Posts Tagged telecommute

Green Acres

CEOs – what if you could double your productivity, cut costs, and save the planet at the same?

In “Coffee Klatch,” I reported the remarkable productivity gains of organizations like AT&T and the Arizona Health Care Cost Containment System found by simply sending their employees home. The practical advantages of virtual officing in productivity, hard cost and opportunity savings are compelling enough, but are there also benefits to the planet?

The answer is “yes.”

Exhibit A: there are approximately 56 million white collar workers in the US[1]. About 76% of these commute alone to work[2], each dumping about 5.2 metric tons of carbon[3] out their tailpipes along the way every year. That works out to 223 million metric tons of carbon annually. While it’s true these people don’t all use their commute cars exclusively for commuting, if 70% of total usage is spent on commuting, that’s still 156 million metric tons of carbon expended on commute.

Exhibit B: office buildings consume 1,134 trillion BTUs of energy each year[4]. At 215 pounds of carbon produced for every million BTUs of energy consumed[5], that yields 122 million tons of carbon every year. If you were ever curious about what all those office buildings in Silicon Valley produce, well, now you know.

Exhibit C: office buildings in the US occupy 282 thousand not-so-green acres[6]. If you planted pine trees where those office buildings are currently standing, you would sequester 282 thousand tons of carbon annually (1 metric ton per acre[7]).

The grand total: 278 million metric tons of carbon annually! That’s about 5% of the grand total Sasquatchian carbon footprint of the United States. Stated another way, it’s about 50 times the daily carbon equivalent output of BP’s Texas Tea Gulf gusher[8].

There are lots of other exhibits: if there were 56 million fewer commuters, our freeways could be a lot narrower. We wouldn’t need to expend carbon to construct or maintain as many roadways, bridges and tunnels. We wouldn’t need to manufacture as many cars, or the resources to maintain them.

Of course, there are some offsets – if we all worked at home, there would be a net increase in home energy consumption for homes that are currently dormant during business hours. There would be some increase in occasional home deliveries or trips to the store for things like office supplies and equipment. Still, there is little question that the net benefits to the environment vastly outweigh the offsets.

I have no illusions about businesses suddenly packing up their cubicles in Silicon Valley, where there exists a fascinating inverse relationship between the sophistication of tech company products and those companies’ administrative processes. I am simply pointing out yet another significant cost associated with maintaining a 19th century business model in the 21st century.

One of the very first things management does when setting up a business is to find an office. This ostensibly fundamental step in the process of forming a business is so deeply hard wired into the minds of business managers that they never question why they’re doing it – it’s simply one of those checkboxes that requires a mark before opening for business. It’s never a question of whether or not to get an office, it’s a question of “where” and “how much?” If the question of “why” were ever to bubble up, it would likely be dismissed or rationalized as being somehow essential to the business – employees need supervising, management needs their colleagues nearby just in case they need to talk about something – whatever.

This raises one of the fundamental paradoxes of offices – though management has an intrinsic faith that business cannot succeed or even function without them, the reality is that offices consume resources and productivity – they do not multiply them. It requires money to rent the office, furnish it, and enable the infrastructure. Offices consume productivity in a variety of ways, including time lost in commute and preparation for work, as well as that lost in unnecessary meetings and water cooler chat. Offices severely narrow the geography from which management can recruit talent, thereby driving up competition and cost of talent. And offices exact a substantial carbon premium from the planet.

Despite the powerful inertia of tradition, a growing number of companies are embracing the advantages of virtual officing or “homesourcing,” including JetBlue Airways, 1-800-Flowers, J. Crew, and Office Depot. When you call JetBlue to make a reservation, you’ll be speaking with a work-at-home agent, many of whom are stay-at-home moms. As Thomas Friedman wrote in “The World is Flat,” JetBlue CEO Jeffrey Neeleman started homesourcing reservation agents at his first venture in the airline business, Morris Air (acquired by Southwest Airlines). As Neeleman put it, “We had 250 people in their homes doing reservations at Morris Air. They were 30% more productive – they take 30% more bookings, by just being happier. They were more loyal and there was less attrition. So when I started JetBlue, I said ‘We are going to have 100% percent reservations at home.’”

When asked why JetBlue prefers homesourcing over outsouring to India like other airlines, Neeleman went on to say “[Employers] are more willing to outsource to India than to their own homes, and I can’t understand that. Somehow they think that people need to be sitting in front of them or some boss they have designated. The productivity we get here more than makes up for the India [wage] factor.”

More productivity, happier employees, greener planet – what’s not to like? In our current challenging economic zone, traditional choices are increasingly becoming risky choices. A growing preponderance of data is compelling savvy businesspeople like Jeff Neeleman to set aside tradition in favor of facts when making decisions about their businesses, particularly those about their office monuments.


[1] The Henry J. Kaiser Family Foundation, “United States: Workers by Occupational Category, states (2007-2008), U.S.” The Henry J. Kaiser Family Foundation. Web. 2008 http://www.statehealthfacts.org/profileind.jsp?ind=748&cat=1&rgn=1

[2] U.S. Census Bureau, “American Community Survey, 2005-2007.” U.S. Census Bureau. Web. 2007. http://factfinder.census.gov/servlet/NPTable?_bm=y&-qr_name=ACS_2007_3YR_G00_NP01&-geo_id=01000US&-ds_name=ACS_2007_3YR_G00_&-_lang=en

[3] U.S. Environmental Protection Agency, “Emission Facts: Greenhouse Gas Emissions from a Typical Passenger Vehicle.” U.S. Environmental Protection Agency. Web. February 2005 http://www.epa.gov/oms/climate/420f05004.htm

[4] U.S. Department of Energy (DOE), Energy Information Administration, “U.S. Commercial Buildings Site Energy Consumption.” U.S. Department of Energy (DOE), Energy Information Administration. Web. December 2004 http://www.eia.doe.gov/emeu/cbecs/cbecs2003/introduction.html

[5] U.S. Department of Energy (DOE), Energy Information Administration (EIA), “Fuel and Energy Source Codes and Emission Coefficients. Voluntary Reporting of Greenhouse Gases Program.” U.S. Department of Energy (DOE), Energy Information Administration (EIA). Web. April 15, 2008 http://en.wikipedia.org/wiki/Carbon_tax#cite_note-eia-coefficients-27

[6] 824,000 office buildings, Source: U.S. Department of Energy (DOE), Energy Information Administration (EIA), “2003 Commercial Buildings Energy Consumption Survey.” U.S. Department of Energy (DOE), Energy Information Administration (EIA). Web. 2003; 14,900 average square feet per office building: Source: U.S. Department of Energy (DOE), Energy Information Administration (EIA), “The Commercial Buildings Energy Consumption Survey (CBECS) 1995.” U.S. Department of Energy (DOE), Energy Information Administration (EIA). Web. 1995 http://www.eia.doe.gov/emeu/cbecs/cbecs2003/introduction.html

[7] Birdsey, Richard A., “Carbon Storage for Major Forest Types and Regions in the

Coterminous United States.” Forests and Global Change, Vol. 2: Forest Management Opportunities for Mitigating Carbon Emissions, ed. Sampson, Neil, R. and Dwight Hair, American Forests, Washington DC 1996, Appendix 4, Table 26, p. 361.

[8] Average of 45,000 barrels per day x a minimum of 317kg of CO2 produced per barrel of crude oil when the combined liquid fuels from an average barrel of crude are consumed – Bliss, Jim. Web March 20th, 2008. http://numero57.net/2008/03/20/carbon-dioxide-emissions-per-barrel-of-crude/

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Virtuality — Part 1: News for the Hard of Hearing

snl-news-hard-hearingIn “My New Old-Fashioned Company,” I’ve discussed what’s old about my company. Is there anything new?

Oh yes!

My company, gwabbit, is a 100% virtual office (as was my previous company). No bricks & mortar office whatsoever. Seriously!

I went virtual with my previous company, WebFeat, in 1998. If we were not the first successful100% global virtual company, we were certainly among the first. I must admit that, at the time, my motivation for going virtual was driven more by finance than vision. My little bootstrap start-up was short on cash and we simply could no longer afford our cool New York City office flat. Now, 11 years later, I can’t imagine running a business any other way.

When I would tell Silicon Valley colleagues about my virtual company, I found that most simply could not bend their heads around the notion of a 100% virtual office. The conversations usually went something like this:

Silicon Valley Colleague: “Where is your office?” (note: I had already explained to colleague that we were a virtual office)

Todd: “We don’t have an office”

Invariably, my colleague would ask the question again, slowly, as though either my hearing or cognition was impaired:

Silicon Valley Colleague: “where - is - your - office?” He asked, slowly

Todd: “We - don’t - have - an - office.” I repeated, slowly

One colleague actually asked the question a third time, making arm motions as though he were drawing a real office (ironically, in virtual space) as though I did not understand the question the first two times it was posited. It reminded me of when Garrett Morris did the News for the Hard of Hearing on Saturday Night Live by simply yelling at the camera.

Once my colleague reluctantly accepted the fact that I was serious about my virtual office, he would proceed to inform me why it could never succeed. The reasons included:

  • Virtual businesses can’t scale
  • You can’t supervise virtual office employees
  • You can’t have too many direct reports

I’ll knock these down one-by-one:

Virtual businesses can’t scale — invariably, my critics could never explain why they didn’t think a virtual business couldn’t scale. It just couldn’t scale. Like many reactions to the virtual company, this was an attempt to assign a rational sounding argument to an uncomfortable visceral feeling — we’ll talk more about feelings in later installments.

Despite the very worst prognostications of doom, our business somehow managed to scale anyway. At the time I sold my company, we had 40 employees. Still a small business, but I see no reason why it wouldn’t scale to 100 or 100,000

You can’t supervise virtual office employees — this is probably the most absurd argument against the virtual company — the notion that management can’t keep a close eye on their employees. My response to this is a simple one: why would you want to hire people that require supervision? Whether your business is virtual or not, don’t you want employees that can work and produce without supervision?

Too many direct reports – another one of the sillier arguments against the virtual office. More than one of my otherwise brilliant colleagues assumed that virtual officing somehow translated into every employee reporting directly to the virtual corner office. My experience has been that virtual offices utilize similar hierarchies and numbers of direct reports as their traditional counterparts.

So I’ve discussed some of the arguments against the virtual office – what are the arguments in favor?

There are many, which I’ll discuss in future installments, but the most compelling is this: in my 11 year experience with virtual officing, I found that a well-managed virtual office is 200% - 300% more efficient and productive than its traditional counterpart.

That’s right – not 20% or 30% more productive – 200% - 300% more productive!

In my decade long experience with WebFeat, our virtual David went up against not one, not two, but three traditional Goliaths. These companies had up to 100 times the number of employees as WebFeat, with relatively vast cash reserves. WebFeat, with no venture capital, funded entirely from operations, and fielding a comparatively puny cast of dozens, smacked down each of its Gigantor opponents, gaining top market share.

How – you might ask?

For the answer, stay tuned for the next installment of Virtuality!

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