heavy snowfalls. There are no company credit cards. Nobody works from home. There are, it seems safe to assume, no bean bags or giant wooden bananas. And yet last year Dish had revenue of $14.3billion. Its shares rose by more than 30 per cent. And thanks to that approach, Gergen’s net worth was estimated at about $11 billion.
Then there are the companies which have, over the years, attempted to implement some variation of the Steve Jobs plan – and failed spectacularly. The most notorious is the US advertising agency Chiat Day, which went through an ill-fated upheaval when it tried to do away with cubicles and desks in favour of absolute freedom and flexibility. The problem was, it was 1993, and blackberries were still nothing but a fruit: the technology simply didn’t exist to support founder Jay Chiat’s dreams of a virtual office. People often couldn’t find each other. One employee was known for trundling around the building with a little red wagon laden with papers; others, desperate to secure one of the few useable desks, resorted to sending their assistants in to claim them at 6 in the morning. Within three years, the grand experiment had been scrapped, and Chiat himself had sold up and left.
Even today, as the means of executing such a strategy properly become more and more widely available – and the models for how to do it well proliferate – the missteps are probably more common than the success stories. In the course of reporting this piece, I lost count of the number of times I came across businesses that had installed a slide and declared it proof of their leap towards modern, efficient working. Peer One Hosting, a web company based in Southampton, won coverage in a number of papers when it bought one earlier this year. “It is also part of the interview process,” explained lead designer Sarah O’Callaghan, in remarks that will have sent chills down the spine of many introverted prospective software engineers. “If they don’t go down it, they are not buying into the culture of the business.” It’s a terrifying, Brent-ian image, and it raises the question: what must it be like to be made redundant at the juice bar?
The problem here is a confusion between superficial trinkets and the sort of deep structural changes that make altered working practices inevitable. “We put a slide in at Red Bull,” says Simon Jordan, founder of architecture and interior design practice Jump Studios. He’s speaking in a rather beautiful inflatable meeting room that stands, quivering slightly, in the middle of his office. “That was the first one ever. But it was part of the whole theory of circulation we had there. Now it’s a bit cringing. People find it hilarious to say, what if we had a telephone conferencing space but it’s a red telephone box? We need to get away from those one liners, because you have to walk past the red telephone box every day.”
There are bigger issues than these mere matters of aesthetics. The data-driven approach used by Waber and co is powerful, but it raises some questions. How closely are we comfortable with being monitored by our bosses? Is it appropriate for a business to tell its staffers that they need to socialize more, and that if they fail to do so they aren’t doing their jobs properly? What if someone figures out a way to tell if an employee is in poor health?
Sociometric Solutions have measures in place to prevent their data being used to victimize the vulnerable. Anyone who doesn’t wish to take part can wear a dummy tag so that their supervisors are none the wiser. But rival companies are bound to spring up, and some businesses may carry out their own research. We’ve got used to the idea that our bosses can read our email if they choose to; it’s not impossible to imagine that we might have to make the same adaptation to their knowledge of our toilet habits, taste in coffee and conversations. “People should be concerned about that,” says Waber. “We have to get legislation around this, because the data that’s being collected, it’s predictive of a whole host of things. If we don’t fix this now in ten years someone will screw up and do something really bad.”
Such objections do not seem likely to halt the march of progress. So what comes next? Well, there are plenty of possibilities. In 1989, the urban sociologist Ray Oldenburg conceived of our lives as being divided between home, work, and the ‘third space’ where we relax and build communities; as technology makes us more flexible, Simon Jordan suggests that the next step could be the development of ‘permeable buildings’, where public and private spheres collide. A business might, for example, open up its ground floor as a piazza, or let parts of their offices act as thoroughfare between public amenities. “It’s already happening on the internet,” Jordan says. “Companies should embrace it. They should be more open, more transparent, more engaging.”
“Third space is fascinating, and it’s growing remarkably,” agrees Phillip Ross. He talks about the polycentric city – a model that would kill the classic ‘central business district’ by allowing people to work in hybrid spaces much nearer their homes. “The CBD is based on a notion that distance is expensive,” he says. “With the internet that’s dead. So that reinvents how work takes place, and where.”
This, it should be noted, somewhat contradicts the idea of a workplace where people bump into each other all the time. But Ross has an answer for that, too, in the unnerving form of ‘smart offices’ that promote serendipity in a different way: having built-in technology that detects what you’re working on and links you up with colleagues who might have something to add.
It’s another piece of an extraordinary vision that will certainly make us more productive. As to the other question, easily forgotten, of whether it will make us happier - well, that’s harder to say. There’s something to be said for the familiar, after all. “I like my cubicle,” says Tim Sullivan. “I sit around colleagues I happen to like. And we have an espresso machine.”