I’m lucky enough to work with all my team in one room. I’m aware of all disadvantages of grouping people doing different things in one place but I’m still saying I’m lucky.
• I know development requires focus. I know that grouping a bunch of people in one place generates some chit-chat which distracts people trying to focus on their tasks. I know occasional phone calls do the same. I accept the fact. Hey, have I just said I accept lower productivity of our developers? Bad, bad manager.
• I know most people would consider a private office as a huge improvement from open-space. I wouldn’t offer that to my people even if I had a chance to make them this kind of offer. Ops, I’ve just admitted I wouldn’t make my people happier even if I could. How come?
It just about trade-offs. While putting people together invites costly context switching because of distractions it also brings huge values in terms of team work.
• Instant problem solving. It’s enough one person to ask another one about some issue to see insightful discussion emerging virtually instantly. You don’t need to think whether PM should join since he’s here and he joins as soon as subject appears interesting for him. Solving problems as you go is much more efficient.
• Communication improvement. Communication issues are probably number one issue when it comes to visiting dead-ends, doing the same job twice or banging the wall hard with your head. When I think how much effort is wasted just because a couple of people didn’t talk with each other I believe every method which improves communication is worth considering and most of them are worth implementing. Co-locating people is one the most efficient choices here.
• Reducing number of meetings. Many meetings aren’t even needed. However they’re scheduled because they’re considered as the easiest way of communication between more than two people from different rooms. Remove walls and you’ll automatically remove many meetings. People will have more time to do the real work.
• Atmosphere building. Try to cheer up person who sit next to you. Tell a joke or something. Succeeded? Great. Now do the same with the person sitting on other floor. It takes walking and other tiring physical activities. It’s harder. You won’t do it so often.
• Getting to know people. You’ll know better a person after sitting with her in one room for a month than after working in different locations for a year.
And yes, I believe these compensate reduced productivity and happiness. Actually not only compensate but add more too. Net value is positive. That’s why co-location rules.