Change for the Better

Dan Emerson Contributing Writer

A favorite topic of many business gurus and leading motivational experts is the importance of treating change as an opportunity, rather than something to be feared and avoided. One of the best examples of that optimistic mindset applies to growing-- or downsizing-- companies that find themselves needing to relocate or add new sites.

Experts in "change management" say that an impending move is not only an anxiety-provoking, all-consuming task; it also presents an opportunity for firms to re-evaluate their organizational structure and general modus operandi, and retool.

The recent move of CADware Inc., a St, Paul-based computer systems integrator for design and manufacturing firms, could truly serve as a case study.

A year ago, CADware was adding more services such as hardware/software training workshops and seminars and planning to double its 10-person staff. The growing firm's existing 1,000-square-foot space in the Lowertown Business Center--a business incubator--had served its purpose well, but CADware needed more room. Vice President Jenny Noeker says her firm also wanted "a more professional look," calling for an upgrade for class B to class A office space.

She and her brother, president and founder Erling Noeker, also wanted a layout that would help convert their company from a traditional "top-down" structure to the au courant team model popularized by Japanese industry and being adopted by many U.S. firms. They also wanted to create a flow environment that would be conducive to the creative nature of their work.

YOU ARE WHERE YOU WORK

When the Noekers began planning their move about a year ago, they enlisted a change management expert, John Fennig, a psychologist and consultant with Developmental consulting Resources in Edina.

"One of the key things for an organization to recognize is that the physical office environment and the way it is set up does reinforce the company's values, policies, and procedures," Fennig says. "The physical layout truly reinforces behavioral aspects the company is seeking to have working for it."

The team model is in vogue, and many companies are talking about it, Fennig says. "But the acid test of whether people are walking the walk as well as talking the talk is, how do they set up their physical space?"

For CADware's new space, the Noekers had in mind the concept of a "great room"--an open work environment similar to the famous plant of the great architect Frank Lloyd Wright designed for Johnson Wax Corp. in Racine, Wis. They wanted the "ebb and flow" work environment offered by more open space, Jenny Noeker says.

A real estate broker helped the Noekers find and sublease a suitable, 2,700-square-foot space in the 15th floor of the American National Building in downtown St. Paul. They hadn't initially planned on subleasing, but it allowed the company to reduce costs by "piggybacking" on some of the building's existing services such as photocopying, conference facilities and a better phone system.

The Noekers used their move to remedy the existing physical division between their engineers in one room and sales people in another.

"Being a consulting sales organization, when we have clients on the phone, we often want to bring in more technical expertise," Noeker says. "In the old space, we would have to run into the other room and check to see if they were available. It wasn't a very smooth flow of communication. In the new, open environment, it's much easier."

In late July, CADware moved into its new space, featuring a "great room" with several small meeting rooms and a couple of midsize workspaces. The owners have even smaller workspaces in the middle of the floor.

"To an outside observer, there is no pecking order in the allocation of offices," Fennig says. "The private spaces are commonly accessible. It's very egalitarian."

Another Important step in planning such a reorganization is the right to have electronic data systems in place to support the new design. CADware installed Groupware, a software product designed for technical document management and work flow. "We need to be able to share information electronically; it's a systems issue," Noeker says.

She says the new software is similar to e-mail, but "a more sophisticated way of sharing technical information where precision is critical...with better ability to route information and alert people to changes in the document. Design files may be tied together with a word processing document, and we can bring in spread-sheet information."

They also took the opportunity to install a better phone system that is "centralized inbound and decentralized outbound," Noeker said. "Totally decentralized phone lines lead to confusion: Who does the customer call for what? A totally centralized phone system is prone to bottle-necks. In the old building, we had a limited number of lines. Here, we've struck a happy medium."

CULTURAL MODIFICATIONS

More companies are using relocation as an opportunity for rethinking their methods, in some cases reinventing their image, says Andy Marine, a senior consultant with Andersen Consulting in Minneapolis.

Marine recalls working with one corporate client that was planning to add a new midpriced product line to augment its high-end durable goods line.

"The existing corporate culture was clearly going to resist the change, so they used an off-site location and separate manufacturing facility to make a break" from the status quo, he says. "The point is you can use a different physical space and location to modify the company culture in a constructive way."

Marine worked with one manufacturer of seasonal consumer products that used a relocation as an opportunity to "rationalize" its relationships with suppliers-- cutting down to fewer suppliers and establishing "partnership" relations. In doing so, the company was able to reduce its incoming and outgoing freight costs. "The savings were substantial," he says.

In many cases, managing relocation-triggered change might mean helping a company with multiple locations find ways to share services more efficiently among the locations. A firm with a dozen plant sites that is opening a new facility can use that as an opportunity to re-evaluate its delegation of management responsibilities.

"They can analyze which responsibilities are best handled at the corporate level and which ones should be delegated to the plant or site level," Marine says. "We're seeing a lot more location-level decision-making and at the same time more relationship and contract management at the corporate level, to take advantage of the economics of scale and shared services."

GROWTH AND PRODUCTIVITY

Organizational growth within existing space often becomes a drag on the efficiency of an organization, says Dan Janisch of the Minneapolis consulting firm Performance Strategies Inc. But companies that are moving can remedy that situation--particularly manufacturing firms.

"A lot of organizations grow up in a certain space and continue to add equipment," he says. "That doesn't mean that it is the most efficient way to lay out the work flow. That doesn't necessarily mean fewer people. It just means equipment and people can be much more productive."

In planning a new layout, Janisch says, it's important to make sure the people who have their hands on the equipment are involved in the decision-making process.

He recalls one corporate client that put the primary responsibility for designing the new layout in the hands of the production workers, rather than the plant engineers. "The production workers laid out the plan, and the engineers determined how much time and expense would be required," Janisch says. "It worked out really well."

Long-distance corporate relocations can present an opportunity if other factors dictate that staff downsizing is necessary. "It's a good time to look at staffing ratios, especially now when there is more and more reluctance to move on the part of employees," Janisch says.

The best moves are "partnership decisions that involve customers, vendors, investors, and staff," Fennig says. "Company owners who are making moves to fulfill their own self-images, without taking into account the connectivity issues of stakeholders, who are missing the boat."

"Staff involvement is vital," he says. "Polling people is important: 'Where do we need to be? What does the office need to look like? Staff people can come up with creative ideas that reduce costs."

Obviously, the type of business affects how a move is handled, Fennig says. "But there's also a danger of getting into the mindset of just because we're a certain type of business we have to think a certain way."

Fennig says his client's move is a good example of how forward-thinking companies can use change to benefit the organization, and Noeker agrees. "We're very pleased with the result."