Take Alphabet's Q2 Earnings[1] and note that in the 3 months ending June 30, 2016, Alphabet generated 6.9B$ of free cash flow. That is after all the expenses they could think up to take out of it like building new data centers, offices, snacks, google I/O attendee gifts, whatever. Now divide that by the number of employees, 66,500. That means that there was just over $105,000 per employee in free cash flow. If they spent 5% of that, on a per employee basis, that would give them $1,750 per month for additional office space for that employee. Really posh office space is like $20/sq ft per month so divide that by $20 and you get 87 square feet of really nice office, add that to the 1/4 of a cube that employees currently get and you have 100 sq feet or a 10' x 10' room for each and every employee.
So no, with a 5% hit to their free cash flow they could give every single employee an office, or at least their own 10' x 10' cube, but they they would rather that money sit in cash or cash equivalents earning basically a couple of cents on the dollar.
Since the investment rate of return is about 2% for cash equivalents, and the productivity rate of return would be on the order of at least 5%, you could say they were being dollar wise and productivity foolish.
> Since the investment rate of return is about 2% for cash equivalents, and the productivity rate of return would be on the order of at least 5%, you could say they were being dollar wise and productivity foolish.
Would that increase be in individual productivity or team productivity? I wouldn't be surprised if the aggregate productivity goes down after moving into offices. I would love to read any papers that touch on this, if any research has been done.
I am a fan[1] of open offices, they bring certain efficiencies to team dynamics. If I want to see if someone is busy, I look up/around. If they look like they are in the zone, I send and IM and walk over. Listening in on ambient conversations in my vicinity when taking breaks/waiting for compiles is very useful as well - it's the extended version of the "watercooler effect" where I keep up to date on things I don't directly work on and I occasionally provide solutions before the issue is raised via email or group chat.
1. I am not easily distracted, I can shut out external stimuli. Usually, when I'm focusing on something (work, TV, book), you will have to tear my attention from the activity, and it will take several attempts. To my dismay, I read this makes me more susceptible to hypnosis.
Its both, (individual and team productivity). The challenge is that people are different and their maximum productivity may be in an office or it may be in a small group setting.
One of the startups IBM acquired had some pretty solid data analysis they had done on the issue which was pretty clear for their teams.
My point though was that for high margin "info" businesses (where the product required no raw materials to manufacture) the cost of the office isn't an issue. Reading the recent Instapainting post is a good example, this guy is clearing $400K/year he can give himself a nice office to work out of.
The issue is not force everyone to be in private offices 100% of the time. The issue is give everyone a place to go that's private so when they need to have quiet/alone/distraction-free time, then can have it.
Granted, I generally assume laptops, and many folks probably have larger desktop setups, but it's the choice factor here that is always ignored during optimizations for "efficiency".
Until you can test, say, 3-6 months of privates offices for those who want/need them vs open-plan for everyone, you won't be able to get usable comparisons.
Just the costs of the decor and other accommodations would probably outweigh the costs of having internal walls and maybe a tab bit more floor space (even tho I have a strong suspicion that traditional offices are actually more space friendly).
Cubicles and small team offices do not take much more space, in fact they can often be more space friendly since there isn't that much open space needed in order for the office not to feel like a sweatshop and you also save a lot of space on quiet rooms and meeting rooms.
duct work for ventilating multiple smaller offices properly is problematic vs just having one big open space. I'm not sure what fire codes may have to say about it either. ventilation was one issue that was brought up to me years ago when asked for input on a new office revamp. Somehow the owners and exec team still all managed to get new private offices with ventilation, but the dev team didn't...
I'm almost certain that it's legal in US to have people work in a windowless room, but I doubt that most people would accept it. So you're also restricted in how "deep" your building can be, if you discard the open office plan. Meaning that you'd have to build higher, or have more buildings.
our coworking space is almost all windowless - I don't mind, others don't mind (or are still members, despite it). But we've still got ventilation in each room - it would get unbearable quickly without decent HVAC.
