Tag: decentralization of knowledge work

The economics of office presence

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The virtualization and decentralization of knowledge work has greatly reduced the need for office attendance. But it nevertheless holds value for many knowledge organizations as shown by return to office policies mandating attendance for all or some of the work week.

That value is being assigned and weighed by both knowledge organizations and workers in terms of compensation and talent attraction and turnover.  

The math of the office attendance value equation works roughly inversely. Some organizations offer premium pay for office attendance. It’s also being valued insofar as spiffing up offices to make them “worth the commute.”

Conversely, some knowledge workers are willing to accept lower compensation for roles that don’t require much if any office attendance. A paper issued earlier this year by the National Bureau of Economic Research found on average, tech workers are willing to accept a 25 percent pay reduction for roles that don’t require full time office attendance.

This explicitly recognizes the personal cost in terms of time and money incurred by the commute whereas traditionally it was externalized onto staff and seen as part of the job. Now it’s being factored into the employment relationship. Higher compensation for roles requiring regular office presence can offset employees’ cost of commuting.

On the other hand, companies that do not demand office attendance and thus remove the cost of commuting from the employment bargain are being flooded with job applications per this recent Business Insider article, reflecting their high desirability among knowledge workers.

“It’s not about where we work, but how,” Melanie Rosenwasser, chief people officer at Dropbox, told Business Insider. “Flexibility and agency are the new currencies of work.”

The length of the commute and housing costs also factor in. The math there is well established and similarly inverse. Housing tends to cost more nearer to downtown business districts or office parks and campuses or with reliable and fast public transit. Conversely, housing costs tend to be lower in outlying edges of metro areas but come with longer and more time-consuming commutes that take away from employees’ personal time.

As for talent attraction and retention, the most skilled and knowledgeable staff know they are marketable and factor that into their calculations. Knowledge organizations that require office attendance run the risk of losing talent not inclined to work in a mandated organizational office setting.

Buildings and bureaus: RTO isn’t only about trust and control

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Return to office (RTO) isn’t only about control or trust or workplaces. It’s more fundamental. It’s essentially about organizational identity.

For decades, public and large private sector organizations have defined themselves largely by how they functioned, structured in the industrial age management model as vertical bureaucracies exercising command and control management. The hierarchy is represented in the building with the building as totem. Leadership sits in the upper floors of the building and corner offices. Staff in cubicles in the center and on lower floors.

The building is at the core of organizational self concept and sense of purpose. The org may have started humbly in a garage like Apple but now a large multi building campus represents it nearly as much as its branding. In Apple’s case, for example, the modernistic circular spaceship headquarters building.

Apple founder Steve Jobs described the personal computer as the “bicycle for our minds.” That untethers the mind from time, place and distance. But the spaceship houses the bodies containing the minds of Apple employees. It’s the mothership, the corporate edifice.

Decentralized, virtual knowledge work first made possible by Apple computers and later information and communications technology (ICT) advances is at odds with that. Hence, we see resistance expressed as RTO. It really means return to the organization — get back in the building.

Or as some orgs have framed it to staff, you don’t have a future with this org if you don’t regularly appear at the building that represents it and should find another role outside of the org.

ICT has disrupted that. knowledge work no longer requires the industrial age buildings and bureaus of the 20th century or daily commuting to and from them. It’s done wherever knowledge workers are and thinking. Rapidly processed, communicated and recorded on ICT tools like personal computing and communication devices and the cloud.

The essential questions knowledge organizations face in the 21 century:

How are they defined in the post-industrial age (or “smokestack era” as Alvin Toffler termed it in his 1990 outlook on the 21st century, Powershift)? If buildings and bureaus no longer essentially define them, what does?

Since knowledge work has been traditionally defined by Dave Rolston’s four dead kings of work:

  1. One job title
  2. Performed under one manager
  3. At one time
  4. At one place

How will it be optimally defined and organized going forward?

Redefining office space use in the post CCO era

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Return to office (RTO) policies have created controversy, framed as a set to between executive leadership wanting staff to work in centralized, commute in offices (CCOs) and staff preferring to work in their home offices as they did during the public health restrictions during the pandemic years.

RTO mandates have been used to encourage resignations as a blunt personnel reduction strategy, sending the message if you don’t put in office attendance you don’t belong in the organization and should move on.

Another way to view RTO is future shock. As information and communications technology (ICT) and personal devices grew increasingly sophisticated and useful over the preceding four decades starting with the personal computer in the 1980s, it was becoming increasingly clear that they would disrupt the office as it had been known. No longer would daily office attendance with the often time and energy sucking commute be necessary.

The majority of knowledge organizations however didn’t adjust to this slowly emerging reality until the pandemic restrictions forced them to do so and in a space of just two years. The future of knowledge work had arrived but too quickly for organizations to adjust.

So many adopted RTO to lessen the shock. That’s not necessarily maladaptive, but a natural reversion to the known and familiar. That creates a pause to allow time to figure out how to go forward —  and not going backward per se.

What’s truly adaptive is recognizing the primary impact of ICT: that knowledge workers no longer must necessarily report to CCOs because that’s the only location where the tools they needed to work were situated. Now they are portable and can communicate easily. That requires rethinking the use of office space and determining its best and most logical use going forward.

One model that looks promising is that of Stamford, Connecticut–based Synchrony, a branded credit card issuer.

According to this item posted October 6, 2025 at Fast Company, the company’s 20,000 employees work in their home offices and at company offices “when in person gatherings occur for training, leadership meetings, innovation sessions, and culture-building events.”

That redefines the office from a regular workplace in their traditional sense to an event driven gathering venue. There, both the presence in the office and the transportation of staff to get there is defined by a specific business purpose and not just showing up. That provides a guiding vision for the post pandemic future, offering a useful template to knowledge organizations experiencing future shock.

No assembly required

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As information and communications technology tools decentralize and virtualize knowledge work, it challenges knowledge organizations to reconceptualize working. In the pre information economy industrial age, work and education involved assembling: in schools, factories and offices.

Now the office is optional.

Making this conceptual shift has proven difficult for many knowledge organizations. That’s because their leaders often believe assembly is essential for collaboration and teamwork. Hence, they demand staff attendance at least some of the workweek in a centralized, commute in office.

Assembly is no longer needed is when information of all forms is easily shared virtually.

Forced assembly hasn’t gone over well for staff who find themselves going though the motions of assembling, swiping their badges to create a record of attendance. Or sitting in a cube farm and having Zoom or Teams meetings with colleagues in other nearby cubicles – something they could just as easily done without making the commute trip there.

Future shock and past snapback

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Before advances in information and communications technologies over the past four decades, knowledge work required industrial scale centralized commuter offices (CCOs), often staffed by hundreds or thousands of knowledge workers.

Much of the staff worked processing repetitive tasks that shifted from paper to digital form that did not require centralized creation, processing and storage. Information then became portable and decentralized, moving along with knowledge workers on personal computer and communication devices and later internet-based telecommunications and the cloud.

That made CCOs obsolete as exclusive work and meeting places by making knowledge work far less dependent on time and place, allowing information to travel as text, data and video most anywhere and asynchronistically.

These ICT advances have sped up considerably in the current decade with widespread adoption of working from home accelerated by the pandemic and the emergence of generative and agentic artificial intelligence.

These changes have come so rapidly that they challenge knowledge organizations to constructively adapt to them. They are experiencing what futurist Alvin Toffler termed “future shock” in his 1970 book of that title. It happens when the pace of technological change is so rapid institutions and organizations feel overwhelmed by it and experience cognitive dissonance as past, present and future seem to merge.

Understandably so considering the as built environment of office buildings concentrated in central metro areas and connected by what were originally designed as “high speed” highways to bring knowledge workers to and from them from outlying bedroom communities.

That world of the 20th century when companies grew and staffed up and occupied offices at industrial age scale no longer easily jibes with the 21st. That scale no longer make sense when knowledge, innovation and strategic judgment are the most valuable resources, resources that no longer require large numbers of staff regularly concentrated in office buildings.

Future shock produces what could be described as past snapback. It’s resistance to the future and nostalgia for when knowledge workers regularly commuted to the office because that’s where the job was. It’s clearly seen with “return to office” expectations.

Which haven’t gone over well since knowledge workers and not their organizations have traditionally borne the costs of getting there. And once there, sitting in a cube farm doing the same activities they could do in their home offices. That produces cognitive dissonance for knowledge workers.

Knowledge organizations have been trying to reconcile the conflict between the 20th and 21st centuries with “hybrid” office attendance, having staff come in on a designated number and days of the work week. In other words, working in the CCO like in the 20th but with the current century recognition that knowledge work doesn’t necessarily require office attendance.

It eases future shock and cognitive dissonance. But going forward into the third decade of the 21 century, the shifts will require knowledge organizations make a big adjustment to a world that for many seems to have changed in less than a decade.

Toffler’s second and third waves colliding in U.S. federal government

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In his 1980 book The Third Wave, futurist Alvin Toffler depicted the long-term evolution of modern socio-economy as a series of three waves. The first was agrarian – the cultivation and sale of plant crops and animals. The second was the industrial era that began in the 18th century. According to Toffler, this wave reached its peak in the 1970s when services took on a more dominant role relative to manufacturing – the third wave.

The transitions between the waves play out over many decades and are fraught with tension between the receding and rising waves. Not surprisingly since in each, the scale of social and economic change is enormous with broad implications for how and where people work and live. The previous socio-economy and its industries and settlement patterns is remade into the next.

Toffler wrote of advances in information and communications technology and fiber optic telecommunications infrastructure that would fundamentally alter the second wave industrial era based on centralization of production in offices and factories in metro centers. The third wave, Toffler prognosticated, would instead bring about decentralization.

Second wave office work would migrate back to homes that Toffler termed “the electronic cottage.” Toffler’s prediction came just six years after fellow futurist Arthur C. Clarke issued a similar forecast, envisioning the end of commuting to urban downtown office buildings. “Men Will No Longer Commute, They Will Communicate.” And plenty of women too who have entered the workforce since Clarke’s 1964 prognostication.

Toffler’s and Clarke’s future has arrived – gradually since the mass market personal computer in the 1980s and Internet in the 1990s – and suddenly following the social distancing public health measures of the 2020 viral pandemic. Millions of office workers migrated to the electronic cottage, creating home offices and no longer regularly commuting.

The tension between the second industrial era and third information era waves is now starkly evident in the federal government and in two prominent figures of the current American administration: President Donald Trump and Elon Musk.

Trump is a product of the second wave and the 1980s in particular when he developed his identity as a real estate developer including office buildings. The younger Musk is more complex, a creature of both the second and third waves. He embraces technology but largely in the context of second wave transportation advances: automobiles (Tesla) and rocket ships (SpaceX).

Both men are essentially second wave industrialists. For them, Toffler’s postindustrial third wave electronic cottage doesn’t exist. It’s a dwelling, not a place to work. Working there instead of commuting to a distant office is even “immoral” as Musk put it. Consequently, the administration has ordered federal workers to report for duty at the office.

The customer service model and government offices

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The Trump administration’s offer this week to federal employees to either do their jobs in government offices or resign effective later this year reflects a conceptualization of public sector knowledge work similar to that expressed by some state governors who imposed similar personnel rules over the past few years. It likens it to customer facing services people receive in brick-and-mortar locations like retail stores. These locations must be necessarily be staffed during business hours.

Some government services – state motor vehicle departments and health clinics – fit that description. But much of what government does is plan and make decisions on how to allocate public resources and deliver them through government programs. They are what Roger L. Martin would describe as “decision factories” as he termed them in a 2013 Harvard Business Review article.

Prior to the 21st century, these activities were nearly always performed in vast cube farms, closed door offices and meeting rooms in government owned or leased buildings centralized in Washington DC and state capitols.  

Advances in information and communications technology since then have diminished the need for these locations to allow staff to share, analyze, discuss and plan while seated together in these offices. Personal computers and devices and the Internet generally work as well outside of these locations as within including residences, thus eliminating the need to travel to a centralized commute-in office for most forms of knowledge work.

But when they are used in a knowledge worker’s home, a cognitive dissonance occurs, particularly for those who are not digital veterans (early adopters) or younger generations of digital natives. Prior to these ICT advances, the home was clearly for personal time and relaxation – not working. Daily activities were defined by the space in which they occurred. Home is home and offices “workplaces.” That distinction is no longer so sharply defined.

Making the conceptual shift away from those sharp distinctions is difficult, requiring an adjustment in thinking that can be challenging for both public and private sector organizations.

Office presence controversy overlays larger question of how knowledge work managed, organized.

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The controversy over attendance in centralized commute-in offices is currently centered around return to office (RTO) policies and when knowledge workers should be in them.

Advances in information and communications technology since the 1980s are virtualizing and decentralizing knowledge work, making when and where it’s done less relevant. Knowledge workers can develop their ideas, analyses, projects and plans and collaborate with others most any time and any place.

The trend developed slowly. Offices had been in place for many decades before and were still being built as ICT developed and matured. For knowledge organizations, they were the primary place staff work was done.

Social distancing measures taken to tamp down COVID-19 pandemic infections in 2020 suddenly accelerated what had been a very incremental trend with about 95 percent of knowledge workers commuting into offices each workday. Now that many more have worked outside of the cube farms of analog edifices of office buildings since then, circumventing time sucking commutes has taken the place of potentially dangerous viral infections. They are questioning the need for them as digital ICT replaces the analog scheme of transporting knowledge workers to them.

Some organizations including Amazon, JP Morgan, AT&T and most recently the U.S. federal government have adopted strict RTO policies that some have cautioned pose organizational risk for the attraction and retention of knowledge workers. But these organizations don’t necessarily see that as a negative but rather a positive with separations even welcomed and encouraged.

That raises the larger question how knowledge work in organizations is defined: what it is and who is needed to do it. This extends beyond RTO, “remote” or “hybrid” knowledge work itself. It’s about how it’s organized and accomplished.

Virtualization of knowledge work could portend major downsizing trend

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As knowledge work is virtualized and decentralized out of commute in offices with modern information and communication technologies, some organizations are questioning their space needs. And concurrently, apparently also their staffing levels. They are doing so by adopting mandatory office attendance policies as a condition of employment. Those who don’t show up face being asked to resign or be terminated.

A big question going forward is once those positions are vacated when their former occupants depart is whether they will be filled again or eliminated.

If the latter, the virtualization and decentralization of knowledge work also portends a new era where organizations no longer permanently employ large numbers of knowledge workers, concluding they can fulfill their missions with significantly reduced staffing levels. This is a critical issue since for most organizations, human resources and office space make up their biggest overhead expenses.

This has substantial implications. It could redefine knowledge work as primarily project versus employment based where knowledge work is delineated by a set job description and duties. That in turn could lead to increased use of consultants, contract staffing and professional service firms that many knowledge organizations are already utilizing.

Knowledge work has been slowly decentralizing for decades. But since COVID pandemic, it seems like just the past few years.

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Many knowledge organizations have been blindsided by the rapid decentralization of knowledge work. It is disrupting the usual manner of knowledge work as it has been done for decades: commuting daily to a centralized office location. That commute is no longer necessary. Knowledge work no longer requires the physical transportation of knowledge workers to an office building. Thanks to information and communications technology advances of the past five decades, the centralized, commute in office has become obsolete.

Knowledge organizations are struggling to adapt to this change. It’s been building since it was first predicted in the mid-1960s by futurist Arthur C. Clarke and as high speed highways began to exceed design capacity the following decade. But from the perspective of many knowledge organizations, it arrived with suddenness and surprise amid public health measures to contain the spread of the COVID-19 pandemic. That has left many knowledge organizations unprepared and facing future shock from too much change at once. This has led to negative consequences including:

  • Staff surveillance and “coffee badging;”
  • Lowered morale and engagement;
  • Loss of top performers and future leaders;
  • Negative social and news media accounts;
  • Difficulty planning staffing and space requirements.

The good news is knowledge organizations don’t have to navigate the shift alone. They can adapt and do so in a manner consistent with their values and mission and thrive in today’s decentralized, virtualized world of knowledge work.

Help is available.