When you walk into ‘Building 14’ on Cisco Systems’ campus in San Jose, California, don’t expect a traditional Silicon Valley office set-up. The rows of ‘cubes’ so beloved by US firms and immortalised by the ‘Dilbert’ cartoon series, complete with desks and workspaces assigned to named individuals, are gone. In their place is an assortment of work environments designed to meet the different day-to-day needs of a fluid employee base.

It’s easiest to visualise the building in terms of zones. At the front, there’s an open-plan seating area where you can chat with colleagues and visitors, get refreshments and tap into the wireless network. If you’re just popping in to catch up with your boss and check on emails, you can settle into any of the open workstations. If you want to get away from the buzz of the office and incessant telephone chatter, there are quiet zones where you can get some quality thinking time in. And if you need something a little more formal or confidential, you can use a traditional meeting room.

As one of the world’s leading internet-based networking and communications companies, of course, Cisco has a vested interest in demonstrating how the office of the 21st century will evolve. With wireless networks now becoming as pervasive as mobile phones, many of the physical restrictions that used to determine the way we work are gone – particularly the need for everyone to have their own desk, their own telephone and a computer preconfigured for their exclusive use, all tied together by a mound of spaghetti-style cabling in the floorspace. In an increasingly paperless world you don’t even need your own in-tray. Instead, you can bring your laptop and mobile to the office, set it up wherever there’s free space – and you’re away.

It’s not just technology that’s driving this change. For many organisations, property and associated costs represent one of their largest outlays after payroll. But while employees are ‘assets’ that contribute to business growth, property is usually little more than overhead. Even if you’re lucky enough to own your building and can count on it appreciating in value, the costs associated with fixtures and fittings, along with any maintenance you’re responsible for, all come off your bottom line.

What’s particularly galling about this equation is the fact that in most cases, companies dramatically under-utilise the office-based assets they’ve acquired. If you assume your employees work a ‘standard’ eight hours, you’re already guaranteeing that their dedicated desk space is going to lie idle for two thirds of the day – plus weekends. When you throw in all the time they spend in internal and external meetings, or even simply chatting with colleagues in the kitchen, it’s not hard to see why some large organisations estimate their space usage is as low as 15 per cent. Compare that to the manufacturing environment, where any investment in plant equipment is predicated on the basis of minimising downtime and keeping assets in use as close to 100 per cent of the time as possible.

That’s why a growing number of organisations – large and small – are starting to look at the space equation. If you were to remove each dedicated workstation and assume that you’ll never have everyone in the office at the same time, you could instantly cut back on the amount of space you need. If you actively encouraged employees to work remotely for at least part of the week, you could cut back even further. Cisco, for example, says it can now house more than double the amount of employees in Building 14 with its new flexible set-up.

But effective space management isn’t just about costs. The problem with traditional office environments is that they impose physical constraints on the way you work: if you want to reconfigure your office to squeeze in additional people or rearrange employees around new projects, for example, you’ll usually have to deal with a whole load of cabling issues and involve everyone from the IT department to facilities management. Flexible work environments make organisational and physical design changes much easier to put in place.

Much more fundamentally, workplace management is becoming a competitive tool amid the changing dynamics of 21st century people management, where skills shortages are forcing organisations to be far more responsive to employee needs. Again, flexibility is everything. Parents, for example, may prefer to start work very early in the morning and leave mid-afternoon, or split their day and finish off their work when the kids are in bed. Younger knowledge workers, brought up in an environment where they’re permanently connected, will question the logic of commuting to a job that they can do just as effectively from their bedroom. Older workers may choose to work part-time, or work from home a couple of days a week and then come into the office to take advantage of the social and creative benefits that workplaces offer. The more flexibility you can offer each of these different constituents, the more likely you are to attract high-quality staff – and the greater the barrier for other organisations looking to poach them.

Establishing these kinds of working practices presents numerous challenges, from the practicalities of setting people up at home to the cultural and organisational issues that arise before, during and after a workplace transition. For larger, long-established organisations, managing change can be particularly difficult. But the opportunities are very real and the technology enablers are in place. Ultimately, it won’t be a question of whether to embrace these kinds of working practices – competitive pressures mean that it’s more likely to be a question of when.

*Webster Buchanan Research is setting up a ‘Workplace Management’ practice this spring, focusing in part on the crossover between people and space/property management issues. Check Keith Rodgers’ weekly People Perspective column for updates.