The physical environment is the one in which employees actually work, and it comprises 30 percent of the employee experience. This is our surroundings and includes everything from the art that hangs on the wall to the catered meals the organization may offer to the cubicles or open floor plan employees may sit in. It's no secret why our physical space matters. We all want to spend our workdays in environments that energize and inspire us. These types of workspaces help us feel more creative, engaged, and connected to the company we work for. Not only that but also the physical environments in which we work act as symbols that represent the organization and our decision to be there. Great physical environments act as positive symbols and representations. Poor physical spaces act as negative ones. This was first discovered by Edgar Schein, a former professor at the Massachusetts Institute of Technology (MIT) Sloan School of Management and author of the book Organizational Culture and Leadership. In this book he talks about three levels of organizational culture, which are artifacts, values, and assumptions. According to Schein, all three of these things must align, and there are a lot of parallels between these three levels and the three employee experience environments that are explored in this book.

Interestingly enough, with the rise of coworking locations, global connectivity, and collaboration technologies, many people believe that offices are going to die. This is only somewhat true. The traditional idea of an office is indeed going to die—the one with gray walls, brown carpets, and lines of cubicle farms. However, the buildings themselves are going through a bit of an office design renaissance, and instead of disappearing, offices are reemerging as employee experience centers. According to commercial real estate firm CBRE, commercial real estate (at least in the United States) is at a seven‐year high, and organizations such as Amazon, Cisco, Samsung, Whirlpool, General Electric, Schneider Electric, Deloitte, Microsoft, LinkedIn, and many others are investing many millions of dollars into creating these employee experience centers, for a very good reason. As the world of work continues to evolve and change, so do the environments in which the work actually gets done.

It's like redesigning a car by upgrading the engine and leaving the interior the same—it might be more powerful but if it's not pleasant to spend time in, you won't want to drive it! A recent study by furniture manufacturer Steelcase called “The Privacy Crisis” found that nearly 90 percent of workers around the world are less than satisfied with their work environments, which means that there is a lot of room for improvement.¹

In 2010 British Journal of Management published a study by Craig Knight and S. Alexander Haslam from Exeter University called “Your Place or Mine? Organizational Identification and Comfort as Mediators of Relationships Between the Managerial Control of Workspace and Employees' Satisfaction and Well‐Being.” In the study they found that there is a social identity that employees have with their workspaces, and the physical environment can affect the psychological comfort of the employees who work there.

To create a great physical environment for employees, organizations need to focus on the following major characteristics, which are abbreviated as COOL (see Figure 5.1):

• Chooses to bring in friends or visitors
• Offers flexibility
• Organization's values are reflected
• Leverages multiple workspace options

CHOOSES TO BRING IN FRIENDS OR VISITORS

Why do organizations such as Airbnb, LinkedIn, Zappos, and Google let you bring your friends or family members to work? Facebook actually lets any employee bring up to four visitors at any time to see the campus, eat, and hang out. This is actually encouraged. But for what? It certainly takes time, effort, and resources to host and guide people around who don't actually work there so why make the investment?

It turns out there's a lot you can learn about an organization that is willing to open up its doors to others. From what I have observed, these types of organizations tend to have more focus on overall employee well‐being, create a sense of community and diversity, drive innovation, and do a better job of connecting what the organization does back to the employees. In a sense, they have to because they are living and working in a metaphorical glass house that anyone can see into. These companies invest heavily in creating great employee experiences, which is why they feel confident opening their doors. They are holding themselves accountable.

As I mentioned above our offices are evolving into employee experience centers—museum‐like places where employees can feel a sense of awe, curiosity, inspiration, joy, and pride. We all want to feel proud of the spaces we work in. The physical workspace helps create a connection between the organization and the employees who work there. Ultimately the physical environment is a reflection of the values of the organization (which is another key criterion of designing employee experiences discussed later in this chapter). Employees who work in great physical environments typically feel a sense of pride and joy when it comes to their office space. They want to show it off when they are given the opportunity to do so.

When I was younger I worked for various organizations in roles that included a grocery clerk, telemarketer, movie theater usher, marketing analyst, and strategy consultant. When I worked at Whole Foods Market as a grocery clerk, I would always be proud when people walked into my so‐called office. It was always well organized, clean, and modern looking. Interestingly enough, years later when I worked as a consultant for a 400,000‐person company, I would have dreaded for any of my friends or family members to come visit me in my dreary cubicle. To this day I look back at my fond memories of working at Whole Foods, which I consider one of the best jobs I've ever had.

One of the easiest and most effective ways an organization can get a sense of whether employees feel proud of their workspaces and a connection to the organization is by seeing whether employees bring in their friends and family members when and if allowed. Funny enough, you rarely hear about a company with an unattractive work environment offering something like this! I always encourage organizations to open their doors to friends, family members, and strangers if possible. Let people take tours, speak with employees, and get a sense of what it's like to work there.

If your organization is uncomfortable doing so, then chances are that the environment in which employees work is not seen as something to be proud of (assuming you don't have any legal issues preventing people from coming into the office).

In addition, opening your doors can also be a great talent and recruitment strategy, assuming that you have an inspiring environment where your employees work. It's why so many business leaders from around the world flock to Silicon Valley to see what the organizations there are doing. If you have a great physical workspace, why wouldn't you want to show it to others? You can bet that when nonemployees walk through the door and think, “Man, this must be a cool place to work,” they will be checking out your job listings page when they get home. Of course, the opposite is also true, which is why the physical space is so important.

The rationale behind looking at this variable as a function of employee experience is quite straightforward. If employees feel like they work in a beautiful and modern environment, they will typically leverage the opportunity to show it to visitors and friends. Do you have the confidence to open your doors to others?

What This Measures

• Pride in the employee's workplace
• Excitement about the organization
• Connection between employees and the organization

What You Can Do

• Open up your organization to friends and family members of employees and even the public who might want to do a tour (assuming you have a space worth looking at; if not, that's a bigger issue!).
• Think of your physical environment as an employee experience center instead of as an office.

See Table 5.1 to see who some of the highest‐ and lowest‐scoring companies for this variable are.

OFFERS FLEXIBILITY

I explored this in considerable depth in my previous book, The Future of Work. Workplace flexibility continues to be a massive area of desire for employees and focus for organizations. We live in a hyperconnected global world where work‐life balance has been obliterated and replaced by work‐life integration. This means we take our personal lives to work and our work lives home. To continue to work in this type of environment, we have to abandon the notion of the 9 to 5 workday and instead shift toward allowing employees to work anytime from locations of their choosing whenever possible. Granted, this type of work environment is not suited or available for every type of role, for example manufacturing. Still, employees should have as much flexibility and choice as possible.

Consider the following statistics from Global Workplace Analytics:

• Half of the U.S. workforce has jobs in which at least partial telework is possible, and one‐quarter to one‐fifth of the workforce works remotely with some frequency.
• Eighty percent to 90 percent of U.S. employees would like to telework part‐time at minimum. Two or three days per week appears to be the right amount, allowing enough time for on‐site collaborative work and off‐site concentrative work.
• Because studies show employees are away from their desk as much as 60 percent of their workday, Fortune 1000 companies worldwide are entirely redesigning their space.²

However, workplace flexibility doesn't simply mean letting employees work from home. Flexibility refers to employees genuinely being able to pick when and where they work whether it means coming into an office, working from home, going to a coffee shop or coworking facility, or going anywhere else where they can get their jobs done. According to FlexJobs, a site that allows employees to search for the best flexible work and telecommuting jobs, flexible work provides several benefits to employees and the organization, including:

• Increased productivity
• Less stressed employees
• Decreased absenteeism
• Healthier and happier employees
• Cost savings
• Increased trust

In 2016 American Sociological Review published a study called “Does a Flexibility/Support Organizational Initiative Improve High‐Tech Employees' Well‐Being? Evidence from the Work, Family, and Health Network.” The lead authors are Phyllis Moen, who is the presidential chair in sociology at the University of Minnesota and Erin L. Kelly, a professor in work and organization studies at the MIT Sloan School of Management. In the study Moen et al. worked with a Fortune 500 company (not named) over a 12‐month period to see whether workplace flexibility had any noticeable impact. To accomplish the study, they worked within the IT group, where they split them into two groups. One would have the flexible program and the other would not. The pilot group given the flexible work options was able to work anywhere and anytime and was evaluated based on the work produced instead of being seen in the office. The results of the study were quite conclusive, showing that the team within IT that was given the flexible work arrangement felt better about their jobs, had less burnout, and felt lower levels of stress. This was the first time a study of this type was conducted with a control and pilot group inside of a large organization. According to the authors, the study shows the necessity of organization‐wide initiatives creating greater supervisor support and control and flexibility for employees.³

To further make this point, EY did a study in 2015 that surveyed almost 10,000 full‐time employees in eight of the world's largest economies, which include the United States, Japan, Germany, the United Kingdom, Brazil, China, India, and Mexico. The employees listed flexibility as a top feature they wanted in a job and ranked it slightly less important than a competitive salary.⁴

Looking at how the workplace continues to change, it's almost impossible to imagine a world where workplace flexibility won't become the standard for how we work. It's simply becoming too hard, too stressful, and less practical not to have this type of arrangement. Not to mention we have the technologies today that can easily support this way of working.

I use Uber quite frequently when I travel not just in the United States but internationally as well. I always like to strike up a conversation with the drivers to find out why they work with Uber and why they like it. I've had drivers with all sorts of backgrounds ranging from airplane mechanics and corporate attorneys to nurses and finance MBA graduates. They are people who could easily be working for companies like Wells Fargo, Deloitte, or United Airlines, but they aren't. Why not? Because of the flexibility that Uber offers them, that's the number one thing every Uber driver always tells me. The amount of money they would make isn't that different, but they value being able to be in control of when and where they work. This is also what freelancers on sites such as Upwork always say as well; flexibility does indeed make a huge difference. This used to be seen as a perk or a bonus, but now many employees consider this the standard for how work could and should be done.

What This Measures

• Organization's willingness to adapt to how work gets done
• Commitment to employees to make their lives easier
• Progressive workplace thinking

What You Can Do

• Introduce a workplace flexibility program.
• Provide education and training to employees on why and how the flexibility program works.
• Set clear expectations and guidelines for the program.

See Table 5.2 to see who some of the highest‐ and lowest‐scoring companies for this variable are.

ORGANIZATION'S VALUES ARE REFLECTED

Every organization has its own set of values, which are typically words or phrases the organization believes in or wants to represent. Values help guide the culture and the actions that the organization chooses to take. Oftentimes these values include words or phrases such as trust, transparency, fun, innovation, collaboration, and honesty. For many organizations these things (just like mission statements) are nothing more than lip service and useless platitudes. I see this time and time again in many organizations, and I'm sure you do as well.

A few years ago I was brought into a large company that wanted me to advise it on some issues related to employee experience. Naturally I was excited to do so. This particular organization had values that included some of the ones listed above. When an organization says its values are trust, fun, transparency, and so on, then typically I expect to see these values reflected in the actual workplace. However, in this particular instance I found the exact opposite. Employees all had to commute and work 9 to 5, there was no communication or collaboration going on, the workplace attire was extremely formal, the entire floor was colored brown and lined with giant cubicles, employees all looked unhappy, and the CEO's response to why he didn't want to change anything was “It was like that the day I got here and it will be like that the day I leave.” Although the organization still exists I wasn't shocked to learn that some of its divisions have either filed for bankruptcy or have been sold off. There's really no kind way to put this, but as an organization if you say you care about and believe in something and your actions (especially internally) don't reflect that, then you are lying to yourself and to everyone who interacts with you.

If this particular organization were to be honest with itself, its values would have actually been don't communicate, keep outdated workplace practices, build the tallest hierarchy, make employees miserable, and do what you're told. It's not enough to have values, to communicate those values, or even to have employees memorize what those values are. Values need to be physically manifested in the spaces in which employees work (and ingrained in the culture, which I will explore later). In other words, if you were to walk around your organization, would you actually be able to see your values come to life?

Oftentimes when we interview to work for organizations, the question of values comes up. We have our personal values and the organization has its values. As employees we make decisions based on these sets of values because we want to work for an organization where they align. If you care about making the world a better place, being fit, being able to learn new things, contributing ideas to executives, and having fun, then naturally you would want to work for an organization that enables you to do so and cares about similar things. So what happens when you join a company and it doesn't actually manifest the values it says it cares about? You feel lied to, betrayed, and cheated. Unfortunately at that point you already signed the contract, so you can't really jump ship. Immediately you become resentful.

Your home can say a lot about who you are. Everything from the paintings or photographs you hang on the wall to the color of the walls to the type of dining table to even the types of towels and soaps you put in the bathrooms speaks. When you walk into someone's home, you get a better sense of who someone is, and when you walk into organization, you get a better sense of the type of organization it really is.

Facebook, which scored highest out of all 252 organizations on the Employee Experience Index, has five core values, which are “Be Bold, Focus on Impact, Move Fast, Be Open, and Build Social Value.” Definitely a noble set of values to have. If you visit the Facebook campus, you can quite literally see the manifestation of these values. Whether it's the mainly open floor plan, the eclectic art that adorns the workplace, the ability of employees to quickly move around the campus to work anywhere they want, the diverse group of employees (each with his or her unique fashion style), the guest business leaders who come speak to the employees, the customer stories that are shared, or the fact that employees are encouraged to speak up to share their ideas and feedback and even challenge their managers—you can absolutely see the values come to life.

I was at an executive customer board meeting for a large technology company not too long ago. One of the attendees mentioned that one of his company's core values was “Do the right thing” and asked how they could possibly show that value manifested in the workplace. I was honestly a bit stuck. Then another attendee chimed in that his organization also had this as one of the core values and brought this to life by having on‐site battery recycling, charitable contributions, and guest speakers from social impact organizations and by consistently promoting ethical and sustainable business practices to employees. This is an amazing way to help employees see this value come to life!

Culture and technology take some time to absorb and get a feel for, but the physical space is something you can see and immediately make a judgment about. Remember, the physical space acts as a type of symbol for the organization and as a modern‐day employee experience center or a museum for the people who work there. This is why one of the quickest ways to ruin an employee experience is by the organization not reflecting the values in the physical work environment. If you want to get a good sense of an organizational culture, then start by looking around at the workplace. It's something we can spot and notice on day one!

What This Measures

• Commitment to employees versus lip service for employees
• Whether the organization represents itself in the way it says it does
• Organizational honesty and integrity
• Culture

What You Can Do

• Write down your values on a sheet of paper and walk around the office. Do you see those values come to life? Why or why not?
• If the values do align, think about what you can do to enable everyone else at your organization to see that alignment. If they don't align, what can you do to fix that?

See Table 5.3 to see who some of the highest‐ and lowest‐scoring companies for this variable are.

LEVERAGE MULTIPLE WORKSPACE OPTIONS

There has been an ongoing debate around open versus closed office spaces and which one is better. Open offices tend to enable collaboration, yet they are also prone to cause distractions and noise. Closed offices and cubicles tend to allow for more focused work, but they can also be a bit depressing while not encouraging collaboration and communication. So which one do you go with?

Unfortunately all of these debates and arguments around open versus closed offices miss the point entirely. The physical environment needs to be thought of as a house. Every room in a house is designed for a specific purpose. You eat in the dining room, cook in the kitchen, sleep in the bedroom, and relax in the living room.

Leesman is a company based in the United Kingdom that seeks to understand the relationship among organizations, people, and place. It has studied and surveyed over 110,000 people and found that there are actually 21 workplace activities that employees participate in. These range from planned meetings to individual focused work to collaborating to relaxing and taking a break.⁵ Clearly not all of these activities are effectively done in a single type of a space. It doesn't really make sense to relax and take a break in the same space that you have your planned meetings. Similarly, it doesn't make sense to eat and sleep in the kitchen.

Employees need access to environments that enable them to do their best work. This is in the best interest of the organization and of the employees who work there. We are moving away from working in a linear, monotonous world, so our workspaces must adapt accordingly. This is why the most forward‐thinking organizations around the world are actually creating multiple floor plans instead of focusing on just open or closed spaces. None of the forward‐thinking organizations in the world commit to just a single type of workspace environment (or even two or three!). For example, when I visited the offices of SAP, I noticed that they have a very wide variety of spaces that employees can choose to work from. This included modern cubicle‐like environments, open spaces, cafe and lounge areas, collaboration spaces where you can write on the wall, conference rooms, quiet areas, outside work areas, and more. By creating this type of environment, organizations like SAP are saying, “We get it. Your job is not linear and uniform, so we will understand how and why you work and give you multiple options based on that. As an employee you should be able to pick the environment that will allow you to be most effective and efficient.” That's a powerful message and a commitment to people. Many organizations also realize that they are able to save a lot of office space and hence real‐estate cost by doing this because they are able to leverage those closed offices, usually devoted for a single person, for multiple people.

A recent article published in Harvard Business Review by Diane Hoskins, the co‐CEO of architecture design firm Gensler, called “Employees Perform Better When They Control Their Space” found that employees who have more choices over their workplace (including when, where, and how they work) scored higher on innovation, job performance, job satisfaction, and workplace satisfaction. This makes complete sense. Why shouldn't we have a bit more control and choice over the spaces in which we work?

Perhaps one of the best examples of an organization that offers multiple workspace options is the commercial real estate company CBRE, which redesigned its Los Angeles offices to focus on “16 spaces to work.” Think about that for a minute. Most employees are lucky if they are afforded a way to work beyond their cubicles, but 16 spaces is really astonishing. CBRE is in the process of pushing this out to its other offices as well. These spaces include everything from a client conference room and open team areas to teamwork tables and offices for a day to phone booths and even a Zen garden area. Each of these spaces caters to a specific way that employees at CBRE work.⁶

I recently spoke with Freddie Chow, the chief talent officer for the Asia Pacific Region of Sanofi. He told me that in his region, the physical environment employees work in creates and promotes a certain type of hierarchy. The more senior people get the nicer offices with the better desks and the more extravagant views. Sanofi was trying to become a more collaborative and flatter organization, so the physical environment was a big hindrance to making any kind of progress. Freddie and his team made a radical change and eliminated all the offices in the organization. Instead they focused their efforts on something known as Activity Based Working, which is a concept where employees don't have any assigned seats. Instead they have multiple floor plan and workspace options they can select from based on the activity or task they are doing. After this shift Freddie and his team saw an increase in productivity, engagement, and collaboration, along with a reduction in real estate costs.

Don't get stuck in the open versus closed office debate. Instead seek to understand the various activities that employees perform throughout the day and how they work. Then design spaces accordingly.

A word of caution when thinking about the physical workspace. When we see or hear about organizations like Google or Facebook, one of the first things we think about is their amazing office spaces. Business leaders flock from all over the world to visit these organizations in an attempt to bring back some things they can implement at their own companies. The thought process is “Google has a giant slide. We need one too!” Or “Facebook has a giant cafeteria with free food. We have to get that!” What many of these people fail to realize is that you can't simply copy a Google or a Facebook, nor should you. These organizations might seem like they are just building anything that looks fun, but everything they do in relation to their physical environment is done strategically and with purpose. Organizations that invest in beautiful spaces don't just do it for fun.

Atlassian is one of the cool and hip companies that have a modern and beautiful office space. I met with its executive team to find out whether they just hired a design firm and threw money at making an awesome‐looking space. They laughed at me when I asked that. Atlassian actually analyzed how employees worked by using sensors attached to employee's desks and speaking with employees. After looking at the data executives realized that employees hardly used assigned seating, which led them to design a space that made sense for them, a more open central plan that leveraged multiple other ways of working.

Atlassian, like many other forward‐thinking companies, didn't copy what others were doing. It used data to understand how employees work. Atlassian then designed around that.

Another executive I spoke with at a large organization didn't have a large budget to redesign the workspaces so he recruited volunteers. He set a budget at IKEA (the do‐it‐yourself furniture store), and everyone showed up for a few weekends to create environments they wanted to work in. Airbnb used to work with fancy design and architecture firms to build and design their conference rooms (which are modeled after actual Airbnb listings). Today the company recruits volunteer employees and gives them a $900 budget to design these conference rooms. Not only is this cheaper for Airbnb but employees also feel a sense of pride and ownership in actually creating the rooms.

You will be amazed how excited and engaged employees will be if you tell them they can design their own environments. Not only that but also I'm willing to bet that your organization has a few creative and handy employees who will know more than their fair share when it comes to design and furniture.

What This Measures

• Commitment to enabling employees to do their best work
• Understanding of how employees work

What You Can Do

• Observe how employees work and where they work.
• Get employee feedback around the types of environments they would like to use.
• Think beyond open or closed floor plans, and instead view your organization like a house, where each room serves a specific and unique purpose.

See Table 5.4 to see who some of the highest‐ and lowest‐scoring companies for this variable are.

HOW ORGANIZATIONS SCORED

The maximum number of points that an organization could have received for each of the above variables was 6.5 for a total of 26 possible points. Out of the four variables here, the one with the lowest average (4.3/6.5) was “The organization offers flexible work options (such as the ability to work your own hours wherever you want) and encourages autonomy.” I found this rather surprising because workplace flexibility and autonomy have been two topics of discussion in the business world for many years, yet there is enormous room for improvement. The variable with the highest average (4.9/6.5) was “The physical space reflects the values of the organization (e.g., if the values are collaboration, openness, transparency, and fun, then you wouldn't expect to see a dull environment with nothing but cubicles!).” Although the score here is still relatively low, I believed that most organizations would struggle with this physical space variable the most. Surprisingly that was not the case.

On average, the 252 organizations I analyzed scored a 4.6 for each question, or 18.4/26 for the physical space environment. This just barely comes to 71 percent of the maximum that an organization can get. If this were the University of Employee Experience, then collectively these organizations would get a C− for their physical environment grade.

Having a COOL workplace is more than just having some color on the walls, a beer keg, and free food. It's more than visiting a Silicon Valley company and copying what it does. Organizations that create truly COOL workspaces genuinely understand how and why employees work and design spaces that reflect those ways of working. Only then will the physical environment truly help create an overall positive employee experience. Budget is also not an excuse for why organizations aren't able to rethink their physical environment.

When looking at the entire physical environment, here are some examples of the highest‐ and lowest‐scoring organizations (see Table 5.5).