Next Generation Workplace

Center for Information Systems Research Sloan School of Management Massachusetts Institute of Technology RESEARCH BRIEFING Volume IX Number 9B September 2009 THE NEXT GENERATION WORKPLACE Microsoft’s New Workplace Eric van Heck, Visiting Scholar, MIT Sloan Center Located at Amsterdam Schiphol Airport, Microsoft’s for Information Systems Research and Professor, new building illustrates some key characteristics of Rotterdam School of Management, Erasmus University the next generation workplace.2 Microsoft employees arrive for work at all times of the day. De- In 2009, for the second consecutive year, the Great pending on their activities, they choose an area of Place to Work Institute awarded Microsoft the Best the building in which to work. Some will meet Workplace in Europe Award in the Best Large customers in the video conference rooms or the Workplaces category. This award honors companies trendy café to discuss new products and services, that invest in people by providing exceptional work while others are preparing presentations in closed environments, practices, benefits, and recognition. cubicles. One can have brainstorming sessions with Competing with 1,350 companies, local Microsoft colleagues in the open-air terrace garden, while the offices across Europe won awards in all 16 coun- auditorium provides space to present work to larger tries, with first-place awards in six countries. The audiences in an interactive way. No employee—not new Microsoft building in the Netherlands is seen as even the general manager of Microsoft a flagship example of how Microsoft is creating the Netherlands—has a dedicated office. next generation workplace for its employees. Microsoft’s new building, with its abundance of What did Microsoft do to win? What are the charac- windows, reflects the transparency that the em- teristics of best workplaces? What are the lessons ployees want to radiate to their colleagues and learned from Microsoft’s experiences? We address visitors. The new building also features technology those questions in this briefing. that ranges from the latest collaboration tools to a There were three main reasons Microsoft initiated a cooling system that provides lower CO2 emissions. new way of working. First, Microsoft recognized Collaboration technologies include Microsoft Office that an increasing part of current knowledge work is Live Meeting—an online meeting space where par- no longer traditional office work—it is about gener- ticipants can deliver a presentation, work together on ating new ideas, convincing other people, combining a document, or collaborate on whiteboards; Microsoft different perspectives, and producing new knowl- Office Communicator—a communication platform edge. Next generation knowledge workers are seek- using instant messaging (IM), voice over IP, desktop ing inspiration, flexibility, and the use of the newest sharing, and video; Microsoft RoundTable—a tool collaboration tools to create knowledge that has for 360-degree video conferencing; and Microsoft value and provides sustainable results. It’s useful to SharePoint—an integrated platform of server capa- think about their new workplace requirements. bilities such as search, web site design, and business Second, Microsoft recognized that their operating intelligence. model was changing from traditional software sales Our research examined the impacts of this new to a more service and customer oriented model. This workplace design on employee working styles and operating model requires new forms of performance. We surveyed Microsoft employees in collaboration, teamwork, and customer relationship 2007, before they moved to the new building, and management. Third, Microsoft recognized that business growth depends on the personal growth of People Ready: Inside Your Company is a Powerful Force employees who are empowered with the tools and (February, 2006). technologies that drive the business forward.1 2 Microsoft The Netherlands (NL) is a medium sized subsidiary of Microsoft Corporation and part of the Microsoft European, Middle East, and African (EMEA) 1 For more details see the Microsoft Whitepapers: Digital region. Microsoft NL was Microsoft’s “Subsidiary of the Work Style: The New World of Work (May, 2005) and Year” in 2007. © 2009 MIT Sloan CISR, van Heck. CISR Research Briefings are published monthly to update MIT CISR patrons, sponsors & other supporters on current research projects.

CISR Research Briefing, Vol. IX, No. 9B Page 2 September 2009 again in 2008, after they had been in the building for The workplace changes led to changes in three six months. We found that the move to the new working dimensions that contributed significantly to workplace resulted in more mobile working styles, worker productivity: (1) Job competence, the sense higher reported flexibility, and a small increase in that employees felt better equipped to do their jobs worker productivity. We also measured changes in after moving to the new workplace. Microsoft job satisfaction but this measure was very high in motivated and trained their employees in such a way 2007, so the change from 2007–2008 was negligible. that they felt better equipped to do their job after moving into the new workplace. (2) Extrinsic job Different Digital Working Styles motivation, which reflects forces external to the Every knowledge worker has a different working individual that affected the employees’ level of style depending on his or her individual approach to effort; and (3) interaction outside the organization, work, the type of job, and the availability of which suggests that the building as a meeting place collaboration tools. In this research we considered (instead of an office space) led to more frequent and one aspect of working style: mobility. We charac- better interactions with customers, partners, and terized a person’s mobility on a scale of 1 (desk suppliers. bound) to 7 (very mobile). Figure 1 shows how The level of innovativeness very slightly improved. employees described their mobility in 2007 and Microsoft would like to see more of an impact on 2008. They have become less office bound; they innovativeness and is working to increase it. work in more locations and at different times; and they use more mobile technologies. Trust and Empowerment Are Critical Improved Individual Performance Our broader study (see the Appendix describing the study) indicated that a crucial factor for adopting a Although worker performance is crucial for overall more digital working style and creating higher levels company performance, improving individual perfor- of individual performance is the way top managers mance is not an easy task.3 Our research examined themselves use the next generation workplace: four dimensions of knowledge worker performance: “Practice what you preach.” If top managers advo- (i) flexibility; (ii) productivity; (iii) satisfaction; and cate this new concept but stay in their traditional (iv) innovativeness. offices (usually on the top floors of a building), the Flexibility refers to the work one has to do, where next generation workplace will not be easily adopted and when the work is done, and how easy it is for by the rest of the company. Another factor that members of a team to fill in for one another. Survey resonates in all our empirical results is the empower- analysis indicated that Microsoft’s adoption of the ment of employees.4 Managers need to trust their next generation workplace has had a dramatic employees and empower them by giving them first, impact on flexibility. Specifically, the new clear objectives and decision making tools, and then workplace facilitates team work because it is easier allowing them the freedom, flexibility, and discre- to integrate work process modules that are executed tionary power to make their own decisions and by other (virtual) team members. However, this execute operations. flexibility is restricted by traditional income and promotion structures that evaluate individual Appendix performance, rather than team performance. Specific This research briefing is based on extensive research contractual provisions can also inhibit flexibility. on workplace changes performed from 2007 to 2009 Interestingly, women at Microsoft NL reported in the Netherlands. The research was sponsored by greater increases in flexibility than men. De Unie, Microsoft, Rabobank, and Sogeti and was performed by researchers and master students of The results at Microsoft NL show that adopting the Rotterdam School of Management, Erasmus Univer- next generation workplace also had a significant im- sity. The research team collected data via interviews pact on knowledge workers’ sense of their individual and online surveys. They also analyzed secondary productivity. Figure 2 provides an overview of material such as white papers, web sites, and internal significant changes in working dimensions related to the productivity of Microsoft’s knowledge workers. 4 Lodewiek Jansen, Trust and empowerment: affecting employee satisfaction and productivity of the IT related 3 See, for example, research at the Institute for Innovation knowledge worker, MSc Thesis, Rotterdam School of & Information Productivity (www.iii-p.org). Management, Erasmus University, February 2009.

CISR Research Briefing, Vol. IX, No. 9B Page 3 September 2009 company documentation. Four online surveys were (N=191). The fourth online survey was done at conducted to measure the perceptions of knowledge Sogeti where the relationship between trust, empow- workers and their work dimensions. The first online erment, work, employee satisfaction and produc- survey was conducted at the workers union De Unie tivity was investigated (N=1294).5 after they moved into a new building (N=128). The second online survey was conducted at Microsoft. Employees submitted a survey before (N=268) and 5 More details and research results: Van Baalen et al. after (N=293) moving to the new building with 117 (2008), Worlds of Work: Results from the New Worlds of respondents participating in both surveys. The third Work Research Report 2007, May 2008; and Van Baalen survey was conducted at Rabobank, a global triple et al. (2009), Worlds of Work: Results from the New “A” bank headquartered in the Netherlands, where Worlds of Work Research Report 2008, September 2009. two departments moved into new work spaces Figure 1: Percentage of Microsoft NL employees that adopted a specific digital working style (1=deskbound; 4=mobile within building; 7=highly mobile) before (2007) and after (2008) moving into the new building. Figure 2: Work dimensions that significantly impacted productivity (N=117). Work Dimension Level of Productivity 2007 Level of Productivity 2008 (M = 3.99) (M = 4.08) Job Competence 4.27 4.31 Extrinsic Job Motivation 3.57 3.61 Interaction Outside 4.25 4.36 Organization

About the Center for Information Systems Research CISR MISSION CISR RESEARCH PATRONS CISR was founded in 1974 and has a strong track record The Boston Consulting Group, Inc. of practice based research on the management of infor- BT Group mation technology. As we enter the twenty-first century, Diamond Management & CISR’s mission is to perform practical empirical re- Technology Consultants search on how firms generate business value from IT. Gartner CISR disseminates this research via electronic research IBM Corp. briefings, working papers, research workshops and exec- Microsoft Corporation utive education. Our research portfolio includes: Tata Consultancy Services Limited Achieving Superior Business Value from IT— CISR SPONSORS A Single Framework of What Matters Communicating Effectively about IT Value Aetna, Inc. Pepsi Americas, Inc. Maturing and Globalizing IT Governance Allstate Insurance Company PepsiCo International Australian Govt., DIAC Pfizer, Inc. Managing Business Experiments: ANZ Banking Group (Australia) PNC Global Investment Web-based Innovations in Collaboration Banco Bradesco S.A. (Brazil) Servicing Learning from IT Projects: Banco Itaú S.A. (Brazil) Procter & Gamble Co. Effective Post-Implementation Reviews Bank of America Raytheon Company Benchmarks for IT Decision Making Biogen Idec Renault (France) Leading the Transition to the Digitized Platform BP Standard & Poor’s Designing and Managing Shared Services Campbell Soup Company State Street Corporation Managing the Information Explosion Canadian Imperial Bank of Sunoco, Inc. Commerce TD Bank Making Sense of “the Cloud” CareFirst BlueCross BlueShield Tetra Pak In July of 2008, Jeanne W. Ross succeeded Peter Weill Caterpillar, Inc. Time Warner Cable as the new director of CISR. Peter Weill became chair- Celanese Trinity Health man of CISR, with a focus on globalizing CISR re- Chevron Corporation Unibanco S.A. (Brazil) search and delivery. Drs. George Westerman, Stephanie CHRISTUS Health VF Corporation L. Woerner, and Anne Quaadgras are full time CISR Chubb & Son Wal-Mart, Inc. research scientists. CISR is co-located with MIT Commonwealth Bank of Australia World Bank Sloan’s Center for Digital Business and Center for Credit Suisse (Switzerland) Collective Intelligence to facilitate collaboration between CVS Pharmacy, Inc. faculty and researchers. Det Norske Veritas (Norway) DHL Global Management GmbH CISR is funded in part by Research Patrons and Spon- (Germany) sors and we gratefully acknowledge the support and con- Direct Energy tributions of its current Research Patrons and Sponsors. Embraer – Empresa Brasileira de Aeronautica S.A. (Brazil) CONTACT INFORMATION EMC Corporation Center for Information Systems Research ExxonMobil Global Services Co. MIT Sloan School of Management Fidelity Investments 5 Cambridge Center, NE25, 7th Floor Grupo Santander Brasil Cambridge, MA 02142 Guardian Life Insurance Company Telephone: 617-253-2348 of America Facsimile: 617-253-4424 Hartford Life, Inc. http://mitsloan.mit.edu/cisr/ HBOS Australia Intel Corporation Jeanne Ross, Director jross@mit.edu International Finance Corp. Peter Weill, Chairman pweill@mit.edu Johnson & Johnson Chris Foglia, Associate Director cfoglia@mit.edu Liberty Mutual Group George Westerman, Res. Scientist georgew@mit.edu Marathon Oil Corp. Stephanie Woerner, Res. Scientist woerner@mit.edu MetLife Anne Quaadgras, Res. Scientist aquaad@mit.edu Mohegan Sun Jack Rockart, Sr. Lecturer Emeritus jrockart@mit.edu NASA Chuck Gibson, Sr. Lecturer cgibson@mit.edu Nomura Research Institute, Ltd. Tea Huot, Sr. Admin. Assistant thuot@mit.edu Origin Energy Erika Larson, Admin. Assistant elarson1@mit.edu Parsons Brinckerhoff

Next Generation Workplace

by Eric van Heck on Nov 12, 2009

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Next Generation Workplace — Document Transcript