Oil Companies Demand Digital Their Way.

The oil industry’s rush to capitalize on digital change has scrambled relations with service providers big and small, giving the oil companies a greater say in the process.

February 15, 2021, By Stephen Rassenfoss, Journal of Petroleum Technology

Oil industry executives surveyed last year ranked the potential positive impact of big data analytics at the top of the list of trends, higher than even changes in oil demand.

That bold conclusion was from a survey by accounting firm Ernst and Young (EY), putting big data analytics among the top trends that could aid business growth in the next 3 years, even above the demand swings that move oil prices.

The survey may have reflected the mood last summer when the outlook for oil consumption looked so weak that cost saving was the only path to better results.

“The survey speaks to a high-level ambition across the operator community to use digital as a mechanism to drive down costs,” said Toby Summers executive director for EY. The promise there is that digital can allow them to scale up operations with fewer hires in good times and scale back with fewer layoffs when the cycle turns down.

These projects also cost less than other cost-cutting options.

“Digitization is one of the cheapest ways to get the business more resilient,” said Patrick von Pattay, a vice president for Wintershall Dea, a Germany-based independent, and chairman of the Digital Transformation Committee of SPE’s Digital Energy Technical Section.

Process changes supported by digital analysis can cost a couple hundred thousand dollars; that is not a lot of money in a business where a single offshore well often costs hundreds of millions.

What is not obvious is who does the work.

The rush to digital has scrambled traditional relationships with oilfield service companies and brought in new players, from Silicon Valley giants to a flurry of startups in the oil business, a few of which have become established players.

As a result of the change in the technology, and the business models of the upstarts, oil company technical teams can and do play a more active role in digital technology development and use than in the past.

Changes began in 2014, when the sudden end of $100/bbl oil forced oil companies to drop their long-time reliance on owning their own computer systems. Oil companies finally joined the decade-old shift to buying data storage and processing as a service from giants such as Amazon and Google. That facilitated digital innovations by centralizing their data, eliminating splintered storage systems that hindered analysis.

The giant looming over the service business now is Amazon Web Services (AWS). The cloud storage arm of the online retail and logistics giant has grown exponentially, doing everything from selling an array of digital tools to promoting a list of preferred energy providers.

Digital newcomers disrupted relations with service companies that had built software solutions and sold equipment programmed using proprietary coding.

Increasingly user-friendly tools for visualizing and analyzing data, plus the ability for smaller companies to buy data capacity, allowed engineers to do more and allowed midsized companies to act like big ones.

“There has been a shift now; the independents have access to the same tech as the big guys,” Summers said.

Those big players, as well as smaller names from the tech and oil sectors, eagerly courted oil companies, selling things based on widely used software languages such as Python.

“What we get from young fresh companies with a great vision, with a great drive to deliver, they are giving us the opportunity to grow beyond the classic service companies,” von Pattay said.

No Commute, But a Worsening Sense of Isolation – New Data from Steelcase Shares the Highs and Lows of Working from Home and Its Impact on the Future Workplace

95% expected to return to the office in some capacity as engagement, productivity and innovation suffer when workers unsatisfied at home

New data released from Steelcase today on the status quo work experience of 2020—which featured the majority of office employees working from home for most of the year—shows just how much it’s costing some businesses in terms of lost productivity, engagement and innovation. According to the report, 41% of workers who work from home frequently are dissatisfied with their work-from-home experience while only 19% are fully satisfied. Experiences and affordances at home vary greatly from worker to worker, which may explain why the data finds 95% of workers expect to return to the office in some capacity. As many companies begin to plan their future work experience, this data can be used to design the future.

The research from Steelcase includes findings collected throughout the pandemic in as many as 10 countries with more than 32,000 participants, including business leaders and real estate decision makers who represent millions of workers. The findings show when people are dissatisfied with their work-from-home experience, it results in a 14% reduction in engagement, 12% drop in productivity and 6% decline in innovation—factors that can hurt a company’s bottom line. Many workers also reported a drop in quantity, quality and consistency of work. These impacts could equate to a 5% average reduction in profits for large companies.

“The pandemic has reshaped many aspects of our lives, including where and how people want to work,” said Gale Moutrey, vice president of workplace innovation, Steelcase. “Their experiences working from home, and what they face when they return to the office, have influenced what they want and expect to see in the workplace going forward. Our data shows the majority of workers want to return to the office and their experiences during the pandemic will provide the guidance for a new, better work experience.”

Steelcase’s research uncovered several benefits and challenges among people currently working full time from home, including the following in the U.S.:

  • 37% report a worsening sense of isolation
  • 20% report a drop in their productivity
  • 20% report a drop in their engagement
  • 35% enjoyed not commuting
  • 25.7% liked the ability to focus
  • 20% are experiencing a worsening speed of decision making
  • 16.5% have worsening work-life balance

Poor work-from-home setups are among the many factors contributing to unsatisfactory work-from-home experiences. For example, 36% of workers lack a place free from distraction and 28% do not have a physically comfortable workspace—instead toiling from their bed or couch. Nine percent of workers consistently work from their beds. All workers are not facing the same challenges, however: 75% of directors or above always or almost always work at a desk and 46% have an ergonomic chair. Among individual contributors, however, just 48% work at desks and 24% have ergonomic chairs.

“Our research shows that people want and expect to go back to the office, but they want a space that is safe, comfortable, inspiring and productive. They also want more control over where and how they work,” said Moutrey. “This data will help leaders design workspaces that are flexible, resilient and support the new ways people want to work.”

As organizations consider the future work experience for their people, more flexible policies appear to be the norm. Only 5% of organizations expect to work from home full time, up just slightly from 3% before the pandemic. Nearly a quarter will name the office as the primary work location, while the vast majority, 72%, plan to take a hybrid approach of working from both home and office with greater flexibility. Many organizations are also exploring satellite or coworking spaces closer to where workers live, which may be in response to positive reactions to a lack of commute.

Additional data from the Steelcase report will be released in the coming weeks and contain data on workers’ new needs and expectations, four major workplace shifts on the horizon and new principles for the future of office design. 

About the Research
Since the onset of the pandemic, Steelcase has committed to conducting ongoing research to help organizations understand what is really happening to their workforce and the impact it is having on their business. The Steelcase data includes findings from eight qualitative and quantitative primary research studies. This work was designed to measure the impact the COVID-19 pandemic has had on work, workers and the workplace. The studies were conducted in as many as 10 countries and have included more than 32,000 participants around the world using methodologies based in the social sciences.

About Steelcase
For over 108 years, Steelcase Inc. has helped create great experiences for the world’s leading organizations, across industries. We demonstrate this through our family of brands – including Steelcase®, Coalesse®, Designtex®, Smith System®, Orangebox® and AMQ®. Together, they offer a comprehensive portfolio of architecture, furniture and technology products and services designed to unlock human promise and support social, economic, and environmental sustainability. We are globally accessible through a network of channels, including over 800 Steelcase dealer locations. Steelcase is a global, industry-leading, and publicly traded company with fiscal 2020 revenue of $3.7 billion. For more information, visit www.steelcase.com.

Floating Wind Solutions

“Leveraging the Established Global Offshore Supply Chain”

Floating Wind Solutions Conference & Exhibition 2021 will be an ideal platform to understand the energy transition strategies of major energy companies and their important commitment to get to ‘net zero’ by 2050 or sooner.

Floating Wind Solutions will showcase the many capabilities of the established Global Offshore Supply Chain and create a strategic platform for technical solutions and knowledge sharing while facilitating development of this novel industry. The goal of FWS is to create a strategically significant forum bringing together key players form the Offshore Wind and Offshore Supply Chain to share lessons learned, strategies, technologies and opportunities in order to influence the market towards delivering competitive, commercially scaled Floating wind developments on an accelerated basis.

Floating Wind Solutions will be a ‘let’s take inventory’ of proven and readily available solutions, services and technologies sourced from an experienced supply chain that took costs from $80/bbl. to $35/bbl. FWS will bring together supply and demand under one roof in Houston to discuss technical solutions for two days and evenings of networking opportunities.

The FWS Conference is led by an esteemed Advisory Board of industry experts, each a specialist in her/his field of expertise from these leading industry key players:

Floating Wind Solutions (FWS) is the ultimate opportunity for those who are presently involved-in / or seeking entry into Floating wind.  FWS will facilitate network opportunities with the right experienced people and gain knowledge of the technical solutions available.


Get in Touch

Floating Wind Solutions
77 Sugar Creek Center Blvd., Ste 310
Sugar Land, TX 77479
+1 (281) 725-7664
andrew.chadderdon@questfwe.com

US Hits Pause Button on Oil & Gas Leasing, Doubles 2030 Offshore Wind Target

January 28, 2021, by Adrijana Buljan, www.offshorewind.biz

U.S. President Joe Biden signed a new Executive Order on 27 January, directing the Department of the Interior to identify steps that can be taken to double offshore wind energy production by 2030 and to pause entering into new oil and natural gas leases on public lands and in federal waters.

The Executive Order comes a week after Biden’s statement of acceptance of the Paris Agreement on 20 January, following the U.S. exiting the Paris Agreement under the previous Administration. With the new order, Biden-Harris Administration aims to achieve a carbon pollution-free power sector by 2035 and put the U.S. on an irreversible path to a net-zero economy by 2050. 

“The order affirms that, in implementing – and building on – the Paris Agreement’s objectives, the United States will exercise its leadership to promote a significant increase in global ambition. It makes clear that both significant short-term global emission reductions and net zero global emissions by mid-century – or before – are required to avoid setting the world on a dangerous, potentially catastrophic, climate trajectory”, the White House states in a press release.

The federal agencies are also directed to eliminate fossil fuel subsidies and identify new opportunities in clean energy technologies and infrastructure.  The Department of Interior said that it would immediately begin a review of processes and procedures to date as it re-invests in a rigorous renewable energy program.

Commenting on the offshore wind target set by the new administration, Liz Burdock, president and CEO of the Business Network for Offshore Wind, said: “President Biden’s actions today confirm the critical role that offshore wind energy will play in creating a clean U.S. energy grid and achieving White House commitments to combat climate change. His call to double offshore wind production in U.S. federal waters sends a clear signal of support to our industry, which will generate billions in new investments”.

“Over the next few years, the offshore wind industry will dramatically scale up development of the U.S. supply chain, growing tens of thousands of new jobs in the process. The offshore wind has been on the precipice of significant growth thanks to states’ bold leadership and President Biden’s executive order further pushes the industry to new heights with a new sense of urgency”, Liz Burdock said.

The U.S. currently has two offshore wind farms up and running in its state and federal waters.

The country’s first offshore wind farm, the 30 MW Block Island Wind Farm, comprises five GE Haliade 6 MW wind turbines which have been in operationsince December 2016.

The two-turbine, 12 MW Coastal Virginia Offshore Wind (CVOW) pilot project, the first wind farm installed in U.S. federal waters, went into operation last year. The pilot project is expected to provide the operational, weather, and environmental experience needed for a 2.6 GW development in the adjacent 112,800-hectare lease site, expected to be operational by 2026.

SpaceX Linked To Two Semisubmersibles That May Soon Become Deepwater Spaceports

Trent Jacobs, JPT Digital Editor | 19 January 2021

Two deepwater rigs that were likely destined for the scrap yard appear to have found a second lease on life as offshore launchpads.

This is according to various reports that claim SpaceX is linked to the purchase of a pair of semisubmersibles from London-based offshore drilling contractor Valaris before it filed for bankruptcy protection last year.

The development was first reported on Twitter by reporters with NASASpaceFlight, an independent website covering the space industry, who shared photos of a drilling rig in Brownsville, Texas, which sits along the Gulf of Mexico. The images showed a rig named Deimos and the website reported that a second rig named Phobos is also sitting quayside in Brownsville.

The semisubmersibles both measure 240 × 255 ft and were formerly known as ENSCO 8500 and ENSCO 8501. According to public reports they were sold for $3.5 million apiece by Valaris in August. Later that month the drilling contractor, which was formed in 2019 when Ensco acquired Rowan, was forced into bankruptcy protection as the pandemic-driven downturn removed hopes of an offshore revival.

The owner of the newly renamed rigs is a company called Lone Star Minerals which public records show was incorporated in Texas in June. Twitter users revealed that the limited liability company has a single principal listed: Bret Johnsen, the CFO and president of strategic acquisitions at SpaceX. 

The company is known to have used a similar arrangement for its rocket landing barges that it leases from a wholly owned subsidiary. SpaceX also operates a test launch site in Boca Chica, Texas, located about 20 miles from Brownsville.

SpaceX has not commented on or confirmed the details surrounding the two rigs.

In June, SpaceX began recruiting offshore operations engineers “to design and build an operational offshore rocket launch facility.”

As news of the job postings spread, SpaceX CEO Elon Musk confirmed on Twitter that the company’s goal was to build “floating, superheavy-class spaceports” that could be used to send rockets into Earth orbit, to the Moon, or to Mars.

Deimos and Phobos are the names of the two moons of Mars.

The ENSCO 8500 was constructed in Singapore in 2008 as the first of seven identical rigs designed to drill in up to 8,500 ft of water and maintain station using dynamic positioning. Rig builder Keppel FELS delivered the ENSCO 8501, the second in the series, to the Gulf of Mexico in 2009.

The semisubmersible is the offshore oil and gas industry’s most-common type of mobile drilling rig. As the industry moved into deeper waters, the semisubmersible design became increasingly popular because it affords a large and stable deck space.

If SpaceX manages to convert the deepwater drilling units into launchpads, it will not be the first to do so.

In 1997, a semisubmersible previously used to drill subsea wells was converted into a commercial spaceport.

Called the Odyssey, the 456-ft long vessel was stationed on the equator where the surface of the earth moves faster than it does closer to the poles, thus lowering the cost of launches. The floating facility was used to successfully launch more than 30 rockets with satellite payloads from 1999 to 2014.

Should Oil and Gas Companies Move Full-Speed Ahead With Energy Transition Plans?

Peter Bryant, Clareo | 05 January 2021

Within the race for renewables, oil and gas companies are finding themselves in a proverbial rut as they reassess existing profitable models with future energy transition plans.

The nature and magnitude of this shift has set new strategic parameters for the sector.

What adds more difficulty is the question of speed in which companies pursue this conundrum. Should oil and gas companies be more aggressive in their energy transition plans?

Maximizing shareholder value is a part of a multi-pronged strategy to accelerate the energy transition. Those elements include

  • Maximizing the value of the current oil and gas business by significantly reducing the cost of production
  • Capital allocation efficiency to large offshore projects that needs to anticipate future demand and supply
  • A transition of capital expenditure to renewables businesses at a measured pace
  • A commitment to net-zero emissions from operations
  • An investment in carbon-reduction technologies (e.g., carbon capture and storage)

A serious commitment to all the above is required to influence and shape the market sentiment, and ultimately share price and shareholder value.

As I mentioned in The Wall Street Journal’s article on the energy investor’s dilemma, no oil and gas company has figured out how to make money in a low-carbon energy world. In short, Exxon and BP are two sides of the same coin.

Arguably, improved performance in the core oil and gas sector may not help increase the share price and shareholder value unless it is backed by stock buybacks and high dividends, which would in turn divert capital from investing in new growth businesses.

The slowdown in oil demand combined with oversupply and the resulting low prices means that if oil continues to sit in the range of $30 to $50/bbl, the spread between returns on capital oil projects and renewable projects narrows significantly.

My belief is that a reset is imminent for oil companies and their dividend yield profiles because it will be impossible to maintain their current dividend yields at that price range; no oil company can sell enough assets and borrow enough money to do it.

Most CEOs of the major independent oil companies, especially those in Europe, have realized that a valuable energy company in 20 years is not a pure oil and gas company, and they are transitioning to do just that. But to date that transition has been very measured among the likes of BP and Shell, which includes shifting the percentage of CAPEX to renewables.

To honor this commitment, as reported in The Guardian, BP has pledged to invest $5 billion by 2030 in renewables, which is a tenfold increase, against a total downward revised 2020 CAPEX of $12 billion.

These investments are focused on investing in various parts of the new energy value chain as they build optionality. For instance, Shell, with its offtake agreement, expects completion of Phase A of the offshore (North Sea) Dogger Bank Wind Farm in Q2 2022.

Onshore construction began in 2020. It is being jointly developed by Equinor and SSE Renewables, and first power is expected for summer 2023. The total expected power generation is 3,000 gigawatt hours (GWh) per year, which is enough to power more than 825,000 Dutch households.

Meanwhile, BP has acquired UK’s largest charging company, Chargepoint, and Total has acquired two utilities since 2018 with a combined 8.5 million customers in Europe.

Oil and gas companies also need a strategic viewpoint on where value lies and new and disruptive business models.

Venture arms have traditionally provided that opportunity with varied investments in new energy startups, from smart grids to hydrogen fuel, to further bolster optionality. For instance, BP Ventures reportedly invests between $150 million to $200 million annually into startups, the majority of which are in the renewable energy space.

Although these ambitious commitments by primarily European companies are promising, they have made little movement for their languishing stock prices and market caps. (The market clearly does not see these strategies as entirely credible, in my opinion.)

Orsted, a wind company which transitioned from a coal company, has a market cap ($76 billion) greater than BP ($70 billion), despite having a fifth of the revenue. Or consider this: NextEra Energy, the biggest renewables producer in the US, has a market cap of $147 billion, which is close to Exxon’s $170 billion, despite having 10% of Exxon’s revenue.   

With these forces at play, oil companies will start allocating ever-increasing percentages of their CAPEX to renewable energy, as we have seen.

On average, oil companies allocate 10% of their CAPEX into renewable energy investments, including acquisitions of smaller utilities. Additionally, a shift in CAPEX of between 30% and 50% toward renewable energy in the next 3 to 5 years is possible, although the most aggressive companies like BP say that is 10 years out, for now.

The dilemma is significant, given the uncertainty as to where the sweet spot is that makes their transition meaningful to investors and the market without cratering their core business. BP calls this dual approach “Perform and Transform” and the market does not seem to be buying into either right now. 

12th Annual Warrior Benefit Sporting Clay Tournament

The 12th Annual Warrior Benefit Clay Tournament will be held on Friday, March 19, 2021 at the Westside Sporting Grounds near Houston, Texas.

  • 100 Clay Tournament
  • 4-Man Team, Ammunition Not Provided
  • Breakfast, BBQ Lunch and Drinks Provided
  • Gates Open at 7 a.m.
  • Shoot Starts at 9 a.m.

Come honor and shoot alongside those who sacrificed for us after 9/11!  All proceeds go to the Warrior Benefit, a 501(c)(3) non-profit organization dedicated to building camaraderie between post 9/11 combat wounded veterans, and demonstrating to those still recovering from physical and emotional injuries that there is a good and purposeful life after service to their country.

Five Ways High Achievers Can Eliminate Overwhelm and Get Un-Stuck

Here are a few tips you can use to free your mind and create space for progress.

Article by Janet Autherine, January 8, 2021, www.thriveblobal.com

You are on your way to an abundant life, enthusiastically checking every box on your to-do list, and you unexpectedly become stuck. You try your usual tricks to free yourself, but this time nothing works. Your mind and body are telling you that your old way of operating no longer works and it is time for something new.

There have been so many times that I have had to work through the overwhelm that leads to inaction. It is a frustrating feeling, especially for high achievers who are used to powering through any struggle. Here are a few tips you can use to free your mind and create space for progress.

1) Practice mindfulness.

Island mindfulness brings the gift of presence. It is the convergence of a conscious mind and a free spirit. Find confidence in knowing that you are one with the universe and the universe is rooting for you. Know that your mind can be that junk drawer where you toss everything or a calm oasis. Calm is what we seek.

Begin with five minutes of mindfulness meditation each morning to clear the clutter from your mind. The only requirement is a quiet space to be one with yourself. Eliminate all thoughts of the past or the future and focus on the present. Take a few deep breaths and feel it move throughout your body.

As a society, we have moved away from the joy of stillness, so this may feel like an uncomfortable exercise. Don’t give up! Within a week, you will notice a big difference in your stress level and mindset. Take that calm with you throughout the day and tap into that space when overwhelm starts to set in.

2) Avoid overwhelm.

Mindfulness helped you clear the clutter from your mind. Now, clear the clutter from both your physical space and your to-do list.

Decluttering your physical space can free the mind, so make your bed, give away the clothes that you haven’t worn in a year, store the knick-knacks in the garage, and create a workspace that promotes calm. I am surrounded by books, because that brings me calm.

Finally, identify one activity that consistently brings you peace, such as going for a short walk. This will be your stress-free ritual when stress starts to build up.

3) Get un-stuck.

After meditation, when your mind is calm, have a honest conversation with yourself about what is causing the mental block prohibiting you from accomplishing a particular goal or task (wrong goal, resources, lack of confidence, time constraints).

Act based on your truth, but go at your own pace. If you are on social media, you will notice so many people seemingly passing you by. Understand that everyone is on a different journey.

If you keep your foot on the gas that leads to your destination, you are winning. When you go at your own pace, you enjoy the journey – and you also enjoy the rewards when you arrive safely.

4) Focus on balance.

We get stressed, overwhelmed and stuck when we are focusing on either too many priorities or the wrong priorities.

Multi-tasking is disastrous to balance. Each morning, choose no more than three priorities.

5) Create an abundant life.

Find your purpose and then determine what legacy you would like to create. Your purpose and your legacy are your main missions in life; everything else is either a distraction or a wonderful bonus. Eliminate the distractions.

Finally, don’t keep moving the goalpost for success; walk in gratitude and stop to enjoy each victory. As with any practice, repetition is the key to success.

GE’S NEWEST RENEWABLE ENERGY PROJECT IS A GIANT TURBINE THAT POWERS A HOME FOR TWO DAYS WITH JUST ONE TURN!

BY Shawn Mcnulty-Kowal, Yanko Design, 12/24/2020

With its prototype becoming the world’s first wind turbine to generate 288 MWh worth of wind power over the course of only 24 hours, GE Renewable Energy’s Haliade-X is a giant. Towering above Rotterdam, Haliade-X’s 12 MW prototype set world records by harnessing power for 30,000 homes with its debut. For the next five years, power will be generated there for nearby Dutch company Eneco, while production for GE Renewable Energy’s 13 MW and 14 MW wind turbines at Dogger Bank, a large sandbar in the North Sea, moves underway.

Following the literal overnight success of the monolithic, 853-foot wind turbine, GE devised plans for serial production. Dogger Bank is located smack dab in the middle of the North Sea and will soon give rise to the largest offshore wind farm on Earth. Reaching completion by 2026, the wind farm will consist of wind turbines that will be able to generate more than 3.6 GW worth of energy, sufficient to power up to 4.5 million homes. Each wind turbine consists of monumental limbs, with a 722-foot rotor and 351-foot blades, and maintains a high capacity factor, which measures a machine’s energy output with the amount of time it’s been in operation, of 60-64%. All of these elements work together in order to increase the wind turbine’s adaptability and predictability in regard to changing wind speeds. Even further, the long blades, large rotor, and high capacity factor equip Haliade-X with the ability to generate power even through low wind speeds. In fact, the makers at GE Renewable Energy said, “The Haliade-X can capture more Annual Energy Production (AEP) than any other offshore wind turbine even at low wind conditions. One Haliade-X 14 MW turbine can generate up to 74 GWh of gross annual energy production.”

With hopes of reaching a ‘net-zero’ emissions target by 2050, the UK currently looks towards Haliade-X as a beacon of light in reducing the country’s CO2 emissions, which a single 13 MW Heliade-X can help reduce by 52,000 metric tons – the equivalent of removing 11,000 passenger cars off the road on a yearly basis. By the time the Dogger Bank wind farm’s commercial operations are completed in 2026, around 190 13 MW wind turbines will dot the North Sea, expecting to generate electricity for more than six-million homes.

Why The Office Simply Cannot Go Away: The Compelling Case For The Workplace

Tracy Brower, Contributor, www.forbes.com

We’re in the midst of the most significant reinvention of work in our time. We’ve proven people can work anywhere and the greatest social experiment—sending everyone home to do their work—has decimated barriers to working away from the office.

Some contend people are working with a reasonable level of productivity from home. And this is during arguably the worst-case situation for remote work: Being forced to work from home without choice, experiencing stress about the pandemic, sharing space with spouses or partners who are furloughed or also trying to work from home and finding time to educate children who would normally be at school—all of these create challenging conditions. Even so, people are getting work done—and could probably perform even better from home when the coronavirus abates, children go back to school and employees can return to a more typical way of life.

We can work from home with some level of effectiveness. We can meet using all kinds of technology platforms. We can stay connected to colleagues. We can perform our tasks. We can manage our work.

We can, but it’s just not the best idea.

It’s tempting for companies to conclude the office is irrelevant. Perhaps commutes, conference rooms and coffee bars aren’t really that necessary after all. With billions invested in real estate and maintenance of the workplace, companies would be missing something if they weren’t at least asking questions about its necessity.

But not so fast. The office simply cannot go away. It is necessary on multiple levels—for our effectiveness, for our sanity and for our humanity. It is unlikely work will ever go back to the way it was. In addition, many companies had productive approaches to remote work pre-pandemic, and global work has always required working together from a distance. Working from home offers some wonderful benefits—avoidance of a commute, positive impacts on the environment, more time with family and greater work-life fulfillment. Partly based on these benefits, it is likely companies will continue to encourage some level of work from home, but the best strategies combine working in an office and working from home. It is not an all-or-nothing. It is not an either-or. Deleting the office altogether is not the best option. The workplace offers all kinds of critical value—and it simply cannot—must not—go away. Here are five reasons why:

Humanity And Innovation

Humanity. The office is critical to our humanity. We are social creatures and we crave connections with other people—even at socially-distanced lengths. People may have different preferences for how much they work alone or with others based on their personality, but everyone needs some level of connection. Face-to-face communication contributes to all kinds of wellbeing including physical, cognitive, and emotional. On the flip side, a lack of human connection detracts from mental health and physical wellness. Some of this connection can be effectively facilitated by technology, but not all of it. According to a study by the Society for Human Resource Management (SHRM), 71% of people are struggling to adjust to remote work and according to additional research, people working from home are reporting mental health challenges. In addition, the longer people work from home, the more likely they are to report issues with sadness and fatigue. We need each other, and we understand ourselves based on our relationships with others. We are coworkers, colleagues and team members. Being together in the office feeds this need for togetherness whether we’re working side-by-side creating a new idea at a white board, solving a thorny problem around a conference table or acknowledging a friend across the cafeteria. Our proximity may need to be social distanced pre-vaccine, but hopefully post-vaccine, we can be closer. Either way, our humanity demands human connections and technology only meets part of our need. Being together in a work setting contributes much more significantly.

Innovation. The workplace is also critical to innovation. As humans we are fundamentally creative—and want to contribute what’s new and impactful. In addition, companies live and die on the ability to adapt and respond to customers and the market in new ways. Just three years ago, a who’s who list of companies significantly reduced their telework because the programs were impeding their ability to compete. We can be creative anywhere, but being together physically is so much more effective for stimulating thinking. We can build on each other’s ideas and not have the awkwardness that arises from delays when we’re interacting virtually. Successful ideation depends on rapid exchange of concepts and the flow of dialogue unhampered by fits and starts of never-fast-enough technology. Experimentation occurs based on the opportunity to roll up sleeves—literally—and work together on generating the novel and testing the unproven. Innovation is also facilitated by the unplanned encounters we have at the office. We have a new idea because we chatted with a colleague we don’t normally see, or we were inspired toward a new solution because of information we overheard standing in line to pick up lunch in the cafeteria. Perhaps those who do individual work can be successful working exclusively from home, but teams work better when they can come together in an office to blend their best thinking. Beyond co-creation that happens within teams, organizations require collaboration between and across teams—and nothing offers the same value as an office in achieving this goal.

Purpose And Energy

Purpose. The office also provides a critical sense of common ground. Any company knows that to deliver powerful results, they must ensure people have a sense of shared purpose and aligned objectives. Employees must be rowing in the same direction. The physical experience of place helps foster this sense of being in it together. But we’re currently without it, and the SHRM study demonstrates 65% of companies report they are struggling to maintain morale. From the earliest times, people gathered in places for common purposes—whether it was for celebration, mourning, childcare or learning. People have always come together to inspire a sense of community. In the modern world, the office offers this espirit de corps. We walk in the door with another employee, run into a coworker over (a socially-distanced) lunch or simply connect with someone while waiting for the elevator. We can get some of this through virtual connections, but not as effectively. Being together in a place reminds us we’re unified and are part of something bigger than ourselves.

Energy. The office provides for communication and it energizes. Disseminating and exchanging information can happen anywhere and everywhere and this has never been more true than in this age of social media and technology platforms. But there is something powerful about showing up together for a town hall meeting or an annual gathering—even when we are socially distanced. There is a rush in the feeling that so many people are in one place, sharing an experience. There is the power of laughter or applause or the focus that is demanded by presence. Being together virtually just doesn’t have the same magic—some people are engaged, some are distracted, some are multi-tasking and some are having technical difficulties. This disparity in focus can occur in person as well, but the influence of the crowd makes this less likely and the sociological concept of the bandwagon effect—when we’re swept up by the group—can be helpful to our enthusiasm and engagement in hearing a message.

Health And Wellbeing

Variety. We crave variety and the workplace provides it. We’ve proven to ourselves we can do everything from home. We can shop, eat, exercise, socialize and yes, we can work. But we want the variety that comes from getting out—to browse, enjoy a restaurant, go to the fitness club, gather with friends and go to our workplace. From neuroscience research, we know our brains are easily bored. We want the stimulation that comes from a diversity of experiences and an assortment of atmospheres. The office is one of these.

Movement and thinking. The office also helps us feel better. It allows for movement—across the campus or between conference rooms, and shifting postures throughout the day—something the workplace offers better than home—is best for your physical health. Movement has also been correlated with enhanced memory and learning. The physical workplace itself is also better for your thinking process. Having a place to go gives you a greater sense of time demarcation, reducing the disorientation that so many are reporting based on being (almost) exclusively at home. In addition, you avoid the cognitive challenges that arise from video conferencing (struggles to get in sync and fully read non-verbals). You also remember things better when you have more landmarks around you. The conversation from the atrium or the discussion you had in the hallway on the 4th floor tend to cement in your mind because of the physical markers around you.

Boundaries. We also need some healthy boundaries. Traditionally, we have talked about how to ensure a separation between work and home—how to leave work at the office and ensure a focus on life at home. But through the pandemic, the opposite has become true. People benefit from leaving home at home and coming to the office to focus on work. Work is a part of life and a full life embraces the effort that comes from making a contribution through whatever kind of work we do. Going to an office provides the opportunity to immerse in work with less of the distractions of home.

Talent And Engagement

Talent. The office attracts talent. Much of company culture is intangible. It is norms and values and assumptions, and it is “the way things get done around here.” But the workplace is a powerful way to demonstrate culture in a more tangible way. Place is the most visible artifact of culture. The lobby communicates a sense of a company’s mission. Gathering areas demonstrate the value it places on collaboration and connection. The work café shows employees their experience matters. The windows, daylight and views are a subtle depiction of the company’s emphasis on wellbeing and its ties to the community. All of these are powerful signals about an organization’s values and priorities. These are the beacons that attract talent and the messages that influence people’s engagement over time.

Engagement. Being in a physical workplace also helps reduce brain drain. Research has demonstrated people are more likely to have side hustles when they’re working from home so the chance of losing talent to the gig is greater. In addition, when people are home, they are more distracted and may be more likely to do non-work tasks during the day—from online shopping to surfing social media accounts. People working from home also admit to reduced likelihood of following procedures to protect company data and 84% of IT professionals say data loss is a significant concern with people working from home. Finally, people may be less engaged from home simply because they’re more distracted. Rather than being together in the workplace pitching in on a key project, they may be folding laundry during your meeting or responding to email during a critical work team discussion. The SHRM study finds 35% of organizations are reporting reductions in productivity and a study from the American Journal of Political Science finds women are disproportionately disadvantaged in terms of the ability to devote time to their work—and to be optimally productive. All of these are risks which are mitigated by being together in the office.

Empathy And Culture

Empathy. Empathy and trust are enhanced with physical presence. Team members who are regularly together can more easily stay attuned to each other —to share in positive events, offer support during struggles or learn from each other. Trust is built through proximity, and according to MIT, “physical distance can turn into psychological distance.” One study of 1,153 people showed a deterioration of team dynamics when people worked remote. We don’t trust what we don’t understand. More regular interaction can help us make sense of people’s responses, and more greatly appreciate their point of view. When we see each other more frequently we tend to identify with others and give them the benefit of the doubt. Social capital is the goodwill, fellowship, links and shared understanding that allow us to work together most effectively—and this is built more effectively when people are together. The alternative is the depreciation of social capital that can result when people don’t have access to the power of place. Leaders too can more easily focus on employees and their needs. Rather than having to check in formally, they can easily see non-verbal signals and understand when an employee has a question or needs guidance. All of this can happen virtually, but not as easily. When relationships require more effort, there is risk they will erode, a challenge avoided in the shared workplace.  

Culture. Without the chance to be together at the office, the SHRM research demonstrates more than a third of companies are having difficulties with their organizational culture, and a study by Prudential points to cultural decay which may result from an exclusively work-from-home approach. Culture is significantly determined by the worst behavior it will tolerate. Companies aren’t managing culture, they are managing behaviors in terms of what they encourage, discourage or reward. While leaders can still reinforce actions and hold people accountable via technology platforms, it’s more difficult and there is a higher likelihood they will miss opportunities to reinforce and recognize great contributions or to guide and manage actions which may not be aligned with cultural values.

The Bottom Line

Working from home will likely never go away and this is a good thing. It offers plenty of benefits, chief among them, work-life fulfillment. But the workplace must also not go away. It is critical for individuals, teams and organizations. In summary the office provides:

  • Humanity and innovation
  • Purpose and energy
  • Health and wellbeing (including variety, movement and thinking, boundaries)
  • Talent and empowerment
  • Empathy and reinforcement of culture

These benefits hold even in a socially distanced near term office, and especially in post-vaccine workplace.

We can do so much from home—and do so relatively effectively and productively—but it’s just not ideal. We’re better when the office is part of our holistic work experience—in addition to working from home. The workplace had a place in our businesses, our society, our communities and our lives—a place we must maintain.