Forbes magazine recently profiled serial entrepreneur Sid Sijbrandij, whose current venture, GitLab, is valued at over $1 billion on $100 million in yearly revenue. GitLab is pretty standard for a successful startup, except for one huge difference: all 700 of his employees work remotely.
GitLab's rapid growth and obvious success in a competitive high-tech market is a perfect example of how a company with remote workers can outperform companies who workers toil in open plan offices. GitLab illustrates how work-from-home creates the advantages that that open plan offices failed to deliver.
Why Open Plan?
Companies adopted open Plan Offices (OPOs) for two reasons: 1) to increase face-to-face collaboration and 2) to reduced office rental costs. Collaboration was supposed to generate greater cohesion and connection
We now know that OPOs don't increase face-to-face collaboration. As a recent Harvard study showed, workers are reluctant to interrupt co-workers with impromptu meetings or telephone calls, and therefore use email and texting more frequently than when they had private offices or cubicles.
To counteract this, some companies have installed single-person or multi-person phone booths. While single person phone booths make outgoing calls less burdensome on co-workers, they don't increase face-to-face collaboration, because if co-workers want to talk, they each must find an empty booth--an obvious hassle--and the meeting wouldn't be face-to-face anyway.
Similarly, while multiple-person phone booths might make face-to-face meetings tolerable for everyone else, because they're "hot-desked," high-status employees will likely camp out in them, leaving the hoi-polloi to suffer in the wide open. In any case, phone booths are obviously a patch rather than a fix; the mere fact these booths exist is a tacit admission that OPOs create distractions rather than increase collaboration.
To make matters worse, while open plan offices do consume less floor space than other designs, they significantly reduce productivity in many ways. And since labor is usually a much larger expense than office rental, even a small decrease in employee productivity is likely to more than offset the cost-savings due to lower rents.
Due to all of the above, Open Plan Offices are almost undoubtedly the dumbest management fad of all time.
Not be obvious, but from a cost-savings perspective, work-from-home is infinitely less expensive than an OPO, because work-from-home costs a company exactly nothing. Furthermore, employees will accept smaller salaries because they're not forced to commute, which can add many hours to their work week.
The limitation with work-from-home, however, is that it does not increase collaboration either. Quite the contrary. Remote workers, especially those who are naturally extroverted, can end up feeling isolated and out-of-touch.
At GitLab, however, they've solved this problem by holding daily online webcam meetings, not just to discuss business, but just to hang out. Typically, these hangouts involve about 20 people in each group and anything is up for discussion. This satisfies employees' need for social contact while increasing collaboration, but without the burden of trying to get individual work done in a cafeteria-like environment and without forcing people to sequester themselves in phone booths.
Because the collaboration is conducted online, there's less counterproductive socialization, like flirting and gossiping. Because especially problematic behaviors (like sexual harassment and bullying) becomes difficult or even effectively impossible, the company reduces its exposure to lawsuits.
As implemented at GitLab, work-from-home doesn't just accomplish what OPOs were intended to accomplish, it also unleashes other advantages, like greater workplace privacy, lower liability and better work/life balance. This added to overall higher productivity, which was already a proven outcome of work-from-home.
Furthermore, work-from-home is better for the environment because it eliminates commuting, makes it unnecessary for workers to live in already crowded areas (like Silicon Valley), and reduces overall carbon footprint, because individual home offices are cheaper to heat and cool than OPOs, which are typically huge rooms with high-ceilings. (Plus, you can keep your home at a temperature that works for you.)
In short, work-from-home, as implemented at GitLab, is the true "office of the future. " Hopefully, we can now look forward to a days when all of us can connect and collaborate with coworkers, while remaining comfortably at home. Of course, this will require the CEOs who embraced OPOs to admit they've been snookered, which might take some time, alas.
But we'll get there.