Virtual knowledge industry and the rise of penturbia

Regions and towns that boomed in the pre and post WWII industrial decades are now losing population, according to a recent article in The Economist. However, some are paying knowledge workers who can now work most anywhere to move to them in order to bolster their declining tax bases and ability to fund local services and pensions for retired local government workers.

In addition to the move in bonus, they also benefit from lower housing costs than in large metros. The newspaper cites Muncie, Indiana as an example. The city of 65,000 people has since 2021 it offered $5,000 grant entice virtual knowledge workers to make their homes there:

So far 152 people have moved to the city under the scheme, which is run by MakeMyMove, a firm based in Indiana which helps promote the incentive schemes of cities that are willing to pay people to move there. From its foundation in 2017 MakeMyMove has expanded enormously, says Christie Hurst, its spokeswoman, not least thanks to the pandemic, which freed many workers from having to go to an office. The result is a much larger pool of potentially mobile workers over whom cities can compete—hence the growth of the business. Yet a taxpayer gained by Muncie, Indiana, is one lost to somewhere else. And with growth overall slowing, not everywhere can win. In fact, remote-working may only hasten the decline of some struggling places, by making it possible for a worker in, say, Muncie, to relocate to a pretty mountain town in Colorado.

This trend was predicted by socioeconomist Jack Lessinger in his 1991 book Penturbia Where Real Estate Will Boom After the Crash of Suburbia. The penturbs represent America’s fifth major residential settlement pattern: regions and towns that lost population since 1970 but destinated to gain residents in future decades where housing dollars go further than metro suburbs and particularly high-cost suburbs close in to metro centers.

Lessinger’s forecast rise of the penturbs came before advanced telecommunications made possible by the Internet, setting the stage for its acceleration.

Aligning work, outcomes key challenge facing knowledge organizations — not office attendance

The state of knowledge work has reached an accelerated transitional phase of virtualization and decentralization, beginning with the broad adoption of information and communications technologies (ICT) in the 1980s and 1990s. This megatrend has been sped up by the public health measures during the COVID-19 pandemic. Today’s knowledge work is largely digital, obsoleting analog highways and office buildings. It’s also less tied to what author Dave Rolston dubbed the four dead kings of work: one job duty, supervised by a single manager and performed at a set time and location. Knowledge organizations must now quickly plan how to navigate this paradigm shift relative to the mission and needs of their organizations. They can start by asking themselves these basic questions:

  • To what extent can the organization’s work be accomplished virtually and asynchronously? Who does the work and how is it organized?
  • What work requires co-located staff working in real time and how does this support the mission? How often, where and how and most importantly what are the expected benefits and outcomes?
  • Is the organizational culture like that of a think tank where staff regularly convenes in person to spitball ideas and white board or Kanban them? Or is most thought and planning work done individually?

For many, it might be a mix of this type of synchronous joint brainstorming and async, not bound to time and place, considering the best and most creative thought work often gets done and ideas and solutions to tough challenges bubble up when doing other activities such as exercising, walking the dog, housework and even sleeping.

Should they host two to four week seminars like that of a university where newer staff are tutored by more senior staff? What physical spaces would be most economical for these? Many organizations will find they don’t need dedicated spaces; smart ad hoc co-work locations will do.

It’s imperative organizations address these questions rather than adopting an arbitrary schedule wherein staff commute to an office location a certain number of days or on designated days of the week, referred to as “hybrid.” As coffee badging is showing, this approach isn’t sustainable. Staff morale will suffer if team members feel they are going through the motions without purpose other than to show up at a designated office site. It also fuels resentment, with staff feeling that their personal time is being wasted by unnecessary commuting.

Underlying these questions is a bigger question with major implications: Is the Industrial Age employment model outdated for today’s knowledge work along with its wage and hour requirements and state mandated workers compensation insurance? Does it really make sense with so many knowledge workers working in their own homes rather than a centralized commuter office?

The same question applies to employer medical benefit plans given reform of individual medical insurance in 2010 with the Patient Protection and Affordable Care Act designed to make it easier for individuals to purchase their own plans. Both it and state workers’ compensation laws could benefit from a thoughtful review and updating.

Workers’ compensation insurance mandates on employers could be narrowed to apply only to occupations that require on site duties that pose clear injury risk, saving knowledge organizations money spent on premiums. The Affordable Care Act mandate on large employers to offer group medical benefit plans conflicts with reforms aimed at boosting non-group plans. For now, getting around the mandate would require knowledge organizations to rethink whether their staffs should be classified as employees going forward given the change in the nature of knowledge work.

Some knowledge organizations — information technology companies in particular — tend to hire and fire en masse. Instead of employing, they should consider fully migrating to using contract staff and self-employed people and putting key personnel on retainer. They can be formed into teams to work on short term projects of a year or less as well as longer term initiatives. These outcome based models of knowledge work offer a great adaption to Rolston’s dying kings of work and offer knowledge organizations greater flexibility and significant overhead savings.

Roger Martin, former dean of the Rotman School of Management, suggested knowledge organizations – which he termed “decision factories” in a 2013 Harvard Business Review article can avoid the cycle of mass hiring and firing by restructuring into flexible teams to work on defined projects rather than hired as permanent employees based on a written job description. That coincides nicely with both Rolston’s assessment of the changing nature of knowledge work as well as its accelerating virtualization.

“Coffee badging” symptom of need to redefine knowledge work

As some employees are being called back to the office, many are subtly protesting by returning to the office for as little time as possible, Frank Weishaupt, CEO of Owl Labs in Boston, told FOX Business. “Coffee badging is when employees show up to the office for enough time to have a cup of coffee, show their face and get a ‘badge swipe’ — then go home to do the rest of their work,” said Weishaupt. His firm, Owl Labs, which makes 360° video conferencing devices, did a deep dive into the trend’s data. The new trend of “coffee badging” at work is apparently in response to companies’ requirements that more employees return to the office. “Our 2023 State of Hybrid Work report found that only about 1 in 5 workers (22%) want to be in the office full time, with 37% wanting hybrid work options and 41% preferring to be fully remote,” said Weishaupt.

This phenom is a symptom of the struggle to redefine knowledge work that has been decentralized out of commute-in offices thanks to information and communications technologies that emerged more than four decades ago with the innovation of microcomputers, personal communication devices and the mass market Internet. The momentum and urgency of which increased considerably with the public health measures to slow the COVID-19 pandemic.

Some organizations have resisted the decentralizing trend, insisting their staffs must commute to centralized offices to collaborate in person. But “coffee badging” shows not everyone is on board with the idea – or that any meaningful collaboration is taking place. Particularly if they are showing up to work in a cubicle when they could just as easily get their work done in a home office and avoid wasting an hour or more a day commuting.

The redefinition of knowledge work will require deeper thought in the ICT and post COVID-19 era that has fundamentally altered it. It is no longer about showing up at a set location at a predefined time schedule — two of Dave Rolston’s “dead kings” of work. The new definition will must center on outcomes and goals and how information is developed and communicated to further a knowledge organization’s mission.

Return of office debate and organizational communications culture

The return to office controversy has been about where knowledge workers work. Due to the sunk cost fallacy, anchoring and present cognitive biases, the management of many knowledge organizations — particularly those with substantial investments in office real estate –– believe that should be in the office most of the week. On the flip side, many knowledge workers disagree, arguing knowledge work is more virtual and doesn’t fit into a factory paradigm of set daily shifts measured by office attendance.

But the issue isn’t merely about office space and cube farms and the commute to them. The larger underlying issue is how work gets done and specifically a knowledge organization’s communication culture. In some organizations, the culture is spoken. Staff talk with each other in real time, in conference rooms, break rooms, and in offices and cubicles. In others, it’s more written and asynchronous, expressed in collaboration and project management platforms, emails and chats.

Organizations whose communication culture is more real time spoken-based are naturally more office centric whereas those that are not are more virtual. The former tend to have more difficulty with non co-located work. Calendars get overloaded with meetings since those are the primary means of communication and decision making. This situation existed for decades before the public health restrictions of the COVID-19 pandemic forced many organizations out of the office. Knowledge workers complain it’s difficult to get work done in a day filled with meetings; the dominant speaking communication culture interferes with more concentrated thought work. When done virtually, it leads to “Zoom fatigue.”

In some organizations, management frowns on staff informally chatting among themselves, thinking they are not getting any work done. Ironically, these same organizations argue staff must be in the office to bump into each other and talk informally, contending these activities promote collaboration and serendipitous creativity. So there’s a bit of a conflict going on between these expectations that requires organizations to engage in some honest introspection. If real time, spoken communication is truly at the core of an organization’s communications culture, management must determine how that’s best done: where, when and how often and for what purposes.

For those organizations looking to become less office-centric, their challenge is to build a communications culture based more on asynchronous written communication and select the collaboration and project management platforms that best support it.

At its core, return to office debate about redefining knowledge work

Personal computing and communication devices and the Internet have decentralized knowledge work and made the daily trip to centralized commuter offices (CCOs) obsolete. Knowledge workers discovered its irrelevance and enjoyed recovering personal time spent commuting during the public health social distancing measures in response to the COVID-19 pandemic.

Now as some organizations demand they return to the office (RTO) on a set number or designated days of the week, many are understandably rebelling.

But the real debate isn’t about showing up in person at the CCO on a prescribed number of specific weekdays. It’s about redefining knowledge work and specifically how it’s done and managed.

In his 2013 book 2013 eBook Four Dead Kings at Work: The Decentralization and Blending of Work in the 21st Century, author Dave Rolston predicted the imminent death of the four primary tenets or kings of knowledge work in the Industrial Age:

  1. Set job duties;
  2. Managed by a single manager;
  3. Performed at one place (the CCO);
  4. At the same time (8-5, Monday-Friday).

This definition worked well before 1990 when the tools for knowledge work were at the workplace and not portable like today’s personal devices, online databases, collaboration platforms and more recently, AI chatbots.

Now, organizations and knowledge workers must adjust to the post-Industrial Age environment. That entails determining when co-located work is beneficial and when it isn’t. It also requires assessing the communications culture.

When knowledge workers were regularly in the CCO, meetings — both scheduled and ad hoc — were frequent. Even too frequent for many knowledge workers. They express a real time, speaking-based communication culture.

To fully utilize today’s communication and collaboration tools, knowledge organizations must adopt a more written, asynchronous communication culture. They also must find the right balance between this and spoken communication and when knowledge workers must be assembled to discuss and sort through complex and difficult issues that benefit from synchronous, in person discussion. That is driven more by business needs to complete reports and projects and reach decisions rather than the daily calendar.

It’s also critical that knowledge organizations keep their missions clearly communicated to staff so they can see how their work makes a meaningful contribution as this article in today’s Wall Street Journal implies.

Hybrid work is not the future, says Meta’s former director of remote work | Fortune

Hybrid, Dean told Fortune in an interview, isn’t actually an even split between remote and in-office work, despite bosses who insist it’s a huge step forward. Plus, she adds, the office is never going to be a solution to existing problems of productivity, innovation, or creativity. “Those are all how to work problems, not where to work problems,” she says. “The office won’t solve these problems. New ways of working will. This is a watershed moment of innovation of how work gets done, but we’re still talking about the f–king watercooler.”

Source: Hybrid work is not the future, says Meta’s former director of remote work | Fortune

That’s Annie Dean, VP of Team Anywhere at Atlassian, a distributed work policy at the software firm that encourages asynchronous, flexible work.

In 2011, author Dave Rolston announced the death of four “kings” of knowledge work and specifically how it’s performed: 1/ In a single, dedicated job role; 2/ Managed by a single manager; 3 /At one time (8-5, M-F). And finally, 4/ At a single location: the centralized, commute in office (CCO).

That fourth king is going through violent death throes as seen in the context of the hot debate over working from home vs. working in the CCO. It was about to climb onto its death bed prior to the public health restrictions of the COVID-19 pandemic. It’s now laying upon it and drawing its last breaths.

While those in Rolston’s school of thought are proclaiming that king is dead, many organizations insist it isn’t, essentially shouting “Long live the king!” As noted in the Fortune article, those exclamations are driven in large part by the cognitive bias of sunk cost investment, with organizational leaders believing they must somehow recover the cost of CCO purchases and leases even if the CCO is no longer necessary to fulfilling the mission. We need that king to stay alive at least until that significant investment is recouped.

Dean is correct describing hybrid work in CCOs part of the work week as office-centric since the CCO remains as the primary workplace. (Similarly, the term “remote” work keeps the CCO at the relative center). Dean is also correct in framing the debate over hybrid working in the larger context, more than simply where knowledge work gets done as Rolston wrote more than a decade ago. As Dean notes, it’s how it’s done with modern day tools including microcomputers, the Internet and various communication and collaboration platforms. Those tools have disrupted, decentralized and transformed knowledge work as well as our traditional notions of it. It’s natural to want to return to the familiarity of co-located working rather than make a committed effort to adapt to something new.

Disruptive change is understandably uncomfortable for many knowledge organizations. Knowledge organizations themselves will be transformed. Like the traditional location of where knowledge work is done (the CCO), in the near-term knowledge organizations will no longer define themselves by their metro location, campus or high-rise headquarters.

Dean touches upon a major adaption knowledge organizations must surmount. It’s also one of Rolston’s four dead kings: doing knowledge work at the same time. With its decentralization out of CCOs comes working more asynchronously. This has been a big challenge for many knowledge organizations that have a spoken communication culture primarily dependent on real time discussions as the usual way of assessing information and making decisions. That has led to widespread complaints of back to back video meetings and “Zoom fatigue.” To work more asynchronously, knowledge organizations will have to shift their communications culture to rely more on written communication and reflection rather than frenetic jumping from one meeting to another. Knowledge work doesn’t have to be crazy and it’s not the emergency room as the authors of this book advise. Good knowledge work benefits from calm thought.

Four Dead Kings at Work

Dave Rolston has generously provided permission to share his 2013 eBook Four Dead Kings at Work
The Decentralization and Blending of Work in the 21st Century
under a Creative Commons license. Dave’s work inspired my own eBook Last Rush Hour: The Decentralization of Knowledge Work in the Twenty-First Century including the closely worded subtitle.

Decentralization is the key word, the meta shift occurring as the economy transitions to an information based one that has no center but where it and the work that creates value from it can be done most anywhere. It is not tied to a single job function under a single manager, performed at one set place or time — the four dying kings of the Industrial Age.

Exurban migration demands fiber delivered advanced telecom infrastructure, EVs

Growth on the urban periphery, while a boon for housing affordability, comes with environmental costs, chewing up farmland and perpetuating the car-centric lifestyles that are a significant contributor to climate change. California, for instance, has a goal to cut greenhouse gas emissions 40 percent below 1990 levels by 2030, but has found it increasingly out of reach as home prices have pushed workers farther from the urban core, where they drive more. In theory, if more people work from home, even in if more people work from home, even in a hybrid capacity, it would offset some of those emissions by cutting down daily commutes. But the farther people get from the urban density and public transportation, the more dependent they become on cars even for short trips.

Source: House Hunters Are Leaving the City, and Builders Can’t Keep Up – The New York Times

As per previous posts on this blog, fiber delivered advanced telecom is the essential utility for knowledge workers migrating to the exurbs. That replaces the need for long commutes and related carbon emissions. But as this NYT piece points out, personal vehicles are still needed for short trips — a need that can be met with EVs.

Leased/owned office space downsizing likely to accelerate

Knowledge work is currently in an awkward transition out of centralized commuter offices (CCOs) and dispersed to home offices. Many organizations have adopted what’s referred to as “hybrid” arrangements with staff working in the CCO a set number of scheduled days, typically two or three days a week. For knowledge workers, the hybrid arrangement is disruptive. The vast majority need only one workspace as shown during the COVID-19 public health measures.

A home office is that location. It provides convenient access to food and coffee that fuel knowledge work, particularly given many if not most CCOs lack on site cafeterias. In addition, workspaces are customized to knowledge workers’ preferred equipment and ergonomics. Some, for example, may prefer sit/stand desks or kneeling chairs that aren’t present in both home offices and CCOs. Finally, their most portable knowledge work tool – the brain – does not require multiple locations in order to function effectively.

The homes of some knowledge workers don’t offer a good office setting. They may not have a suitable space for a home office setup or other circumstances that make it impractical as a regular workplace. These staff need and prefer the CCO to get their work done. But they are a small minority and don’t justify the amount of office space organizations must finance. They can get by with only a fraction of their current owned and leased space and considerably reduce operating expense.

Organizational management is recognizing the trend and potential sizable cost savings and rightsizing their office space footprints accordingly. Expect this to accelerate over the next few years.