Yes, the Open Office Is Terrible — But It Doesn’t Have to Be

It began as a post-war dream for a more collaborative and egalitarian workplace. It has evolved into a nightmare of noise and discomfort. Can the open office be saved, or should we all just be working from home?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Stephen J. Dubner?

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• 0:43Stephen J. Dubner?

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• 1:28Stephen J. Dubner?

  Visit amica.com and get a quote today. Freakonomics Radio is sponsored by ChatGPT. ChatGPT Work is a new way to work in ChatGPT. ChatGPT Work can pull info from across your apps and connect to your tools to help you create finished work. You can even automate work in ChatGPT with the Scheduled Tasks feature, and the whole time, you stay in control. Put ChatGPT to work on your most ambitious ideas and projects. Get started at chatgpt.com by selecting Work Mode, available on Plus and Pro plans.

• 2:14Stephen J. Dubner?

  Hey there, podcast listeners. This week, we've been in London, recording some live shows that you'll be hearing soon. And where have you been? After a long, peaceful summer, you have been back in your office. So we've got a little gift for you. One of our favorite episodes from the archive. It's called "Yes, the Open Office is Terrible, But It Doesn't Have to Be." Hope you enjoy, and thanks for holding down the fort while we are out here gallivanting. Cheers.

• 2:52Stephen J. Dubner?

  Hey, are you at work right now? And do you work in an office? Have you ever worked in an office? If you have, there's a good chance it was an open office, at least to some degree. The open office design has been around for decades in a variety of forms. If you are a cynic, you might think an open office is all about cramming the maximum number of employees into the minimum amount of real estate. But you could also imagine that an open office produces better interaction and more collaboration. Wouldn't it be nice to know if this were true? That's what these people wanted to learn.

• 3:28Speaker 01

  I'm Ethan Bernstein. I'm an associate professor of business administration at the Harvard Business School.

• 3:33Speaker 02

  My name is Stephen Turbin. I am a recent graduate of Harvard College. And I currently work for a global management consultancy.

• 3:43Stephen J. Dubner?

  Turbin has since moved on from his consulting job. Anyway, he and Bernstein had just co-authored a paper called "The Impact of the Open Workspace on Human Collaboration."

• 3:54Speaker 02

  I don't think I realized how much anger there was against open offices until the research was published and I was contacted by a number of friends and colleagues about their open offices and their deep, deep emotional scarring.

• 4:12Speaker 01

  There's certainly a population of people out there who hate. I think that's perhaps even not strong enough of a word.

• 4:18Speaker 02

  Not strong enough, I agree.

• 4:19Stephen J. Dubner?

  But proceed, please.

• 4:21Speaker 01

  It's just, people find it impossible to get work done. They find it demoralizing. Also, the lack of privacy and the feeling that they're being watched by others. Privacy tends to give us license to be more experimental, to potentially find opportunities for continuous improvement, to avoid distractions that might take us away from the focus we have on our work. Ethan is really, I would say, the king of privacy.

• 4:49Speaker 01

  My research over time has been about the increasingly transparent workplace and its impact on human behavior and therefore, performance.

• 4:59Speaker 01

  I've, over time, gone to ask the question, what about the open office? How does it impact the way in which people work and collaborate? I haven't had an empirical answer.

• 5:11Stephen J. Dubner?

  In search of an empirical answer, Bernstein and Turbin began a study of two Fortune 500 companies that were converting from cubicles to open offices. Sure, the downsides of an open office are obvious: the lack of privacy, having to overhear everything your coworkers say. But what if the downsides are offset by a grand flowering of collaboration and communication and idea generation? What if the open office is, in fact, a brilliant concept that we've all been falsely maligning? Today, on Freakonomics Radio, we'll hear what this new research has to say.

• 5:48Speaker 01

  So the study had two main conclusions.

• 5:51Stephen J. Dubner?

  We'll hear why it's so hard to design one office that works for everything.

• 5:56Speaker 03

  About half of our time is spent in focus mode. A little over a quarter of our time is working with others in person and about 20% is working with others virtually.

• 6:06Stephen J. Dubner?

  And we ask the all-important question, what's wrong with just working from home?

• 6:11Speaker 04

  You know, the three great enemies of working from home is the fridge, the bed, and the television.

• 6:31Speaker 05

  From Stitcher and Dubner Productions, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner.

• 6:52Stephen J. Dubner?

  The office is such a quintessential emblem of modern society that it may seem it's been around forever, but of course it hasn't.

• 7:00Speaker 06

  You know, the economy of the United States was based on farming and it was based on manufacturing. And so the office was almost an afterthought.

• 7:08Stephen J. Dubner?

  That's Nikhil Saval, the author of a book called Cubed: A Secret History of the Workplace.

• 7:14Speaker 06

  And so people thought, well, offices are essentially paperwork factories. So we should just sort of array them in an assembly line sort of formation.

• 7:22Stephen J. Dubner?

  This meant a big room filled with long rows of desks and scattered on the periphery, private offices for the managers. This factory model, which got its start in the late 19th century, came to be known as the American plan. And it was standard office form for decades, at least in the US. But then, in the middle of the 20th century, in Germany.

• 7:44Speaker 06

  There were two brothers, the Schneller brothers, who began to wonder about the nature of the American plan. There was a sense that this was arbitrary and there was no real reason to lay out an office in this way.

• 7:58Stephen J. Dubner?

  In 1958, Wolfgang and Eberhard Schneller created the Quickborner Consulting Group, with the idea of bringing some intentionality to modern office design.

• 8:09Speaker 06

  And one of the ideas that came to them was that an office is not like a factory. It's actually a different kind of workplace and it requires its own sort of system. And so maybe there isn't a reason to have desks in rows. Maybe there isn't a reason for people to have private offices at all, if essentially the office is not about producing things, but it's about producing ideas and about producing communication among different people. And so, over time, they pioneered a concept that they called the Bürolandschaft, or office landscape, and was essentially the first truly open plan office.

• 8:52Stephen J. Dubner?

  The idea was to create an office that was more collaborative and more egalitarian.

• 8:57Speaker 06

  It looks extremely chaotic. You just have desks in clusters and they just seem to be arranged in a pretty haphazard form, but in fact, there was rigorous planning around it in a way that would facilitate communication and the flow of people and ideas. And it eventually made its way to England and the United States, and it was considered an incredible breakthrough.

• 9:18Stephen J. Dubner?

  A breakthrough, perhaps, but the earliest open offices drew complaints similar to the ones we hear today. Lots of complaints.

• 9:26Speaker 06

  By not instituting a barrier between people, by not having doors, by not having any way of controlling the way sound traveled in the office, it stopped facilitating the thing it was supposed to facilitate, which was communication, because it became harder to communicate in an office environment where phones were ringing off the hook, where you could hear typewriters across the room and things like that. It wasn't actually the utopian space that it promised to be. In fact, it was deeply debilitating in some ways for the kind of work that people wanted to do.

• 9:56Stephen J. Dubner?

  Meanwhile, there was an American named Robert Probst working for the Herman Miller Furniture Company in Michigan.

• 10:02Speaker 06

  He was not himself trained as a designer. He was sort of like a freelance thinker.

• 10:11Stephen J. Dubner?

  Probst was intrigued by the office landscape idea, its openness and egalitarian aspirations, but he also appreciated its practical shortcomings.

• 10:20Speaker 06

  And he decided to turn to experts, to anthropologists, to social psychologists, to people of that nature.

• 10:28Stephen J. Dubner?

  After some research, Probst came to the conclusion that individuals are, well, they're individuals and they need more control over their workspace. He and the designer George Nelson came up with a new design in which each office worker would be surrounded by a suite of objects to help them work better. In 1964, Herman Miller debuted the Action Office.

• 10:50Speaker 06

  There was a standing desk, a regular desk that you sat at, and a telephone booth.

• 10:56Stephen J. Dubner?

  Design critics loved the Action Office.

• 10:59Speaker 06

  It looked incredible, but it was very expensive and very few managers wanted to spend this kind of money on their employees. So they went back to the drawing board and they tried to come up with something cheaper.

• 11:11Stephen J. Dubner?

  In 1968, Herman Miller released the Action Office 2.

• 11:16Speaker 06

  And it was this three-walled space, these fabric-wrapped walls that were angled, and they were meant to enclose a suite of furniture. And it was meant to mitigate the kind of chaos that an open office plan might otherwise have.

• 11:30Stephen J. Dubner?

  You may know the Action Office 2 by its more generic name.

• 11:34Speaker 06

  Which is the cubicle.

• 11:36Stephen J. Dubner?

  The cubicle promised a variety of advantages.

• 11:39Speaker 06

  It's meant to be very flexible, and it can form an impromptu conference room. And it was meant to divide up an open office plan in a way to mitigate the kind of chaos that an open office plan or an office landscape might otherwise have. And it was incredibly well-received. It was copied by a number of furniture companies, and soon it was spreading in offices everywhere.

• 12:05Stephen J. Dubner?

  But the cubicle could also be exploited.

• 12:08Speaker 06

  It became a perfect tool for cramming more and more workers into less and less space, very cheaply. And so the whole notion of what Probst was trying to do, what, you know, to give a worker a space that they could control, was turned into the exact opposite. And it was clear that his concept had become the most loathed symbol of office life.

• 12:31Stephen J. Dubner?

  Indeed, the revolutionary, freedom-giving cubicle came to be seen as a sort of corporate version of solitary confinement. This left Robert Probst most unhappy.

• 12:44Speaker 06

  And he blamed managers. He blames people who, you know, were not enlightened, that created what he called barren, rat-hole type environments.

• 12:54Stephen J. Dubner?

  Robert Probst, like the Schenella brothers before him, had not quite succeeded in creating a vibrant and efficient open office. Their new environments introduced new problems. Chaos in the first case, cubicles in the second. As with many problems that we humans try to correct, whether in office culture or society at large, the correction turns out to be an overcorrection. Unintended consequences leap out and humble us. And yet, in this case, the fact is that most offices today are still open offices. Why are we holding on to this concept if it makes so many people so unhappy?

• 13:37Speaker 02

  If you're looking purely at a cost per square foot, having an open office is cheaper.

• 13:43Stephen J. Dubner?

  Steven Turbin again, and here's Ethan Bernstein again.

• 13:47Speaker 01

  There are a lot of people, whether they're managers or employees, who like the open office.

• 13:51Stephen J. Dubner?

  Bernstein admits that managers are primarily impressed by the cost savings of an open office, but some employees-

• 14:00Speaker 01

  Some employees like it because they have visions of it being more vibrant, more interactive, you know, that fun, noisy, experiential place they're hoping for once you take down the walls and make everyone able to see each other.

• 14:14Speaker 02

  And there's also been a big push around these collisions that have emerged in social sciences. How do you create these random interactions between people that spark creativity?

• 14:27Stephen J. Dubner?

  Collision is a term you hear a lot in office design and the design of public spaces generally. It's the promise that unplanned encounters can lead to good things between coworkers or neighbors, even strangers. Conversations that otherwise wouldn't have happened. The exchange of ideas, unforeseen collaboration. Now, the office is plainly a different sort of space from the public square. The office is primarily concerned with productivity. We'd all like to be happy working in our offices, but is it maybe worth surrendering a bit of happiness and privacy and so on for the sake of higher productivity? After all, that's what we're being paid for.

• 15:10Speaker 01

  If you want to have a certain kind of interaction that's deep, productive in idea generation or in something that requires us to have lots of, quote unquote, bandwidth between each other, it's nice to have that face-to-face interaction.

• 15:23Stephen J. Dubner?

  Face-to-face conversations are so important. That's Ben Weber. He's the CEO of an organizational analytics company called Human Eyes.

• 15:30Speaker 07

  What we do is use data about how people interact and collaborate at work. Think email, chat, meeting data, but now also sensor data about how people interact in the real world. And we use that to understand really what goes on inside companies.

• 15:46Stephen J. Dubner?

  Human Eyes has developed sociometric ID badges embedded with sensors to capture these data.

• 15:52Speaker 07

  We have by far the largest data set on workplace interaction in the world.

• 15:55Stephen J. Dubner?

  And what do the data say about face-to-face communication?

• 15:59Speaker 07

  In all of our research-

• 16:02Speaker 07

  That has consistently been the most predictive factor of almost any organizational outcome you can think of: performance, job satisfaction, retention, you name it. I mean, people had evolved for millions of years to interact in a face-to-face way. We're very used to small changes in facial expression, in small changes in tone of voice, and that's particularly important in work contexts where high levels of trust, especially as work gets more and more complex, and the things we build and make together are more and more complex. Really having that trust and being able to convey really rich information is critical.

• 16:37Stephen J. Dubner?

  Bernstein and Turbin also believe in the value of face-to-face communication.

• 16:42Speaker 02

  Nuanced communication around, here's a proposal I have, here is a thought I have about how this last meeting went. That is a very rich and nuanced form of communication, and most literature suggests that face-to-face communication is much better at that.

• 17:00Speaker 01

  Sociologists have suggested for a long time that propinquity breeds interaction, propinquity being colocation, being close to one another.

• 17:08Speaker 02

  The closer two people are together, the more likely they are to interact, more likely they are to get married, the more likely they are to work together.

• 17:16Speaker 01

  And interaction being, we will have a conversation, we will actually get some kind of collaboration done between the two of us.

• 17:22Speaker 02

  You can look at slouching shoulders, you can see what is their facial expression, and that can be a lot of information that is really hard to convey, no matter how good you are at emojis, and let me tell you, I am pretty good at emojis.

• 17:41Stephen J. Dubner?

  Okay, so face-to-face communication is important, at least for some purposes and on some dimensions, and an open office is designed to facilitate more face-to-face communication. So, does it work? That was the central question of Bernstein and Turbin's study.

• 18:05Stephen J. Dubner?

  So in your study, there are two companies that were transitioning to open offices. First of all, can you reveal the identity of one or both of those companies?

• 18:15Speaker 01

  I can't. In order to do this study, we had to agree to a level of confidentiality. I will say that we had a choice of sites to study, and we chose the two that we thought would be most representative of the kind of work we were interested in, which is white-collar work in professional settings, Fortune 500 companies.

• 18:36Stephen J. Dubner?

  Can you give us some detail that helps us envision the kind of office and what the activities are?

• 18:43Speaker 01

  If you work in a global headquarters amongst a series of functions like HR or finance, or legal, or sales, or marketing, this would describe your work setting.

• 18:59Stephen J. Dubner?

  And can you describe, for the two companies that you studied, they moved to open offices. What was their configuration beforehand?

• 19:07Speaker 01

  Everyone was in cubicles, and then they moved to an open space that basically mimicked that, but just without the cubicle walls.

• 19:15Speaker 02

  Those barriers went down, and so you could see if John was sitting next to Sally before, and there was a wall between them, that John could see Sally and Sally could see John. And that was the big difference between the original and the office afterwards.

• 19:30Stephen J. Dubner?

  So, tell us about the experiment. I want to know all kinds of things, like how many people were involved, did they opt in or not, was it randomized, and how the data were gathered, and so on.

• 19:43Speaker 02

  In the first study, we had 52 participants. In our second, we had 100 participants. And we wanted to measure communication before and after the move.

• 19:53Speaker 01

  We started with the most simple empirical puzzle we could start with, which was simply how much interaction takes place between the individuals before and after. We wanted to purely see if this hypothesis of a vibrant open office were true.

• 20:12Speaker 02

  So, before the move, we gave each of the participants sociometric badges.

• 20:18Stephen J. Dubner?

  These are the badges we mentioned earlier from Human Eyes.

• 20:23Speaker 01

  So they contain several sensors. One is a microphone. One is an IR sensor to show whether or not they're facing another badge. They have an accelerometer to show movement and they have a Bluetooth sensor to show location.

• 20:35Stephen J. Dubner?

  So you can get a data point which looks like, you know, John again spoke with Sally for 25 minutes at 2:00 PM, but you don't know anything about what the content of the conversation is.

• 20:46Speaker 01

  The number of previous studies that have used these sociometric badges have shown that we are very aware of them for the first, say, few minutes that we have them on. And after that, we sort of forget they're there.

• 21:00Stephen J. Dubner?

  You write that the microphone is only registering that people talk and not recording or monitoring what they say. Do you think the employees who wore them believed that? I mean, if I think there's a 1% chance that my firm is monitoring or recording what I'm saying, I'm quite likely to say less, yes?

• 21:25Speaker 01

  Well, it's actually a kind of a funny question because in this case, we really weren't. But, look, we phrased the consent form as strongly as we could to ensure that they understood this was for research purposes. And if they hadn't believed us, they probably would have opted out.

• 21:38Stephen J. Dubner?

  What are we to make of the fact that the data represents the people who opted in only? Because I'm just running this through my head. If I were an employee and I'm told that there's some kind of experiment going on with these smart people from Harvard Business School, and however much you tell me or don't, I intuit some, or I figure out some, or I guess some, and we're moving to an open office, and I think, oh, man, I hate the open office. And therefore, I definitely want to participate in this experiment so that I can sabotage it by behaving exactly the opposite of what I think they want me to behave. Is that too skeptical or cynical?

• 22:24Speaker 01

  Boy, you sound like one of my reviewers in the peer review process.

• 22:27Stephen J. Dubner?

  Sorry.

• 22:28Speaker 01

  It is a valid concern. Let me tell you what we've tried to do to alleviate it. The first thing I should say is we've compared the individuals who opted in to wearing the badge and those who did not to a series of demographics we got from the HR systems. And we don't see systematic differences there.

• 22:46Speaker 02

  You know, it is always possible when you're doing social science research that someone makes a guess, whether it's accurate or not, about what this study is trying to understand, and then takes a personal stand and says, you know, I'm going to stand for what's right. And what's right is cubicles. In that case, they would have to have done that for every day for two months. So it would have been a remarkable feat of endurance. We don't think that's what happened, but you know, the open office factions are real. So definitely important to keep in mind.

• 23:25Stephen J. Dubner?

  In addition to all these data from the employees' badges, the researchers could also measure each employee's electronic communications, their emails and instant messages. Again, they were only measuring this communication, not examining the content.

• 23:39Speaker 01

  And so what we were able to do is compare individuals face to face and electronic communication before and after the move from cubicles to open spaces in these two environments.

• 23:56Stephen J. Dubner?

  OK, so the Bernstein-Turban study looked at two Fortune 500 companies where employees had moved from cubicles to open offices. And they measured every input they could about how the employees' communication changed, face to face and electronic communication. What do you think happened? After the break, we'll see if you're right. Also, will their findings really matter? If the data say the open office is a disaster, does that mean it's finally dead?

• 24:26Speaker 03

  The open office is not dead.

• 24:28Stephen J. Dubner?

  And if you want to hear another episode we've made about noise and distraction, check out "Time to Take Back the Toilet" from our archive. We'll be right back.

• 24:48Stephen J. Dubner?

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• 25:33Stephen J. Dubner?

  Just head to granola.ai/freakonomics. That's granola.ai/freakonomics to get your time back. Try it for free at granola.ai/freakonomics.

• 25:51Stephen J. Dubner?

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• 26:22Stephen J. Dubner?

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• 27:15Stephen J. Dubner?

  Today, we've been hearing about the history of the open office and a new study by Ethan Bernstein and Steven Turbin about whether the open office indeed produces more interaction and collaboration.

• 27:29Stephen J. Dubner?

  Okay, so you've done this study, two firms, over a period of time with a number of people to measure how their behavior changes generally. Tell us what you found.

• 27:42Speaker 02

  So the study had two main conclusions.

• 27:46Speaker 01

  We found that when these individuals moved from closed cubicles into the open office, interaction decreased.

• 27:55Speaker 02

  Face-to-face communication decreased by about 70% in both of our two studies. Conversely, that communication wasn't entirely lost. Instead, the second result that we found was that communication actually increased virtually. So people emailed more, IM more.

• 28:12Stephen J. Dubner?

  How much of that decrease was compensated by electronic?

• 28:17Speaker 02

  So we saw an increase of 20 to 50% of electronic communication. That means more emails, more IMs. And depending on how you think about what an email is worth, maybe you could say that they made up for it. Is an email worth five minutes of conversation? Is it two minutes?

• 28:33Speaker 01

  It's a little bit hard to say because an email and an interaction may not be comparable in item.

• 28:40Speaker 02

  Even if we saw an increase in the amount of virtual communication, which totally made up for the face-to-face communication, what you probably saw was a loss in richness communication. So the amount of information that was being conveyed was actually less.

• 28:54Stephen J. Dubner?

  What can you tell us about how the open space affected productivity and satisfaction?

• 29:02Speaker 01

  I'll come out clean and say, we don't have perfect data on performance, and we don't have any data on satisfaction. We purposely stayed away from satisfaction. We just wanted to look at the interaction of individuals. In one of our two studies, we have anecdotally some information where the organization felt that actually performance had declined as a result of this move. I will say that

• 29:29Speaker 01

  Boy, if we think about this, there are probably lots of contexts that we can think of where more face-to-face interaction would be useful, and lots of contexts in which we think more face-to-face interaction would not be useful. And that's where I'd actually prefer to take the conversation about productivity. That, at the very least, to date, managers of property, managers of organizations have not thought about this being a trade-off. They've assumed cost and revenue go together. That may be true in some subset of environments, but in others, that's not going to be true.

• 30:07Stephen J. Dubner?

  What did the companies in your study do after you'd presented them with your findings?

• 30:12Speaker 01

  One of them has actually taken a step back from the open office. The other has attempted to make the open office work by adding more closed spaces to it.

• 30:32Stephen J. Dubner?

  Okay. So, an empirical study of open offices finds that the primary benefit they are meant to confer, more face-to-face communication and the good things such communication can lead to, that it actually moves in the opposite direction, at least in the aggregate. To be fair, an open office is bound to be much better for certain tasks than others, and, more important, better for some people than others. We're not all the same. And some of us, I'm told, not me, but some of us thrive in a potentially chattier office. But on balance, it would appear that being put out in the open leads most people to close themselves off a bit.

• 31:16Stephen J. Dubner?

  Why? You can probably answer that question for yourself, but Turbin and Bernstein have some thoughts, too. Here's one: maybe you don't want to disturb other people.

• 31:27Speaker 02

  So, when you're in an open office, your voice carries. And I think people decide very reasonably to say, "Well, you know, I could speak with Tammy, who's three desks away, but if I talk to Tammy, I'm going to disrupt Larry and Catherine, and so I will send her a quick message instead."

• 31:48Stephen J. Dubner?

  Or maybe you compensate for the openness of the open office with behavior that sends a do-not-disturb signal. If everyone can see you...

• 31:58Speaker 01

  You want to signal to everyone that you are a hard worker. So you look intensely at your screen. Maybe you put on headphones to block the noise. Guess what? When we signal that, we also tend to signal, "And please don't interrupt me from my work," which may very well have been part of what happened in our studies here.

• 32:15Stephen J. Dubner?

  And then there's what Ethan Bernstein calls the transparency paradox.

• 32:19Speaker 01

  So very simply, the transparency paradox is the idea that increasingly transparent, open, observable workplaces can create less transparent employees.

• 32:33Stephen J. Dubner?

  For instance, let's say you've been really productive all morning. Now you want to take a break. You want to check your fantasy football lineup. Maybe you want to look up some recipes for dinner. But you don't want everyone in the office, especially your boss, to see what you're doing. So you do it anyway. But you're constantly looking over your shoulder in case you need to shut down the fantasy football or recipe tab.

• 32:58Speaker 01

  That has implications for productivity because we spend time on it. We spend energy on it. We spend effort on it. We tend to believe these days that we get our best work done when we can be our authentic selves. Very few of us get up on a stage in front of a large audience, which is somewhat of how some people encounter the open office and feel we can be our authentic selves.

• 33:20Speaker 04

  So if I have an idea.

• 33:22Stephen J. Dubner?

  That is the Stanford economist Nicholas Bloom.

• 33:25Speaker 04

  If I go discuss it with my colleague or my manager in an open office, I'm terrified that other people are here. They may pass judgment on me. Rumors can go around.

• 33:35Stephen J. Dubner?

  Bloom has studied this realm for years.

• 33:37Speaker 04

  I work a lot on firms and productivity. So what makes some firms more productive, more successful? What makes other firms less successful?

• 33:45Stephen J. Dubner?

  So let me ask you this. A recent paper found that a couple of Fortune 500 companies who switched from cubicles to an open office plan with the hopes of increasing employee collaboration, that in fact, the openness led to less collaboration. So knowing what you know about offices and people, does that surprise you?

• 34:10Speaker 04

  Not really. You know, there's a huge problem with open offices in terms of collaboration, that you have no privacy. Whereas if it's in a slightly more closed environment, it's easier to discuss ideas, to bounce things around.

• 34:28Stephen J. Dubner?

  Or consider the ultimate closed environment, your own home.

• 34:32Speaker 04

  One piece of research I did that connected very much to the open office was the benefits of working from home. So, working from home has a terrible reputation amongst many people, you know, the nickname shirking from home. So, I decided to do a scientific study. So, we got a large online travel agency to ask a division who wanted to work from home and we then had them randomize employees by even or odd birthdays into working at home versus working in the office.

• 35:00Stephen J. Dubner?

  Now, this was a travel agency in China, correct?

• 35:04Speaker 04

  Yes, it was Ctrip, which is China's largest travel agency, is very much like Expedia in the US. And stunningly, what came out as one of the biggest driving factors is it's just much quieter working from home. They complained so often about, you know, the amount of noise and disruption going on in the office. So, they're all in an open office and they tell us about, you know, people's having boyfriend problems, there's a cake in the bakeout room, the World Cup sweepstake. I mean, the most amazing was the woman that told us about her cubicle neighbor who'd have endless conversations with her mum about her medical problems, including, you know, horrible things like an ingrowing toenail and some kind of war issue. I mean, what could be more distracting than that? So, not surprisingly,

• 35:47Speaker 04

  you know, in that case, open office was devastating for her productivity.

• 35:52Stephen J. Dubner?

  So, you find that overall, working from home raises what exactly? Is it productivity? Is it happiness?

• 35:59Speaker 04

  So, we found working from home raises productivity by 13%, which is massive. That's almost like an extra day a week. So, A, much more productive, massively more productive, way more than anyone predicted. And B, they seemed a lot happier. Their attrition rates are how frequently they quit. Part of this was they didn't have the commute and all the uncertainty and they didn't have to take sick days off. But the other big driver is it's just so much quieter at home.

• 36:26Stephen J. Dubner?

  You also do write, though, that one of the downsides of working from home was promotion became less likely, yes?

• 36:33Speaker 04

  Yes, we don't know why, but one, you know, one argument's out of sight, out of mind, they just get forgotten about. Another story would be actually you need to develop skills of, you know, human capital and relationship capital, therefore you need to be in the office to get that to be promoted. And then the third reason I heard, you know, we talked to people working at home and they'd say, I don't want to be promoted because in order to be promoted, I need to come in the office more. So actually, I'm happy where I am, you know, it's not worth it.

• 37:02Stephen J. Dubner?

  I just want them to leave me alone.

• 37:05Speaker 04

  I mean, the most surprising thing from the Ctrip working from home experiment was after the end of the nine months, Ctrip was so happy, they were saving about $2,000 per employee working from home because they were more productive and they saved an office space. So they've said, okay, everyone can now work from home. And we discovered of the people in the experiment, about 50% of them that had been at home decided to come back into the office. And that that seemed like an amazing decision because A, they're now choosing to commute for something like 40 minutes each way a day. And also since they are less productive in the office and about half their pay was bonus pay, they're getting paid less. So all in all, we calculated, you know, their time and pay was kind of falling by 10, 15%.

• 37:49Speaker 04

  But they were still coming in and the reason they told us is it was lonely at home. So people always joke, you know, the three great enemies of working from home is the fridge, the bed and the television. Some people can handle that and others can't. And, you know, you don't really know till you've tried it. So what happens is people try it and some people love it and they're very productive. Great, they should stick with it. And others try it and they loathe it and they come back into the office.

• 38:16Stephen J. Dubner?

  The more you learn about the productivity and happiness of office workers in different settings, the more obvious it is that one key ingredient is often overlooked: choice. Some employees really might be better off at home. Others might prefer the cubicle, and some might thrive in an open office. You also have to acknowledge that no one environment will be ideal for every task.

• 38:42Speaker 03

  So if you stop and think about how do we spend our time, about half of our time is spent in focus mode, which means we're working alone. A little over a quarter of our time is working with others in person, and about 20% is working with others virtually.

• 38:58Stephen J. Dubner?

  That's Janet Pogue McLaurin from the global design and architecture firm Gensler.

• 39:03Speaker 03

  I'm one of our global workplace practice area leaders.

• 39:07Stephen J. Dubner?

  Given the diversity of tasks required of the modern office worker...

• 39:12Speaker 03

  You need the best environment for the task at hand. So if you're getting ready to go on to a conference call, instead of taking at your desk, you may go into a conference room. When you finish that, you may go back to your desk to catch up on email. You may socialize around a cafe area, or even take a walking meeting outside. We need to have all these other work settings at our disposal to be able to create a wonderful work experience.

• 39:45Stephen J. Dubner?

  That doesn't sound so hard, does it? So how do you create that? Let's start with the basics. Pogue McLaurin acknowledges that many open offices don't address their key shortcoming.

• 39:57Speaker 03

  The biggest complaint that we see in open offices that don't work is the noise. And how do you mitigate noise, interruptions, and distractions? And that can be noise as well as visual. And so being able to design a space that zones the floor in smaller neighborhoods, that tries to get buffers...

• 40:25Speaker 03

  Between noisy activities, there's architectural interventions we can also do with ceilings and materials and white noise that may be added to the space. And it's not about creating too quiet of environment. That can be just as ineffective as a noisy environment. You really want to have enough buzz and energy, but just not hear every word.

• 40:49Stephen J. Dubner?

  You also want to account for what economists call heterogeneous preferences and what normal people call individual choice.

• 40:57Speaker 03

  Choice is one of the key drivers of effective workspace. And we have found that the most innovative firms actually offer twice as much choice and exercise on that choice than non-innovative firms do. And choice is really around autonomy, about when and where to work. It could be as simple as having a choice of being able to do focus work in the morning or being able to work at home a day or in another work setting in the office.

• 41:30Stephen J. Dubner?

  To that end, no two employees are exactly alike, and, more important, no two companies are alike either.

• 41:38Speaker 03

  I think some common mistakes that organizations do is they try to copy someone else's design. So if you think it's a cool idea of something that you saw on the West Coast, let's say it's a tech firm, and you're not even a tech firm, and you're sitting here on the East Coast, and you try to just copy it verbatim, it doesn't work. It's got to reflect how your organization works and the purpose and brand and community that you're a part of. So oftentimes, companies would start to adopt what other organizations are doing and say, yes, that will save us space, so let's adopt it.

• 42:22Speaker 03

  But they're missing out by not providing all these other spaces to balance. So they want the efficiency without creating all the other work settings that people need in order to be truly productive.

• 42:41Stephen J. Dubner?

  It's worth noting that Janet Pogue McLaurin, a principal with a design and architecture firm, is arguing that the key to a successful office is design and architecture. But it's also worth noting that her firm has done a great deal of research in all different kinds of offices, all different kinds of companies all over the world.

• 43:00Speaker 03

  We've done several studies in the US and the UK, but we've also done Latin America, Asia, Middle East, and we're just completing a study in Germany.

• 43:09Stephen J. Dubner?

  So what's her prognosis for the long, maligned open office?

• 43:13Speaker 03

  The open office is not dead.

• 43:19Speaker 03

  Oftentimes, people say, you know, which is better? Private office or open plan? We measured all types of individual work environments. And what we found is that if you solve for design noise and access to people and resources, they perform equally. And one is essentially not better than the other. And the best open plan can be as effective as a private one. And that was a surprise. I love data when it tells you something unexpected.

• 43:52Stephen J. Dubner?

  So do we, Janet Pogue McLaurin. So do we. Coming up next time on Freakonomics Radio, now that we've looked at the office itself, how about the least beloved activity that happens in offices? Bad meetings have just been accepted as a cost of doing business. Are meetings even necessary?

• 44:13Speaker 08

  We actually have vastly superior technologies to do exactly the things that people say go on in meetings.

• 44:20Stephen J. Dubner?

  You'll hear from people who study meetings. I study meetings because I dislike them tremendously. From people who tried to fix meetings.

• 44:29Speaker 09

  In my experience, most of our gatherings suffer from unhealthy peace, not unhealthy conflict.

• 44:36Stephen J. Dubner?

  And we'll hear from you, our listeners, about your best and worst meetings.

• 44:41Speaker 10

  Our last all-hands meeting ended with our entire Armenian office yelling over each other in Armenian. And I'm sitting here thinking like, OK, everyone is about to quit.

• 44:51Stephen J. Dubner?

  How to make your meetings less terrible. That's next time on Freakonomics Radio.

• 44:58Stephen J. Dubner?

  Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Rebecca Lee Douglas. Our staff includes Alison Kreglo, Greg Rippon, Harry Huggins, Zach Lepinski, Matt Hickey, and Corinne Wallace. Our intern is Daphne Chen. Our theme song is "Mr. Fortune" by The Hitchhikers. All the other music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on any podcast app, including Spotify or the Apple or Google podcast apps. If you want to get the entire Freakonomics Radio archive, that is available exclusively on the Stitcher app or at Freakonomics.com, where you can also find transcripts, show notes, and sign up for our newsletter.

• 45:36Stephen J. Dubner?

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• 46:09Speaker 10

  Stitcher.

• 46:15Stephen J. Dubner?

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• 46:46Stephen J. Dubner?

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• 47:24Speaker 11

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• 47:53Speaker 12

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