Research briefing developed at MIT Sloan School of Management's Center for Information Systems Research (CISR).

1. Center for Information Systems Research
Sloan School of Management
Massachusetts Institute of Technology
RESEARCH BRIEFING
Volume IX Number 9B September 2009
THE NEXT GENERATION WORKPLACE Microsoft’s New Workplace
Eric van Heck, Visiting Scholar, MIT Sloan Center Located at Amsterdam Schiphol Airport, Microsoft’s
for Information Systems Research and Professor, new building illustrates some key characteristics of
Rotterdam School of Management, Erasmus University the next generation workplace.2 Microsoft employ-
ees arrive for work at all times of the day. De-
In 2009, for the second consecutive year, the Great pending on their activities, they choose an area of
Place to Work Institute awarded Microsoft the Best the building in which to work. Some will meet
Workplace in Europe Award in the Best Large customers in the video conference rooms or the
Workplaces category. This award honors companies trendy café to discuss new products and services,
that invest in people by providing exceptional work while others are preparing presentations in closed
environments, practices, benefits, and recognition. cubicles. One can have brainstorming sessions with
Competing with 1,350 companies, local Microsoft colleagues in the open-air terrace garden, while the
offices across Europe won awards in all 16 coun- auditorium provides space to present work to larger
tries, with first-place awards in six countries. The audiences in an interactive way. No employee—not
new Microsoft building in the Netherlands is seen as even the general manager of Microsoft
a flagship example of how Microsoft is creating the Netherlands—has a dedicated office.
next generation workplace for its employees.
Microsoft’s new building, with its abundance of
What did Microsoft do to win? What are the charac- windows, reflects the transparency that the em-
teristics of best workplaces? What are the lessons ployees want to radiate to their colleagues and
learned from Microsoft’s experiences? We address visitors. The new building also features technology
those questions in this briefing. that ranges from the latest collaboration tools to a
There were three main reasons Microsoft initiated a cooling system that provides lower CO2 emissions.
new way of working. First, Microsoft recognized Collaboration technologies include Microsoft Office
that an increasing part of current knowledge work is Live Meeting—an online meeting space where par-
no longer traditional office work—it is about gener- ticipants can deliver a presentation, work together on
ating new ideas, convincing other people, combining a document, or collaborate on whiteboards; Microsoft
different perspectives, and producing new knowl- Office Communicator—a communication platform
edge. Next generation knowledge workers are seek- using instant messaging (IM), voice over IP, desktop
ing inspiration, flexibility, and the use of the newest sharing, and video; Microsoft RoundTable—a tool
collaboration tools to create knowledge that has for 360-degree video conferencing; and Microsoft
value and provides sustainable results. It’s useful to SharePoint—an integrated platform of server capa-
think about their new workplace requirements. bilities such as search, web site design, and business
Second, Microsoft recognized that their operating intelligence.
model was changing from traditional software sales Our research examined the impacts of this new
to a more service and customer oriented model. This workplace design on employee working styles and
operating model requires new forms of performance. We surveyed Microsoft employees in
collaboration, teamwork, and customer relationship 2007, before they moved to the new building, and
management. Third, Microsoft recognized that
business growth depends on the personal growth of People Ready: Inside Your Company is a Powerful Force
employees who are empowered with the tools and (February, 2006).
technologies that drive the business forward.1 2
Microsoft The Netherlands (NL) is a medium sized
subsidiary of Microsoft Corporation and part of the
Microsoft European, Middle East, and African (EMEA)
1
For more details see the Microsoft Whitepapers: Digital region. Microsoft NL was Microsoft’s “Subsidiary of the
Work Style: The New World of Work (May, 2005) and Year” in 2007.
© 2009 MIT Sloan CISR, van Heck. CISR Research Briefings are published monthly to update MIT CISR patrons, sponsors
& other supporters on current research projects.

2. CISR Research Briefing, Vol. IX, No. 9B Page 2 September 2009
again in 2008, after they had been in the building for The workplace changes led to changes in three
six months. We found that the move to the new working dimensions that contributed significantly to
workplace resulted in more mobile working styles, worker productivity: (1) Job competence, the sense
higher reported flexibility, and a small increase in that employees felt better equipped to do their jobs
worker productivity. We also measured changes in after moving to the new workplace. Microsoft
job satisfaction but this measure was very high in motivated and trained their employees in such a way
2007, so the change from 2007–2008 was negligible. that they felt better equipped to do their job after
moving into the new workplace. (2) Extrinsic job
Different Digital Working Styles motivation, which reflects forces external to the
Every knowledge worker has a different working individual that affected the employees’ level of
style depending on his or her individual approach to effort; and (3) interaction outside the organization,
work, the type of job, and the availability of which suggests that the building as a meeting place
collaboration tools. In this research we considered (instead of an office space) led to more frequent and
one aspect of working style: mobility. We charac- better interactions with customers, partners, and
terized a person’s mobility on a scale of 1 (desk suppliers.
bound) to 7 (very mobile). Figure 1 shows how
The level of innovativeness very slightly improved.
employees described their mobility in 2007 and
Microsoft would like to see more of an impact on
2008. They have become less office bound; they
innovativeness and is working to increase it.
work in more locations and at different times; and
they use more mobile technologies. Trust and Empowerment Are Critical
Improved Individual Performance Our broader study (see the Appendix describing the
study) indicated that a crucial factor for adopting a
Although worker performance is crucial for overall
more digital working style and creating higher levels
company performance, improving individual perfor-
of individual performance is the way top managers
mance is not an easy task.3 Our research examined
themselves use the next generation workplace:
four dimensions of knowledge worker performance:
“Practice what you preach.” If top managers advo-
(i) flexibility; (ii) productivity; (iii) satisfaction; and
cate this new concept but stay in their traditional
(iv) innovativeness.
offices (usually on the top floors of a building), the
Flexibility refers to the work one has to do, where next generation workplace will not be easily adopted
and when the work is done, and how easy it is for by the rest of the company. Another factor that
members of a team to fill in for one another. Survey resonates in all our empirical results is the empower-
analysis indicated that Microsoft’s adoption of the ment of employees.4 Managers need to trust their
next generation workplace has had a dramatic employees and empower them by giving them first,
impact on flexibility. Specifically, the new clear objectives and decision making tools, and then
workplace facilitates team work because it is easier allowing them the freedom, flexibility, and discre-
to integrate work process modules that are executed tionary power to make their own decisions and
by other (virtual) team members. However, this execute operations.
flexibility is restricted by traditional income and
promotion structures that evaluate individual Appendix
performance, rather than team performance. Specific This research briefing is based on extensive research
contractual provisions can also inhibit flexibility. on workplace changes performed from 2007 to 2009
Interestingly, women at Microsoft NL reported in the Netherlands. The research was sponsored by
greater increases in flexibility than men. De Unie, Microsoft, Rabobank, and Sogeti and was
performed by researchers and master students of
The results at Microsoft NL show that adopting the
Rotterdam School of Management, Erasmus Univer-
next generation workplace also had a significant im-
sity. The research team collected data via interviews
pact on knowledge workers’ sense of their individual
and online surveys. They also analyzed secondary
productivity. Figure 2 provides an overview of
material such as white papers, web sites, and internal
significant changes in working dimensions related to
the productivity of Microsoft’s knowledge workers.
4
Lodewiek Jansen, Trust and empowerment: affecting
employee satisfaction and productivity of the IT related
3
See, for example, research at the Institute for Innovation knowledge worker, MSc Thesis, Rotterdam School of
& Information Productivity (www.iii-p.org). Management, Erasmus University, February 2009.

3. CISR Research Briefing, Vol. IX, No. 9B Page 3 September 2009
company documentation. Four online surveys were (N=191). The fourth online survey was done at
conducted to measure the perceptions of knowledge Sogeti where the relationship between trust, empow-
workers and their work dimensions. The first online erment, work, employee satisfaction and produc-
survey was conducted at the workers union De Unie tivity was investigated (N=1294).5
after they moved into a new building (N=128). The
second online survey was conducted at Microsoft.
Employees submitted a survey before (N=268) and 5
More details and research results: Van Baalen et al.
after (N=293) moving to the new building with 117 (2008), Worlds of Work: Results from the New Worlds of
respondents participating in both surveys. The third Work Research Report 2007, May 2008; and Van Baalen
survey was conducted at Rabobank, a global triple et al. (2009), Worlds of Work: Results from the New
“A” bank headquartered in the Netherlands, where Worlds of Work Research Report 2008, September 2009.
two departments moved into new work spaces
Figure 1: Percentage of Microsoft NL employees that adopted a specific digital working style
(1=deskbound; 4=mobile within building; 7=highly mobile) before (2007) and after (2008) moving into the
new building.
Figure 2: Work dimensions that significantly impacted productivity (N=117).
Work Dimension Level of Productivity 2007 Level of Productivity 2008
(M = 3.99) (M = 4.08)
Job Competence 4.27 4.31
Extrinsic Job Motivation 3.57 3.61
Interaction Outside
4.25 4.36
Organization

4. About the Center for Information Systems Research
CISR MISSION CISR RESEARCH PATRONS
CISR was founded in 1974 and has a strong track record The Boston Consulting Group, Inc.
of practice based research on the management of infor- BT Group
mation technology. As we enter the twenty-first century, Diamond Management &
CISR’s mission is to perform practical empirical re- Technology Consultants
search on how firms generate business value from IT. Gartner
CISR disseminates this research via electronic research IBM Corp.
briefings, working papers, research workshops and exec- Microsoft Corporation
utive education. Our research portfolio includes: Tata Consultancy Services Limited
Achieving Superior Business Value from IT— CISR SPONSORS
A Single Framework of What Matters
Communicating Effectively about IT Value Aetna, Inc. Pepsi Americas, Inc.
Maturing and Globalizing IT Governance Allstate Insurance Company PepsiCo International
Australian Govt., DIAC Pfizer, Inc.
Managing Business Experiments:
ANZ Banking Group (Australia) PNC Global Investment
Web-based Innovations in Collaboration
Banco Bradesco S.A. (Brazil) Servicing
Learning from IT Projects: Banco Itaú S.A. (Brazil) Procter & Gamble Co.
Effective Post-Implementation Reviews Bank of America Raytheon Company
Benchmarks for IT Decision Making Biogen Idec Renault (France)
Leading the Transition to the Digitized Platform BP Standard & Poor’s
Designing and Managing Shared Services Campbell Soup Company State Street Corporation
Managing the Information Explosion Canadian Imperial Bank of Sunoco, Inc.
Commerce TD Bank
Making Sense of “the Cloud”
CareFirst BlueCross BlueShield Tetra Pak
In July of 2008, Jeanne W. Ross succeeded Peter Weill Caterpillar, Inc. Time Warner Cable
as the new director of CISR. Peter Weill became chair- Celanese Trinity Health
man of CISR, with a focus on globalizing CISR re- Chevron Corporation Unibanco S.A. (Brazil)
search and delivery. Drs. George Westerman, Stephanie CHRISTUS Health VF Corporation
L. Woerner, and Anne Quaadgras are full time CISR Chubb & Son Wal-Mart, Inc.
research scientists. CISR is co-located with MIT Commonwealth Bank of Australia World Bank
Sloan’s Center for Digital Business and Center for Credit Suisse (Switzerland)
Collective Intelligence to facilitate collaboration between CVS Pharmacy, Inc.
faculty and researchers. Det Norske Veritas (Norway)
DHL Global Management GmbH
CISR is funded in part by Research Patrons and Spon- (Germany)
sors and we gratefully acknowledge the support and con- Direct Energy
tributions of its current Research Patrons and Sponsors.
Embraer – Empresa Brasileira de
Aeronautica S.A. (Brazil)
CONTACT INFORMATION EMC Corporation
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Peter Weill, Chairman pweill@mit.edu Johnson & Johnson
Chris Foglia, Associate Director cfoglia@mit.edu Liberty Mutual Group
George Westerman, Res. Scientist georgew@mit.edu Marathon Oil Corp.
Stephanie Woerner, Res. Scientist woerner@mit.edu MetLife
Anne Quaadgras, Res. Scientist aquaad@mit.edu Mohegan Sun
Jack Rockart, Sr. Lecturer Emeritus jrockart@mit.edu NASA
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