Workspace in supporting strategy implementation – a study of 25 knowledge-intensive organisations

Strategy implementation success factors

Strategy describes how the organisation is going to reach its long-term objectives (Srivastava and Sushil, 2013) by linking its crucial resources, core competencies and other attributes (Babalola and Nwanzu, 2020). Strategy implementation then transforms the goals and strategy into operations, actions and behaviour that are executed on a daily basis. In other words, strategy implementation puts the formulated strategy to work (Heide et al., 2002), and successful implementation is the sum of all actions and resources as “a multifaceted and complex organisational process” (Noble, 1999, p. 131).

Strategy implementation research has identified factors that ensure organisation’s implementation capability and long-term endurance. In total, 11 strategy implementation frameworks were analysed for this study (Amoo et al., 2019; Brinkschröder, 2014; Crittenden and Crittenden, 2008; Galbraith, 2002; Higgins, 2005; Noble, 1999; Okumus, 2003; Pryor and Smith, 2007; Tawse and Tabesh, 2021; Waterman et al., 1980; Yang et al., 2010), and the factors presented in the frameworks were scrutinised in detail, regrouped and renamed. From these, 10 strategy implementation factors were identified (Table 1).

Waterman et al. (1980) also introduced the concept of “soft” aspects of implementation factors to balance managers’ tendency to focus mostly on “hard” aspects such as strategy and structure, when “soft” aspects were easily claimed to be human resources department’s responsibility or considered too intangible to be managed. Beer et al. (2005) and Ravanfar (2015) listed strategy, structure and systems as hard factors and considered style, staff, skills and shared values as soft. Ravanfar also described hard factors as easier to identify and manage, while soft ones are more likely to create a sustained competitive advantage. Alam (2017) extended this notion by saying that hard factors can be directly influenced, whereas soft factors are more intangible and influenced by culture. The strategy implementation framework used in this study (Figure 1) includes the 10 implementation factors identified, and factors are further grouped into hard, soft and context-related aspects.

Hard factors form the foundation upon which the organisation operates. Structure and organisation describe the formal and informal structures with which the organisation creates value and responds to external competition. Operations, processes and systems are practices, methods and agreements used to implement and align organisation’s operations and to ensure organisational performance. Other resources represent other issues needed for strategy implementation, such as organisational-level capabilities, technologies and relations.

Meanwhile, soft factors are linked to individuals working in the organisation. Human resources include both employees and other interest groups with the knowledge, skills and attitudes required to implement the strategy. Commitment refers to the willingness of an organisation’s members to follow the strategy and execute actions and behaviour required.

Some factors are considered hard or soft, depending on the context. Leadership and management involvement is a hard factor when considered as a management structure, but a soft factor when linked to the manager as a person. Communication refers to both the mechanisms and distribution of formal and informal information in the organisation as well as to the interaction among organisation members. Culture and values describe both an organisation’s expectations, preferences and choices and those of the individual members.

Control and feedback include both the mechanisms and management of strategy implementation. In this framework, strategy and control and feedback can be seen as a continuum, and they are not defined as neither hard nor soft factors.

In addition to individual factors, the alignment of factors is a foundation for successful strategy implementation and strategic performance (Heide et al., 2002; Higgins and Mcallaster, 2004; Merkus et al., 2019; Pettigrew, 1987). Although it is a critical issue, organisations often have difficulties balancing factors in a coherent way (Srivastava and Sushil, 2017). Yang et al. (2010) also noted that there is no single recipe for strategy implementation, but organisations should be aware of the diverse dependencies between individual factors. Okumus (2003) concluded that, in some cases, coherence may be difficult or even impossible to achieve because of the complex and dynamic nature of implementation situations.

Workspace as a platform for strategy implementation

A physical workspace is one of the environments where an organisation and its employees work to achieve their goals. At its best, workspace is a tool and an enabler for the organisation’s core business activities (Hassanain, 2010; Jayantha and Oladinrin, 2020; Kampschroer and Heerwagen, 2005; Olson, 2002). Sailer et al. (2009) confirmed that workspace configurations have an effect on organisational behaviour, and Langston and Lauge-Kristensen (2002, p. 3) emphasised that:“Facilities should not be seen as an overhead [cost factor], but rather as an integral part of an ‘ecosystem’ necessary to enable people [and organisation] to perform at their best”.

Elsbach and Pratt (2007, p. 182), on the other hand, concluded that the “Physical environment plays a major role in facilitating and constraining organisational actions […] but choosing objects and arrangements in organisational work settings is one of the most difficult tasks a manager faces”.

Becker and Steele (1995) summarise the importance of workspace by saying that the connection between organisation and workspace is of strategic importance.

De Paoli et al. (2013) stated that both organisational and managerial issues are needed for the workspace to create value. However, Levin (2005, p. 299) expressed doubts regarding organisations’ ability to reach the potential of the workspaces “Even organisations wishing to use workspace as enabler, rarely the connection is made to business strategy […] business appears to confuse design of collaborative workspaces with connections to business strategy. Workspace design seems to be based on a combination of trends and entitlement”.

He urges the “congruence between business model and design of workspace, and the need to connect workspace design drivers to strategy” (Levin, 2005, p. 301).

The impact of workspace on individual strategy implementation factors is already widely studied. Early ideas of workspace and organisational structure rose in the late 1960s – early 1970s. Structure was not yet linked to workspace but was considered helpful in understanding “how the firm hangs together” (Duffy, 1974, p. 111). Later, Bodin Danielsson et al. (2013, p. 196) concluded that “architecture is a tool to create and change the structure of organisation […] and because of its physical, psychosocial and organisational factors, office design should adopt a holistic approach”. On improving processes by workspace design based on user feedback, Duffy et al. (2011) found no particular highlights. In contrast, Vischer (2008) claimed that the office environment affects individual, group and organisation-level performance and that supporting operational functionality is one of the important aspects of workspace design.

Workspace also influences how leadership is perceived (Bodin Danielsson et al., 2013). In particular, hybrid work and virtual teaming place challenges on leadership, and to build trust, it is even more important to develop workspaces that stimulate face-to-face working (De Paoli and Ropo, 2015). Communication and collaboration have also been of great interest in workspace research. For example, human interaction has been found to usually be unplanned and unpredicted, and it does not follow the intended use of space (Sailer et al., 2016). Lansdale et al. (2011) and Oseland et al. (2011) added that an open-plan workspace is not sufficient to increase collaboration, but changes in factors such as organisation structure, rewarding and change management are first required.

Culture and values have been identified as important design drivers for workspaces. A workspace is known to create and support culture (Kallio et al., 2015; Zerella et al., 2017) both at the organisational and departmental levels (Price, 2007), but at team level, cultures can be too fragmented to be supported by a workspace (Maślikowska and Gibbert, 2019). Workspace can be used in changing culture, but succeeding in it requires understanding of organisational aspects and human–environment relationships (Skogland and Hansen, 2017). Workspace’s impact on human resources and commitment is also well covered in workspace research. Workspace is known to impact employee satisfaction and performance (Appel-Meulenbroek et al., 2018; Hoendervanger et al., 2019), participation (Binyaseen, 2010) and well-being (Colenberg et al., 2021; Danielsson and Bodin, 2008), as well as attracting, engaging and retaining employees (Appel-Meulenbroek et al., 2022).

To evaluate a workspace, there are several employee-focused tools, such as post-occupancy evaluation (Abisuga et al., 2020; Hassanain et al., 2018), work environment diagnosis instrument (Groen et al., 2019) and tools for assessing workspace’s impact on employee productivity (Bortoluzzi et al., 2018). However, Duffy (1974) pointed out that focusing on individual responses does not directly indicate what individuals do together, i.e. how well an organisation operates and performs. Duffy (1990) later suggested that metrics should be linked to operations and performance achieved in the workspace. Some researchers have already focused on performance (Voordt and Jensen, 2018) or the quality of workspace more from a business perspective (Appel-Meulenbroek and Feijts, 2007; Hassanain, 2010; Petrulaitiene and Jylhä, 2015).

The first efforts to study workspace from a more holistic, strategy-implementation perspective were made in early 2000. Levin (2005) suggested that workspace design could benefit from applying strategy implementation models such as 8S in design processes, and Kampschroer et al. (2007) used Balanced Score Card to link business goals and changes in behaviour that should be supported by workspace. This study follows the suggestions of these studies and evaluates workspace design and management practices in the strategy implementation context.

The terms workspace and workplace are both used when discussing organisation’s work environment. In this study, workspace refers to the physical environment, including designing, using, managing and developing these arrangements.

Support for organisation-related factors

Structure and organisation were identified in workspace design and management, but supporting them was moderate. For instance, teams could be given specific locations in the workspace, but usually on a recommendation basis. Even when the locations were fixed, employees could still choose where to work. Thus, organisation was only loosely or not at all present in the workspace, and therefore, it would not guide the daily operations and behaviour. In some organisations, customers or partners were welcome to work on the premises. This arrangement made the organisation in the workspace constantly change, and the support of workspace for the organisation and its structures was less stable. Other organisations chose a different path, dedicating their workspaces strictly to internal use, and found it beneficial for internal coherence and trust.

Operations, processes, and systems were best supported in organisations where functions required special settings or equipment. Some organisations arranged workspaces according to key processes, for example, R&D, but in most organisations, functions and employees operated in generic workspaces with little or no customising. In these organisations, workspaces did not provide guidance or support for operations, processes or systems required for implementing strategy.

Other resources, particularly company image, cost efficiency and effective use of space, were often mentioned as drivers of workspace design. The security of the organisation, employees and operations were design drivers, especially in sensitive businesses like energy or telecommunication.

Support for context-related factors

All three context-related factors were usually identified and supported. However, the link to strategy was not clearly articulated, and factors were mostly considered as soft factors. Leadership and management involvement was usually high at the beginning of a workspace project, but design decisions were mostly made by employee representatives, human resource management, and designers. Collaboration and culture were the driving motivations, and employees were encouraged to network by changing locations in the workspace. For formal communication, cafeterias or similar areas with central location were used. Workspaces were seen as social and collaborative platforms and ways to promote the desired aspects of culture. However, justifications for the decisions were quite similar regardless of the organisation, which gave the impression that culture- and value-related expectations might be based on more general trends and not directly on the strategy.

Support for human-related factors

Soft, human-related factors were well supported by workspace design and management. However, argumentation of factors was again general in nature and similar across organisations. Employee experience and engagement were highly emphasised, and workspace was seen as a tool for attracting, committing, and retaining talents. Still, it remains unclear as to what extent goals were driven specifically from the organisational strategy or whether they were reflections of other motivations, such as HR or workspace design trends.

Control and feedback of the ability of workspace to support strategy implementation

Workspaces were mostly evaluated by costs, technical quality or efficiency of space. Some organisations used employee surveys to follow the user experience, satisfaction with and usability of spaces. Employees choosing to come to the office instead of working remotely was also seen as feedback. The absence of strategy-related metrics raised yet again the question of whether workspaces are seen as a platform for strategy implementation or more of a technical, financial or human-related resource.

Supporting the alignment of strategy implementation factors

For successful strategy implementation, organisation’s operations and behaviour should be “pointing” to same direction, i.e. to be aligned (Waterman et al., 1980), and thus, alignment should also be an important criterion for workspace design and management. However, as seen in Figure 2, workspaces of the organisations interviewed might not support the alignment in an optimal way because of some factors being well supported while others being less supported. Therefore, the palette of factors is imbalanced.

According to the strategy implementation theories, both hard and soft factors are important to ensure the success of implementation and need to be aligned. Throughout the sample of this study, soft factors were well considered in the workspace decisions and represented in the workspaces, thus creating a strong support for the strategy implementation (see Figure 2 column “Strong”). Workspaces were designed to express the desired organisational culture and leadership style, to promote internal communication and networking, and to support employee well-being and motivation, as well as the employer image desired.

However, as stated in Figure 1, soft factors need a structural foundation and frame to benefit the organisation as a whole. In other words, hard factors are needed to create a coherent systemic entity. Despite this, organisation-related and hard, context-related factors that create and maintain this organisation-level coherence were not as actively considered or represented in the workspace decisions and design and were less supported than the soft factors (see Figure 2 column “Moderate”). In practice, all organisations do have the hard factors listed in the 2 + 8 model: all organisations, for example, have a structure, knowledge or other processes, and modus operandi. Without these, there would actually be no organisation. However, the workspaces of the organisations interviewed were mostly designed without considering the value of these factors in creating and encouraging strategy-aligned operations and behaviour in the daily working environments. Therefore, the workspaces may provide only a moderate organisation-related support for strategy implementation. In a balanced situation, all strategy implementation factors, and hard and soft perspectives would be carefully considered, and their roles identified in directing strategy-aligned daily operations and behaviour of the organisation on the organisational, group, and individual levels.

Four phenomena causing the misalignment

Four phenomena were found to create this situation: interpretation of factors, valuation of factors, factors contradicting one another, and imbalance in perspectives.

In the strategy implementation frameworks, the factors are defined on a general level. In the organisations interviewed, some factors were interpreted selectively or more narrowly than originally intended, and some aspects were missing. For instance, by definition, structure and organisation include all the formal and informal structures needed to create value and respond to external competition, for example, formal hierarchy, distribution of power and responsibilities, tasks, and the organisation of management. The organisations interviewed did consider hierarchy and functions, but, for instance, distribution of power, duties and responsibilities were not included. Operations, processes, and systems were usually not mentioned in the discussions, maybe because the concept of process is not spontaneously considered to be applicable to knowledge-intensive organisations.

For the success of strategy implementation, all factors are crucial “building blocks”, but in this study, the soft factors were valued over the hard factors. For instance, communication, culture and values, human resources and commitment were well supported in workspace design and management. Simultaneously, structure and organisation, operations, processes and systems as well as feedback and control were usually not drivers for workspace design or management, thereby creating an imbalance in the valuation of factors.

Even if identified and well-supported, factors could still contradict one another and thus distract the alignment of factors. For example, as mentioned earlier, when organisation units are given home locations in the workspace but employees still have the freedom to choose where to work, support for structure and organisation in the workspace is compromised.

The alignment of factors calls for organisational-level perspective. However, according to this study, the organisations interviewed were mainly focusing on employee-related issues, such as employee performance, satisfaction or experience. Although these are important, employee performance is not, per se, equal to organisation-level performance or results.