Why you don’t need an office

When I started Transformed over 12 years ago, like most small businesses there were no staff. It was just me. I did the work, generated new work, paid the invoices, updated the website and spoke to potential clients.

I worked in a spare room at home, like many start-up businesses. Even the likes of Microsoft or Apple all started the same way, working at their dining room table or in the garage. To this day, some 12 plus years later, I still work in my home office: a dedicated space just for me and the business. When I’m in the office, I’m working. When I’m ‘at home’, I don’t go into the office.

Why an office is unnecessary

The modern office is like the factory from the industrial revolution. People from the local village were employed in a foundry, mill or textile factory to manufacture or produce goods that others from the village or district needed. In the 21^st century the majority of people are knowledge workers and no longer need to be physically present at a centrally-located machine to perform the work. However the structures and habits that have been developed over a few hundred years, still persist. The office is the modern-day factory. People are shunted into cubicles to do their work, like factory workers at a station on a machine or assembly line.

So, why don’t we have an office?

Strangely enough, even after 12 or so years, I haven’t ever had the need to have an office. It’s not that we don’t actually want an office, it’s more like we don’t need one. For over 12 years I have been looking for a reason to have an office, but so far, I haven’t found one.

Nowadays, work can be done from anywhere at any time, provided you have your trusty laptop and an internet connection. Most applications are cloud-based, so provided you have a web-browser, you can access what you need. Email, file servers, business applications, accounts software, marketing software et cetera are all available online for a monthly or annual fee. With applications such as Skype, Zoom or Go-to-Meeting teams of people can meet, discuss, share documents and collaborate on a virtual whiteboard and do almost anything that can be done where everyone is in the same room at the same time.

So where did I start?

Prior to starting Transformed I had worked for a range of consulting and technology firms. As consultants we spent almost all our time on the clients site working. We would occasionally go back to the company office for drinks or a briefing by the General Manager. The companies also had a few offices in different cities, so I found I was always emailing accounts in Melbourne or talking to my manager in Sydney whilst I was working in Canberra.

When managing large projects, we would often have small teams of people working on part of the project in a few different locations at once. In most cases I never physically met these virtual teams, but we communicated regularly via phone, email and video-conference.

As the business expanded I needed to bring on staff to help with the work. I hired a book keeper, someone to the marketing, others to help with the actual work and eventually a sales person. The challenge I had was that being based in Canberra, it is difficult to find people with the skills I needed, and given the high starting salaries in government jobs, quite inexperienced people wanted six-figure salaries, which we just could not pay.

I was in a difficult position and didn’t really know what to do, when one day I thought about when I worked for the consulting and technology firms, everyone I interacted with was virtual. This was the answer I was looking for!

What I discovered when I went looking for staff was a few key principles that fundamentally changed my view on hiring a team.

Firstly, there is a new and emerging group of workers collectively known as virtual assistants. Often these are stay-at-home mums who worked in professional roles before they started their family, but now want part-time work to fit in around their parenting responsibilities. This group of people have tremendous skill and loads of experience, but in a world where business still have a preference to hire people on a permanent part time, or full-time basis working in an office, this way of working just doesn’t suit their circumstances.

With the advent of the ‘gig economy’ there are thousands of people around the world that now work on a project or ‘gig’ basis finding and securing work through platform like Fiverr, O-Desk or Freelancer. There are networks of virtual assistants that have been set up to provide ad hoc support or to performance specific activities remotely. Many of these people are solopreneurs, running their own micro businesses, and they are set up to provide the best possible service to you, their customer.

A mistake I see a lot of small and medium businesses make is they often hire people on a full-time basis when in reality, there isn’t a full-time workload for the role. Often with full-time positions the business owner or manager gives a number of other tasks to that person so they have roughly 40 hours a week of work to do. Often these ‘extra’ activities are things that the person doesn’t like to do or just isn’t good at, and so a potential performance issue is created. Instead, a better approach is to hire the best people on an ad hoc or part-time basis, with each person using their specific skills and expertise to do a job they are great at.

My first two hires were a marketing manager and a book keeper, both of whom were located in the Gold Coast. Both worked part-time on an as required basis and were paid an hourly rate for their work. We put in place a system of work, and a few specific protocols so we knew how things would be done. Whilst I couldn’t physically supervise the work they did, the virtual nature of the arrangement forced me to think about how to best manage staff and ensure they did what I needed them to do without me watching over their shoulder.

So what are the benefits of a virtual office?

There are many benefits to operating a virtual organisation.

For a small business, this provides an amazing opportunity. No longer do you need to hire someone in the local area to work for you. You can find the best person anywhere in the world and engage them to do what they do best.

There are also significant benefits for the team that work for you. They don’t need to spend hours each week commuting to and from your office, they don’t need to pay for petrol or public transport and they also don’t need work clothes or a uniform, saving thousands of dollars each year.

The biggest benefit is that allowing people to work unsupervised remotely creates a culture of trust, allows each person to be empowered and self-direct and shifts the focus from the number of hours spent at work to the outcomes produced.

“I found that as I’ve managed staff, the more flexibility and opportunities that I gave them to be good parents, the more commitment that they made to working with me, the less likely they were to leave because they wouldn’t find the same sort of situation somewhere else“

Research has shown that virtual workers are far more productive.  Rank Xerox (UK), for example, reported a sixty percent increase in productivity from people working virtually. Part of the reason is that working remotely provides significant flexibility, so people can work when they need to but can go to their daughter’s school concert, go for their lunchtime walk on the beach or take the dog for a walk when they need some fresh air to help them refocus.

Not having an office results in considerable savings on rent, which can easily add up to tens of thousands each year. International technology giant, IBM saves about $100 million a year by allowing forty percent of their 355,000 strong workforce to work virtually.

There are also substantial environmental benefits. The Telework Research Network[1] identified that of the forty five percent of the US workforce that was able to work remotely from home actually did, then there would be:

• a reduction in greenhouse gases of over 51 million tons;
• the national savings would total over $900 billion a year;
• There would be forty six percent less oil imported from the Persian Gulf; and
• The total energy saved annually would be more than all renewable energy sources in the world combined

I did some analysis a few years ago and calculated that our small team made the following savings each year by working from home. We reduced the amount of travel by

171,600km per year by not commuting to or from an office. We freed up 3300 car spaces in cities, reduce the council’s road maintenance by $3500 per year and saved in direct costs approximately $75,000 in office fit-out expenses and $100,000 pa in staff costs. By hosting our systems in a ‘green’ data centre hosting and using cloud-based software, we have eliminated 66.5 tonnes CO² per year.

What are the challenges?

Working in a virtual office with a virtual team is not all ‘rainbows and unicorns’. It takes some discipline and also requires a few specific practices. Working remotely is also not for everyone. It takes self-discipline to do you work and get motivated when there are no one there to make you work. Some people get distracted by the household chores that need to be done or get sucked into binge watching the latest season of their favourite show on Netflix.

Being by yourself for long periods can be demotivating and the lack of human interaction can leave you feeling alone and isolated. But these can be easily overcome by scheduling calls and meetings with people, or having a ‘meeting day’ each week where you get out of the (home) office to meet with clients or prospects

How do I make it work?

The biggest barrier to running a virtual team is the fear of the unknown. Managers and business owners have a tendency to want to oversee and supervise the work of others. However, this often leads to micromanagement. Instead trust your staff to do their job and give them the systems and training on how to do it, then let them get on and do it.

At Transformed we spent time mapping out our business processes to identify the exact workflows, standards and systems of work to be used. Everyone was then clear on what was being done by whom. Where work passes from one person to the next, we have clear hand and takeover points. If something is missing, some information is not provided or part of the process hasn’t been done, the work handover is ‘rejected’ and it is sent back to the previous person to fix the issues.

Each person has a job description with a set of key performance indicators (KPIs) and associated targets. They are all crystal clear on what their key outcomes and outputs are. The KPIs provide a basis of measurement so we can see who is performing and who isn’t.

Communication is key for virtual operations so we also schedule quarterly get-togethers, where we all fly into Sydney to discuss the plans for the next quarter, where we are at with key projects and work through the specific issues we have identified. This is supplemented by fortnightly call hook-ups where we provide an update of where our key projects are at and discuss the key activities and priorities for the coming two weeks.

So, my challenge to you is, why do you have an office? Do you have one because that’s what everyone does? Or do you have an office because you really need it?