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Special Feature
Part of a ZDNet Special Feature: How to Optimize the Smart Office

Optimising the smart office: A marriage of technology and people

As employees become increasingly 'plugged in' to their workspaces and interact with AI-driven systems as part of their jobs, businesses need to ensure that humans are not overwhelmed by all the technology.

We've all suffered bad days at the office. You forgot your RFID pass for the door-entry system and had to call reception to gain access. Your favourite hot-desking spot was occupied, the office was too cold, and the strip-lighting above the spare desk you finally found was too bright. Later, you struggled with a meeting room's audio-visual equipment before an important video-conferencing session, and the resulting stress meant you didn't perform well. Towards the end of a long day, at short notice, your boss requested strategic ideas for an upcoming planning meeting, but by this time you were tired and lacked inspiration. On the commute home, nursing a headache, you seriously thought about looking for a different place of work.

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Thankfully, not every office actively conspires to ruin your day -- at least, not every day. But the fact is that the design and management of workplaces has a profound effect on the productivity, creativity and engagement of those who work in them. The above example shows that even a modern office equipped with up-to-date technology can deliver an unproductive and unsatisfying work experience. If repeated too often, this could result in increased staff turnover and affect a business's bottom line.

So, can the brave new world of the 'smart' office, bristling with IoT sensors and AI technology, help to improve things? Or is the 'smart' component as much to do with creating a congenial and well-managed work environment as it is with deploying cutting-edge technology?

Workplaces today

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A snapshot of the current state of play in the workplace was provided by Microsoft in its recent Digital culture: Your competitive advantage report, which canvassed opinion from 20,476 workers in large (250+ employees) and small (50-250 employees) businesses across 21 European countries. Microsoft sought information on the technology in use in these businesses, and workers' attitudes to their jobs and their performance.

"Impactful digital transformation isn't really about IT. It's about people. This is where company culture comes in," said the report. A key concept is that of 'digital culture', which the report defined as "Shared, underlying, and deep-rooted basic assumptions, values, beliefs, and norms that characterize how an organization encourages and supports technology use to get work done in the most effective way".

Microsoft examined productivity (work per unit output), innovation (a combination of creativity and collaboration) and empowerment (feeling valued, making a difference and able to make strategic contributions) in businesses classified as having 'weak', 'average' and 'strong' digital cultures. Here are the results:

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Data: Microsoft / Charts: ZDNet

What's noticeable is that, across all three metrics, the stronger the digital culture the lower the percentage of employees who feel unproductive, lacking innovativeness and short on empowerment. A strong digital culture is clearly a positive thing, but there's room for improvement: the percentages of employees in strong-digital-culture businesses who rate themselves highly on empowerment (47%), innovativeness (39%) and -- in particular -- productivity (22%) might be expected to be higher, for example.

Management consultancy McKinsey has recently suggested that productivity benefits from digitisation have yet to materialise at scale for several reasons, including "lag effects due to the need to reach technological and business readiness" and "costs associated with the absorption of management's time and focus on digital transformation".

Another KPI Microsoft examined was engagement, or 'flow' -- the ability for workers to focus on the task at hand and deliver a better end result more efficiently. Overall, just 20 percent of respondents felt highly engaged at work, but there was a fourfold difference between engagement levels in businesses with strong versus weak digital cultures. Also, adding more technology to the mix increased engagement in strong digital cultures, but not in weak ones. Simply adding more tech doesn't seem to be enough -- a receptive digital culture is also essential.

The global workplace

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Engagement was the subject of a comprehensive 2016 report by US office furniture company Steelcase, entitled Engagement and the Global Workplace. Based on an online survey of 12,480 office workers from 17 countries in four continents, the report used measures of employee engagement and workplace satisfaction to examine "worker and organisational wellbeing".

Participants (53% male, 48% female) were from companies with 100 employees or more, in 12 broad industry sectors: mining/gas, industry, energy, water supply, transportation, telecommunications, retail, hospitality, banking/finance, business services, IT and public sector.

Steelcase distilled the wealth of detail generated by the survey into five key findings:

  • Employee engagement positively correlates with workplace satisfaction

As you might expect, employees who are most satisfied with their workplace are also the most engaged. These are "people who come to work energized, ready to generate new ideas, create new strategies and make meaningful progress each day," as the report put it. However, only 13 percent of Steelcase's respondents fell into this category: the majority (66%) were either neutral (29%), somewhat (26%) or highly (11%) dissatisfied/disengaged. This suggests there's plenty of scope for improvement in all aspects of the workplace -- the physical environment, the technology, and management practices.

  • Engaged employees have more control over their experiences at work

Flexibility is a key component of engagement, with 88 percent of highly engaged employees reporting the ability to choose where they work depending on the task at hand, compared to 14 percent of highly disengaged workers. Work can be done at a desk (or 'primary individual workspace'), in other parts of the office (such as huddle rooms or breakout areas) or in remote locations supported by mobile technology. Steelcase also found that employees who could choose their office furniture were more likely to be satisfied with other workspace attributes such as room temperature, ambient noise levels, ventilation and technology equipment. So flexibility over desk choice seems to be a proxy for a progressive management culture.

  • Fixed technology exceeds mobile 2:1

Employer-provided phones and computers were predominantly desktop devices (86% and 80% respectively) rather than mobile ones (39% and 39%), while only 14 percent of Steelcase respondents had tablets. The majority (55%) of respondents never worked remotely, but twice as many of the 36 percent that sometimes did were highly engaged/satisfied with their working arrangements. Again, flexibility and control tends to breed satisfaction and engagement.

  • Traditional workstyles persist

Although there's much variation between countries, most employees in Steelcase's survey worked in either individual (23%) or shared (37%) private offices. A third (33%) worked in assigned spaces in open-plan offices, while just 8 percent were nomadic and regularly worked in different spaces around the office. Nearly half (46%) of office environments were a combination of open plan and individual offices, 31 percent were individual offices only, while 23 percent were completely open plan. Predictably, higher-ranking employees were more likely to have a private office, and be more satisfied with their overall work environment.

  • Cultural context influences engagement levels

Steelcase's survey revealed wide variation in employee engagement and satisfaction levels by country: India was way out in front with 53 percent engaged/satisfied and 20 percent disengaged/dissatisfied, while at the other end of the scale France reported almost the mirror image: 20 percent engaged/satisfied and 54 percent disengaged/dissatisfied. The general pattern was one of positive attitudes in emerging economies versus low engagement and satisfaction in established economies with "industrial and administrative traditions that often include hierarchical styles and workplace norms".

Workplaces in an IoT world

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Memoori is a Stockholm-based consultancy company providing independent market research, business intelligence and advice on smart building technologies. For the company's October 2017 report entitled The Future Workplace: Smart Office Design in the IoT Era, 500 office users in North America were asked about the level of technology in their workplaces and how they felt this affected their ability to work productively.

This report is well worth a read for its extensive background information on the various aspects of office productivity (efficiency, creativity & innovation, comfort, health & wellbeing, focus, recruitment & brand alignment), evolving office trends (employee monitoring, BYOD, biophilia) and emerging office trends (hot desking, co-working, remote working, wearables & implants, virtual workspaces, 'the analogue counter-revolution'). However, we'll restrict ourselves here to some of the headline survey findings.

Office layout

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Image: The Future Workplace: Smart Office Design in the IoT Era (Memoori, 2017)

Survey respondents occupied a fairly even spread of office layout types (39.6% open plan, 34.6% cellular and 25.8% somewhere in between): in open plan offices, 71.4 percent felt that this layout improved productivity, compared to 44.2 percent who worked in cellular office cubicles; conversely, only 12.2 percent felt that open plan hindered productivity, compared to 30 percent of cubicle-dwellers. These results support "the increasing trend for companies preferring open plan over cellular", but also suggest that the optimal solution for most businesses is probably some sort of multi-space layout.

Office lighting

Office lighting doesn't just let you see what you're doing: it can have significant effects on the human circadian system, on employee wellbeing and on productivity. Although two-thirds (65%) of Memoori's respondents reported no perceived effect of lighting on their ability to concentrate, when queried about specific types of lighting a clear pattern emerged: less than one in ten (9.7%) of respondents in offices with halogen/fluorescent lighting said it increased their concentration, compared to 40.2 percent working in 'abundant natural light', followed by LED (32.1%), energy-saving bulbs (25.9%) and incandescent bulbs (21.3%). Halogen/fluorescent was also the only lighting type with a higher percentage (26.5%) of respondents feeling it hampered rather than increased concentration (9.7%).

Office temperature

Heating, ventilation and air-conditioning (HVAC) systems can be the bane of office life, but air quality is vital to employee health, comfort and productivity. Memoori's survey concentrated on office temperature, with just over half (53.5%) of respondents feeling that it was 'just right', a third (31.2%) finding it too cold and 15.3 percent too hot under the (white) collar. Only 20.6 percent of offices used automated temperature controls, while 28 percent used one manual thermostat for the entire workplace; individual temperature controls for each desk or cubicle were available for just 3.6 percent of respondents. The survey also found that employee responses to office temperature varied by both gender and age, suggesting that, to keep the majority of the workforce happy, individual environmental controls are the preferred solution.

Office technology

Following a discussion of emerging office trends such as hot-desking, co-working, remote working, wearables and implants, and virtual workplaces, Memoori's report considered 'the analogue counter-revolution' -- that is, "the basic human need for 'realness' in our increasingly smart, high-tech world". To explore this, survey respondents were asked whether their productivity would be improved by having more or less technology in the workplace.

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Image: The Future Workplace: Smart Office Design in the IoT Era (Memoori, 2017)

It turned out that 60.3 percent of respondents felt that their productivity levels had 'nothing to do' with the amount of workplace technology. Still, nearly four times as many (31.3%) felt that more tech would boost their productivity compared to less tech (8.4%). For Memoori, the conclusion was that "the technological developments that have already taken shape are not having the impact they promise," and that "As technology continues to improve, the IoT sector will need to do much more to win over their important end user groups."

A view from London...

British Land and Worktech Academy surveyed 1,063 office workers in London in 2017, including 291 with decision-making involvement in their organisation's location, as part of a study entitled Smart Offices: A 2017 Vision for the Future. Ninety percent of decision-makers saw a business reason for working in a smart office and a similar number (87%) would require smart office tech in their next relocation. Benefits were expected in several areas: productivity; wellbeing; appeal to new talent; and employee loyalty.

The most popular smart office features across all respondents were: self-adjusting lighting and window shades; personalised heat and light settings that follow you around the building; circadian lighting systems that mimic natural daylight; and heating/lighting systems that adjust automatically according to weather and occupancy. Decision makers were also interested in: an app for booking desks and meeting rooms; meeting rooms where screens work seamlessly with personal devices; and desk or room sensors that track usage for efficiency monitoring.

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Image: Smart offices: A 2017 vision for the future (British Land/Worktech Academy)

In a separate white paper, British Land outlined its vision of 'the smart interaction' of intelligent building-management systems and IoT devices, all running on open internet protocols and generating copious amounts of useful data, accessible to analytics systems via APIs. "By 2020, we can expect that the smart devices and wearables that people bring to work will no longer be in search of a smart building to interact with," said the report. "The physical infrastructure of the building and what people themselves carry or wear will be part of one complete smart system that both generates and acts upon all kinds of data."

Technologies in the future workplace

Which new and emerging technologies might underpin the office of the future? A good place to look is our old friend the Gartner Hype Cycle, which, for the Digital Workplace, looks like this:

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Image: Gartner

As in most Hype Cycles, the action is concentrated in the early stages: 24 of the 40 technologies listed (60%) are either 'On the Rise' or 'At the Peak' of Inflated Expectations. Only seven technologies are currently considered to be 'Climbing the Slope' to high-growth adoption, while speech recognition is the sole one 'Entering the Plateau'. In the 5-10-year timeframe, according to Gartner, transformational digital workplace technologies will include: augmented reality; iSaaS; IT service catalogs; employee recognition and reward schemes; virtual assistants; content services; digital ethics; smart workspaces; conversational user interfaces; embedded analytics; design thinking; bots; workplace ethnography; content integration services; and worker engagement platforms.

Commenting on the Hype Cycle, Matt Cain, vice president and distinguished analyst at Gartner, said: "Humans will still be at the center of work, even as intelligent software and machines become our co-workers. CIOs must anticipate how trends in business, society, technology and information will converge to change where, when, why and with whom we work."

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The effect of AI and robotics on workplace culture was the subject of a recent study by Pega and Marketforce, entitled The Future of Work. The survey covered 845 senior executives in 11 industry sectors worldwide (financial services, insurance, manufacturing, telecoms & media, technology, public sector, healthcare & life sciences, energy & utilities, travel, transport & logistics and retail).

Among the key findings were: 64 percent of respondents expected the term 'workforce' to eventually encapsulate both human employees and intelligent machines; 78 percent felt that AI and robotic automation will allow staff to make more informed decisions and lead to a flattening of traditional management hierarchies; 88 percent were comfortable working together with machines, but 79 percent said they would not be comfortable with an AI-powered boss; 74 percent thought that AI will become standard practice for evaluating employee performance within 10 years, while 72 percent predicted it will be commonly used to set appropriate rewards and compensation.

Outlook

It's easy to be seduced by the allure of new technology, but when it comes to smart offices and future workplaces a degree of caution is advisable: simply throwing IoT devices, AI and analytics into the mix might not deliver the expected results unless due consideration is given to business, cultural and management issues.

As far as office layout is concerned, multi-space solutions combining open plan, some private offices, meeting rooms, huddle spaces and communal breakout areas seem likely to fit the bill for most businesses -- especially if employees are given flexibility and choice over where and how they work, including working remotely as required.

Individual control over workplace lighting and temperature should be a goal -- ideally in the form of an automated 'environmental bubble' that follows employees around an intelligent IoT sensor-equipped building.

As employees become increasingly 'plugged in' to their workspaces and interact with AI-driven systems as part of their jobs, businesses not only need to keep on top of potential cybersecurity and privacy issues, but also ensure that humans are not overwhelmed by all the technology.

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