Ask the Wizard

Good question about organizational behavior in startups and office configuration, a topic about which the FeedBurner cofounders have very definite opinions.

“Oh great Wizard, what is the ideal office space configuration? Cubes with some private offices, combination of open workspace, cubes, and private offices, or some other crazy configuration?”

Yes, we’re all getting cute with the ‘oh great wizard’ stuff….serves me right. My opinion for technology startups is totally open space with some large conference rooms, some very small conference rooms which double as phone rooms for personal/private phone calls, and no private offices, and if that’s not possible (no such rental space in a neighborhood, etc.) then make your existing space as open as possible and turn private offices into rooms with 2-3 desks. When FeedBurner was about 35 people, I was with a collection of CEO’s at one of our investors’ entrepreneur summits, and I stated that this was the winning formula in my book. I was widely disagreed with, mostly on the grounds that you can’t sustain open space with no private offices beyond 40-50 people. Since we were only at about 30 people at the time, I figured maybe that was true, and I certainly couldn’t prove that it wasn’t. My short time at another much larger company with generally open space makes me think my first instincts were correct. I’ve certainly seen that it’s not true that you can’t scale the open space approach beyond 30 people. Let’s talk about why I like this open configuration in startups, and why I hate dislike offices:

1. Speed of communication begets speed of execution. News travels a lot faster in a big open room with no walls than it does in an office with corridors and private offices. When everybody is up to speed on what’s happening in the company in real time, it’s easier for everybody to zig and zag at the same time. True/simple/stacked-deck example: We once were working on a partnership with another small company – fortunately, for the sake of this example, they were in a *very* private office culture, and FeedBurner was totally open floor plan - no offices, everybody has a desk and no walls. Our marketing director received a call from their marketing person about a change their engineering team requested. Our marketing person put down the phone and just said to me “hey dick, they want to do blah instead of bluh”, and I got up to walk across the room to the engineering person on our side and he just said “yeah, that’s fine, no problem” before I even got over there. We’re all up to speed in 10 seconds. Meanwhile, over at private offices company, the marketing director and their lead engineer know about this, but the founder, who is in the office that day, sends me an email three hours later, saying “hey, I just found out our guys wanted to do bluh instead of blah, but I wanted it to be blah because [insert rationale]. So let’s go back to blah.” Then, separately, two hours after that, I get an email from the CEO, who is also in the office that day, and who also has a private office, that says “hey dick, understand we’re now doing bluh, that’s probably even better.” Ok, at this point, their executives aren’t even on the same page on this simple integration. Granted, this is one silly example. Yes, I know that this could have just as easily happened to us if one of us was traveling that day. Yes, I know this could just as easily have happened to us if our marketing director wasn’t at her desk when the phone rang and this became an evening email thread. The point is that all things being equal, our office configuration was far more adept at dealing with instantaneous change (what Newton called “calculus”), and the private offices at the other company prevented what should have been rapid communication given that they were all in the office that day. Private offices create distance when what you require is proximity.

2. Friction begets friction, transparency begets transparency. Can you tell that the key word in this post is “begets”? One function of a very open space work environment is that you get transparency up and down the organization. When the engineering team can hear the support team constantly fighting the same battles on the phone, they have a better appreciation for the product issues. There were many times when just overhearing a phone call would help countless people in the company correct an issue before it occurred (“hey, I heard you tell that guy that XYZ will be ready in a couple weeks. It’s going to be ready but we’re starting to think we want to limit the release initially until we make sure ABC is working well”). You don’t get that serendipity in a private office environment, you get friction. Friction requires a lot more formal communications processes, and processes in small companies have the potential to create more, not less, friction. You obviously have to have a few small conference rooms or phone rooms where people can make private calls. People have personal calls to make and some people don’t particularly care to be negotiating with a major media company out in an open room when the CEO is swearing about something else in the background, you know, just to pick a hypothetical. When all the general business is conducted out in the open, there’s much less likelihood of office gossip because everybody generally knows what’s going on. I would talk to our finance team about quarterly numbers out in the open, right next to engineering. Some people will say that’s stupid, as a new/junior employee might run out to lunch and tell their friend “We only did four dollars in revenue this quarter”. My position was that everybody in the company is a grown up and we’re not going to hide and speak in hushed tones unless there are very specific non-disclosures involved, which of course come up from time to time.

3. Motivation. Look, there are days when everybody comes into work and just thinks “How many times do I have to remind myself that the words ‘more’ and ‘tequila’ do not go together?” The beauty of a big open space is that you’re not going to just sit there and dial it in, or at least if you do, everybody will take notice….when you see your sales director on the phone with a particularly tough customer and really grinding out a long negotiation, it makes you think that you can’t just sit there and suck your thumb. You feel like you have to do your part. You feel more part of a team.

We can all think of a number of startups where you might need private offices, particularly outside the realm of technology startup. Companies where customer/partner confidence is imperative and employees would feel that every phone call had to be taken in a private room. I can imagine some financial services companies, some health care companies, and some consulting companies require that just about everybody have a private office. If every one of your customer calls has to take place in a private phone room, well then, you should probably just have an office, however, I believe this is not the case for 99% of technology startups. I just do not buy that the director of sales or the CEO have to be on private calls more than once or twice a day, at most.

Frankly, whether people will admit it or not, most of the time you end up in an environment with a private office for status reasons, not business reasons, and status is not a particularly compelling argument for a specific office configuration. In fact, status has the downside of causing people in the company to work toward status instead of working toward results.

There is one humorous side effect of this kind of environment, which is that people from traditionally status-oriented industries (say, banking, just to pick on a vertical) don’t take you as seriously when they visit your office. You can’t possibly be doing that well as a company if the CEO is just sitting out here in the middle of the room with the rest of the huddled masses!