The closed world of open office environments.

If you ask company managers and CFOs if they prefer “open office” concepts over private offices, you may well get a different answer than if you ask the people who actually work in open office environments.

There are two attractive aspects about open office plans that surely warm the hearts of many business managers. One is the notion that an open office environment encourages more interaction and spontaneous collaboration among employees.

The other is that open office concepts don’t cost as much to build and maintain as do private offices.

So … let’s break this down a bit.

Speaking personally, I’ve visited numerous company headquarters and branch locations where open office plans are prevalent … but what I see and hear isn’t interaction. Instead, it’s more likely to be mounds of white noise with employees sitting at their desks focusing intently on their computer screens.

Any interaction that may be happening is closer to the hushed sounds of a reference library — or even the confessional zone in the back of a Roman Catholic or Anglican church — than it is to any kind of bright, casual conversation with ideation happening all over the place.

This can’t be what managers had in mind – even if they’re shaving 25% or more off of their facilities management budget.

Now we have some new evidence to support the anecdotal evidence. Researchers at the Harvard Business School studied two Fortune 500 companies that made the transition to an open office plan from one where workers had more privacy.  The firms agreed to allow themselves to be the subjects of before/after evaluation.

The research wasn’t done via a survey, which would likely be susceptible to respondent bias (a fear of being honest and saying something that goes against the common managerial POV). Instead, the actual worker behaviors were charted using “sociometric” electronic badges and microphones that were worn by the employees for several weeks before and after the office redesigns.

The badges worn by the participants included an infrared sensor, a Bluetooth® sensor and an accelerometer that, when combined with a microphone, could discern when two people had a face-to-face interaction (but without recording the actual words spoken).

The Harvard research also studied before/after data pertaining to the volume of e-mail and instant messenger use by the employees.

Even though other variables remaining the same in the before/after evaluation (the same employees … before/after study periods occurring during the same business cycle), the changes in behavior were startling:

  • Employees spent ~73% less time in face-to-face interactions
  • E-mail use rose by ~67%
  • Instant messenger use grew by ~75%

The research also looked at shifts in interactions between specific pairs of work colleagues, where it found a similar dropoff in face-to-face communications along with increased electronic correspondence (although not to the same degree as the overall research results showed).

Furthermore, the research determined that workers tended to interact with different groups of people online than they did in person, which opens up even more potential concerns about the reduction in collaboration that would be happening as a result of moving to the open office concept.

Speaking in a post-study interview, Harvard Business School professor Ethan Bernstein’s conclusion was that there’s “a natural human desire for privacy — and when we don’t have privacy, we find ways of achieving it.”

In the case of preferred office configurations, people simply don’t like fishbowls. Deskside chats don’t happen, and other face-to-face interaction is severely limited as well.

In other words, open office plans don’t result in increased personal interaction, but they do create a more digital environment.  That seems like the polar opposite of what management wants.

Of course, to reduce a company’s facilities budget, an open office environment remains the preferred thing to do.  So maybe companies need to drop all of the pretense about “facilitating positive collaboration and spontaneous brainstorming.” Just tell employees what’s really behind shifting to an open office concept:  spending fewer dollars.

At least employees might appreciate the honesty rather than the obfuscation …

A detailed article summarizing the research, co-authored by Harvard researchers Ethan Bernstein and Stephen Turban, can be accessed here.

The latest newsroom employment stats aren’t pretty — and unfortunately not “fake” either.

For people who might be hoping for a turnaround in the news industry that could take us back to a world more like the one we once knew – you know, with actual journalists writing primary-sourced stories and conducting formal fact-checking – those days seem less likely than ever to return.

In late July, analytics firm MediaRadar reported on the latest stats for print advertising in the United States – and they’re continuing a long slide by falling another 13% between January and April of 2018.

Even worse:  Most of the companies that stopped their print advertising during the period didn’t migrate their ad dollars over to digital. Instead, they stopped advertising altogether.

This by now numbingly-familiar trend in advertising is directly related to the financial well-being of the news media, as advertising has traditionally bankrolled the lion’s share of newsroom activities.

But with revenues dropping relentlessly, it’s having an outsized impact on newsroom employment. The Pew Research Center has just released stats on the number of employees in American newsrooms – and those figures aren’t pretty, either.

According to Pew, in 2008 America’s newsrooms collectively had approximately 114,000 reporters, editors, photographers and camera personnel on staff. As of 2017, the number had plummeted to around 88,000.

That loss of ~27,000 people represents nearly 25% of all the newsroom jobs that were existed in newspaper, radio, TV/cable and other information services in 2008.

Not surprisingly, the biggest decline was experienced in the newspaper segment – down a whopping 45% to ~39,000 jobs. The digital-native sector was something of a bright spot, with job numbers increasing by nearly 80% over the same period to reach a level of ~13,000 jobs in 2017.

But digital news personnel growth hasn’t been nearly enough to make up for the job losses suffered by the other newsrooms.

What’s more, even digital newsroom jobs aren’t particularly secure, with frequent restructurings being the order of the day thanks to the unsettled nature of the industry as it attempts to adjust to ever-evolving news-consumption preferences.

How are news media organizations responding? Give them credit for trying all sorts of gambits – from membership programs to paid newsletters, premium news paywalls and in-house content studios.

But how many of those efforts have proven to be financially robust enough to shoulder the costs of running a “legitimate” newsroom?  Whatever the number, it hasn’t been sufficient, because whether we like it or not, most people have become conditioned to expect their news and information delivered free of charge.  And while many may lip service to favoring traditional journalistic practices, most aren’t willing to put up their own money to pay for it as part of the bargain.

Meanwhile, the hollowing out of traditionally structured newsrooms continues on, with no end in sight.  I wonder if there even are other financial or business models that could stop the hemorrhaging of jobs in newsrooms.

Does anyone have any other suggestions?

Working hard … yet hardly getting ahead.

Many full-time workers in the 25-35 age group with college training don’t need reminding that they’re struggling to balance paying for student loans while at the same time attempting to have decent housing and handling their day-to-day expenses.

I’m not in that age group, but our two children are – and I can see from their friends and work colleagues just how much of a challenge it is for many of them to balance these competing necessities.

One way to deal with the challenge is to settle for the sardine-like living arrangements one encounters in quite a few urban areas, with anywhere from three to six people residing in the same (medium-sized) apartment or (small) house.

Somehow, things just didn’t see so difficult for me “back in the day.” Of course, the entirety of my student loans following college amounted to a monthly payment of $31.28, with seven years to pay it off.

First apartment — a $185 per month rental.

And my first apartment – a one-bedroom flat in an elegant 1920’s building, complete with a beautiful lobby and old-fashioned glam elevator, cost me a mere $185 per month.

Not only that, it was only a five-minute bus ride to my downtown banking job.

Now, a newly released analysis published by the American Consumer’s Newsletter helps quantify the different reality for today’s younger workers.

What the data show is that a college degree does continue to provide higher earnings for younger workers compared to those without one.

But … it also reveals that adjusted for inflation, their earnings are lower than their college-educated counterparts in the past.

According to a National Center for Education Statistics analysis as published by the AC Newsletter, here’s a summary of the median earnings differences for male full-time workers in the 25-34 age cohort, comparing 2016 to the year 2000 in inflation-adjusted dollars:

  • Master’s or higher degree: $71,640 … down 6.4% from 2000
  • Bachelor’s degree: $56,960 … down 8.8%
  • Associate’s degree: $43,000 … down 11.8%
  • Some college, but no degree: $37,980 … down 14.3%
  • High school degree: $34,750 … down 13.6%
  • High school dropout: $28,560 … up 2.8%

Thus, among full-time male workers across all education levels, only high school dropouts have experienced a real increase in earnings between 2000 and 2016.

Among female workers, the trends are a little better, but still hardly impressive – and they also start from lower 2000 income levels to begin with:

  • Master’s or higher degree: $57,690 … down 0.5% from 2000
  • Bachelor’s degree: $44,990 … down 7.5%
  • Associate’s degree: $31,870 … down 12.0%
  • Some college, but no degree: $29,980 … down 13.8%
  • High school degree: $28,000 … down 7.2%
  • High school dropout: $21,900 … up 5.0%

What’s even more challenging for workers carrying student loan debt is that those debt levels are higher than ever – often substantially so.

According to a Brookings Institution comparative study, fewer than 5% of students leaving school in 2000 carried more than $50,000 in student loan debt. In inflation-adjusted terms, by 2014, that percentage had risen to ~17%.

Looked at another way, ~40% of borrowers are carrying student loan debt balances exceeding $25,000. It doesn’t take a finance whiz to figure out how big of a hit that is out of a worker’s paycheck.

It makes the some of today’s realities: people living at home longer following college; having frat- or sorority-like living arrangements; putting off plans to purchase a home, or even putting off marriage plans – all the more understandable.

And I’m not exactly sure what the remedy is, either. When it comes to overburdened education debt, it isn’t as if people can go back and rewrite the script very easily.

Re-imagining the rules for company leadership: Rajeev Peshawaria’s prescriptions.

As the nature of how companies do business changes, what about time-honored managerial styles? Do they need to change as well?

Open Source Leadership is a newly published book by business author former Coca-Cola and Morgan Stanley executive and Rajeev Peshawaria.  Published by McGraw-Hill, Peshawaria’s book contends that many of the many management practices that persist today are no longer well-aligned with the reality of current workplaces, current employees … or even society in general.

One fundamental change that has happened just in the past generation is what Preshawaria labels “uber-connectivity.” Thanks to the Internet, mobile phones and other communication technologies, people are able to access information on nearly any topic and obtain answers to any question — wherever they are and whenever they want.

According to the author, this near-limitless access to information empowers people to an unprecedented degree – and it narrows the gulf between “experts” and “regular folks.”

As for “guru-worship” – the inclination of at least some people to seek out and learn from the soothsayers in the business world … that’s yesterday’s bread.

Lest Peshawaria be accused of being what he himself declares irrelevant, he remarks, “The guru is dead. Long live the Google.”

Rajeev Peshawaria

Couple uber-connectivity with increasing world population plus the concentration of that population in urban areas, and the result is companies that are now able to source talent and knowledge from wherever they exist.

How do these changes affect the theory and practice of business management?

In Peshawaria’s view, company leaders are still called upon to provide steadfast leadership about “purpose and values,” while at the same time acting with “compassion, humility and respect for people.”

Some of this may sound something like the “autocratic” management style that was prevalent in business until the 1980s – but not exactly. At the same time, it’s different from the “all-inclusive” democratic style that became ascendant in the world of business during the past three decades.  Let’s call it a hybrid.

One other important factor addressed by Peshawaria in his book is that employee motivation remains a nettlesome issue for companies – and far more complex than most management theories and stratagems account for.

One prescription from Peshawaria is for managers to dump the notion of giving “stretch goals” to all employees in an attempt to foster high performance. He argues that stretch goals work only for “the small percentage of employees [who] have the creativity, innovation and drive to truly relish and achieve stretch goals at any one point in time.”

According to Peshawaria, for the majority of employees stretch goals end up “causing stress, anxiety, or poorly thought-out behavior.”

Open Source Leadership is a book that’s worth a read – and it’s readily available from Amazon and other online retailers.  For those who have read about Rajeev Peshawaria’s theories in this new book or in his earlier volume Too Many Bosses, Too Few Leaders – or if you have years of experience working in business organizations, what do you think about the author’s perspectives and prescriptions?  Are they on point … or off-base?  Please share your views with other readers.

Peeking behind the curtain at Google.

A recently-departed Google engineer gives us the lowdown of what’s actually been happening at his former company.

Steve Yegge, a former engineer at Google who has recently joined Grab, a fast-growing ride-hailing and logistics services firm serving customers in Southeast Asia, has just gone public with an explanation of why he decided to part ways with Google after having been with the company for more than a dozen years.

His reasons are a near-indictment of the company for losing the innovative spark that Yegge thinks was the key to Google’s success — and which now appears to be slipping away.

In a recently published blog post, Yegge lays out what he considers to be Google’s fundamental flaws today:

  • Google has gone deep into protection-and-preservation mode. “Gatekeeping and risk aversion at Google are the norm rather than the exception,” Yegge writes.
  • Google has gotten way more political than it should be as an organization. “Politics is a cumbersome process, and it slows you down and leads to execution problems,” Yegge contends.
  • Google is arrogant. “It has taken me years to understand that a company full of humble individuals can still be an arrogant company. Google has the arrogance of “we”, not the “I”.
  • Google has become competitor-focused rather than customer-focused. “Their new internal slogan — ‘Focus on the user and all else will follow’ – unfortunately, it’s just lip service,” Yegge maintains. “A slogan isn’t good enough. It takes real effort to set aside time regularly for every employee to interact with your customers. Instead, [Google] play[s] the dangerous but easier game of using competitor activity as a proxy for what customers really need.”

Yegge goes on to note that nearly all of Google’s portfolio of product launches over the past 10 years can be traced to “me-too copying” of competitor moves. He cites Google Home (Amazon Echo), Google+ (Facebook) and Google Cloud (AWS) as just three examples — none of them particularly impressive introductions on Google’s part.

Yegge sums it all up with this rather damning conclusion:

“In short, Google just isn’t a very inspiring place to work anymore. I love being fired up by my work, but Google had gradually beaten it out of me.”

Steve Yegge

It isn’t as if the company’s considerable positive attributes aren’t acknowledged – Yegge still views Google as “one of the very best places to work on Earth.”

It’s just that for creative engineers like him, the spark is no longer there.

Where have we seen these dynamics at play before? Microsoft and Yahoo come to mind.

These days, Facebook might be trending in that direction too, a bit.

It seems as though issues of “invincibility” have a tendency to creep in and color how companies view their place in the world, which can eventually lead to complacency and a loss of touch with customers. Ineffective company strategies follow.

That’s a progression every company should try mightily to avoid.

What are your thoughts on Steve Yegge’s characterization of Google? Is he on point?  Or way wide of the mark?  Please share your perspectives with other readers here.

The vacations that aren’t: The myth of “getting away from it all.”

Even with the end-of-year holidays coming up, for many families, the biggest vacation time of the year is now over.

And if you took that vacation and were able to steer completely clear of any work-related requirements … consider yourself lucky.

For years now, we’ve heard about the challenge to “disconnect” completely while on vacation, as more ways for the office to intrude on personal time and space continue to proliferate.

For the latest insights on this issue, we have a recent online survey of 6,600+ travelers from 14 urban areas around the world, conducted by Marriott Reward’s Global Travel Tracker.  Foremost among the research findings is that the majority of us are staying connected with our work via e-mail or other digital means while on vacation.

Breaking down the responses by gender, a larger portion of women than men reported that they are able to completely disconnect from work while on vacation.

On the other hand, by a 36% to 44% margin, fewer men than women reported being “more stressed” upon returning to the office and facing the presumably larger stack of work requirements that have built up during their absence.

Interestingly, the Marriott Rewards survey found that residents of Tokyo report the highest levels of stress upon returning to work, whereas residents of Mexico City are at the other end of the scale. Residents of major U.S. cities – New York, Chicago and Los Angeles — fall in the middle range of the 14 international urban areas that were included in the Marriott Rewards survey.

Speaking personally, I haven’t been able to “completely disconnect” from the office while on vacation in living memory — and I don’t think I know anyone else who has.

What is your vacation track record in this regard? What sorts of strategies do you use to get the most relaxation out of your days away from the office? I’m quite sure other readers will be interested in hearing about them.

Where Robots Are Getting Ready to Run the Show

The Brookings Institution has just published a fascinating map that tells us a good deal about what is happening with American manufacturing today.

Headlined “Where the Robots Are,” the map graphically illustrates that as of 2015, nearly one-third of America’s 233,000+ industrial robots are being put to use in just three states:

  • Michigan: ~12% of all industrial robots working in the United States
  • Ohio: ~9%
  • Indiana: ~8%

It isn’t surprising that these three states correlate with the historic heart of the automotive industry in America.

Not coincidentally, those same states also registered a massive lurch towards the political part of the candidate in the 2016 U.S. presidential election who spoke most vociferously about the loss of American manufacturing jobs.

The Brookings map, which plots industrial robot density per 1,000 workers, shows that robots are being used throughout the country, but that the Great Lakes Region is home to the highest density of them.

Toledo, OH has the honor of being the “Top 100” metro area with the highest distribution of industrial robots: nine per 1,000 workers.  To make it to the top of the list, Toledo’s robot volume jumped from around 700 units in 2010 to nearly 2,400 in 2015, representing an average increase of nearly 30% each year.

For the record, here are the Top 10 metropolitan markets among the 100 largest, ranked in terms of their industrial robot exposure.  They’re mid-continent markets all:

  • Toledo, OH: 9.0 industrial robots per 1,000 workers
  • Detroit, MI: 8.5
  • Grand Rapids, MI: 6.3
  • Louisville, KY: 5.1
  • Nashville, TN: 4.8
  • Youngstown-Warren, OH: 4.5
  • Jackson, MS: 4.3
  • Greenville, SC: 4.2
  • Ogden, UT: 4.2
  • Knoxville, TN: 3.7

In terms of where industrial robots are very low to practically non-existent within the largest American metropolitan markets, look to the coasts:

  • Ft. Myers, FL: 0.2 industrial robots per 1,000 workers
  • Honolulu, HI: 0.2
  • Las Vegas, NV: 0.2
  • Washington, DC: 0.3
  • Jacksonville, FL: 0.4
  • Miami, FL: 0.4
  • Richmond, VA: 0.4
  • New Orleans, LA: 0.5
  • New York, NY: 0.5
  • Orlando, FL: 0.5

When one consider that the automotive industry is the biggest user of industrial robots – the International Federation of Robotics estimates that the industry accounts for nearly 40% of all industrial robots in use worldwide – it’s obvious how the Midwest region could end up being the epicenter of robotic manufacturing activity in the United States.

It should come as no surprise, either, that investments in robots are continuing to grow. The Boston Consulting Group has concluded that a robot typically costs only about one-third as much to “employ” as a human worker who is doing the same job tasks.

In another decade or so, the cost disparity will likely be much greater.

On the other hand, two MIT economists maintain that the impact of industrial robots on the volume of available jobs isn’t nearly as dire as many people might think. According to Daron Acemoglu and Pascual Restrepo:

“Indicators of automation (non-robot IT investment) are positively correlated or neutral with regard to employment. So even if robots displace some jobs in a given commuting zone, other automation (which presumably dwarfs robot automation in the scale of investment) creates many more jobs.”

What do you think? Are Messrs. Acemoglu and Restrepo on point here – or are they off by miles?  Please share your thoughts with other readers.