No organization design without building design, no building design without organization design
Buildings and transformation
For more than a decade, we and our peers have contended to ourselves and to our clients that the workplace is a strategic asset, a critical component in the array of tools that an organization deploys to achieve its aims. I have to admit that, at times, I had felt a bit self-serving using this language, and a bit embarrassed by the groupthink characterizing our profession.
But we had, in background, felt enormous change emerging in the world in which we practice. This significance of the essential relationship between buildings and getting things done was affirmed not just by our senses but also by clients whose projects were driven by the need to change their organization, operations and culture to achieve or sustain leadership in their industries.
We began to realize that almost every organizational design initiative was accompanied by a facilities project, and every building project arose from an organizational redesign initiative.
The first wave of this change was in the dot-com boom. The growth of the technology sector, the youth at its core, and coding as one of the new ways of working generated a more casual-looking yet productively interactive workspace. This was not style but substance at work.
As other organizations began to confront a need for more integrated solutions in an increasingly complex world, multidisciplinary collaboration as a work mode became a driver of workplace form. Support for serendipitous conversation and for intense team focus generated a workplace with a significantly varied granularity of space and form.
And now, as industrial companies begin to uncover the exploding potential in the hybrid of analog and digital, the mechanical and the electronic, and product and services, a new wave of workspace change is emerging. We are seeing the rise of an entirely new kind of organization. We are seeing what some now call the most significant change in the manufacturing organization since the Second Industrial Revolution more than 100 years ago.
Does this latest wave of organizational change look like these others? Are industrial companies using facilities as a core asset in the change they seek? Are these new buildings arising from simple expansion needs, or is there something else at work here?
Why is it that organizational transformation projects evoke building projects? Here are three examples.
Evolving from moving air to storing power
Dyson is well known for its air-moving technology. The company’s “cyclone” powered vacuums are iconic, soon to be made autonomous, and have changed the entire market for home products. You may also have experienced its hand-dryers in airports and commercial buildings, ending the paradigm of having to wipe your hands on your pants after using other driers. Its ventilation fans are now also air cleaners, and the company will soon roll out a new technology in hair dryers.
In the background, the company is also moving into other emerging technologies, and not all about air movement. Lighting is one of those areas, and battery power another.
But product line expansion is not the reason for its investment in a new research and development center. Yes, scale is part of it. Dyson recognizes that a breakthrough product may only arise out of thousands of failures (“For engineering, it’s a good thing because you’re forced to make mistakes and learn from them. You gain this visceral, tactile understanding.”). The company now needs to hire thousands more people to participate in that exploration.
But there are other, more significant drivers for its new building.
First, there is the DNA of the company. Like Apple, Dyson is fiercely committed to the design excellence and the entire product experience. Anthony Bamford, chairman of the UK construction equipment company JCB, was recently quoted in the Financial Times saying, “Dyson is a brilliant engineer and an exceptional designer. His love of product sets him apart — he cares about how a product looks, how it performs, how it can be different. As an iconoclast, he’ll develop many concepts . . . Those that [work] are wonderful examples of British creativity.” That quest for design excellence meant the development of 5,127 prototypes for the bagless vacuum cleaner, 1,000-plus prototypes for the 360 Eye robot, and 600 prototypes for the Supersonic hair dryer.
Then, there is the product development model refined in previous Dyson buildings. There is an essential openness through every part of the product development process. From its visit, the Financial Times says, “We tour through the prototyping area, with 3D printing machines that use 30 tonnes of nylon powder a year to create models. Next comes product testing, with robots pushing vacuum cleaners over patches of dust. Finally, we stand on the edge of a space that was once a production line for washing machines, and is now packed with desks bearing computer screens. Some 1,000 young engineers cram into the space.”
Then, there is the presence of everybody, even Dyson in the workspace. Dyson spends a lot of time in the laboratory, with significant effect. Dyson’s chairman and chief engineer talks of his monthly “James reviews.” He says “It can be nerve-wracking because he’s so inquisitive. He’ll always ask you a question you don’t have an answer to. We’ll sit for hours brainstorming and we’ll filter it down to what we think works best and build a prototype. James will say, ‘Have you thought about this?’ and we’ll say, ‘Well no, we haven’t.’”
Finally, there is competition. We know from our other research that there is a significant shortage of engineers in almost every developed economy. Britain is no exception, with more than 60,000 open job opportunities seeking talent. Every product design and development company in every industry is in competition with each other. The distribution of product development around the globe is part of the effort to find and engage top talent wherever they may live. The leading companies also realize that multidisciplinary collocation is a principal underlying condition for generating new product ideas and speeding their development.
Dyson now has plans to double the number of products it has on the market by 2020. To lead in that competition for talent and for new product, Dyson has designed and built Building D9 – a top-secret $2000 million building intended as a “gleaming cornerstone” in the company’s efforts to draw top talent right out of college to try, fail and then win with innovation and product design and performance excellence.
Moving from hardware to software, from machines to outcomes, from big iron to smart applications
Among the great by-products of all of the electronic controls and sensors built into modern operating industrial products is the huge amount to data generated by them. That data is a large part of the “big data” that is now the focus of almost every company’s strategy.
GE, the celebrated manufacturer and funder of most of the big operating things in machines and infrastructure is now transforming itself to achieve a new generation of industrial leadership based on that data. The collection, analysis and application of that information can help the company and its products perform better and, more importantly, could help shape a lifetime of GE-provided services associated with that equipment. That transformation is what Jeff Immelt, GE’s CEO, has called “probably the most important thing in my career…it’s this or bust.”
Now, GE is in the start-up space, literally and figuratively. The company is investing a billion dollars in a software development operation, a “center of excellence,” in San Ramon for an initial team of 1400 people. They are trying on the Silicon Valley way of doing things, all of them carrying copies of The Lean Startup. Immelt has been quoted saying, “If you went to bed last night as an industrial company, you're going to wake up this morning as a software and analytics company.” Everything about the company is in play from its customer value proposition, to its organizational structure, to its culture, and to its methods of recognizing revenue.
The company’s new division brings together the its information technology, industrial security operations and software center under one roof in San Ramon. Although acknowledging that technology would allow for a dispersed virtual operation, the innovation and speed necessary to achieve and sustain leadership required a place where everybody could locate together. A new kind of space was also an essential tool in visualizing and affirming the company’s commitment to change and an attractor to the kind of talent the company needed for its transformation.
The interior of the operation is unlike any associated with the GE of Big Iron. The look and feel is, however, familiar to Silicon Valley with its concrete floors, open workspaces, bench seating, whiteboards, couches, balconies and kitchens. There is also a design studio to foster collaboration in product and services development. That space, in itself, breaks new ground of the industrial company and is a model for the company’s transformation. Working directly with customers and suppliers, the highly adaptable and customizable space space will help design teams reduce the product development cycle and increase the speed and success rate of its customers’ adoption.
The building is also a model for transformation of other parts of the company. Employees from other locations are sent to San Ramon for technology briefings and immersion into the new culture. The goal is to infuse the work styles, culture and productivity of Silicon Valley into GE’s industrial manufacturing soul. The design of the workspace, in other words, is the visual catalyst for radical transformation of the company.
Moving from cars to mobility, from products to services
Ford is another great example of an industrial company using building design to drive organizational design and cultural transformation. With an intention to evolve from a car company to a mobility company, Ford is now investing more than a billion dollars to rapidly remake its Dearborn, Michigan Research and Engineering Center and, ultimately, its corporate headquarters.
After more than a year of on-site research and gathering insights from other places, Ford came to the clear realization that its campus was both out of date for the design and development of vehicles and totally out of step with the kind of work environment it would need to sustain its leadership position as Uber, Google, electrification and autonomy redefined the auto industry and defined the new world of mobility.
Ford found, as others do, that the shape of the workplace significantly influences the culture of the organization and the performance of its people. While describing itself as a “family” company, Ford reinforced a hierarchical organization of power and privilege in its workspaces. Any attempt to move to a more agile, entrepreneurial, risk-taking culture could not be achieved in its thin buildings which were designed in an era when secretaries in anterooms controlled access to executives and where the conference room and who was invited in to it defined status.
Much of the campus was also designed to incrementally develop technology and products that now increasingly look irrelevant. Gasoline engines and individual car ownership are becoming overtaken by electrical propulsion, shared transportation and vehicle autonomy. Bill Ford has looked into the future of the world’s rapid urbanization to recognize that congestion, especially in the rapidly growing emerging economies where his future market is, means a whole new way of thinking about transportation, transit and mobility.
So now a design process is underway in which much of the existing campus will be erased and a new set of buildings put in place. The new buildings will be designed with an eye on the emerging generation of designers and engineers, and the essential new hybrid culture where hardware and software engineers work together on the tough problems rapid urbanization, mega-cities, and broader concepts of mobility. Ford’s master plan and its building prototypes are seen as the principal strategic tool to attract, engage and develop the talent that will reshape and redefine the next generations of the company.
Why do they do this?
Why is this relationship between organizational redesign initiatives and new building projects so consistent? We might speculate on a few reasons from these three stories.
These are systemic flips, moves from one state to another. Natural forms (caterpillar/butterfly) may be an appropriate conceptual model illuminating that change in function means a change in form.
Everything about work is changing. The digital transformation in industry is evoking entirely new business models. Those new or hybrid models require new kinds of talent in the organization and the new ways of working that they bring. Things move faster, so the more formal and hierarchical forms of organization and operation present too many barriers. New workmodes and the rapid generation of new businesses demand new environments.
Most business messaging seems to be regarded skeptically. The CEO's declaration of an intention to change won't be considered authentic without clear visual evidence of the move. Neither Immelt's declaration that GE should become a digital business, nor Dyson's move out of air, nor Ford's move to mobility could hardly be received as serious if there were no other visible evidence of the company's commitment to change.
Each culture, it seems, has its own footprint. Family and village and city and tribe are descriptors both of the way that people come together but also specific forms that support their activities. Business models are cultural descriptors as well, and the culture of the organization is authentic when the form of the company and the form of the space are aligned.