What images spring to mind when you try to visualise GCHQ? Tweed-jacketed, code-cracking geniuses straight out of the film Enigma, perhaps? Echoing corridors and paranoiac levels of security, almost certainly. The reality couldn't be more different (although, admittedly, you will bump into the odd genius). GCHQ today is housed in a state-of-the-art building that, on the inside at least, looks more like the headquarters of a high-tech business, complete with open-plan layout, desk-sharing and a central garden. The whole building has "campus" written all over it, not "spooks". It's all been designed with the aim of creating a new culture. And HR has been at the heart of it.
 
Rewind to the late 1990s and the picture would have looked completely different. GCHQ – Government Communications Headquarters – started life at Bletchley Park in Buckinghamshire and moved to Cheltenham shortly after the second world war. By the end of the last decade it occupied around 50 buildings and, according to Alan Green, the man who planned the move out of those buildings, every one of them was occupied by a unique "tribe". "The one thing they had in common was a belief that GCHQ would be a great organisation if the other 49 started doing things they way they did," he says.
 
But the pressures for change were gradually building. For one thing, GCHQ's mission was being redefined. "We'd built a highly efficient factory for fighting the cold war," says Green. "And then the cold war went away." In place of a static enemy with relatively limited communications to monitor, almost overnight GCHQ was having to focus on terrorism as the main threat, while the internet was rewriting the rules of the game. Inflexible working systems were wholly inappropriate for this new reality.
 
By 1997 change was also being demanded by the incoming Labour government, which put a new stress on delivery, and a new director, David Omand – the first ever to be appointed from outside GCHQ. Omand set in train a modernisation programme that has proved to be remarkably resilient, surviving three changes at the head of the organisation. This included a leadership development programme, Lead 21, which Green says has resulted in some "radical changes in people's self-perception and behaviour – including at very senior levels". (See further information.)
 
The really dramatic catalyst for change came in 1998 when the Treasury demanded that GCHQ think about using Private Finance Initiative (PFI) funding for its next round of building renewal. At first this suggestion was met with incomprehension, according to Green; how could a super-sensitive organisation such as GCHQ rent its headquarters from a private landlord? But gradually the realisation dawned that this was an exciting opportunity to make a fresh start on one site – and so a brief was drawn up for the "new accommodation project" which, over the 50-year lifetime of the PFI contract, will be worth around £1 billion.
 
This is where Alan Green came in. A GCHQ "lifer", he started out as an engineer, then moved into general management, becoming head of HR in 1994, a role he held until 1998 when he returned to engineering as head of the department. In 2001 Green, who was part of the team that wrote the original brief for the move, was appointed business change manager for relocation, effectively responsible for all the people management issues involved in relocating a workforce of nearly 5,000 in summer 2004.
 
"This was an exciting challenge for me," he says. "In my previous role I'd led an HR reform programme, changing our processes and services, driving forward the leadership development programme and introducing a competency framework. When I moved into HR I met lots of people who had good ideas, but no clue of how to make them happen. That's what I was good at."
 
The first thing that Green and his team decided was that the walls had to come down – in the existing buildings, two-thirds of all staff worked in cellular offices, and silo working was rife. The new building was therefore designed to be open-plan from the very beginning, with only a few exceptions; ironically, that included parts of HR itself.
 
Initially there was a fair amount of resistance to this idea, particularly from managers who feared the loss of their status symbols of offices and big desks, but most have been won round. "We thought we would lose lots of people because of the shift to open plan," says Green, "but in the end fewer than 10 people left as a result. It was nowhere near as dire as people had feared."
 
The new building, known as "the doughnut", is a huge circular structure built around a central courtyard, or "secret garden". On the ground floor, a central walkway, "the street", runs right around the structure, with restaurants, a gym and meeting rooms on either side. Like the famous street at BA's headquarters, it's deliberately designed to encourage chance meetings and spontaneous interaction.
 
"Seemingly, every corporate HQ has an internal street today," says a British Construction Industry award citation for the building. "GCHQ's is refreshingly different." Above this central corridor is a huge atrium stretching up to the glass ceiling, bisected by bridges that connect the open-plan working areas on the first and second floors; these bridges are equipped with chairs and coffee tables, to act as impromptu meeting spaces. White noise and carefully designed acoustics prevent anyone from being overheard, although employees have had to get used to speaking at a lower volume than they might be used to – even in the "pods" set aside for conversations, people will be overheard if they start shouting.
 
Not everyone proved to be compatible with pure open-plan working. Many of the agency's mathematicians are introverts by nature and work best in seclusion, with no distractions apart from the occasional frenzied brainstorming session. Although they are based on the open floor with everyone else, Green's team had to modify these people's workstations to give them greater privacy.
 
The second radical departure for the new building was a "work anywhere" principle. All data is stored on central computers, and the IT infrastructure is designed so that staff can log on at any workstation and their information and phone calls will automatically be routed to their location. This was a massive undertaking: the IT investment alone cost £300 million, compared with the £380 million spent on the buildings, but it was long overdue.
 
"It took Y2K to teach us how little we understood about our IT," says Green. "We have the most sophisticated networks this side of the Atlantic, and the computers in this building use more power than the rest of Cheltenham put together, but we were running seven different email systems and we didn’t have a common infrastructure. Now we do."
 
One of the most obvious benefits of the new building – not to mention the significant energy savings – is that teams can be configured and reconfigured at a moment's notice. On 11 September 2001, it took GCHQ 24 hours to work out how to structure a team to respond to the new terrorist threat, and three months for the new team to be fully installed. Within 24 hours of the London bombings this July, the GCHQ response team was fully functional.
 
There is another benefit, though: desk-sharing. In part this is driven by necessity. Between the writing of the brief and the actual relocation to the new building, GCHQ's workforce grew by an unanticipated 25 per cent, and there simply wasn't enough room to accommodate everyone in the new headquarters. This isn't unique to GCHQ, Green says. "Everyone we've spoken to about this says the same thing: no one ever builds enough space when they relocate."
 
However, on any given day 15 per cent of the workforce is out of the office, so desk-sharing was an obvious solution. Everyone has their own pedestal for storing paperwork and other items, but not everyone has their own desk – including, crucially, board members.
 
The target for desk-sharing was initially set at 5 per cent – 19 desks for 20 people – but that's now been pushed up to an average of 10 per cent and some areas are operating at around 30 per cent. That still means a substantial number of staff have to be located off-site, at one of the old GCHQ buildings, which is one of the biggest disappointments for Green and his colleagues.
 
You get the sense, though, that GCHQ would still be desk-sharing even if there were more space. This is an organisation that's passionate about modernisation and about creating a new, empowered culture, but still has an strong esprit de corps.
 
Outside the cosy secret garden and the friendly street, there's one way in for visitors and that leads through a museum devoted to GCHQ's glorious past: Enigma and other German, British and American cipher machines sit in cases beside decoded telegrams and press cuttings from the 1920s. Beyond that, the whole "doughnut" is encased in a protective wall that GCHQ's own corporate literature likens to a "medieval fortress", and that's surrounded by razor wire and high-security surveillance systems.
 
So is there a conflict between the empowered, boundary-free culture being built inside GCHQ and the forbidding face it shows to the outside world? Not according to Alan Green: "I don't have a problem with that at all," he counters. "Our core values are to be modern and professional. Our security systems show we take that seriously."
 
 
Egg shells out for staff
Online bank Egg has also used the built environment to achieve a cultural turnaround, but this was done without relocating. When the company moved into its premises in Derby's Pride Park area in 1998, the new building was designed to foster collaboration, high-energy working and a culture that supported the brand. However, thanks to Egg's growth, by 2003 the building was accommodating half as many people again as it was initially designed to take.
 
The solution was a change programme aimed at resetting the "being" of the building itself. "By 'being' we mean the essence of the structure, which builds and drives patterns of behaviour, and therefore forms a layer within the individual and communal 'beings'," says Egg's chief people officer, Neil Rodgers.
 
"We used traditional success factors of cost, time and risk quality as the core of our cost analysis. But we also designed the building to reinforce Egg's purpose and strategy and make them live, in terms of how the building is experienced by the people that work there."
 
The resulting refit saw the introduction of new areas aimed at stimulating conversations between staff, study zones for e-learning, quiet reflection and research, a multi-purpose studio, equipped to host events, and plasma screens to broadcast information on the changing nature of the business.
 
 
Buildings stuck in the past
The past decade has seen a profound switch from an industrial to a post-industrial economy, according to If Price, professor of facilities management at Sheffield Hallam University – but the way we design and use our buildings simply hasn't caught up.
 
Price, whose research work has included collaborations with GCHQ and internet bank Egg, says: "Stan Aronoff and Audrey Kaplan, the authors of Total Workplace Performance: Rethinking the Office Environment, make the point that when electric power became widely available in factories, it took another 20 years before people stopped designing manufacturing lines as if there was only one power socket. The same thing's happening to the way we design offices today.
 
"The physical workspace is the most important and the least appreciated tool of contemporary knowledge management. Conversations are the production process of the knowledge economy, and conversations are heavily influenced by the spaces in which they occur."
 
Research by Price's team has found that employees value the ability to interact with colleagues above all other aspects of workplace design, but such issues are often given low priority when a move is being planned.
 
The enthusiasts for new ways of working can often be their own worst enemies, says Price. "There's no point introducing open plan for its own sake and expecting it to work. Actively managing this, including involving people in the designing of their own workspaces, is important."
 
The vocabulary used is also crucial. "Some people are frightened by terms such as 'hot-desking', whereas the reality may be far less painful," he says.
 
 
Further info
Lead 21 is described in more detail on the CIPD's website
 
Professor If Price will be chairing a session on "More than just a makeover – innovative workplaces" at the CIPD's annual conference and exhibition in Harrogate on 26-28 October. The speakers will be Alan Green and Egg's Nick Wilson and Paul Wilde • www.cipd.co.uk/annualconf-ex
• 020 8612 6202