In 2011, when the electronics firm Plantronics redesigned its headquarters in Santa Cruz, California, executives decided to remove the desks for a third of the firm's 500 local staff. Employees were given a choice: They could work daily from home; they could commute to headquarters; or they could join one of three Bay Area locations of NextSpace, a four-year-old company that runs a chain of work spaces buzzing with freelancers, salespeople, and entrepreneurs. A dozen or so opted to work regularly at a NextSpace branch tucked inside a former bank building in downtown San Jose, where a sign outside screams working alone sucks. Inside were all the comforts of a typical Silicon Valley office, including strong Wi-Fi, stronger coffee, plush couches, individual workstations, communal tables, and the keyboard clatter of 70 people working alone together.
Plantronics is engaged in "coworking"—that is, toiling alongside someone who isn't a colleague. In the past few years, the population of these spaces has moved beyond assorted freelancers and the newly unemployed to something far less marginal. "People are burrowing into their social networks in addition to their organizations," says Chris Mach, a global workplace strategist for AT&T. Mach is placing dozens of his company's best researchers, product developers, and technologists in coworking hubs across the country, and he has invited startups and partners such as Ericsson to work alongside them. The goals: spot talent, inspire creativity, and get products to market faster.
There are now an estimated 90,000 coworkers worldwide, nearly half of whom are in the United States. The number of dedicated spaces for them has doubled every year since 2005, to more than 1,800 locations, reported Deskmag, as of last summer. NextSpace plans to open 25 offices across the United States over the next five years. A startup named Serendipity Labs in Rye, New York, will offer corporate memberships in more than 200 U.S. locations. WeWork, with 3,000 members in nine buildings across three cities, tags itself as "The Physical Social Network."
Plantronics and AT&T are part of a vanguard of corporations placing employees in such spaces. According to the Deskmag survey, nearly one in 10 coworkers are employed by large or medium-size businesses. Accenture, PwC, and Capgemini have all deployed teams to various spaces; so has Twitter in Detroit. In London, Google is backing Campus, a seven-story complex that reserves one floor for Google employees and two for coworking facilities. Google is less interested in saving rent than in meeting smart people. "For companies that seek to acquire a lot of talent, something like this makes a lot of sense," says Elizabeth Varley, CEO of TechHub, an entrepreneurs' collective and another Campus tenant.
Proximity also seems to stimulate innovation. A recent study of some 35,000 academic papers found that the best, most-widely cited research came from coauthors sitting less than 10 meters apart. "How closely they worked mattered as much, if not more, than their affiliation," says the study's author, Isaac Kohane of Harvard Medical School. Coworking's combination of casual relationships and shared spaces, he suggests, can lead to some of an employee's most fruitful collaborations.
Coworking generally falls into one of three categories. The most typical is the NextSpace model—a big, well-appointed office where the employed and self-employed go to make contacts, stare at a laptop, and sip coffee. A second, newer iteration is sometimes called company-to-company sharing, in which a group of companies pool space, employees, and ideas. The third and arguably most radical type might be described as private-to-public sharing—in effect inviting outsiders to work inside your company building or campus.
At the moment, the world's largest experiment in company-to-company coworking sits at the end of a row of handsome brick warehouses in downtown Grand Rapids, Michigan. The teams stationed in the lofty offices of GRid70, as they're called, have been charged with plotting their employers' futures. The fourth floor houses the growth initiatives team of Steelcase, the world's largest office furniture manufacturer, and Amway, the $10 billion multilevel marketer. The test kitchens of Meijer, the Midwest grocery chain, dominate the ground floor, while the third floor belongs to the footwear designers of Wolverine Worldwide, owner of such brands as Hush Puppies, Keds, and Sperry Top-Sider.
GRid70 is an exercise in engineering serendipity, or "happy accidents," in the words of Wolverine CEO Blake Krueger. The hope is that these disparate residents will use their expertise to help one another in their struggles. To that end, an open-door policy reigns. Amway's Post-it-Note-strewn space has no doors at all. Steelcase eschewed cubicles for a long, double-wide table and a few videoconferencing pods. Downstairs, accessible through an atrium staircase, Wolverine's 50 or so designers wade through shoe samples in their open-plan office, while Meijer's food scientists spend their days sampling vendors' baby-back ribs, candy, and macaroni and cheese in a spotlessly clean kitchen the size of a nightclub (which happens to have been the ground floor's former tenant).
All are encouraged to linger in the office kitchen or in one of the building's many airy conference rooms, including a lounge in which they're invited to crash each other's meetings. Residents have shared trade secrets, trend forecasts, materials science, and even recipes for kielbasa. Steelcase reportedly has given Wolverine tips on controlling odors from cement (a problem plaguing the manufacture of both shoes and furniture) and, in turn, has received Amway's proprietary research on India's emerging middle class. None of the companies are in competition with one another. Thus Steelcase can take Amway's advice without parsing it for office politics.
The setup in Grand Rapids is decidedly different from a coworking experiment now under way in Las Vegas. There, architect Jennifer Magnolfi hit upon the idea of inviting Sin City's 2 million metro area residents to work from Zappos's new headquarters. It is almost certainly the world's largest example of private-to-public sharing. It is also the centerpiece of Zappos CEO Tony Hsieh's Downtown Project, a $350 million bid to catalyze both the city and the company by deliberately blurring the lines between the two.
Hsieh's thoughts on corporate evolution borrow heavily from the Harvard economist Edward Glaeser, who has described cities as the greatest serendipity machines of all. To Glaeser, as cities grow larger they encourage more chance encounters among citizens, sparking innovation and productivity. With companies, though, the bigger they get, the more sclerotic. For Zappos to avoid a similar fate, Hsieh reasoned, he needed to make the company more like a city, so in August he relocated 200 of his 1,400 employees from a suburban campus to downtown Las Vegas, with the rest to follow this year. As part of Hsieh's plan to make Vegas "the Coworking Capital of the World," Magnolfi proposed creating a coworking space on the building's ground floor, essentially a membrane through which strangers and Zappos employees will pass and hopefully collide. Eventually Hsieh wants to turn the company inside out, transforming every downtown bar and restaurant into an extension of its conference rooms, drawing hundreds of startups, students, and small businesses into the Zappos orbit.
The next step may be learning how to rearrange office space at will. Perhaps the greatest failing of the corporate office has been its inability to change as quickly as the nature of work. Companies often neglect office layouts for years at a time. Compare this with Grind, a year-old coworking space in Manhattan, which constantly monitors the head count and positions of its members, reconfiguring the room when necessary. Cofounder Benjamin Dyett can tell you Wednesdays are peak and Fridays are dead, and that at more than a hundred occupants, "the room falls apart" as members hunker down under the onslaught of arrivals. Ryan Anderson, director of future technology at Herman Miller, imagines bringing new tech to bear on such spaces, perhaps tracking physical movements of workers with sensors or using social media apps to see which acquaintances are nearby. "A data-driven, highly evolutionary work space is where we're headed," he says.
The challenge will be to accommodate everyone who wants a desk. According to the U.S. Bureau of Labor Statistics, by 2020 about 65 million Americans will be freelancers, temps, and independent contractors—40% of the workforce. That fact inspired the creation of LiquidSpace, which wants to make every coworking space, conference room, and spare cubicle searchable and bookable online. "There is $8 trillion worth of office space worldwide," says CEO Mark Gilbreath, and at any given moment, two-thirds of it is empty because the occupants are elsewhere. Why not fill that space with outsiders? With so many of our coworkers already strangers, it can't hurt to let the right ones in.
A version of this article appeared in the March 2013 issue of Fast Company magazine.
Slideshow Credits: 01 / Photo by Dan Forbes; 02 / Courtesy of GRid70; 03 / Courtesy of GRid70; 04 / Courtesy of GRid70; 05 / Photo by Dan Forbes; 06 / Courtesy of GRid70; 07 / Courtesy of GRid70; 08 / Courtesy of GRid70; 09 / Courtesy of GRid70; 10 / Courtesy of GRid70; 11 / Courtesy of GRid70; 12 / Courtesy of GRid70; 13 / Courtesy of GRid70;