1997 Innovation Optimas Award Profile TBWA Chiat_Day, Los Angeles

November 1, 1997
Fight your way through the chaos of Venice Beach, California. To your left, over-inflated musclemen in doll-sized swim trunks waddle toward the on-beach gym, trailing a slick of baby oil. To your right, tattooed, dreadlocked teen-agers in tie-dyed T-shirts jostle into stores to buy... more tie-dyed T-shirts. Behind you, you've left a wake of street performers, willing to sing, dance or just hustle you for a buck or two. Maneuver around the single-minded tourists, blazing toward the beach's bazaar of tent shops, intent on finding the Holy Grail of souvenirs. Finally you reach TBWA Chiat/Day, Los Angeles, which, being Venice Beach-cool, is shaped like a pair of binoculars. Open the door. Feel the enveloping air conditioning. Close the door on the musclemen, teen-agers, street performers and tourists. Step into...

"Chaos," laughs Nancy Alley, HR manager for the ad agency that brought you the Energizer bunny and those hilariously surreal Nissan commercials. "Sometimes controlled and sometimes not, but it's the way we work."

It's the way the company has worked since 1994, when the agency, which had overflowed into two buildings, moved under one roof. The new building allowed management to create a new kind of work space, reminiscent of a big, lofty warehouse, with cubicles and offices verboten. The free-flowing office would foster more collaboration, creativity, efficiency and freedom for the already imaginative staff. Concurrently, work processes loosened up, so Alley introduced hoteling, telecommuting, teleofficing, job sharing and flexweeks-to varying degrees of success.

For any company interested in going virtual, or even just becoming a little more innovative with the workplace, TBWA Chiat/ Day's Venice Beach office is the one to mark. The three years since the agency went virtual have yielded three important lessons for any company thinking about such a transition to heed; lesson No. 1 is:

Try a little of everything.
Yes, it sounds a bit like something your Mom would say on Thanksgiving: "How do you know you don't like pickled beets if you've never tasted them?" But it's a good strategy for virtual officing. No HR person can guess whether telecommuting or hoteling or job sharing will work for employees. You've got to let employees taste a little of everything so they know what they like. This isn't, Alley says, a free ticket to wing it. HR should work out the logistics of making virtual officing workable. But from there, all bets are off. The real world is the best testing ground.

So as the agency unloaded boxes and crates at its new home, it also delivered a new policy. If an employee's job allowed for such flexibility, the employee could work wherever he or she wanted: at home, at a client's, on the beach, wherever. "What we tried to do was get away from people being evaluated by the amount of time they spent in the office instead of whether they met their goals," Alley says. "We told them if they wanted to have breakfast with their children or work at home to meet the cable man, that's fine as long as they're accessible to the client and their team, and they meet their goals."

Soon, a job-sharing partnership sprang up, as did several reduced-work arrangements. An entire department switched to a four-day workweek, and more employees began working from home on certain days, including Alley.

Meanwhile, employees had to adjust to a work area in which cubicles and offices were passÉ. As employees came into the office in the morning, they didn't head to their personal areas, as they would in a traditional office. Instead, they picked up their cellular phones and went to wherever their work would take them. Because TBWA Chiat/Day is an account-driven agency with employees assigned to customers rather than divided by job functions, that meant most employees headed to project rooms. Similar to a politico's campaign war room where strategists plan and plot for voter approval, a project room is the gathering place for each particular account at the agency.

All the creative people, the media people and the account-services employees spend most of their days in their assigned project rooms. This allows more synergy around each account. If the creative people float an idea that the account people know the client won't go for, the idea can stop right there-no time wasted.

The agency also built a clubhouse-a central meeting place with booths, tables, a kitchen, a pool table, punching bags and bean bags, even chairs made from old carnival Tilt-a-Whirls. Employees eat there, work there, or collaborate over a game of pool when a creative block hits.

Client conference rooms allow for more formal client visits, and an information resource center offers a quiet area for employees who need a break. "Because the office became so collaborative and so community oriented, we needed to have a quiet space where there were no telephones allowed, no meetings allowed, kind of a place to gather one's thoughts," Alley says.

All this flexibility is enabled in large part by a sophisticated phone system. Each morning, employees tell the switchboard operators where to ring them. Employees then can get calls at home, on their car phones, directly to voicemail, to a project room or to one of the agency's community work spaces, areas that offer access to a computer, phone and supplies like paper clips and staplers.

Computers, of course, play a large part in flexibility. Every work area has a Macintosh that can use the server system the company implemented. All work must be put on the server rather than saved on a hard drive, because no one is guaranteed the same computer each day. In addition, each laptop is equipped with remote-access capabilities, with modems and faxes ready for use anywhere.

Ever notice how human beings instinctively set up their own personal spaces? Even if there's no designated seating, people invariably choose a particular seat in a carpool, or chair at the family dinner table, even the left or right side of a bed. "The virtual office [requires behavior] that's very different from the human qualities of territorialism," says Amy Norton, assistant manager of HR. "Human beings want consistency. The virtual office is about sitting anywhere and working as long as you want. From a technical standpoint, it sounds brilliant. From a humanistic standpoint, it can be a very lonely experience for people."

How do employees deal with a workplace in which they don't have their own offices, their own computers, even their own telephones? The answer is, most don't do so well without the proper support. Some will eventually leave, Alley discovered; others will absolutely thrive, which brings us to lesson No. 2:

Specialized training and time to transition are key to success.
Alley says the move to virtual, which occurred within five months, was "pretty dramatic and pretty traumatic." It took her, she says, a full year before she felt fully acclimated. Patience and support became mandatory.

In the support category was training. At the most basic was training simply on how to use the new technology. Conducted both onsite and offsite, the training updated employees on Macintosh programming the company would be using, and skills such as how to access files from a remote server, how to store files on the server and how to use a modem. The agency also brought in a few hired guns, information-systems specialists, who walked the corridors of TBWA Chiat/Day the first few virtual months, ready to be of service to frustrated employees.

Then, of course, there was that little matter of training employees on how to change their entire view of working so they would be successful in their new environment. Managers had to learn how to evaluate their people on meeting goals and getting results, rather than the amount of face time they racked up. Employees in turn, had to learn such basics like what should and shouldn't be kept at a virtual office. That meant sacrificing the security blanket of hard copy, hold-it-in-your-hands documents, not ever easy, but particularly difficult in a client-service environment.

In the first few months, morale dipped dramatically at the office as the already busy workforce, straining to meet customer demands, suddenly had to take on a whole new skill set-and mindset. "A lot of the stuff we implemented was really to help people's efficiency," Alley says. "But it actually got in the way of them doing their jobs in the short term, and that was frustrating."

In exit interviews, Alley began specifically asking employees what they thought of the change. She estimates about 60 percent said they liked the change; 40 percent were frustrated but weren't leaving because of the change alone. One person did leave because of the new virtual officing. On the other hand, Alley says, the agency acquired a few new employees who came because of the virtual office.

Skeptics may think virtual officing is just the latest trend and not worth the trouble. Carolyn Corbin, president of Dallas-based Center for the 21st Century, a think tank predicting future workplace trends, thinks otherwise. In fact, she thinks TBWA Chiat/Day is simply one of the few companies adequately preparing for the future.

As the United States faces more global competition, especially with massively populated countries such as China and India that are increasingly productive, Corbin predicts U.S. companies' profit margins will plummet. Remaining competitive will require a quick-moving workforce-one that can work virtually anywhere-as well as the sacrifice of current luxuries such as office space. "In the not-so-distant future, 70 percent of the workforce will be virtual," she says. "But [managers] aren't training employees with that in mind. They're only training the entrepreneurial-minded employees, which if you look at the general population, is 7 percent to 10 percent. But it's important to train everyone. Get everyone to operate without walls. It's smart business, because this is going to happen."

So for smoother "virtual" implementation, heed lesson No. 3:

Get rid of what doesn't work; keep what does.
OK, Alley concedes, the hoteling idea wasn't flawless in execution. There were days in which employees came to work and couldn't find a phone, a computer, even a place to camp out for the day because more people had come in than expected. Many would spend hours wandering aimlessly.

In addition, a lot of people simply couldn't function completely virtually, and the company didn't want to lose them over the issue. "We made the assumption that everybody could work this way, that they can pretty much plop down anywhere, that people don't need stuff on their desks like photos of kids or spouses. But some people really like that stuff," Alley says. The agency has restructured so that every employee who wants it has access to some sort of personal place. Alley herself is one of those employees.

Even with the changes, the open-office structure, while allowing the company to keep its high-energy, bustling environment-the very thing its creative employees thrive on-can also be frustrating some days. Norton, for instance, faced a little culture shock when she came aboard from the staid hotel industry. "The main switch is just not having any privacy or any downtime," she says. "There are no boundaries; you can't close your door because you have no door. So that was one thing definitely to get used to."

Norton says the flip side of all this interaction is that human resources can provide intimate customer service and is a highly respected and relied on function at the agency.

Another change HR made was to revamp the performance reviews to make them more goal-oriented. The evaluation is simple: The manager and HR state the specific goals the employee must achieve in the coming year. At the end of the year, the manager states whether those goals were met. The agency stripped objectives that didn't link directly to goals. It would be nice if every employee could write and communicate well, for instance, but if these skills didn't tie directly to a goal, they were tossed. Alley says specific goal-driven evaluations are crucial to a virtual environment because managers don't interact with employees for days, or sometimes weeks, on end.

For those who can do it, company culture helps form a feeling of continuation. This is where the very traditional office functions, such as get-togethers, anniversary recognitions and T-shirts to commemorate projects become so important.

As for flexible work arrangements, Alley says, they're still thriving. "We'll listen to any case. If it works, it's the best thing to do for the business, it makes financial sense and will retain a good employee, we'll definitely be open to it." If a telecommuting venture ends up not working, the employee and his or her manager will come up with something else. The department that switched to a four-day workweek later switched back to regular hours when its schedule created too many complications.

Today, on any given day, as many as one-third of TBWA Chiat/Day's salaried workforce won't be found in the office. Alley says the company has worked out most of its post-virtual problems and is enjoying the fruits of its labor-more creative, energetic and satisfied employees. "We treat people like adults," she says. "Just giving people this freedom makes them feel more positive about being committed and giving of themselves."

It isn't easy being virtual. It can be confusing, frustrating and challenging. It's a very simple idea that in reality takes a lot of work and a lot of support from HR. It isn't for every company either. But it allows a firm like TBWA Chiat/ Day to function in a perfect state of controlled-and creative-chaos.

Workforce, November 1997, Vol. 76, No. 11, pp. 56-63.