OFFICE FURNITURE COMPANY LAUNCHES "UPSTART" WORKPLACE CONSULTING UNIT, TELECOMMUTING REVIEW, September 1994 SUMMARY: In response to changing customer needs, Steelcase recently set up a separate company to provide a wide variety of services to companies looking for expert advice and outsourcing help. It's a good example of how large vendors can evolve as the marketplace changes. Also noted is an interesting approach to redefining "productivity" that appears in the company's sales literature. Steelcase, the Michigan-based office furniture manufacturer, has made a well-deserved name for itself as a leader in its market. During all the years of steady growth in office buildings around the world, Steelcase and its competitors did quite well. But more recently, the effects of worldwide economic downturns have taken their toll on this industry, and all the office furniture companies have taken steps to diversify and meet the needs of a changing market. In late 1993, for example, Steelcase opened its Turnstone company [see 11/93 TR] to sell a limited line of its products via catalog to the small business and home-office markets. Earlier this year, the company launched Tangerine (yes, that's the name - just like the fruit) for quite another reason. "We had a consulting group within Steelcase, and began to hear from our customers that they wanted something different from us," explained Fiona Hughes, who headed the internal consulting group which led to Tangerine, which she serves as president. "They said, 'We want to buy your knowledge without having to buy your products.' They didn't want to feel obligated or directed into buying Steelcase products if they really wanted some guidance on a consulting basis. That's why I pushed the company to set up this independent business in which the consulting and service wouldn't be tied to a furniture sale." The spin-off company's literature describes it as "A Steelcase Upstart," and notes that it "creates, develops and maintains effective working environments." Tangerine has only sixteen salaried employees now and isn't likely to grow very quickly. "We rely heavily on contractors and strategic partners," Hughes told me, "and we don't want to build a large organization if we can provide the services our customers want in other ways." [Ed. note: Having had some contacts with Steelcase over the years, I can tell you that Tangerine is decidedly different. Steelcase is a very effective organization, but I would not describe it as "lean and mean".] Tangerine got its first big contract with Travelers Insurance last spring. The contract covers over 4 million square feet of office space in five Northeast U.S. states, which is where most of Connecticut-based Travelers' offices are located. The contract covers virtually every aspect of facilities design and management - ranging from construction management and facilities planning to office design and furniture management. Most of the work is being done by Tangerine's "alliance partners" under Tangerine's direction. "We're working with Travelers to brainstorm some radical changes in their work environments," said Hughes. "We won this contract over more than 100 other potential vendors because Travelers felt we had a very good grasp of their business." Hughes noted that Tangerine will work with companies to assess and implement alternative work environments on a global basis. "This raises some interesting questions," she said, "such as whether a company really can have a uniform strategy around the world, and how it will be possible to accommodate cultural and geographical diversity in doing so. We recognize there can't be a single strategy that works well in every location, but we also know there some overall corporate goals that must be met." Hughes and her colleagues bring a range of experience about what makes knowledge workers productive, and about how to "surround people with the right work environments," as she puts it. On the subject of the virtual office, Hughes made it clear that there's a lot more talk than well-informed action these days. "Everyone talks about the virtual workplace, but who really understands it? We find we have to do a lot of education with our clients and make sure they aren't creating the very problem they are trying to prevent," she said. Some companies moving ahead with virtual office programs are ending up with mobile workers that have as many as three or four separate work locations. "This creates a lot of extra work, extra cost, and inefficiencies," Hughes observed. I asked her about the role of corporate real estate cost reduction in alternative work environments programs. "We believe that if cost reduction is the prime focus there will be problems. We've been trying to make the distinction between cost reduction as a trigger or as a driver. If it's a driver, and it's really the main motivator, it isn't going to work. But if cost reduction is a trigger - that is, it is the reason why companies start to look at workplace redesign but it isn't the only reason - that will be more successful." [Ed. note: see following article for more on this subject.] A Side Commentary About Knowledge-Worker Productivity If you've been reading this newsletter for a while or have heard me speak or consult, you know I've been trying to discipline myself and others away from talking about "improved productivity" as one of the benefits of telecommuting - even though most of us deeply believe that well-managed telecommuting translates into more and better work. The problem is that the term "productivity" is a factory-age term that generally relates units of output to units of input - a metric that doesn't translate well to knowledge workers and most professional-level office settings. I've suggested we start using the word "effectiveness" as a term to capture not only increased output, but also improved quality, ability to handle multiple priorities, and ability to meet deadlines - the kinds of outcomes we see from knowledge-worker telecommuting. That's why I was glad to see that Tangerine's brochure included the following as one of the keys to success in "these unforgiving times:" Get beyond productivity. Recognize that the best way to increase your organization's earning power today may be to increase its effectiveness. Effectiveness = the ability to satisfy customers. That's a short and simple definition of "effectiveness" and I think it captures the essence of what we expect people to do. Whether they are working for internal or external customers, knowledge workers have to satisfy customer needs - and that means more than just thinking about simplistic output measures. [Incidentally, it's worth requesting a copy of the Tangerine brochure just for the sake of seeing a marketing brochure that's concise, fun, and exceptionally well-produced - not to mention that it will say a lot more about what Tangerine does and offers than I've described in this article.] CONTACT: Fiona Hughes (616) 247-2900, Fax: (616) 246-4925 ________________________ Gil Gorden Associates 10 Donner Court Monmouth Junction, NJ 08852 (908) 329-2266 Fax: (908) 329-2703 Email: 74375.1667@compuserve.com David L. Peterson 235 West 56 Street, #11-F New York, NY 10019 (212) 586-5235 Fax: (212) 582-2038 Email: dlp@pipeline.com TELECOMMUTING REVIEW © Copyright. All Rights Reserved.