Hipster workplace

Will the future workplace be a hipster studio of free-lance creatives? 

Google and the dorks in Silicon Valley have revolutionised the idea of work. Creativity and energy are the magic ingredients of the new age company. Ideas equal profit in the dynamic tech world. 

The philosophy of Silicon Valley is weaving its way into the HR practises of established firms. I have worked in old school firms that create ‘innovation hubs'. The aged decor of beige carpets are enlightened by Ikea disco balls. In these surrounds, poor engineers are introduced to the delights of table hockey and lounges. It doesn't take long for them to slink back into a comforting laptop silence.

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As an economist, I am fascinated by these changes. Why did we micro-manage our staff in the old days, and what's changing? 

The old way of managing staff was related to what economists call the "principal-agent" problem. The basic story is that lazy staff slack off as soon as the boss leaves the room. To address this problem, each employee needs direction from a manager, who reports to a senior manager, who reports (etc etc).

Maybe this worked in the old ‘process’ view of work. Economic growth came from producing goods on a farm or in the factory. There was a clear focus on productive efficiency – making more with less. If we didn’t watch carefully, bored workers would go for smokos or fraternise to form dangerous unions. 

Many firms still operate in this paradigm. They are becoming the dinosaurs of the modern economy.  Fleet footed competitors employ lateral and creative ways to kill old industries. The staples of modern existence are ominously near death’s door. Think of newspapers, television, the retailer.  

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What’s changing? The western world no longer has a comparative advantage in producing ordinary things. We now outsource most production  to countries with low cost labour. In a globalised world,  developed economies can only grow if they are on the forefront of invention. Using our expensive labour to create the unimagined goods and services of the future. 

Enter creativity. We no longer want employees that plod along in process mediocrity, steadily producing more and more each year. We want ideas, jazzy communication, and energy to execute ideas.

With the change has come a psychological shift in the way we perceive the motives of workers. Yes money is important, direction helps, but what keeps us happy and productive is the space to create. I have even heard of workplaces dispensing with annual leave entitlements. You simply come in when you want (anecdotally this has led to a reduction in days off).

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The shift we are seeing in Silicon Valley may be the tip of the iceberg. In the future, the organisation chart may be thrown out altogether. Organisations will demand ideas. Stale middle management will just get in the way. 

With this could come the death of the salaried professional. A whole new species is likely to emerge from the unemployment ruins. I vision a new generation of workers who crave independence and diversity of experience. Collaboration and networks will be essential in this new breed – as they pitch ideas to firms that fully outsource their workforce.

This workplace may start to look like a hipster arts studio. The economist sitting beside the graphic designer, next to the barista serving up espressos right there in the workplace.