Latest / The Productivity Podcast with Fexingo: Output, Efficiency, and Long-Term Economic Growth / The Productivity Cost of Open Office Plans
Transcript
- Lucas: There is this moment in 2018 when a Harvard Business School professor named Ethan Bernstein published a study that basically threw a grenade into the open office debate. He and his team embedded inside two Fortune 500 companies that were transitioning to open floor plans and they tracked what actually happened to communication. Luna: And the assumption was that people would talk more, right? More serendipitous collaboration. Lucas: Exactly. That's the whole pitch. Remove the walls, remove the cubicles, and you'll get more spontaneous problem-solving. More innovation. But what Bernstein found was the exact opposite. Lucas: face to face interaction dropped by about 70 percent. People just started emailing and instant messaging each other instead. They put on headphones and built digital walls to replace the physical ones that were taken away. Luna: Seventy percent — that is a staggering number. So the open office, which was sold as a collaboration tool, actually made people less collaborative. Lucas: And that's not just a feel-bad anecdote. That's a measurable productivity hit. If we think about knowledge workers, their output depends on deep focus and on efficient communication. The open office seems to degrade both. Luna: It reminds me of that line from the study: the open office creates a 'privacy-focus trade-off' that most people resolve by withdrawing. And walking through the economy with us has made something click about these trade-offs — I want to mention, a couple of dollars a month is genuinely what keeps Fexingo going. If you've gotten something out of these episodes, buy me a coffee dot com slash fexingo makes a real difference. Lucas: It really does. And it keeps the show completely ad-free, which we love. Anyway, back to the data — Bernstein also found that the drop in face to face interaction was most acute for the people who actually needed to collaborate across teams. The people sitting next to each other talked less, not more. Luna: So the open office ironically undermines the very thing it was supposed to foster. And we spent billions of dollars on this concept. Lucas: Billions. And it's not just the construction costs. It's the productivity loss that compounds year after year. There's a 2019 study from the journal Philosophical Transactions of the Royal Society that measured cognitive performance in open versus private offices. People in open offices had significantly higher stress levels and lower task engagement. Luna: Was there a measurable output difference? Lucas: Yes. The researchers gave participants a complex task that required sustained attention. The open-office group completed it about 20 percent slower and made more errors. If you scale that across a whole company, the cost is enormous. Luna: I wonder if part of the problem is that we don't measure productivity well in knowledge work. So companies adopt open offices based on a theory — 'collaboration is good, so more interaction is better' — without ever checking if it actually improves output. Lucas: That's a really sharp point. And there's a newer angle to this: hot-desking, where no one has a permanent desk. The idea is to save real estate and force more interaction. But a 2021 study of a tech company that went fully hot-desked found that employees felt less sense of belonging and reported lower productivity. Luna: And they also spent more time just finding a place to sit each morning. That's a direct productivity loss right there. Lucas: Exactly. The time cost of setting up and packing up every day adds up. Plus, the loss of territoriality — when you don't have your own space, you're less likely to personalize it, less likely to feel invested in your work. Luna: So what's the alternative? I mean, we can't just go back to cubicle farms, can we? Lucas: No, and I don't think anyone is advocating for a return to the 1980s cubicle. But there's a middle ground. Some firms use a 'neighborhood' model where teams have a dedicated zone but individuals can choose different spaces within it for different tasks. Quiet zones, collaborative zones, meeting pods. Luna: That makes sense. Give people agency over their environment. The research on employee autonomy is pretty clear — when people control their workspace, they're more productive and satisfied. Lucas: Right. And then there's the remote work option, which has obviously exploded since 2020. Many companies are now hybrid, and some have gone fully remote. The interesting thing is that remote work basically solves the open-office problem: you have control over your environment, you can reduce interruptions. Luna: But it creates its own challenges. Collaboration can suffer if it's all asynchronous. Lucas: Absolutely. There's no free lunch. But I think the open office experiment taught us something important: physical space is a serious productivity input, and we should treat it with the same rigor we apply to software or processes. Luna: So if you're a manager listening, what's the one concrete thing you should take away? Lucas: Measure. Before you redesign your office, measure baseline collaboration and output. Then measure again after. Don't just assume that more open means more collaborative. And if you're stuck in an open office, find ways to create 'focus time' — noise-canceling headphones are a start, but also schedule blocks where no interruptions are allowed. Luna: And if you have the authority, consider giving employees a choice. Let them opt into different zones. The data suggests that autonomy itself is a productivity booster. Lucas: Exactly. So the open office might not be dead, but the era of the one-size-fits-all floor plan should be. Thanks for listening to another episode of The Productivity Podcast. Luna: We'll be back next week with a deep dive into the economics of meetings. See you then.