Leading Innovation: AT&T’s First Shared Office

Rick Miller featured in Harvard Business Review, May/June 1998:

START_QUOTE_30t_smRichard S. Miller, vice president of global services (GS) at AT&T, leads some 2,000 sales and support professionals serving major corporations and government clients in the eastern United States. His organization generates $4 billion in annual revenues; its expense budget is about $200 million, of which real estate represents 6%.

In December 1996, Miller learned on a television newscast about a competitor’s initiative to pursue an AW program. Driven into action, he asked the help of AT&T’s global real estate (GRE) organization in developing a new facility. His idea: a shared office that staff members who spend much of their time with customers outside the office would use as needed, without having assigned workstations. The objective: creating an environment in which teamwork would flourish while reducing real estate costs.

The GRE unit, then in the early stages of developing AT&T’s Creative Workplace Solutions strategy, had not yet planned the type of facility Miller envisioned. So he and GRE’s planning director, Thomas A. Savastano, Jr., formed a team to consider the alternatives. The team rejected several scenarios. One would have refitted a building already occupied by Miller’s group, but that would have disrupted existing operations. Instead, the team opted for a three-part plan: redesign vacant AT&T space in Morristown, New Jersey, as a shared office; move 200 employees from five traditional office locations and 25 others from three satellite offices to the new facility; and redeploy the space to be vacated.

The total group included 58 salespeople, 101 technical specialists, and 66 management and support staff. Miller knew that the staff would need full-time space in the new facility. But he estimated that at least 60% of the sales and technical people would be out of the office with customers at any given time and therefore could share work space. At the time, the GS organization was beginning to transform its technical specialists into virtual resources; that is, rather than dedicate individuals to specific customers, these individuals would float from one account to another as needed. That change, Miller reflects, eased the transition from a conventional to an alternative workplace.

The new shared office works as follows: Through their laptops, employees log onto a system to reserve a workstation either before they arrive at the building or when they enter the lobby. Once there, they retrieve their own mobile file cabinet and wheel it to their reserved space. The workstations are six feet square and are arranged in pairs with a C-shaped work surface so that two people can work apart privately or slide around to work side by side. The reservation system routes employees’ personal phone numbers to their reserved space. As one occupant says of the new arrangement, “I don’t know who is going to sit next to me tomorrow, but interacting with different people all the time helps me think about customer issues more productively. I’m always getting a new perspective and new ideas from others’ experience.”

AT&T has installed three low-tech features in addition to its high-tech systems. A café encourages people to mingle for coffee and conversation about new sales, customer solutions, and office events. Two large chalkboards allow people to leave messages for others; this feature also reduces the paper flow within the office. And three types of enclosed space—phone rooms, “personal harbors,” and team rooms—accommodate private meetings and teleconferences.

AT&T’s project shows how significant the tangible and intangible results of an AW initiative can be. It cost $2.1 million to develop, including construction, furniture, equipment, and systems. But the investment was well worth the effort, as the accompanying table shows. Annual savings alone amount to more than $460,000 or $2,000 per person. Over five years, the company will avoid nearly $2 million in costs associated with running a traditional office. In addition, individual space was halved, and team-meeting space doubled. Finally, the project has produced closer teamwork, better customer service, and greater employee satisfaction.