May 7th Monday Report
May 7th, 2007

Economic Notes:

This Weeks Leads:




Why Office Design Matters Part II

Building the civilized workplace.

You want to concentrate and collaborate, but how can you get the best of both worlds in your current office set-up?

One factor that affects knowledge worker performance that isn't well understood is the physical work environment-the offices, cubicles, buildings, and mobile workplaces in which knowledge workers do their jobs. There is a good deal said about this topic, but not much known about it. Even more unfortunately, most decisions about the knowledge work environment are made without seriously considering their implications for performance.

Continued from last week

Knowledge workers move around in the course of their work.

They need mobility and spend a lot of time out of their offices. Several firms that have observed their knowledge workers have found that they spend up to half of their time out of their offices-either in meetings, talking informally in other peoples' offices, or traveling. As a result, organizations need to provide them with the ability to work and be productive outside of their offices. The most obvious instantiation of mobile work environments is the laptop computer, but there are others-for example, access to physical work artifacts such as books and files, the ability to use telephones, computers, and messaging technologies while traveling.

Knowledge workers collaborate.

They meet, they chat, they congregate. Office environments need to facilitate the collaboration and exchange of tacit (hard to express in explicit written terms) knowledge. What does this mean? At a minimum, there need to be meeting spaces and conference rooms. Maximum facilitation would be to create a variety of collaborative spaces, technologies, and facilitation approaches for an array of collaborative purposes. Technologies for collaboration-from videoconferences to webcasting to shared networks- are increasingly making a big difference in collaboration, but users are frustrated by technical difficulties in many cases. Very few, if any, organizations have attempted to foster collaboration to a high degree, in part because they haven't made the effort to understand what kinds of collaboration are needed.

Knowledge workers concentrate.

The opposite side of the collaboration coin is the need to concentrate at work. This requires a quiet setting with relatively few distractions. Such an environment is particularly important for knowledge creation activities-thinking, writing, programming, designing, and so forth. This takes up a widely varying proportion of knowledge workers' time-some studies have found, for example, that programmers spend only 20 to 30 percent of their time doing solo programming, but others have found workers devoting up to 64 percent in "quiet work."5 Whatever the fraction of time, it's important for the production of final knowledge work outputs. Many organizations that have moved to more open offices trumpet the benefits of increased collaboration, but they discount the penalties incurred on the concentration side.

Knowledge workers work in the office.

Despite many years of discussion about telecommuting and telework, a very small percentage-some studies suggest 5 percent-of workers do "serious" (full-time or near-full-time) telecommuting, and a good proportion of those are administrative workers rather than knowledge workers. Knowledge workers, like all other types of workers, like flexibility, and they like to work at home occasionally. However, they don't want their homes to be their only offices. They know that to be constantly out of the office is to be "out of the loop"-unable to share gossip, exchange tacit knowledge, or build social capital. This means that organizations should not bother with office arrangements that assume full- time telecommuting, even though occasional telecommuting doesn't save companies any money. It also means that firms that are committed to telecommuting may be less attractive in the knowledge worker labor market.

Knowledge workers communicate with people who are close by.

Tom Allen, the dean of researchers on the work behaviors of scientists and engineers, found more than two decades ago that technical workers (a proxy for knowledge workers) whose desks are more than thirty meters apart have a frequency of communications that is roughly zero.7 Some might argue that e-mail and instant messaging have changed the relationship between physical proximity and communication. However, I'd argue that you rarely e-mail or IM intensely with someone you don't know. Assuming it's still true, Allen's important and oft-cited finding means that companies should design work environments so that knowledge workers who need to communicate are physically close to each other. Of course, this requires some strategizing about who needs to be talking with whom. Organizations such as 3M and Herman Miller have tried to do just that in the design of some of their facilities.

Firms that are committed to telecommuting may be less attractive in the knowledge worker labor market.

Knowledge workers don't care about facilities gewgaws.

At least there is no evidence that anyone ever took a job, stayed at a job, or worked more productively because of foosball, pool, or ping- pong tables, cappuccino bars, office concierges, hearths, conversation pits, quiet rooms, lactation rooms, creativity rooms, relaxation rooms, nap rooms, etc., etc. In these lean and mean times, many workers are even reluctant to be seen using these facilities for fear that they won't be considered hardworking enough. In any case, there's no clear relationship between knowledge worker performance and various appealing features of the work environment, though they may help slightly with recruiting or morale. To my knowledge only a couple of office furniture firms (Herman Miller and Steelcase, to be precise) do much to have an impact on such workplace innovations- and their focus is on broad workplace changes, not on architectural gewgaws-so we may never know for certain whether they are worth the money and the architect's time.

Despite the faddish nature of workspace design and the absence of detailed knowledge on its implications, many organizations truly believe in the effects of the particular approaches they have adopted. It is often assumed, for example, that open offices lead to increased collaboration and open communication. This was the goal at SEI Investments, where all dividers were torn down in favor of a big open room that, according to one SEI knowledge worker we interviewed, "creates a fun environment in which people can communicate freely." Of course, an HR manager at SEI admitted that only about half of the potential hires for the company thought they could stand working in such an open environment, which seems a high price to pay for architecture (although, to be fair, SEI believes that the environment is a good screening mechanism for the collaborative workers they want to hire).

Certainly there are many occasions in which chatting over cubicle walls has facilitated the flow of information through knowledge work processes. Yet we heard just as many anecdotes about workers who stayed at home to do heads-down work because they couldn't concentrate in the office. One knowledge worker involved with highly sensitive political risk analysis, for example, feared that his job performance would be severely compromised as soon as the firm moved to a completely open floor plan. And at Monsanto (which later merged with Pharmacia & Upjohn to form Pharmacia), where a business unit had attempted to do away completely with private offices to reduce hierarchy and increase communication, senior officers of the unit eventually erected their own private offices. Employees are skeptical of open office arrangements and often suspect (as do I) that the primary benefit of these designs is the lower space costs of packing more people into cubicle-structured space.

Similarly, mobility within the workspace and outside of it is a frequently cited objective. This obviously makes sense in industries such as professional services, where workers must travel to clients frequently. Yet we don't know what price organizations pay in social capital when employees are highly mobile and can't be easily located for a face- to-face conversation. "Hoteling," for example, or the assignment of workers to whatever workspace is available when they come into the office, is clearly an efficient means of allocating space to mobile workers, but several firms that have experimented with it report that it engenders about the same level of community we find in an actual hotel. How many friends have you made in hotels? When the person next door is different every day, informal social relationships don't develop easily.

Source: An excerpt from Thinking for a Living: How to Get Better Performance and Results from Knowledge Workers, by Thomas H. Davenport

Women are drivers of global growth

What do growth, expansion and prosperity have in common?

In French grammar they are feminine and when it comes to facts and figures they are feminine as well.

Forget China, India and even new technologies - for the past 10 years the number one vector for global growth has been women.

Since 1970, women have held two out of three new jobs. According to The Economist, which compiled studies from a number of research firms, the arrival of this new workforce has done more to encourage global growth than increases in capital investment and improvements in productivity. "Over the last 10 years the increase in women [in the workplace] in developed countries has made more of a contribution to global growth than China has," concludes the British weekly.

Let us look at France and the US. The female workforce is growing at an increasingly rapid rate. At the beginning of the 1950s, 7m women held a paying job in France, or about a third of the working population. Today women make up 47 per cent of the workforce. A similar scenario applies to Sweden, the UK and the US, where a third of women of working age were employed in 1950 and two-thirds today. The increased number of women in the working population compensates for the negative demographic effects of an ageing population and lower birth rates. The same trend is now also visible in emerging countries. South-east Asia's economic success is due primarily to women, who hold two- thirds of the jobs in the export industry, the region's most dynamic sector.

So, will the workplace, where women have long fought for their rightful place, become woman's domain? One thing is certain: women's rise in power, which is linked to the increase in wealth per capita, is happening in all domains and at all levels of society. Women are no longer content to provide efficient labour or to be consumers with rising budgets and more autonomy to spend. They are increasingly becoming directors, managers and entrepreneurs. Some studies have even shown a correlation between the presence of women in managerial positions and a company's financial results.

This is just the beginning. The phenomenon will only grow as girls prove to be more successful than boys in the school system and enrol in higher numbers in universities. For a number of observers, we have already entered the age of "womenomics", the economy as thought out and practised by women. Those Chinese who desire that their only child be male may soon realise that a daughter could be a better investment. Bosses know full well that a team of both men and women is more creative and efficient than one comprised of only men.

But perhaps we are getting ahead of ourselves. Despite their irrevocable rise in power, women remain under- utilised and not only in emerging countries. In Italy, for example, the number of working women is still at only 40 per cent of the workforce. Even in countries where there are a large number of women doctors, lawyers and high-level executives, they represent only a small percentage of surgeons, partners and chief executives. It is true that the "glass ceiling" that prevents women from reaching the highest echelons is also, in part, in their heads. Indeed, women seek happiness and an equilibrium in their activities more than men and often find themselves turning down responsibilities, citing the sacrifice it could mean for their family life.

We could say that the judicial progress made, such as the recent French law requiring equal pay for men and women in the workplace, is merely an opener for the work to come. If society wants to benefit from women's resources and if companies want to hold on to talent, they must create social protections to neutralise the effects of interruptions in the career path or offer the choice to accept fewer professional obligations than a male counterpart.

"Womenomics" is not, as some would claim, a passing fad, but rather a lasting trend. Women are on centre stage when it comes to all vital issues: healthcare, education, the environment and demography. As women today are reaching positions of power in massive numbers, their responsibility towards the progress of society is growing. Women want to assume this role and they will.

The writer is the founder and president of the Women's Forum for the Economy and Society. The annual meeting of the Women's Forum on the theme of women's new responsibility for improving society will be held in Deauville, France, October 5-7

Source: The Financial Times Limited


Why Office Design Matters Pt II

Women - The Drivers of Global Growth?

  • Economic Notes:
    • Seventh Heaven For U.S. Commercial Real Estate Market
    • Has rational exuberance replaced cautious optimism? A new survey of investor sentiment finds that spiraling demand for commercial real estate should persist through at least the end of 2007, driving asset prices beyond their current record levels. On Monday, Chicago-based law firm DLA Piper released findings from its 2007 "State of the Market" real estate survey. The survey, last conducted in September 2005, polled 2,400 U.S. senior real estate executives. Most respondents expect commercial real estate fundamentals to continue firming up over the next few months. A full 78% of respondents described their 12-month outlook for commercial real estate fundamentals as "bullish." By comparison, only 43% of respondents felt "bullish" about the near-term market fundamentals in September 2005.
    • Buoyant Quarter For Brokerage Giant
    • CB Richard Ellis announced a strong first quarter today, boosting earnings per share by 59% during one of the strongest global real estate markets in history. CBRE generated revenue of $1.2 billion, up 61.6% over the $751.3 million posted in the first quarter of 2006. The company also drew its revenues from a diverse mosaic of business lines and markets. "For the past 18 quarters, the company has been the acknowledged market leader in most major business centers worldwide," says Brett White, president and CEO of CB Richard Ellis, who led the first quarter earnings call today. "This dominant geographic footprint coupled with the industry's most extensive offering of client services and business lines, has allowed us to leverage a favorable global marketplace into exceptionally strong growth." White says that the Trammell Crow integration is "going extremely well and ahead of schedule." Last Halloween, CBRE paid $2.2 billion for Trammell Crow. The Trammell acquisition (and others) helped generate roughly half of the 61% revenue growth that CBRE achieved during the first quarter. Revenue for CBRE's development services segment - acquired through the Trammell Crow merger - totaled $17 million for the first quarter. CBRE also had $5.5 billion in development projects underway at the end of March.

    Source: NREI Newsline

  • This Weeks Leads:
    • Eastern Mountain Sports
    • Eastern Mountain Sports, Inc. trades as Eastern Mountain Sports at 69 locations throughout CA, CT, DE, MA, MD, ME, MI, NH, NJ, NY, PA, RI, VA and VT.
    • The stores, selling sporting goods and related apparel, occupy spaces of approximately 7,500 sq.ft. in strip and power centers, in addition to urban, tourist and freestanding locations.
    • Plans call for additional openings in the Mid-Atlantic and Northeast sections of the U.S. during the coming 18 months.
    • Typical leases run seven years.
    • A vanilla shell and specific improvements are required.
    • Preferred cotenants include upscale and entertainment retailers.
    • For more information, contact Mike Corrie, Eastern Mountain Sports, Inc., 1 Vose Farm Road, Peterborough, NH 03458; 603-924- 9571 Ext. 6082, Fax 603-924-9138.
    • Steve & Barry's University Sportswear
    • Steve & Barry's University Sportswear operates 191 locations in 33 states nationwide.
    • The stores, carrying private label merchandise with most items priced at $9.98 or less, occupy spaces of 25,000 sq.ft. to 150,000 sq.ft. in malls, lifestyle, power and strip centers and urban/downtown areas.
    • Plans call for 100 openings nationwide during the coming 18 months.
    • For more information, contact Doug Calvin, Steve & Barry's University Sportswear, 12 Harbor Park Drive, Port Washington, NY 11050; 516- 267-7359, Fax 516-487-4361; Email: dcalvin@steveandbarrys.com; Web site: www.steveandbarrys.com.
    • Brookshire Grocery
    • Brookshire Grocery Co. trades as Brookshire Food Stores and Super 1 Stores at 155 locations throughout AR, LA, MS and TX.
    • The supermarkets, offering gasoline facilities and a pharmacy, occupy spaces of 30,000 sq.ft. to 70,000 sq.ft. in freestanding locations, power and strip centers.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months.
    • Typical leases run 15 to 20 years.
    • Preferred demographics include a population of 13,000 within one mile earning $30,000 as the average household income.
    • Competition is cited as Albertsons, Kroger and Wal*Mart Supercenter.
    • A land area of five to six acres is required for freestanding units.
    • The company prefers to acquire its sites.
    • For more information, contact John Broderhausen, Brookshire Grocery Co., 1600 West Southwest Loop 323, Tyler, TX 75710; 903-534- 3000, Fax 903-534-2217; Web site: www.brookshires.com.
    • The Men's Wearhouse
    • The Men's Wearhouse, Inc. trades as The Men's Wearhouse at 530 locations nationwide.
    • The men's off-price apparel stores occupy spaces of 6,000 sq.ft. to 7,000 sq.ft. in freestanding locations and power centers.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • Typical leases run 10 years.
    • Specific improvements are required.
    • Preferred demographics include a population of 150,000 within five miles earning $50,000 to $75,000 as the average household income.
    • For more information, contact Tom Jennings, The Men's Wearhouse, Inc., 40650 Encyclopedia Circle, Fremont, CA 94538; 510-657- 9821, Fax 510-723-8315; Email: tljennings@tmw.com; Web site: www.menswearhouse.com.
    • Nutty Bavarian
    • Nutty Bavarian trades as The Nutty Bavarian at 400 locations worldwide.
    • The stores, selling an assortment of nuts, occupy kiosks in entertainment and outlet centers, malls and tourist attractions.
    • Plans call for 100 openings in the existing markets during the coming 18 months with interest in auditoriums, theme parks and arenas.
    • Typical leases run one year.
    • Preferred demographics include a population of 30,000 within a five-mile radius earning an average household income of $35,000.
    • For more information, contact David Zangenberg, Nutty Bavarian, 305 Hickman Drive, Sanford, FL 32771; 407-444-6322, Fax 407-444-6335; Email: davidz@nuttyb.com; Web site: www.nuttyb.com.

  • Bonneville Research is a Utah-based consulting firm providing economic, financial, market and policy research to public and private sector clients throughout the intermountain west.

    Our services include:

    • Urban Renewal/Redevelopment Analysis and Budgets
      • Urban Renewal "Blight" Studies
      • Economic Development "Benefit Analysis"
      • Financial Potential Analysis
      • Project Area Budgets
    • Strategy and Policy Analysis
    • Economic and Fiscal Impact Analysis
    • Statistical and Survey Research
    • Business License Fee Analysis Work Flow Improvement and Cost Analysis

    We live where we work and each of our effort is tailored to address the unique needs of our clients and their communities.

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    Bob in Japan

    From April 27th through May 12th, Bob and his wife Gwen will be in Matsumoto Japan.

    Gwen will be representing Salt Lake City as part of the 100 year anniversary of the founding of Matsumoto Japan - the first and most active of the Salt Lake City Sister Cities.

    Two of Bob & Gwen's children - Will (26) & Liza (24) have been living in Matsumoto this past year teaching English as a second language.

    Bob will be visiting with long time JC friends and just trying to stay out of trouble.

    Matsumoto is in the Japanese Alps - close to the sites of many of the 1998 Winter Olympics.

    Jon will be available to handle any issues or questions that may come up.

  • Japan Alps
  • The "Japan Alps" contain the highest peaks in Japan after Fujiyama, and are very similar to the Alps of Central Europe both in character of the landscape and in the abundance of snow in winter.

    The Alps attract large numbers of walkers and climbers in summer and skiers in winter.

    Matsumoto is at the "gateway" of the Japan Alps.

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