Our workspaces are not just spaces where we make products and services. Workspaces are also spaces of interaction, engagement, and reflection where we build and develop various types of human and social capital.

This is important as these, and other types of capital, provide key strategic resources for our organizations to utilize as they grow, shift, and adapt over time. Our physical workspaces strongly mediate how these two specific forms of capital – human and social – are created, developed and utilized in an organizational setting. As such, an important strategic focus of every organization ought to be how their workspaces are configured.

Human and social capital are generally defined as:

Human capital – the skills, knowledge, and experience possessed by an individual and;
Social capital – the networks of relationships among people who work in a particular organization that enable that organization to function effectively.

The production of these two particular types of capital plays out in a number of ways within organizational settings. In terms of corporate culture (and the social capital that this entails), hierarchy can thus be expressed not only through reporting mechanisms and ‘org charts’ but also through spatial distinctions and divisions. As an example, whether or not senior executives work in open plan offices alongside other workers, or are hidden away in private offices does much to signal whether or not executives are seen as being approachable and available to all or, instead, are seen as occupying a higher status level than others.

As another example, the ease with which our workspaces enable workers to meet up with one another can directly impact on their ability, and so too their desire, to work in teams with others. The furniture configuration used in an organization, and the spatial layout of workspaces, therefore influences the performance of not only individual workers but also teams. A poorly laid out workspace – with large distances between meeting rooms, lack of proximity to co-workers, and lack of space for vertical and horizontal work surfaces – can be costly, no matter what the quality of the space utilized, when team members spend large parts of the day covering large distances to get from one-meeting room to the next. This ability to work in teams, let alone work effectively or efficiently in teams, in turn has a direct impact on human and social capital development within the organization.

However, despite this, discussions about the spaces that we occupy and so too the impact of these spaces on the creation, development and functioning of human and social capital are often at best an afterthought in strategic decision-making in organizations. The problem is that organization’s workspaces – the physical environments in which we undertake work – are still generally seen as being a cost to the organization rather than as an investment.

Things have improved somewhat in recent years as the dramatic success of tech companies such Google and Facebook, and their use of more open-style office planning, has at least brought to leaders attention the fact that space matters. That said, the discussion at the senior level still seems often to be more concerned with following what Google and Facebook did, rather than intentionally exploring what is the best use of physical space to maximize the effectiveness, productivity, and happiness of workers for their own organizations.

In respect to these issues, Jacqueline C. Vischern has claimed that there are thus three key ways in which space affects people in organizations:

space as an organizational resource, linking accommodation decisions with corporate business objectives;
space as a tool for work, providing needed support for employees’ daily tasks; and
space as it frames organizational interactions and social network formation, a mediating influence on the creation and operation of intra-organizational relationship

It is the combination of these three approaches that provides a framework for us to create high-functioning workspaces where human and social capital can be successfully created and developed.

Combined, these three aspects demonstrate how our physical workspaces are not just spaces where we make things, but are also the mediators of key organizational activities such as information flow, collaboration, social engagement, and the reinforcement of corporate values. In an environment of seemingly constant change, coupled with ever an increasing demand for highly skilled workers, ignoring the impact that our physical workspaces make in the development of human and social capital is – to put it bluntly – bad business.

Organizational leaders and managers therefore need to take seriously the various design criteria that can help them build effective and efficient workspaces. In their strategic work, leaders and managers need to consider not only the financial costs incurred by the amount of space utilized by their organization but to also begin to take seriously the negative costs incurred through a lack of appropriate space for group interaction, learning, and social capital development to occur.

This realization will help to break down the increasingly false distinction between managing people – traditionally the remit of HR – and managing spaces – traditionally the remit of facilities management. These two aspects of a well-functioning organization are inter-related, and decision makers would be well advised to include discussions of workspaces – and their configuration – seriously in their strategic work and operations if their goal is to create an effective, high-functioning organization.

Images courtesy of: Pixabay

In an increasingly turbulent world, dynamic capabilities are an important part of any well-functioning organization. As David Teece has demonstrated, these dynamic capabilities are important as they are an organization’s “capacity (1) to sense and shape opportunities and threats, (2) to seize opportunities, and (3) to maintain competitiveness through enhancing, combining, protecting, and, when necessary, reconfiguring the business enterprise’s intangible and tangible assets.”

In an external environment of near constant change, organizations need to be able to adapt and modify their organizational strategies to ensure not only their success but sometimes even their very survival. The agility to rapidly process strategic data and transform that into changing tactical operations is a direct function of the dynamic capabilities of the organization.

There are two aspects to this discussion of capabilities. The first, drawing from the practice of strategic management, focuses at an organizational level on structures and processes. The second, drawing more heavily from the Strategic Human Resource Management (SHRM) tradition, focuses on the individual and on teams. It is this second aspect of dynamic capabilities that we’ll address here. The problem at hand is that global changes in the nature of employment arrangements are negatively impacting on the creation and maintenance of team capabilities.

The last twenty years has seen a shift to the increased use of contingent workers by organizations in an attempt to enhance labor flexibility and reduce labor costs. This is problematic though because, with ever-higher levels of external complexity and uncertainty, organizations are increasingly needing to rely on the ability of individuals and teams to adapt effectively to changing circumstances.

The use of contingent workers is an excellent method to quickly and rapidly acquire some of the dynamic capabilities required by an organization to effectively adapt to changing external circumstances at the level of the individual. However, the use of contingent workers can also undermine the strong sense of purpose and shared beliefs that often typifies high-functioning teams. In this respect, the use of contingent workers can negatively impacts on the ability for organizations to acquire and possess the required dynamic capabilities at the level of the team.

The ability to rapidly source individual capabilities via contingent employment is therefore at odds with the sense of trust and shared purpose that is required to build high-functioning teams. There are a number of ways in which this risk can be mediated though.

Three possible ways to build a sense of identity, belonging and purpose across a group of employees, while still maintaining the benefits of flexibility, are:

the development of long-term relationships with contingent workers mediated through temporary help services (THS) firms;
the use of alliances between organizations to share workers across organizational boundaries;
the use of part-time flexible employment relationships.

The key to the success of any of these mechanisms is the sense of continuity of relationship that flows through these mechanisms.

A well-understood key to the operation of high-functioning teams is a strong sense of purpose and shared beliefs. While the shift to the increased use of contingent workers negatively impacts on this, these three methods create a degree of continuity – which can positively impact on the creation of a sense of shared purpose and beliefs – that can help mitigate some of these negative aspects.

In fact, with increased numbers of workers desiring more flexible working environments these types of structures actually might end up providing value for not only organizations but for workers themselves.

Issues do arise though with legal frameworks in some countries that inhibit the ability of organizations to maintain a continuity of relationship with workers while still maintaining a high degree of flexibility in the employment relationship. That said, as organizations increasingly move to the use of contingent workers these legal frameworks will change to reflect the reality of modern forms of employment relationships.

Dynamic capabilities at the level of the team are an important strategic resource for any organization. While changing employment relationships are impacting on how teams are able to build the sense of shared purpose and sets of beliefs that underpin high-functioning teams, new ways of maintaining a degree of continuity of teams over time are available for use if organizations are willing to think outside-the-box in terms of how they structure their employment relationships.

Images courtesy of: Pixabay