Making the case that the design of the workplace impacts the bottom line of a company is by its nature both intuitively obvious and difficult to prove. Is the premise that the design of the office can be a significant factor in employee engagement compelling to the decision makers in corporate America who are hiring architects and interior designers and buying furniture and furnishings?
Steelcase has long been a leader in gathering the evidence that, as they say, Space Matters. It gathers the data and spends significant resources analyzing and organizing it into ideas, concepts and language that business leaders can understand and relate to. So, when I had an opportunity to interview Steelcase CEO Jim Keane, I wanted to hear his perspective on how well the message is getting across.
officeinsight (OI): Are the business leaders you meet with thinking about the impact of workplace design on their bottom line?

Jim Keane (JK): “First of all, I think there’s really no question that the business leaders are engaged in these topics, because for them it’s not about furniture, it’s about how they can engage with the workforce.
I go to CEO conferences and I see CEOs all the time here in Grand Rapids, and they are concerned about innovation and they are concerned about talent. Naturally, they are concerned about talent for the whole company, but particularly for knowledge workers. As they see it, they are fighting a war for talent, and they will begin the conversation with us by asking how they can attract talent, how they can create a culture in an organization that will appeal to the kinds of people they’re trying to hire.”
OI: Are there specific types of knowledge workers that are in high demand?
JK: “These days every company is becoming a software or tech company! As their businesses change, things like big data and digital security become issues that every CEO is thinking about, and not just in terms of protecting the business that they have today. All of them are being asked, ‘How will your business become truly digital?’ and ‘How will your business be transformed by these forces?’
It’s not just about recruiting talented IT people per se, but also communications people and marketing people and product development people. It’s about hiring the talented people that will help them imagine entirely new business models. With the challenges CEOs are facing today, they know that they have to attract a different kind of workforce than they’ve had in the past to think about those tasks.
Once you’ve attracted them, that’s great – you’ve won one battle in the ‘war for talent,’ but now what? If, as Gallup has reported, more than half the workforce is disengaged and in effect a lot of them are actively disengaged, that’s a big deal. These are no longer statistics that businesses are surprised by when we quote them because they’ve already been talking about it.”
OI: So the CEOs you talk to are already there when you talk about office space and the link to engagement.
JK: “Yes, so when we make the connection between the physical office and engaged employees, we may say one way to engage your people is through things like purpose – having purposeful work and designing work that’s purposeful in helping the company be seen by its employees as doing things that are of importance in the world; helping people see that they’re making progress; helping people grow connections with their colleagues. These are the things that can help improve employee engagement. Then it’s only one more small step to say, the things you say matter, the things you do matter and the workplace matters.
The workplace shapes behavior, it reinforces the idea that either we do have an important purpose and you matter, or you don’t matter. The workplace can be equally effective in telling you that you’re just like everyone else here and if you left tomorrow we could replace you in a heartbeat. If the workplace is still telling people that, then that’s a problem.
We’re entering this new world where treating everybody the same and trying to make everybody uniform, sometimes even by literally wearing uniforms, is not getting anybody excited. You wouldn’t want to work like that, and neither would I.”
OI: No.
JK: “And I think that’s a transformation; that’s why publications like the Harvard Business Review have picked up Steelcase research on these topics. C-suite leaders and those adjacent to the C-suite care about this. They want to know more about how they can make a difference. I think it’s very exciting for people in our industry. We could easily miss it and think that it’s just about the same things that have mattered for the last 20 years. I think we really are right smack in the middle of a revolution in the way people think about the office.
I also think it’s starting in other places. It wasn’t that long ago that if you would tell people at a cocktail party that you work in the office furniture industry, they’d say, ‘Oh, I am so sorry.’ (laughs)
OI: That’s funny. Nobody’s ever said that to me. They’ve always just said, “What’s that? Oh there’s an industry about that?”
JK: “I’d get knowing glances from people. You might as well have told them you work for a newspaper or something because they thought that they knew all about that. Things like, offices are getting smaller, people are sharing offices, people are working at home, and ‘The Office is Dead’ articles every now and then help that picture along.
Yesterday’s Wall Street Journal talked about the bubble in the office world right now, that there’s a bubble because of rising rents and rising prices for new buildings and concern that the market for commercial office properties has gotten so frothy that we could have some sort of a bubble forming. But bubbles only form when there is extraordinary demand for something.
There’s an extraordinary demand right now for people moving offices back into the city, pulling their people together from the five spaces they used to have into one central space. That’s good. And this is exactly the opposite of what people predicted just a few years ago – that offices would be going away. Offices are in fact becoming more and more critical, and you can see it in real estate prices.”
OI: Interesting. Did you happen to see the recent REIS report on net office space absorption? Last year, it was up to more than 32 million square feet, and they’re forecasting net absorption of 52 million this year.
JK: “Exactly. If you look at that, you might say, ‘what’s going on, business people don’t make decisions to pay more money for office space unless there’s a reason. They don’t make the decision to consolidate four spaces into one unless there’s a reason, and these reasons are not always economic reasons. I think it’s because they get it, they hardly ever get their people together.
We have to find a way to improve productivity, and we can’t do that from the top. We have to do it using the things that happen magically when people are gathering together in spaces that promote creativity, collaboration and innovation. That’s what attracting that kind of workforce is all about. It’s a very exciting time.”
It seems many business leaders recognize the link between great office design and employee engagement; building a positive corporate culture and winning the ‘war for talent.’ At least the ones making their way to Grand Rapids, MI, to meet with Steelcase executives do. And Steelcase has done a great job of sharing its research. Among the many ways it does so, the publication of 3600 is one of the best. If you haven’t already read the most current issue, I strongly recommend you do so.
But, as I stated at the beginning of this article, the linkage between the workplace and better corporate performance is hard to prove. It’s the type of cultural premise that makes the social sciences “soft sciences.” In the soft sciences, the idea is to accumulate a “preponderance of evidence,” such that it seems unlikely that any other explanation of the facts is plausible. So to all of you engaged in accumulating evidence, I urge you to continue gathering data, and continue circulating the data you gather. Let’s get to a place where the preponderance of evidence proves our case.