Key Takeaways & Discussion Points 

• We’ve hit a point with flexible, hybrid working where we can’t go back to the old ways — 56% of people would seriously consider changing jobs if they were forced to go back to the office. 
• There’s not one “correct” model for a hybrid workplace — each organization is unique in its demographics, goals, and values.  
• Switching to flexible work requires cultural readiness — and the right data to support large-scale space decisions.  
• A financial ROI should not be a driving factor for a hybrid workspace, but a by-product.  
• “Build it and they will come” doesn’t quite work for the workplace — your office has to provide a quick, easy, and painless experience to get employees to show up.  
• When thinking about instituting flexible workspace and making workplace changes, it’s important to examine whether the workplace encourages behaviour that aligns with your company’s missions, values, and goals.  
• Sensors can give you a high speed to insight to help you make agile, data-driven decisions — and usually costs only 2% of what you’ll save.  
• Technology alone doesn’t create a successful flexible workplace story — there must be a deep, underlying understanding of the occupants, the space, and what goes on there. 
• Lots of organizations are currently sitting on a lot of data — but it’s siloed. It’s critical to blend this data together to understand how to plan for the future of your space and to present a data-supported plan to your space accommodation leaders. 

Links:

• Sandra Panara – Director of Workplace Insights at Relogix 
• Elie Elkaim – Executive Director at Horizant  
• Wayne Liko – Managing Partner, Real Property Solutions at Horizant 
• Angus Reid Institute – “Employee advantage: With job market remaining tight, many workers continue to resist a return to office” (April 2023) 
• Verdantix – “5 Best Practices for Success in the Hybrid Working Era” (May 2021) 

If you liked today’s show, check out more episodes of the Let’s Get Real Podcast! This podcast is available on iTunes, Spotify and Google Podcasts.

Transcript:  

Sandra 

Hey everyone, welcome to Let’s Get Real with Sandra and Friends, a workplace consortium podcast brought to you by Relogix. I’m excited to be sharing conversational musings about current events and how we envision the ever-changing world of work. I’m Sandra Panara, Director of Workplace Insights at Relogix. With 25 years of hands-on experience, I help value engineer global workplace portfolios and employee experiences by aligning workplace analytics with corporate real estate needs.  

Have any questions, comments, or suggestions for future podcasts? Please drop me a line at [email protected].  

Elie Elkaim 

Bonjour tout le monde, welcome everybody, I appreciate you joining us for this intimate conversation between me and Sandra. Good news is we’re not going to talk too much. We’re going to talk for about 20 to 30 minutes, see where the conversation is going and then open it up to questions.  

The intent is to have a meaningful conversation around a very hot topic that’s in the mainstream media, that’s in all of our lives around the dinner table as well. We’re talking here today about flexible workspaces, return to office, and how we’re transforming from a society where the employer tells us where we need to work to one where the employee is starting to gain the momentum to say where I would like to work. Very interesting conversations happening around this topic. So welcome to everyone, I appreciate the time and I’m just going to jump straight into introductions. 

My name is Elie Elkaim, I’m out of Montreal, Canada. So yes, the snow is finally gone, I can see green. My gray hair is probably giving it away, I have about 30 years of experience helping organizations align technology with their business objectives. I consider myself very fortunate that for the last 15 years I’ve been immersed in the real property side of the equation and helping the real property managers and real property owners leverage technology to meet their goals. 

I work for Horizant, a system integrator focused on real property. We love to say we’re a bunch of geeks at the intersection of technology, people, and business processes. Working at Horizant has allowed me to see in the last many years, actually even before the pandemic, the journeys that a lot of organizations have undertaken for flexible workspace. I’m hoping to bring that experience and knowledge to bear in today’s conversation. Sandra, do you want to take a minute to introduce yourself? 

Sandra 

Thanks, Elie. My name is Sandra Panara, I am the Director of Workplace Analytics and Insights at Relogix. I, too, have worked in corporate real estate for about 30 years, pioneering workplace analytics done the right way. I’ve been immersed in global corporate real estate data and analytics, supporting workplace reduction and optimization strategies, also looking at location strategy, workforce and people analytics. We’re bringing all of those worlds together as companies start to think about what the purpose of workplace is in their organization and how you bring these worlds together so that you’re essentially aligning your real estate goals with your company objectives. 

My first exposure to workplace strategy or the impact of workplace strategy was a personal situation back in the time when you didn’t have laptops or mobile devices and flexible working was not something that people spoke of. I walked into my boss’s office one day and was prepared to hand in my resignation and instead was surprised with, hold on, we’ll get you set up with a laptop and you can work from home. 

That’s how I became very passionate about workplace strategy, flexibility, and all of the things that come with what we’re now calling hybrid work, from just experiencing the benefit of having that option. To be able to do what I needed to do from a personal life perspective and then also being able to balance it with my day-to-day work requirements. 

So, let’s get started. Elie, with all the experience that Horizant has had working with clients, what are the current organizational trends regarding their specific journeys as they now start to rethink their workplace? 

Elie 

Excellent question. Actually, I think what I would like to do is start with what we’re hearing on the market most recently. As I alluded to before, flexible workspace and return to office has become mainstream. It’s in the news daily, and especially with the latest strike in Canada, it’s become absolutely mainstream. Just recently, Angus Reid themselves conducted a very thorough poll and survey. And what I got from that Angus Reid poll is that I don’t think there’s any doubt anymore. Flexible workplace is here to stay. It’s clear, especially for those sectors that need to accommodate traditional office space, there is no going back to the old ways. It’s become de facto. 

Another thing that was very interesting out of the Angus Reid survey is that they were able to put a percentage of about 56% of people who are currently working from home who would seriously consider changing their job if they were forced to go back in the office five days a week. That really stood out. That made me think that everyone clued into something that I clued into over, I would say, 14 years ago.  

And just like you, Sandra, for personal reasons, I needed to change quality of life and I needed the option to be able to work from home. And I met a gentleman by the name of Wayne Liko from Horizant, and I was very impressed. Horizant has been doing it since long before my need, but completely accommodated the work from home approach. And for the last 15 years, and I’m really giving my age away, it’s transformed my life. It was a needed change for personal reasons.  

I think with the pandemic, it made it very relevant for a large part of the population in terms of quality of life. But 56% people are saying they would seriously consider changing their job before entertaining going back full time. That’s a pretty important stat.  

And the last piece of the Angus Reid survey that was interesting for me was the affirmation that productivity is not a valid reason for a mandate to return back to the office. It’s actually the contrary. We found that productivity goes up when people are working remotely.  

I’d also like to cite one other research firm and one other article or study that really marked me over the last couple of years and that would be from May 2021 if I remember correctly. Verdantix came out with a study on “Five Best Practices for Success in the Hybrid Working Era” and that correlated directly to what I was doing in the space and what I was seeing my customers’ challenges were. It talked about how there’s not one model. In truth, it’s in aligning the organization’s culture for how they collaborate with the different models of flexible workspace. It really talks to how an organization has to think about cultural readiness or the cultural aspect of providing a flexible workspace, about finding the right mix for the organization. That’s one of the key success criteria. There are many different types of flexible workspaces, and it’s really about understanding your organization and finding the right alignment and the right product mix, if I can use those words, in terms of having an office-centric space, space that’s remote centric, or do you have a split workforce? And understanding how that split exists.  

The insight I got from that study was about the flexibility an organization has to adopt and the alignment it needs to find with its own organization’s culture. So, taking into consideration demographics, the occupants’ age, what they’re doing, how they like to collaborate. That Verdantix study was something that fell into place for me, especially with what we’re doing with our existing customers today. 

But I know I’m not here to talk about market and what they’re saying, but really to share what we’ve learned through the many experiences of our customers who have deployed flexible workspace, leveraging technology, particularly technology that we support. And we do have customers that currently have over 50,000 flexible workspace transactions in a month. So, we’re talking not small or medium, but large scale and customers that are national, municipal, private sector. And this started before the pandemic, but the pandemic has just been an amplifier. It’s just been incredible what it’s done in this space.  

So, I had to pick and choose a couple of those lessons learned for today. It was pretty hard because there’s a lot of lessons learned. 

The first one I’m going to throw out there is, we think too often, unfortunately, that making the flexible workspace or the return to office strategy all about the financials, about right-sizing the real estate, which is typically one of the top three costs in the domain for any organization, sort of a driving factor to instituting a flexible workspace or remote policy within the organization. And we’ve seen that it just doesn’t succeed. It should be a by-product of what you’re doing in terms of providing flexible workspace. The financial ROI, in terms of reduction of real estate and right-sizing of real estate to what the occupants need, it’s a by-product. It shouldn’t be a driving factor. It should never be. In the statement coming from the management top down, this is why we’re doing flexible workspace, it really is not about that. 

Another one I’m bringing to the table today in terms of experience is something that we’ve seen a lot of success with. Those organizations that took the time to understand, and I’m using this word again, the cultural readiness of their organization, had a much higher rate of adoption. What does cultural readiness mean? It means several points. It means identifying what makes your organization successful today in terms of collaboration, understanding the demographics of your population and the occupants of that space and how they interact.  

Age plays a large part of it. Look at me. This is the first time on a LinkedIn Live event, and what’s that expression about teaching an old dog new tricks? But you have to identify who’s occupying the space, what are their criteria for collaboration. And customers that had a lot of success doing this did it by team, by department, by functional group, identifying how they best collaborate and then providing and transforming the physical space to give them those areas they need to collaborate in the way they want to collaborate. The companies that took the time to do an evaluation of the cultural readiness for flexible workspace and put in the right mixture of different forms of space to adapt and align with that culture had a lot more success. 

I brought a third to the table to spark the conversation with Sandra, taking the approach and again, I’m probably dating myself, from the movie Field of Dreams. “Build it and they will come”. Not anymore in a flexible workspace. We’ve not seen too much success with that kind of approach. 

There’s one last one, and it’s kind of a claim to fame that a co-worker uses quite often. Somebody that inspires me on a daily basis. His name is Wayne Liko, and he drives this point every day. It needs to have a focus where you’re providing a quick, easy and painless experience. “Painless” experience being one of the keywords in finding the workspace that you would like to use to collaborate in.  

And what do I mean by that? A lot of these mandates that are going out are getting us into conflict resolution. And I have one client who marked me with a particular phrase: “space pirates”. And how do you deal with space pirates? You don’t want to create more conflict in instituting a flexible workspace. You’ve got to be very careful in terms of not creating extra anxiety. It’s really got to be a quick, easy and painless experience for the end user. 

So those were my top ones that I’m bringing to the table today. But before we get into back and forth, I have a question for you, Sandra. All of these mandates for return to office and flexible workspace, there’s a lot of decision support. There’s a need for data, a need to make effective data. And this is definitely within your wheelhouse. So the link of data that exists today, data that can exist tomorrow with some technology, what are you seeing on the use of data and the role it’s playing in the flexible workspace? 

Sandra 

So, a good question, but before I jump into that, I just wanted to address the point that you made about readiness. Readiness is a critical success factor, if you will, for even jumping into the data journey.  

The way I look at readiness is twofold. Number one, it’s a precursor to the data journey because you need to identify what it is that you want to change. And number two, it can also be an assessment of where you are and how much you actually want to change or need to change. And it’s really important to know that because if you don’t know what you want to change, your data journey is going to be misguided, potentially. You don’t really have that North Star of how to look at information in a way to either prove or disprove a theory. Because a lot of times there are theories in organizations that are going around and there’s really nothing to support whether there’s truth or not to it. So, it’s really, really important to understand what your objectives are because that’s going to set the stage for the data journey that you’re about to embark on. 

When it comes to the data itself: usually what companies will do is they’ll want to baseline where they are. So, with the readiness factor, you might have a baseline in your head. Let’s take for example, return to office mandates, something’s being put out there and there’s an expectation tied to a mandate. You need to come back to the office three days a week, four days a week, whatever the case might be. If there’s a problem or not and you’re just basically interested in what’s actually occurring, you then want to basically say, okay, how do I get at this information to understand where are we right now? 

That’s really what the gist of baselining is about. It’s to assess, if we’ve put something out there, there’s a policy on hybrid, there’s a requirement for people to come into the office a set number of days or specific days: how are people actually reacting to that? Rather than using surveys where people are self-reporting, you can actually use information from your badging, from sensors. There’s a variety of different ways to be able to capture data to actually validate whether or not people actually are adhering to these new policies or procedures. 

What happens when you baseline is that you look at what have you requested of your employees, what is the data telling you in terms of how are they’re responding to that, and then assessing how much of a gap is there between what you want versus how the employees are behaving. And it’s interesting because we probably have all heard the phrase that “culture is what you do when no one is looking”. So, you’re collecting data about what the natural behaviors of people are, because it’s not really being managed from the standpoint of compliance. Nobody’s measuring or taking attendance every day, but through things like badging data and other data sources that you have in your organization, you can quickly assess, okay, are people actually adhering to what we’re saying? 

Typically what would happen then is if you’re really close to achieving the behaviors that you want because people are actually behaving that way, then check, you’re doing good. If you’re not, however, then you want to assess how much of a gap there is. Because that gap is going to basically guide you in terms of which directions you want to go in and ultimately, how much change are you prepared to go after within your organization. The wider the gap, the harder it is to get people to change. Because what you want to do is align to the preferred behavior that’s being demonstrated by the employees.  

What we’re seeing right now is that they often refer to it as a tug of war between employer and employee, where the employer is pushing for something, the employee is pushing for something completely opposite, and then there’s no meeting in the middle. So, then it becomes a question of, well, how do you compromise? And again, that becomes part of the data journey to understand, okay, of the people that are coming in, what spaces are they gravitating to? Why are they there? And then likewise, the people who are not coming into the office, why is it that they’re not coming into the office? There could be a variety of reasons that they’re not coming in. We hear about the commute. They feel enabled to work from home. So, what’s the point of commuting for an hour and a half or whatever to get to the office, when they can be fully productive from home? 

The underlying point to all of this is really about alignment. If you think about your company, what is its mission, what are its values, you want to look at, are the behaviors supporting the mission and values of your organization or not? And most of the time the behaviors actually do align with the mission and the values because every company talks about things like community building, sustainability, wellness, diversity and inclusion. All of these buzzwords which I’ve been reading as of late, there’s been a lot of greenwashing or just washing in general of these various terms where companies will put that out there as messaging to attract and retain talent.  

But now people are being much more skeptical about what is behind those words. Do companies actually mean what they say? And they’re being much more discerning with decisions about whether to remain an employee or move on to another organization. 

Companies have a real opportunity to really start to look at the data with these different lenses, to understand not only is there a bum in the seat, but what is the significance of whether or not people are coming to the office? And how does that help or hinder the direction that our organization needs to take or wants to take as it relates to all these other things that we’ve claimed that we care about and that we’re supporting as an organization? So that’s really key from a baselining point of view. 

The other thing, too, is from a Relogix perspective — obviously we’re in the workplace analytics business and most of the data that we collect first and foremost comes from sensor technology. But we do analytics by blending in other data sources as well to show a more holistic picture. 

I often get asked the question, what is the value of having sensors installed? Because a lot of times people say, well, there’s only 30% or 40% of people in the office and it’s too much of an expense to put sensors in. Like why would you do it? And the main reason is the speed to insights. So, if you’re doing manual data collection, you’re going to be spending a lot more time waiting for the trends to evolve. And unfortunately, right now we don’t really have that much time because time is money. That’s always been the case but now I think there’s way more urgency today than there ever has been in the past. And so if you’re looking for a way to baseline, to get really good information quickly, sensors are the way to do it because it’s going to give you a level of granularity that you can’t get any other way. And the best thing out of all of it is it’s real. It’s based on real behavior that can’t be disputed. Right? 

Elie 

I have to agree in terms of key value proposition. I don’t think people organizers have yet to fully understand the value of speed to insight. I like the way you said that. Leveraging technology to give you that speed also allows you to become very adaptable to the trends and what is happening within that physical space. So that speed to insight allows your space planners and your accommodation folks to be able to adapt with the trends because space is not used the same way every single day for the next 20 years. There are trends in occupancy and how that space is being used. And you can’t beat an input or an output from a sensor, but it’s really that speed of insight and bringing all that adaptability and flexibility. 

Sandra 

The other thing I should add is, as you were talking earlier about collaboration, a lot of companies are doing one of two things. They’re either looking at data to be able to make decisions about right-sizing, which is absolutely true, or they’re looking at the data to inform the redesign of their office space. What I find interesting is a lot of companies are going in with a preconceived notion that they need to redesign their space to better support collaboration. But how do you know that your organization is collaborating or meeting? 

Elie, when you and I first spoke, we talked about one of the things that we’ve seen during the pandemic and just shortly after, which is that a lot of companies are rushing to put technology in. Technology is going to supposedly solve everything, but without, again, really understanding why you are putting the technology in and what are you trying to get out of it.  

If I think about the whole concept of hybrid working as putting in a calendar or a booking tool or something like that and that’s going to basically enable people to work hybrid — it’s a lot more involved than that. And you need to understand what is it that you’re trying to solve for. Because it’s not just a matter of applying technology without really knowing what the problem is or what is the anticipated problem that you’re trying to solve for and therefore look to technology to enable that.  

Elie 

We definitely have two technology folks on this call, me and you, and we’re both saying the same thing. Technology doesn’t give you a flexible workspace success story. It definitely is a combination of different factors and nothing is more important than understanding how the occupants need to collaborate, not how you see it or you think you see it, or an individual’s gut feeling that it should be this way. You really need to take the time to understand the occupants of that space and how they would like to collaborate. 

Sandra 

Let’s talk about another topic of ours. We were talking yesterday about data visualizations and heat maps. I love heat maps just as much as you do. 

Elie 

But hold on a second because we did get a question from the group. The question is, do we think mandates are creating more hesitancy for hybrid work? Do you want to start? 

Sandra 

My personal opinion is that mandates and hybrid work are on opposite ends of the spectrum. Hybrid can’t be mandated. It can’t actually be managed either. I mean, there certainly can be policies that set the stage for expected behaviors. But if you’re really looking to support a hybrid workforce, that needs to be more free flowing. And so when you get mandates that are basically telling you which days of the week you need to go into the office, as some companies do, or how many days of the week you need to be in the office, you’re essentially upsetting the natural rhythm of how people work best. Because those are not things that you can pre-plan. And it’s based on whatever is happening.  

In fact, actually, it’s quite interesting. We’ve had several conversations with friends or even just companies where they’re looking at, for example, their booking data and they know that there’s an expected number of people to come into the office and then some people will come in and realize that the people that they were supposed to meet with didn’t come in that day. As you were saying before about the experience — it’s absolutely important. Does a tool like that guarantee a great experience? Absolutely not.  

The same can be said about mandates, where the decision to go in usually doesn’t happen until the day of because there are other factors that play into whether or not you go to the office. And I think that that’s true more so now because you can fall back on the technology tools that you have that you’ve been using for the last three years to be able to meet with people virtually rather than do the commute to go to the office. 

Elie 

I think what I’ll add to this question and hopefully it doesn’t get me in trouble, but too often there’s a mandate without the thought process behind what the actual benefits are. A mandate for the sake of a mandate, based on how things were done in the past. An expectation.  

Part of the question was how does it take away from potential benefits? Well, a mandate just for the sake of a mandate is never going to give you the level of benefits you’re really expecting out of this, even if it is just the financial ROI. You need adoption. You want to enable the workforce or the occupants. You want them to come in because it’s easy, it’s painless, and it gets them what they need. A mandate for the sake of a mandate can never support that. I’ve never seen that work to date. It could be seen as just inflexible, I guess, is the word that comes to my mind. 

Sandra 

Tough word. 

Elie 

Am I getting trouble for that? 

Sandra 

I also think there’s truth to that. I think back on pre-pandemic times when less than 15% of people worked flexibly. It wasn’t as big of a deal. And I remember usually after you implemented a flexible program, two, three years into it, if you started out at with the company saying, okay, we need to convert 20%, 30% of our population to work flexibly. It was rare, but it did happen.  

When you went in and did a survey two, three years later, you did a baselining assessment of where is the company? You often saw that what started out as 20%, 30% usually jumped to closer to 40, 50, 60%. And that was just a natural progression because people see what other people are doing. You don’t know what you don’t know, right? So, the people who at the time didn’t get the concept of flexibility because they felt like they needed their desk, I need my space in the office, I can’t work from home. They just couldn’t fathom how do you do that. You’re now on the other side, right? You’ve had three years where you’ve had no choice, you’ve had to work from home. 

So, what’s the reason for pushing people back? What’s the why? If it’s about being more productive or being more collaborative or being more innovative, and you look at what’s transpired over the last three years, we see that productivity continued, innovation continued. Companies were having stellar years during that time. So, again, what’s the reason for pushing people back to the office? 

I’m not saying that there isn’t a purpose for the office. I still think that companies should seriously consider what the role of the office is. And if there is a requirement to have an office, we can still provide that as an option. The question just becomes how much of it is required? And then the bigger question is where or what type of office space? Because again, we always looked at it as traditional office space versus now all of the options that have opened up where people can meet, collaborate, work together, to do whatever. There are a lot more options that are available because of the comfort with technology that most people didn’t have before the pandemic. 

Right now, obviously, that opens up a whole can of worms for IT departments around security and privacy, they need to do a lot of catching up. But that’s just the way forward, I think. You don’t want to go back to something that we’ve already peeled back and we’re on to something else. We can’t say, you have to come back, because we’re not ready for that. They should be thinking about how we bring everyone forward. If, again, 90% of the population or 80% of the population has spoken and that is the preferred way of working, are you going to force the 80% to come back into the office and change the behavior when the ship has already sailed?  

Elie 

Definitely, the ship has already sailed. I don’t think there’s any way we can go back completely to the office. 

We actually have another question that came in, and it looks like this is right in your wheelhouse too. Sandra, would you have a recommendation for a basic set of questions that must be raised prior to a decision to install sensors or not? 

Sandra 

That’s a good one. I would say the very first question to ask is, what is the level of detail that you need to get at? So as many people know, there’s a variety of different ways that you can measure occupancy, attendance, space utilization, quantifying and qualifying data from different data points. You have to ask yourself, is the data that you get from badging sources, for example, good enough to be able to make costly, high-risk decisions? Or do you need to go deeper because there are various levels of analytics?  

Everybody knows badging data mostly. Everybody can get it. All it tells you is how many people are in your building. If done right, you might be able to get a sense of how many people are visiting multiple buildings or are traveling between floors in your building. Again, it depends on how your system is set up. Same thing with Wi-Fi. It kind of places people in the building on a floor. That’s about it.  

If, however, you’re looking at doing a furniture change or a redesign of your space, or you’re trying to understand why people are coming into the office and validating, and not necessarily going based off opinion, the sensor data is what’s going to tell you precisely. 

So, if you’re looking for accuracy and precision to inform a costly decision like redesigning your space, bringing in new furniture, changing out designs, maybe collapsing floors, that kind of thing, you want to know that level of detail so that you’re not over-provisioning and likewise, you’re not under-provisioning for space.  

So, the key would be, how much detail do you need to get? Do you need to get right at the seat level? Because obviously the data is anonymous. But if you need to understand the need for a space type or a subtype — in our world, for example, we’ll have a desk type, and then within that desk type category, there are various subtypes. Let’s say a company’s offering sit-stand workstations or workstations that have ergonomics set up. They’ve got dual monitors or triple monitors or different types of attributes of those spaces, and you now want to understand, are people coming in? Maybe they don’t have assigned seating anymore, so they can basically sit wherever they want. Where are people gravitating towards, what kinds of spaces?  

We’re seeing that a lot of companies are in exploration mode, where they understand that the traditional cubicle farm is out. It’s surprising to me that it still exists. And they’re experimenting with different vignettes of furniture. What are people preferring when they’re coming into the office? Of the people that are coming in, what are they actually using? The key is figuring out what level of detail of data do you want to get at.  

And then the second factor is the cost. We get a lot of questions about cost. Well, how much money do you want to spend to get at that information? The reality is that installing sensors is actually quite cost effective, especially when you look at the savings potential. I know we started out at the beginning with not leading with the cost savings, but it definitely is an outcome. It’s almost guaranteed. In all the years that I’ve been doing it, I’ve never, ever seen a company that actually didn’t achieve a significant amount of cost savings. And in fact, I’ve done some of the math. It’s usually the case that the cost of implementing sensor technology is well under 2% of the total savings that you can achieve. It’s a very small drop in the bucket when you look at the potential of what you would learn about your space, for one. 

And then what is the cost savings opportunity, which is not about the savings per se. That’s why I throw in the word opportunity. It’s about what that cost savings does for your business as an alternative. If it’s changing the furniture out or modernizing the office or adding back certain benefits that maybe budget didn’t allow for in the past because the company is downsizing or whatever, it just frees up resources. So instead of spending it on real estate, you can spend it in other areas. That ends up being a win-win for both employers and the employees alike. 

Elie 

There’s one more important piece when we have these conversations with our customers about sensors. Sensors, the nature of them, is about the collection of data. And data is used to make decisions, insights. So the first set of questions we tend to focus in on is, what are those insights you’re looking to gain? That will drive a lot of the decisions around what the right technology is to collect the data to allow you to make those insights. Before the decisions to install sensors, you have to understand, what are the reflection points you’re asking yourself? And that will gear towards finding the right mix of technology, i.e., sensors, to give you those insights you’re looking to get. We always try to correlate back to a use case and the insights that you’re looking to gain from having this kind of data collected.  

We’ve seen very simple sensor projects where it was just purely on utilization of a particular type of space, a classic form of meeting rooms. Wanting to understand the reality of how utilization around our meeting rooms happen. That’s one of the easiest and most common conversations. 

We have a lot of conversations around utilization of the space. There’s a lot more advanced topics coming up. I just wanted to share that it needs to be tied to what the decisions are and what are the insights you’re looking to gain from the data that you’re collecting, or that you want to collect. So, the first question that we usually ask is why are you collecting this data. 

Sandra 

We have another question here: what can the current data tell us about the next 24 months? All the data, including lease renewals and other economic stressors, et cetera. 

Elie 

That’s a big question. 

Sandra 

I think it can tell you a lot. I know from personal experience, if you’re just looking at badging data on its own or booking data or survey data on its own, it’s going to tell you something. It’s very “right now” kind of data.  

When you start looking at the blending of data — bringing various data sources together, specifically bringing your workforce data to understand the attributes of your workforce, so things like tenure, age, job function, job families, the reporting hierarchy — for example, you can perform commute analyses to really understand the correlations between office use and the attributes of the user. You can learn a lot about how you should be planning for space in the future.  

So, if you’re looking 24 months out, you start to look at the data and you start to see patterns based on different segments within the organization. And the correlation between those is going to be different at every company. You can’t make an assumption for a specific generational group or tenure group because the makeup of every company is going to be different.  

But it certainly begs the question, who are you planning for? You start to understand who the people are that are coming to the office, even with these return to office mandates. You’re not going to get everybody back, but there is going to be a percentage of people in your workforce who are coming back. What you want to understand is what percentage of those people are repeat users? Who’s there more frequently than the ones that come in less frequently? What is it about those specific users that potentially brings them back to the office every day? And then when you think about hiring new people into the organization, do we need to cater more to those types of people and build a space to accommodate those types of people?  

With respect to the lease, same thing. If you blend the data in with your leasing information, you can quickly understand and actually build a strategy based on your lease expiry date. So you want to build a plan for the next three years? Show me the buildings that have occupancy of less than x percent or more than x percent, maybe in the same metro area. You can isolate specific areas and quickly identify where you need to put your focus in the next three years, because those leases are coming due. We all know that decommissioning takes at least a year and a half, if not longer, to figure things out. And you have to give notice usually six months prior. So three years for us in the real estate world is just around the corner, if you’re looking at leases that are expiring in the next three years. So, you’re probably already looking at leases that are expiring in the next five years just to give you time to get organized around it. 

Elie 

I’ll add one point to this, because we see this often. We’re talking about a lot of data, and we’re talking data that we see too often in a siloed format. So badging data has been brought in for one specific reason, to badge in and badge out. Have organizations really seen the value of tapping into all these siloed data sources, bring them together, and how it could help you in your space planning and accommodations planning and understanding behavior? Very few organizations have gotten to that point, understanding that they really are sitting on a lot of valuable data. It’s a matter of aggregating it together and giving access to the facilities accommodations team. I think will be pretty surprising to a lot of organizations, what kind of insights they can pull out from that data. 

So don’t be afraid to take siloed data and leverage technology and combine it and bring it together and put it in front of your space accommodation folks, because a lot of the organizations are already sitting on a lot of the siloed data. 

There’s another question that came in, and it put a smile on my face. Can you define the core value behind RTO mandates? Wow. I will say this. For me, the core value behind an RTO mandate is retention. If I had to give one word to an RTO mandate, it’s retention. It’s about understanding the occupants and providing them with what is now being demanded by space accommodation teams and space planners out there and the owners of this space. A space that provides them with a flexible workspace, that provides them the quality of life they’re looking for. So, I tie it back to the person, the people and that for me falls back to retention. 

Maybe I’m answering it differently than you’re expecting, but the core value should be retention. And that’ll drive all the other points about having the right type of space, accommodating the right type of flexibility. If the question is about coming back to the office old school, no, I don’t really have core value for the old way of doing it. Return to office mandates can have a lot of value, as long as you take into account the quality of life factor and how it ties into retention. 

Sandra 

I think that the part that throws me is the word mandate. 

Elie 

Pretty harsh word. 

Sandra 

Because core values and a mandate seem to be, as I said, on opposite ends of the spectrum. I think personally that the core value, at least from what’s being said in the marketplace, is this belief that you need to be together in order to collaborate effectively to build relationships or solidify relationships. And I think that there’s truth to that. It doesn’t necessarily mean that it’s better, it’s just a different method.  

But it’s not an either-or situation. It’s a matter of giving options. And the options aren’t hey, today is an all-hands-on-deck meeting and everybody needs to be in the office for this meeting to collaborate. Because that has happened in the past, even in organizations that were partially flex, at least four times a year for quarterly meetings or whatever frequency there are in-person meetings that you are required to attend and people still question it. Why, right? I could be working with a team that’s located in another state or another province and I can just dial in remotely. I’m going to come in for 2 hours and then what? Work virtually for the rest of the day? So again, it’s that time management piece that I think comes into it. 

It goes back to what we were talking before, what is that value based on? Is it based on a hunch? Is it based on a belief that’s unfounded? 

I’ll give you a quick story example. I worked at a company and we were doing a pretty deep analysis. I remember hearing many times as I was walking around the hallways that there was this belief that if your manager was in the same city as the employee, the employee tended to come into the office more often and therefore was more productive. And I kept hearing this over and over and over again, and I was like, I don’t think that that’s true.  

So I went back and I said, okay, let’s see what kind of data we look at. Let’s look at if there’s significance to that. And sure enough, this was pre-sensor days, so we mapped card access data to HR data, so we had the hierarchy of who reported to who. The badge data had the people information, and we were able to look at where the manager was located. Were they in the same city as their employees and therefore coming into the same office on the same days? Or were they in different places that it was impossible for them to be in the same office? We disproved the fact that the people who were in the same city came into the office more because that just wasn’t true. 

And then there was some conversation also around the measurement of productivity or effectiveness. And that really came down to looking at the only real, validated measurement of employee performance, which is your annual review score. And that one was a bit tricky because it had to remain anonymous. But we were able to basically blend that data in the background with the help of IT and basically illustrate anonymously that it wasn’t true. 

These are just things that people will think of because it seems to make logical sense. But in reality, when you look at the data, you can very easily prove or disprove it and say that’s not the case, and therefore it’s not a reason to push people back to the office. It’s quite amazing, the kind of stuff that you can do when you actually look at the data and you know exactly what it is that you’re looking for. 

Elie 

I know we’re coming up to the top of the hour. Sandra, I apologize, we didn’t get into heat maps. But for everyone that is on this LinkedIn Live event, the conversation does get to continue on LinkedIn. So the questions we were not able to get to, we will absolutely get them to them on the chat. And I think I’ll say at this point in time, Sandra, always a pleasure. And I know you’re fortunate enough to be having some time off soon, so enjoy. 

Sandra 

Thank you. 

Elie 

And again, thank you very much for joining today and having this conversation. And thank you for everyone who participated in the live event, and for all the great questions. Bye, everyone. Thank you. 

Key Takeaways & Discussion Points 

• Is there a difference between co-working and flex working? 
• Has the pandemic experience shifted what types of space people are looking for? 
• Is it true that the office is becoming primarily a space to collaborate? 
• Is “time spent” in a location an accurate measure of its value? 
• What is the flight to agility? 
• Turning excess space into a co-working space is a possible solution for companies locked in long-term leases 
• How do security and privacy concerns impact the desirability of flex spaces?  
• Does a company lose its brand identity when coming into a shared or flexible space? Is that important? 
• Does having highly desirable organizations in a flex space increase demand for that space? 
• How do flex space and coworking contribute to building a sense of community? 

Links:

• Sandra Panara on LinkedIn – Director of Workplace Insights at Relogix 
• Jamie Hodari on LinkedIn – CEO and Co-Founder at Industrious 

If you liked today’s show, check out more episodes of the Let’s Get Real Podcast! This podcast is available on iTunes, Spotify and Google Podcasts.

Transcript: 

Sandra 

Hey everyone, welcome to Let’s Get Real with Sandra and Friends, a workplace consortium podcast brought to you by Relogix. I’m excited to be sharing conversational musings about current events and how we envision the ever-changing world of work. I’m Sandra Panara, Director of Workplace Insights at Relogix. With 25 years of hands-on experience, I help value engineer global workplace portfolios and employee experiences by aligning workplace analytics with corporate real estate needs.  

Have any questions, comments, or suggestions for future podcasts? Please drop me a line at [email protected].  

In this episode, I’m talking with Jamie Hodari, CEO and co-founder of Industrious, the highest-rated Workplace-as-a-Service company. Under his leadership, Industrious has grown to over 150 locations across more than 50 cities since its founding in 2013 and is recognized by corporate real estate leaders for its asset-light model based on landlord partnerships rather than traditional leases. Most recently, Industrious was named one of America’s 500 fastest growing companies by Inc. Magazine, and also appeared on Forbes’ annual list of best start-up employers.  

Hodari holds a JED from Yale Law School, and an MPP from Harvard University, as well as a BA from Columbia University.  

Hey Jamie, very excited to have you today as my guest! Why don’t you tell us a little bit about yourself? 

Jamie 

Thank you for having me! So, I run industrious, we’re a workplace provider in about 65 cities. We allow people to basically buy their workplace experience as a product from us. We have a coworking brand, we do much larger suites for companies, and increasingly, in a lot of buildings will run all of the shared amenities and experiences for the whole building. We’re about ten years old, based in the US. And still, that’s our largest market, but we’re in 10, 11 countries now. 

Sandra 

What inspired you to start Industrious? 

Jamie 

Well, I was in a very different field at the time that my co-founder and I launched Industrious. I was running an organization that basically launched and runs hybrid universities in East Africa, where you watch your lectures at night at home, and then you do your homework in class with your classmates. And because of that classroom model, we were able to deliver a $1,000-a-year accredited US college degree in Rwanda, and now in more places. And I really loved that job. I wasn’t thinking about moving on from that at all.  

Our largest funder was IKEA, the furniture company. And I had a meeting with the president of IKEA in the US. And our US offices were quite small. The vast majority of our staff was on site. In the US, we were in a shared workplace. I went to prepare for the meeting, and the conference room table was sticky, it was just not a great vibe. There were light bulbs out. So, I moved it to a Le Pain Quotidian, the coffee shop chain, at the last second. 

And that night, I was just so upset. I couldn’t believe that I’m paying for a workplace, and it didn’t meet a standard of professionalism to where I was comfortable holding an important meeting there. And my co-founder, who was my best friend from growing up, had had a very similar experience. We were like, let’s just do this as a side project. If we think there’s a white space for a more professional, more elegant, flex workplace option, there must be 50,000 companies that want that same thing. 

So, we launched as a side project, and for better or worse, it really took off from the very first moments. After about a year of trying to run both organizations side by side, it became totally unsustainable. I had to leave Kepler, and have been running Industrious full time ever since. 

Sandra 

Wow, that’s quite impressive. It’s always cool that when you hear stories of people starting a business because of personal experience. Somehow that connection just makes it that much more different, where you recognize that there’s a gap in the market because you yourself are looking for that experience and it doesn’t exist. And then you go ahead and boom, overnight you have a business. 

Jamie 

I totally agree. I think it has been helpful over the years because a lot of times people start a business because they’re in business school and they notice that this particular sector has great margins and good valuations, and then you’re building for some kind of external valuation metric. But when the origin of a business, when the sort of stimulating moment for starting it is about an experience, a desire to give a customer something that you yourself wanted, that can be very grounding and helpful, I think. 

Sandra 

Absolutely. You often refer to coworking and flex working when you describe what you do. Is there a difference between those two? 

Jamie 

I think flex, at this point, is the name for the broad category of products that allow people to flexibly buy their workplace experience as a product from someone on a subscription, rather than having to sign a long-term lease, field out the space themselves, run it themselves. And then coworking would be the name of one of the products that sit underneath that, which would be highly productized space for teams of 20 and below, where you share a lot of amenities.  

If you’re a six-person team, you might have your own private lockable office, but the conference rooms, the cafe areas, the focus rooms, the mother’s rooms, things like that, those are much more likely to be shared with other companies. Once you get past 20, 25 people, if you have your own separate floor, then usually people wouldn’t use coworking to describe that. But if a lot, let’s say more than 60% of the space over the course of your day that you’re accessing, is something that other companies are also accessing, I would think of that as the coworking part of the flex industry. 

Sandra 

You said Industrious has been around for about ten years. Have you seen a shift in the last couple of years, especially since the pandemic in terms of the types of spaces preferred by people? 

Jamie 

Yes. I’m trying to think how to even describe this succinctly, because I think it’s so interesting and it doesn’t always match what people read in the news. But yes, there’s been an enormous number of changes over the last couple of years in both the space types that people want and also at the most basic level, the way they conceive of what their workplace is how do I use it and what’s it for. Can I start with how people are actually using the workplace? And it’s easier to describe the physical impacts of that.  

Sandra 

Sure. 

Jamie 

There are a good number of people who are working from home full time. That’s still not that common, let’s say single digits, but there are a lot of people who do it and enjoy it just as they were before the pandemic. There are a small number of people who still go in five days a week in white collar jobs where they’re not mandated to, but that works for them. And then the vast majority of people, 70%, 80%, go in a few days a week, but fewer than in the past. And they therefore have to pick which days do I go in? What types of things would be best suited for working from home versus the days I come in? And people tend to come in and they want to interact with colleagues, they want to see other people, they want a breath of fresh air, they want to go out to lunch. So, there’s more pressure on interaction space. The little vignette with the couch and the two armchairs, the cafe with the high-top tables. That was something people said in 2020—when people come back, they’re going to want to hang out. 

There’s also a lot more demand for private space. Once you’ve gotten used to being on your Zoom in your home with very few interruptions, having someone 2 feet to your right and 2 feet to your left and you’re trying to do your meeting while you hear them talk about the bad date they had the night before, that becomes really painful. And so, there’s also a lot more demand than pre-pandemic for little phone booths, little focus rooms, places to retreat to. I would say if I had to typify it, instead of working in a big benching area at a desk with people to your left or right for 10 hours a day, you’re moving back and forth between very social spaces and very private spaces. 

Sandra 

That’s quite fascinating, actually, because I’m currently in the process of pulling together some benchmarking data from the sensors that we have installed across the globe in all types of industries and spaces. We measure spaces in desk areas or workstation areas, private offices, closed meeting, open collaboration and the amenities and support spaces. And the eye opener for me was, looking at the couple of customers we have that are in the flex, co-working industry, this request for private space. I did not expect that at all.  

And you’re seeing that in the private offices as well, especially right now with the return-to-office objective that’s been floating around for the last several months, looking at the distribution of the people that are coming back. Apart from the fact that occupancy is lower, looking at the data from the perspective of observing the people who are coming back, what is their preference or how has their preference actually changed? You do see differences like open workstations. The general, open areas are not as well utilized as the closed private areas. Closed meeting room space, amenity and support space, which is again, more like quiet rooms, nursing rooms, aimed for one person to separate from the rest of the people that are there.  

Looking at the data was interesting. When I saw that, I went back and said, where did this whole story around a need for increased open collaboration come from? I do recall seeing when the pandemic had first started and we were right in the throes of it in late 2020, early 2021, again, looking at that small percentage of people that were coming back, the preference had definitely shifted towards this open collaboration area. The cafes, the lunchrooms, the large spaces where you had tons of elbow room, and very few, if at all, were going into the closed meetings. Private office space stays fairly consistent throughout the pandemic. People who had offices obviously felt more comfortable going in because they didn’t have to contend with being exposed to as much risk as the people who were using the workstations. 

So it certainly explains why we were seeing that difference. But I thought about, why was there a shift like what happened between 2021 and then going into 2022, when now we’re sort of emerging from the pandemic? Not that it’s completely gone away, but I think the comfort level around how to manage your surroundings has changed somewhat, especially with vaccinations and such too. What’s changed? I think the reason for that is back when we were going through the pandemic and there was still a lot of uncertainty, people had control over their environment. So, if you went into an open space, you could control your distancing. You couldn’t do that as well in a meeting room because you’re in a closed space. You think about air quality and circulation, and that became a little bit more worrisome.  

And so fast forward now to 2022 and you’re seeing the reverse. Why, how has that happened? My suspicion is that as more people have become vaccinated, less concerned about being together, as we see that with people going out into the world and going about their day, the demand for the closed space is really to fill the gap, if you will, around what they can’t do at home. 

So, if you don’t have office space at home, then you’re probably going to go to the office and you’re going to want to use a private space because it’s about focus work. And then likewise, if you’re going to have meetings, it’s one of the things that you can’t really do well at home. Yes, you can do them virtually, but occasionally there’s requirements to meet in person. And so those are the scheduled meetings. They’re not the ad hoc, watercooler type of conversations that you just have randomly because you happen to be in the right place at the right time. It’s fascinating to see that, and say, okay, is that really what the purpose of the office is? Or what it’s going to be going into the future? Because there’s a lot of talk about how it’s about bringing people together to collaborate, to innovate and that it’s going to be this great social sort of thing. But the data right now, at least, is not showing that. 

Jamie 

I would say two things. First, I think everything you said resonates for me. And there’s also really an emotional component to the office. I mean, it’s a component to everything we do in life. I live on a block in Brooklyn that once a year does a block party. People talk about it for months in advance. Everyone on the block puts in $50 and we get a bouncy castle and whatever. It’s a famous Brooklyn block party, because it starts with the bouncy castle and clowns and then it turns into a DJ and dancing at two in the morning.  

And it did live up to that, but I had probably five conversations with people by 10:00 PM who were like, damn, ten straight hours of socializing? I used to have another 5 hours. But this is really taking a lot out of me, because I think we’ve all become a little more introverted as a result of the last few years. And so, there’s also the mental and emotional tax of constant interaction on the days you’re in the office. People are less used to it. I think they have less comfort with it. 

That’s probably the other one that we see. The other thing though, I would say a little bit to counter that point, is sometimes number of minutes spent or number of hours spent, it doesn’t capture everything. What we see for our customers is they might not be spending major portions of their day in those collaborative open environments. But for me, for example, I have a seven-month-old daughter and starting about six weeks ago, we could put her a little high chair at the table and every night we have dinner for maybe 35 minutes, me, my wife and her. And it’s only 35 minutes, but it’s like the most amazing, most impactful 35 minutes of my day.  

And so, I do think for a lot of people who are going in, they’re spending a lot of time in private spaces. But those moments at lunchtime are those moments where they’re laughing a little bit and having a moment of levity or a moment of connection, even if on a pure percentage of total time spent. It feels small, but I think it’s very meaningful. And you see that a lot in customer surveys. 

And what’s driving customer behavior right now? They just don’t want to spend 5 hours doing it. 

Sandra 

Yeah, no, I totally agree with that. Okay, so let’s move on to understanding the customer. I’ve been hearing as of late, terms or concepts like flight to quality, flight to agility. How do you know what your customers want and what do those terms actually mean to you? 

Jamie 

Flight to quality is definitely a word people are using a lot in real estate right now about in general, higher quality, fancier, newer office buildings, performing better. And I would position it as maybe a flight to relevancy. There are office buildings and work environments that are relevant to people. Either they’re very low commute spaces and so it’s a really relevant place for them because they can walk seven minutes and be out of the house, or it’s a stunning building with lots of great restaurants right at its base, et cetera. So, it’s worth getting on a 35-minute train for. But you do see that as a pattern. And then what was the second phrase? 

Sandra 

Flight to agility. 

Jamie 

And flight to agility. Well, look, we’re one of the big global flex providers and have been a huge beneficiary of this. 2020 was a very scary time for our business. And then as the vaccine started being distributed, we saw a spike in sales and then a spike on top of a spike and then next thing we knew we were selling three times our pre-COVID average sales every month. And that has continued pretty much unabated to today.  

I think it’s driven by a few different things. It is driven by the fact that companies want agility in the sense that they don’t want to sign a ten-year lease and have to plan in cycles that are not commensurate with the actual day-to-day lived reality of their business. But the other half of the flight to agility, if you define it broadly, is that a lot of the workplace strategies you see companies deploying more distributed ways of working, hub-and-spoke models where you might have a smaller than before central office in downtown New York, but then you have a no commute space in Brooklyn and no commute space in New Jersey. 

It’s very hard to accomplish those via leasing a bunch of space and controlling it yourself, unless you’re JPMorgan or Google. For the vast majority of businesses, you would need some kind of agile partner that can help you buy that as a product on a one year rolling basis. And then if the Brooklyn office has really taken off, you add more seats there. And if no one’s going into the Westchester one, you shrink there. And that ability to basically give your employees something if they want it, but in a way that allows you to adjust over time as you’re seeing what people are actually doing, or if what they’re actually doing changes year to year. It’s very much, I think, what’s in demand right now for businesses. 

Sandra 

That’s interesting. One of the things that gets asked quite a bit when we’re speaking to customers, and even on previous podcast episodes that I’ve done, is about customers who currently have leases that don’t have expiry dates coming up for at least another ten years or so, what do they do? They might look to coworking and flex space as a great alternative just because of the decentralization aspect of it. But then you’ve got this central office that you need to deal with. Just curious, does your company go into those types of spaces and help companies figure out what to do with that space? Is there an advantage to doing that for you? Or how do you deal with that? 

Jamie 

One piece of context, if my answer seems overly diplomatic, is that one of the main points of differentiation from Industrious with our competitors, is we don’t sign leases with landlords. We do management agreements with them, which means the asset owners and landlords are really our business partners in delivering these spaces. And as a result, I think there are a lot of companies that are breaking leases or going to landlords and saying, it’s just not working for me and we need to figure something out. But maybe I’m not totally in a position where I could advocate for that particular avenue.  

I think one thing that is possible is finding other uses for the space the companies are on the hook for. And what we do, because what we do is very in demand, is very much a viable option. So we have been approached by probably 200 companies to say, could you take half my headquarters, rejigger it, and make it a coworking space, or make it suites that can be rented by the outside world and help us to free some of the cost of this?  

It doesn’t always work. It costs a lot to reposition that space. Maybe they don’t want to spend that money, et cetera, but in a few cases that has worked out and it’s working out really nicely for the company, it’s working out nicely for us. So, I think that will not be 90% of how companies deal with the disposition of spaces that are too large, that they’re not using, but it’s a nice niche option, especially if people have offices in high traffic, very desirable areas. 

Sandra 

Interesting. As you’re talking, it makes me think about a couple of conversations I’ve had in the past several years, one with Convene. Just before the pandemic, I was at a conference in New York, actually, and obviously Convene’s focus has always been more about meeting and collaboration space. It was interesting to start to learn about what they were doing. Coming out of a company that had quite a bit of excess real estate, long-term leases. How cool would it be if a company like that could insert themselves into an organization? Convert the space into something that’s shareable? While the company then could collapse their space into the floors that they need and they want to maintain. Mostly because of privacy and security concerns that a lot of organizations have about going into flex and coworking spaces. And we’ll talk about that momentarily, but then making that space available to their employees so that as they collapse their space, their space is just workstations and offices, but then the meeting and collaboration or the event space, if you will, kind of is sandwiched in between. So, it’s no longer exclusive to just that company, it becomes available to anybody in the building and even people outside of the building. 

And I always wondered if that was something that companies are considering, like if there’s been talk along those lines? At least from some of the conversations that I’ve heard around, coworking being great, flex is great, because of the financial reasons, but usually there are the security and privacy concerns around who’s in that space. You don’t want your information to get into the hands of the wrong people or someone listening into a conversation or seeing something that they shouldn’t be seeing. Obviously, there’s protocols around what you do and what you don’t do when you work in coworking space as an employee of a company. But I’m just curious, have you seen anything like that in your travels? 

Jamie 

What you’re describing, basically long-term leased controlled space by a company, adjacent to flex space that the company’s employees can move back and forth between is something that doesn’t really have a name, but people talked about it for a long time. Some people call it fixed flex. Some people call it core flex. And I think it has been one of the great promises of our industry. If you’re a Prudential and you don’t know if you’re going to have 400 people in Denver or 1000 people in Denver by 2028, but you know you’re not going to have zero, then you should sign a lease for 400 people and have the next 400 people worth of space sit side by side and have that deflect space.  

I think that is something where Industrious has really been the industry leader on that. We do a lot of that. Oftentimes, customers don’t want to talk publicly about it. So, I can’t name tons of names, but we do it in England. We have a big site with one of the largest banks in the world where they have a large space controlled by them and then an adjacent Industrious space. 

And the employees oftentimes don’t even know when they move back and forth between the space controlled by Industrious and the space controlled by the bank. We are about to announce a really ambitious example of this as one of the biggest tech companies in the world, with another of the biggest banks in the world. And you know, it is complicated. It requires a three-way contract between the provider, the landlord, the large occupier, but when you pull it off, it’s really special. I do think you are right to flag it and I think by five years from now it’ll be a very common pattern of usage for companies. You just have to get over the fact that it’s a pain in the ass to set it up and do it. Once you do it, it’s great. 

Sandra 

We slightly touched upon security and privacy. Obviously, there’s a bit of a requirement for shifting the mindset. I’ve had this conversation with Mark Galbraith several months ago when he was a guest on our podcast. We talked about the user of these types of spaces and the small business versus the enterprise and some of the challenges that are presented by those different user groups. Do you see that one group is more challenged by another? Are they virtually the same? What are you hearing? 

Jamie 

I think both physical security and digital security is one of the primary considerations for companies when they work with a flex provider. In the end, you are allowing someone else to control what it feels like to work every day as a bank employee or as a British Airways employee. And that’s a big thing to hand off to someone else. And that includes some very central things.  

It has been a long time since I would say that’s been a major obstacle for Industrious at this point. We’ve had defense contractors, the largest consulting firms in the world that are working on very sensitive information, the drone division of one of the largest aircraft manufacturers in the world, etc. You do have to work at it. You have to sit with them and say, what are your IT, security needs and what are your protocols? And how do we make sure that you’re in a place where this works for you? And you do sometimes have to get creative about having those employees be on their own, separate network, etc. But I have found over time that almost anything is doable. 

One analog for me is in the early days of outsource manufacturing. We’re kind of an outsourcing industry. You’re outsourcing your workplace. People said, okay, well, you can’t do outsource manufacturing for the really important stuff. You can make your tchotchkes for your annual investor meeting. And now the iPhone is manufactured by Foxconn. You’d say, look, for logistics, for really important logistics, we can’t have DHL or UPS do it. And now everything that Amazon does for the most part goes to UPS, etc. So, I think in a lot of these B2B outsourcing businesses, there’s an era where people say, there’s something so fundamental that we, the customer, need to control. And then eventually the providers get good enough to overcome that objection and say, no, you’re going to get just as good of an outcome when you let us do this for you is when you do it yourself. And I think security is one of the things that squarely fits within that dynamic. 

Sandra 

Let’s talk a little bit also about brand thinking, about branding space. So again, another topic that’s come up quite a few times around the difference between having your own space and then using a shared space of some sort is, who ultimately owns the brand? Does the company lose their identity when they’re coming into a shared and flexible space? 

Jamie 

I think that is one of the considerations. There is a productization, I guess, that happens in this circumstance. The whole way this works is that if McKinsey leaves the space, let’s say they have a 60-person suite in Toronto, BCG has to be able to move in 30 days later or 60 days later with a little bit of repositioning, or else the business doesn’t work. I think that’s a very good thing. I think the process of ripping everything to studs and rebuilding it every time a tenant leaves is horribly environmentally impactful, very inefficient, and I’m not sure in the end provides that much. I think a small amount of aesthetic differentiation in the last mile goes a long way. I’m not sure most employees are like, I need to know that Ernst and Young rewired the HVAC systems and the electrical distribution to my Ernst and Young special needs. But I think perhaps more importantly, one of the big things that happened during the pandemic is companies have gotten a lot better at listening to their employees.  

We have 250 customers, and what I see every day is that companies that three years ago would have said, our CEO is very into marble, or our CFO really wants us to be at Rockefeller Center because that’s going to impress — our clients are much better at saying, I think the marketing associates on the team really want to make sure there’s a Sweet Green nearby or what have you. Companies are getting better and better at saying what employees who are using the space care about. Very few of those employees care about Squarespace branding or stuff like that. And therefore, I think that concept of company branding is on the way out a little bit because the actual users of the space don’t care about it that much. Companies are getting much better at saying, what are the things that these people are actually asking us for that’s going to make them more engaged, that’s going to make them have a better day of work? And that’s the kind of stuff you see companies pushing on right now. 

Sandra 

That’s interesting, because I’ve always wondered about brand. I totally agree with what you’re saying around keeping the space fairly generic so that you can swap out different customers on a dime. But I often wondered about the impact of the brands that are using specific spaces and how that plays into the demand, the cost, the exclusivity, if you will, of certain spaces being more attractive to a potential end user than others.  

So, let’s imagine you have a space that has representation of some of the FAANG companies or some of the highly coveted companies that people want to work for. There’s the learning aspect of being able to go in and sit down and talk to someone casually that works at some of these companies and learn about what it is actually like to be a product manager, or whatever the conversation is about. And how does that help from a brand perspective or location perspective to drive the demand for the space? The second part of that question is this whole idea of pay to play. I’ve seen some spaces here in Toronto that have that sort of flavor and you don’t really know for certain what’s going on, but you wonder, why are some spaces way, way more expensive? 

It’s like hotels, right? If you’re planning to go on vacation somewhere and you want to stay at an exclusive resort that usually costs $700, $800 a night, but then you look again and suddenly that same hotel is $2,000 a night. It’s because maybe some celebrity is there and therefore they charge more. So, if you want to be part of that, you’re going to be paying a premium to be able to be at the same resort with that celebrity. So, I kind of wonder, does this kind of environment create that and what is the impact either positively or negatively? Because I think it has pros and cons either way. 

Jamie 

It’s funny you mentioned this, because that was something we thought in the early days of the business we were going to see a lot of and for whatever reason, we almost never see that in the history of Industrious, that when a very hot company that everyone wants to work for moves into a space, it doesn’t make the office next door any more likely to go.  

I do think the people themselves make a difference. I think spaces that have a great community, but it also feels professional, and I think people are hyper aware of who they’re working around and the vibe and the types of social interactions and I’m going to make new friends here. We have a Brooklyn location near where I am right now that a lot of young parents, a lot of non-profits, and people like that are bonding over stuff like that. So it seems to oftentimes take the form of, who are the other people in the space? Rather than, what’s the corporate entity they work for? Maybe other providers have observed something different, but that’s definitely been our experience. 

Sandra 

It’s interesting because you look at that and you think, okay, from a coworking operation business, obviously you’re trying to make the space accessible to all. But you wonder, in the future when brands fully embrace it (because I think it’s still in sort of the early stages), does that pose a risk where then suddenly it becomes unaffordable, if you will, for companies to really be truly distributed, because there may be premium spaces that people want to be in? I wouldn’t necessarily say that you would want to go into a space to start generating leads for sales, right. But you start to think about that as you get these communities that are being created. 

I heard recently of a company that is theme based, so the people that go to these communities all have a shared interest. And so, as someone that might be selling trinkets or whatever it is that I’m selling, if I know that that’s my target audience, I might want to go into that space because that’s an opportunity for me to go in so many different directions. 

Right now, we’re thinking space, we’re thinking about work, we’re thinking about solutions to the problems that we’re seeing emerge right now in the marketplace around real estate and work as a result of everybody working from home for the last 30 plus months. And guess what? You don’t need to be committed to space from a lease perspective. There are alternatives that can serve that need in a variety of different markets and neighborhoods. And everybody wins, right? Companies win and employees win. Like you said, you’ve been doing it for quite some time, but would you say that you’ve achieved critical mass in the last ten years, or are you seeing critical mass approaching as we sort of come out of this pandemic? 

Jamie 

I think we were approaching critical mass, and now the definition of critical mass has changed because the number one observation about what people want out of a workplace that changed during the pandemic is they want to go a couple of days a week, not five days a week, but just under that is the threshold for the commuting distance. What people are comfortable with has transformed. We see this in our Paris locations, in our London locations, in New York and Atlanta, that people really started to get frustrated with commutes pre-pandemic once they hit 40, 45 minutes. And I’m not exaggerating when I say now people start to get frustrated after 15 minutes, and therefore all of your neighborhood locations are on fire, doing extraordinarily well. And we’re just launching more and more locations in mixed use neighborhoods and even in places that are traditionally considered residential. And so now, we have probably not a critical mass in the sense that to have a true Toronto area network or a true Chicago area network, if you want to touch not just the great business districts of Chicago, but all of the mixed use and more residential ones, you need 25 locations, not six locations. 

But it’s great for our business, so we’re excited to be on that journey. 

Sandra 

Yeah, it’s really interesting. I think the future is definitely looking up with respect to that. I think it’s great also that if you’re going into more of those residential type neighborhoods to be able to support the neighborhoods that I think are in most need.  

Again, another very common argument is, well, why would I go and use a coworking space in a downtown location or even a midtown location when my office is there? It kind of doesn’t make any sense. If I have to do the commute, then I might as well just go to the office versus if there’s something close by that gives me access to the space. But then the flip side of that is, are you then going to the space to work, like to do the heads-down stuff that you could do at home, or are you going there to meet up with co-workers, who are distributed all over the place? And again, if it’s about community, how do you centralize community? Because centralizing community again, comes back to having a location that everybody can come to. And then you get into that, well, if I have to go to a coworking space, I can go to a cafe or I can go to a hotel or a library or a restaurant where it’s mutually convenient for both people because they’re all over the place.  

Those are the types of, I think, rebuttals that you might get when you’re trying to position coworking as an alternative, in the sense that, yes, it absolutely solves the commuting issue and having an alternative location to work at. But then in the same token, if the whole objective of coworking is building strong communities, it’s really expanding into interacting with other people, because I believe that that’s how innovation actually happens. It’s not just the people that are within your space. It’s talking to other people, bouncing ideas off each other, just having a friendly conversation that you just learn so much about things that kind of gets the wheel spinning in your brain.  

Jamie 

And what you’re describing right now is one of the main considerations I see customers wrestling with. If our 12 Denver employees all build bonds by being together or in a big metro area, if the Brooklyn employees get to know each other better and see each other a few days a week. And the New Jersey ones do, and the Soho ones do. But they’re not gathering all 200 people more than maybe once a quarter. Does that accomplish a lot of what I want to accomplish? And I do think most companies are saying if it builds bonds, if it builds affiliation with the institution.  

When you go to university, if you go to the University of Toronto, you’re not seeing all 30,000 students all that often, but you might see the people in your major and in the end, years later, you still feel affiliation to that university. And so, I think most companies are saying, if I can get those clusters, that does accomplish a lot of what I would want out of that sort of institutional business community building. 

Sandra 

Final comments — as we think about the value proposition for business, when I say risk and reward, which one do you think matters more? 

Jamie 

Risk. But I would define it differently than a lot of companies do. I think historically, when people talk about risk, the biggest risk they talk about in real estate is, what if I get into this lease and then market rates move? Or it was sort of financial risk. And I think for a lot of companies now, the biggest risk is, have the bonds between my employees frayed, do I have a less engaged workforce? And figuring out how to manage that risk and flip it into a benefit and say, I’ve found a way to have a team of people that love working together, that like this company, that want to keep working here and like their job in a very complicated world, would be the great reward that a lot of companies are chasing right now. 

Sandra 

Yeah, I think that’s a really nice way of putting it. Just this morning I was thinking about how we put a lot of emphasis on the real estate. Recent dialogues have been around trying to figure out the purpose for the office and you hear about incentivizing people to come back to the office and what amenities and things can you put in the office. There’s all this focus on the office versus to your point, how do employees actually benefit from that? Be more focused on the experience that you want your employees to have and then figure out how space fits into that. Because the degree to which you might rely on space is obviously going to vary from company to company. And that’s really driven by that specific experience that you want your employees to have.  

From what I gather from what you said, it seems that the position that Industrious takes on the market is you’re not necessarily there to disrupt, you’re there more to complement. Would you say that’s fair? 

Jamie 

Very accurate. Very accurate. 

Sandra 

Okay. Any final thoughts, comments? 

Jamie 

I think this is a very exciting moment. Any time where you’re seeing companies get better and better and better at listening to their employees and democratizing decisions that used to be very top down and very coercive, is a wonderful thing. I trust the collective wisdom of employees to probably care more about sustainability and equity and having workplaces that work for everyone than I would trust a CFO to unilaterally make those decisions. So, in general, I think the fact that we’ve moved into this era now where companies are doing a much better job of trying to understand what their employees need and deliver on that as regards workplace policies, etc., is really good at the individual level. And over time, I think it also is going to yield a lot of benefits at the population level as well. 

Sandra 

That’s great. Jamie, thank you very much for your time today. I really enjoyed this conversation, I learned a lot. So, thank you for the learning opportunity as well. 

Jamie 

Thank you. This was great. 

Key Takeaways & Discussion Points 

• We’re currently going through the single biggest transformation of any industry in the history of work ⁠— we live in momentous times! 
• How will any tech company convince its workers to come to the office, especially when they’ve spent the last 2 years hiring remote talent? 
• How vital is “breaking bread” (in person) with your team to collaboration, building connections, and innovating? 
• How do you manage expectations within an organization when some job titles can be afforded much more flexibility than others? 
• Good management is about having difficult conversations with your people about how to accomplish our collective goals. “Because I said so” is not going to cut it for a lot of employees! 
• How do you get a useful reservation system working when everyone is waiting for the other person to book first?  
• What is the value of solving problems in person versus over email? Do we rely too heavily on tools for communication? 
• You can glean important insights from simple data sources, like access badges. How do you know when you need to go deeper? 
• Your employees might have valuable skills that risk going unnoticed or underutilized if you don’t take the time to get to know them, ask questions, and break bread.  
• How do you solve the disconnect between subject matter experts in corporate real estate and interpreting the data collected on this topic? Sometimes the solution is partnering with a third-party data analytics expert.  
• Trust and communication will be key as organizations switch from attendance-based management to outcome-based management.  
• What measurements can be put in place to make sure hybrid actually works for you? 
• Why are patent attorneys losing business these days, and what does that have to do with corporate real estate? 

Links:

• Sandra Panara on LinkedIn – Director of Workplace Insights at Relogix 
• Daniel Ryan on LinkedIn – Vice President of Real Estate and Facilities at Pegasystems

If you liked today’s show, check out more episodes of the Let’s Get Real Podcast! This podcast is available on iTunes, Spotify and Google Podcasts.

Transcript: 

Hey everyone, welcome to Let’s Get Real with Sandra and Friends, a workplace consortium podcast brought to you by Relogix. I’m excited to be sharing conversational musings about current events and how we envision the ever-changing world of work. I’m Sandra Panara, Director of Workplace Insights at Relogix. With 25 years of hands-on experience, I help value engineer global workplace portfolios and employee experiences by aligning workplace analytics with corporate real estate needs.  

Have any questions, comments, or suggestions for future podcasts? Please drop me a line at [email protected].  

I’d like to welcome my special guest, Dan Ryan. Dan is the VP of Real Estate, Facilities, and Travel for Pegasystems, Inc. An MCR holder from CoreNet, Dan has worked in corporate real estate for 25 years for some of the best-known tech companies in the Boston area. A global executive that has worked in major markets around the globe, Dan has immersed himself in the local cultures to provide excellent service to all his customers. Dan has spent the last 12 years with Pegasystems implementing a real estate strategy to support this innovative and fast-growing SaaS company.

Dan and his lovely wife of 35 years, Cathy, live in North Andover, Massachusetts.  

Hey, Dan! Welcome, I’m happy to have you as a guest today. Why don’t you tell us a little bit about yourself? 

Dan 

Sure, Sandra. Very excited to join, this is a topic I get very passionate about.  So, I’m a long-time real estate facilities person. I’ve worked in tech for almost all my career, but I actually started out working for the Boy Scouts of America as a district executive. So, I’ve done lots of interesting jobs throughout the years, but I’ve spent the last 20, 25 years working in the real estate and facilities world for many well-known tech companies in the Boston area. 

Sandra 

What made you want to go into facilities?

Dan 

I wanted to travel, to be perfectly honest! It’s a funny story because I was working as a procurement manager for a software company, and the woman who was managing the facilities for the company decided to leave and go join a company down in Florida. I went to my boss and said, hey, listen, I’d like to have her job and will backfill my procurement role. He said, you know, I hadn’t thought about that. Let me sleep on it and I’ll come back to you tomorrow.  

The next day he came back to me and said, listen, I have no question in my mind as to whether or not you can do both jobs, but I’m willing to give up one of my direct reports, so pick one. And I’m going to backfill the other and have them report to me.  

And I said, you know, I’ve always wanted to learn something about this real estate facilities stuff. I want a new challenge. So, I started managing a real estate portfolio that was east of the Mississippi River. Not so much Europe, they weren’t willing to give that to me as the new guy on the block, but I quickly showed them that I was more than capable, and I’ve never looked back. And I’ve thoroughly enjoyed it.  

I’ve travelled the world, I’ve ridden camels around the Pyramids of Giza, I’ve walked the Great Wall of China, I’ve seen the Taj Mahal. I’ve been very, very lucky and blessed to be given the opportunities that I’ve been given while I’ve built out these offices around the world.  

Sandra 

That’s pretty cool! I’ve never heard of someone as worldly as you in facilities management. You’ve definitely been a lucky one in that regard.  

Dan 

Yep, I’ve really enjoyed it and now I have friends around the world. You know, I grew up in a little town in western Massachusetts, and if I’d followed the path my parents imagined for me, I’d be working in a factory somewhere making toothbrushes. But here I am instead.  

My mom used to play bridge with all her friends and say, Danny’s in India today, thinking I’m such a big wig. But I put my pants on one leg at a time, just like everyone else in the world! I just sort of fell into this and have earned the right to be able to do it.  

Sandra 

That’s great! Let’s talk a little bit about what’s happening in the world of facilities management. What’s happening in the world of offices? We know there are a tonne of challenges and organizations are trying to figure out their next steps. As we think about the return to office and hybrid, and all of these new things that are emerging that are very different from what the office was like in 2019, what puzzles are you trying to solve in your organizations following the pandemic? And how do you know they’re the right ones to solve? 

Dan 

That in itself is the one trillion dollar question. I don’t look at them as challenges. I call this the single biggest transformation of any industry in the history of work. We, as real estate facilities professionals, used to have some things that were just givens. You know, a person filled a seat. If they were a salesperson, they didn’t fill a seat. For the most part, if you were in professional services, you had some kind of ratio and that was a given.  

That’s no longer a given. It used to be the same for every company, and now, depending on who you talk to and the leadership of the company, it could be the old one or it could be something that’s 180 degrees and in the opposite direction and there’s no rhyme or reason to it at all.  

People used to look at real estate facilities professionals as the person that just took care of the office. We didn’t have a seat at the table, and now we’re being asked to come in to explain why we have either too little or too much space. We’ve all seen some of the recent articles about some companies that have mandated people to come back to work. But they don’t have enough space for them to come back to work when they mandated it, because they didn’t take any additional space at the beginning of the pandemic to accommodate the people they were hiring.  

And it’s not just real estate facilities. I do travel and physical security too, and travel is just as crazy as real estate and facilities. A lot of it is related to the ability to hire people, because so many of the Boomers have decided to retire early and nobody had planned for it. They lost a tremendous amount of talent.

As far as what we’re trying to do, we’re trying to make sure that we understand what peoples’ needs are. We’re trying to make sure that everybody understands the give and take of the decisions that they ask for. Hey, if you’re going to be remote, then be remote, and accept that you’re not going to have a permanent seat.  

A lot of the challenges that we have are being able to make sure that people understand the impact of what they’re asking. There isn’t any company out here that should, if they’re being fiscally responsible, hold seats for people in case they want to come in. I think that’s the biggest thing in real estate. People are now trying to justify things. In talking to some of my friends, you’ve got management that want people to come in, but they’re unwilling to put mandates in place, so leadership is saying not to give up the space, they might come back.  

But I think in tech it’s going to be really hard to get people to come back. Especially companies that have spent the last 2 years hiring the best talent within a 30-mile radius of any particular city. How do you tell the team that’s within the 30-mile radius that they have to come in to the office, and that the people outside of that radius don’t? That’s going to be the biggest challenge to managers that want people to come in and collaborate.  

What’s going to be the biggest challenge for guys like me is, what kind of an office do I have to build in order to catch the people that are on the verge of not coming in? Those that want to come in are going to anyways, if you live within 5 minutes of the office. They’re going to come in pretty consistently 3 days a week because it’s not a heavy lift. But at half an hour, 45-minute radius, you’re going to have to do something pretty special to get them to come in, or have a manager that has a really good reason to bring the team together periodically, in order to collaborate and work together. And then there’s the question, does the office support that collaboration?  

Sandra 

You’ve raised some really interesting points. On that last point with respect to distance and commuting time: we find that to be true in our data sets as we look at commuting patterns and how frequently people actually come into the office. It’s absolutely true that the further away from the office you live, the less likely you are going to come in. It’s a challenge in terms of figuring out what is going to bring people back. I think what’s really interesting, too, is you’re able to determine things like what percentage of your population falls into those buckets, because I think that would be really useful as well.  

Dan 

We haven’t done it recently, because we signed most of our leases in all of our cities prior to the pandemic. So, making those changes and reducing it to accommodate the number of people coming in versus what we need in the future ⁠— I see this as right-sizing the real estate portfolio versus a question of where people are living. But it’s helpful information, and it’s good data. We’ve used it for making a lot of our decisions. 

To answer your question, no, I haven’t gone back and re-run that data. But I do know that a lot of people have moved around since. And a lot of people have changed and left. If the Great Resignation continues, you almost have to run that report every 6 months in order to make sure it’s up to date, and I’m not sure what information that would give you.  

Because for me, it’s really coming down to how many people are coming into the office vs what’s going to happen in the future. I don’t know about your crystal ball, but mine’s a little cloudy right now. I can only look at what’s happened in the past and then try to make some guesses about what’s going to happen in the future. And I do that more by talking to people, not necessarily looking at data, as far as where they’re living.  

Because again, I’m the guy that’s in that 35-mile radius. But if I go in on a Monday or a Friday, it’s great. I can get in and out without a problem in 35 minutes. But if I took mass transit to get into the Boston office, it’d take me 2 hours. The other day, from the moment I left my house to the time I walked in the door, it took me 2 hours. But I went to the office this morning and it took me 35 minutes. Completely different scenarios. The 2-hour commute, broken down, doesn’t seem like a lot but when you add it up, holy smokes, that’s a long commute.  

So, because people are going in one day a week, they’re not giving up their cars. They’re not willing to take the train. They’ve gotten used to having that flexibility and the choice to do whatever they want, as opposed to having to be there for 9:00 AM in the morning and not leave until 5:00 PM at night. If you look at the commute travels around Boston right now, the return commute starts at 2:00 PM.  

It’s really fascinating how our work patterns have changed over the past 2.5 years, it’s really incredible.  

Yet, on the flip side, one of the biggest things that we’re getting back in some of our surveys is people wanting permission to turn off. You know, we never had that issue pre-pandemic because people worked 9 to 5, and then they got in their cars or on the train. Maybe they did some emails in the train, but they didn’t necessarily do it on the way home. They shut off. But now people have been working from home for two years now, and they’ve lost the ability to shut off. So that’s been really interesting.  

That’s one of the things we’re trying to address. Some of the new information that we’re sending out about hybrid work is about just having that discussion with your manager about the hours you’re going to be available. But there’s also no one complaining about no longer having to start their day at 9:00 anymore. I can start my day at 7 and be done at 3 if I want to. There’s nobody complaining about that.  

I think that’s part of some of the other things we’re talking about ⁠— it’s a mutual responsibility that you need to communicate to your boss about what hours you’re going to work in order to get that block of stuff done. But you also need to communicate to people when you’re not going to be available.  

And I think we need to put some guardrails around what is acceptable depending on the job title. So, if you’re an individual contributor, you don’t have to work with anybody around the world, then that’s fine. You want to work 4:00 in the afternoon until midnight, knock yourself out. But if you’re dealing with people in India, sorry, you’ve got to start your day pretty early in the morning to get that overlap so you can talk with your coworkers and be able to work. That’s got to be part of it, but we need to have more communication around this.  

We really need to learn not just to talk, but to collaborate. We’ve sort of lost that with having this electronic separation from each other. I just had my team here from around the world. I’ve got 2 people in the US, 2 from India, and 1 in Poland. We just spent a week here together, and it was the best way to get reconnected. Everyone agreed that it was really productive.  

We thought we were well connected before, but managers like myself have got to bring teams together and reconnect with people. I call it breaking bread. If you break bread with people, you will build connections that will last forever. And we’ve sort of forgotten how to break bread with each other, and how important that is to the success or failure of companies and reaching their goals.  

Wow, I’m getting on my high horse today. I thought we were going to talk about data here a little bit.  

Sandra 

We are, in a second! I was just going to ask you, how do you manage expectations? I’m just thinking about previous organizations that I worked with where you have different teams that are managing flexible or hybrid work. And inadvertently there’s always this sense of “have” and “have not”, just because of the nature of what people do as part of their job. There’s a certain requirement and so they’re not going to have the same level of flexibility as others who work in the same organization. So how do you manage those expectations when it comes to differences within the organization? 

Dan 

First of all, in corporate, there’s going to be people who have different jobs and that flexibility is granted to people differently. Let’s just get that out there, let’s recognize that there’s a difference between all of us.  

I had a discussion with a manager the other day, and he said, I want you to come out with a corporate standard. I said, oh really, why? And he said, because I don’t want to tell my people that they have to come in. I want you to say it, and I’m just going to say sorry, corporate says you have to come in. I said, wait a minute ⁠— what about all of the managers who don’t feel their people should be coming in? Are they now going to break the rules because they don’t want to force their people back? He said, well I guess I don’t want you to do that either.  

There’s a lot of relearning going on, on how to be a manager. One of the things we’re talking about with our hybrid program is that we need to come up with some new training programs on how to reconnect with your employees and how to have these hard discussions. How to be transparent with your communication. That’s the way you solve that problem, as far as I’m concerned. You’ve got your receptionist and cleaning people, they can’t do their job without coming in to the office. Hey, this is an office job, you want to wear a mask, go ahead. Our receptionist in Cambridge wears a mask at the front desk every day. That’s a personal choice and there’s hand sanitizer and everything else, and she’s perfectly happy and content to do that, and no one’s wigged out by it.  

But these are the kinds of discussions that managers have to have with their employees. Another one of my Danisms: that’s why you get paid the big bucks. You have to have these discussions and learn how to explain to people the goals of the organization and how we’re going to accomplish these goals. 

There’s no magic here, this is no different than any other business problem. It’s just a difficult thing for some people because they’ve never faced it, and they think there’s some magic in how to communicate it, but it’s nothing more than just being transparent and having a dialogue around it.  

I had a great boss here at Pega, and we were talking about hybrid versus remote and what that means, and he said, do you have hybrid workers or do you have remote workers? If you have hybrid workers, that means they’re going to be expected to come into the office at some frequency, two days, one day a month, I don’t know. But if they can’t get in because you said they’re hybrid and they work out in Connecticut and our office is Massachusetts ⁠— it’s highly unlikely that they’re even going to be in once a month. So, are they remote? And if they’re remote and the ten other people in their team are not, how do you expect it to work?  

These are the real questions, this is where the rubber meets the road. These are the hard things we have to solve for and have the answers ready. But we’ve got to go through some training sessions to get the consistent answer. Because it could be, “because I said so”. And for some employees, that will be acceptable, and for some, it won’t. And they’ll have to decide what they want to do in these instances.  

Sandra 

It’s interesting, I was thinking this morning about there maybe being a significant difference between companies who have locations in different parts of the country and companies who have people who all reside within a certain state or city, who have access to the office. So in that situation you have hybrid, depending on how you define hybrid ⁠— to me, hybrid is basically the collusion of the in-office and remote-office workers that are working together. They’re not necessarily all in the office at the same time, but there’s this constant change of who’s in, who’s out, who’s working remotely, who’s working in the office. 

Dan 

And there’s a much more complicated piece of this. One of the biggest questions I consistently get, is how do I know when Sally’s going to be in the office, because Sally is the person I want face time with? And I ask, did you make a reservation? And they say no, because I don’t know when Sally’s going to be in. I said ok ⁠— let’s see the flip side here. If you don’t make a reservation, and Sally’s thinking that she only wants to be in when Jamie’s in, how is she going to know when Jamie’s going to be in the office? Everybody’s waiting for the other guy to move, and that’s never going to happen. That’s the single biggest challenge.  

We created a really usable reservation system, but nobody uses it because they don’t know if Sally’s going to be there and they don’t want to make a reservation and then not use it.  

It’s been really interesting. I don’t know what’s supposed to happen first anymore, like the chicken and the egg. I care about the people that want to come into the office and not be the only one there. They’re having that meeting in office but everyone else is remote. And everybody’s sort of like, look at Charlie, he came into the office and we’re all at home!  

Two of the things we’ve learned: one, if you’re a senior person, you’ve got to publish a calendar of when you’re going to be in the office, and you have to stick to that calendar. Or you have to give people advance notice of when something’s come up and you can’t be in. If you’re a senior manager and you’re telling people that you’re going to be in and then you don’t show, people will never come into the office. If the big guys are not going to be there, they’re not going to get face time, they’re not coming in.  

And I can show you very specific examples. We had a senior manager who said, I’m going to have my staff meeting and I’m going to be in the office. So, everyone said they’re coming. But the day before the meeting, messages came in, something came up, I’m not going to be there, I’m not coming. I’m not going in. I’m not. It was almost the exact same sequence of people who chimed in.   

There are very specific examples of people who want face time and productivity and time with senior people, to be able to have that mentoring opportunity or to impress them with their knowledge. Senior managers need to be aware that when they’re in the office, their time is going to be drawn by these people meetings, and they need to accommodate that. They need to walk around and talk to their people. Because that’s their time to break bread.  

I would tell any senior manager that any time they go into the office, if they don’t have a lunch schedule with somebody, it’s a lost opportunity to build some stickiness with key employees. Because they took the time to sit down and just get to know these people that they may not have had the chance to meet.  

Back to my meeting last week. The biggest thing I did was schedule a lot of senior managers to come through and talk about what they’re doing and have lunch with us. We learn more about what’s going on in the company in those hours, and what people are thinking about how work is going to happen, than we would in any of those meetings. Because there was a free flow of ideas. There was no agenda. If this had all been pre-planned, it wouldn’t have worked nearly as well as it did while we were just sort of sitting around. It makes a big difference.  

Sandra 

Interesting. I think the key, at least from where I’m standing, is accessibility. If you’re going to be in person, you need to be accessible. You shouldn’t be going in, if you’re a senior leader, and just sitting in your office.  

But I think it’s also about being accessible online. In my experience in particular, having worked in hybrid environments, working from home 100%, not having the luxury of going in to the office because the office is located somewhere else ⁠— when you’re managing a team like I do, you have virtual office hours where the team can ping you as needed so that you’re there and able to support them. Just the same as if they would walk up to your desk and your office and ask you a question.  

Some people see that as being disruptive. And it does sort of chip away at my productivity. But I think that’s really how you keep cohesiveness on your team, having that time that you’re accessible, that you’re available and there, in order to keep things moving forward.  

Dan 

The other thing that we’ve lost the ability to do is, if a question pops into your head, rather than responding by email, just go to the person and ask it. If we were in office, did you just walk over to the person? Or did you send an email? We’ve lost the ability to have these water cooler moments. We’ve got to get back to that and do this stuff consciously. And you know, I’m not saying stop sending emails.  

Sandra 

It’s funny, if I think back way before the pandemic, I posted an article on LinkedIn about what I call “desk bombing”. I was like, what is this?! It was the fear of going up to someone’s desk and asking a question.  

It made me think about when I was at Nike back in the 90s, we used to actually have days of the week where we were not allowed to send emails because you were in the office. Everybody was, at the time. Instead of walking over to someone’s desk and having a water cooler moment, you relied very heavily on emails and just sent messages. You’re done and you throw the onus on whomever you’re sending that email to respond, rather than get up and go have a friendly conversation where you can learn something.  

So, I don’t know that what we’re experiencing is a result of the pandemic. I think that was always there. It’s a tool for communication and we lean very heavily on tools for communication. But there’s also a level of accountability and responsibility, where you send an email, and your job is done. You’ve asked the question, raised the concern, and now the onus shifts to someone else. 

The other piece of it too, is that by working remote, everything you do is documented. I think it really slants the comfort level people feel having a telephone conversation, because of the fact that those conversations are not documented like they are with email.  You can always pull up an email and say, we talked about this months ago. But you can’t do that when you’re having a face-to-face conversation, which is unfortunate, but it is the reality for a lot of people in workplaces right now.  

But by the same token, I always tell my people, go talk to him, and then send a follow up email. If you’ve sent an email more than twice, you’ve got to pick up the phone, because there’s a disconnect there somewhere.  

Dan 

And I get it, there’s lots of introverted people that don’t want to do it. But in some instances, we’ve created something like a team room, where there were 8 to 10 engineers in a room. They asked for this, with their own AV and they had a central desk and they’d come together in a room, talking and working.  

When they’d get a wrong answer, one of the other engineers would send the other ones the answer, without taking his headphones off and entering the conversation. They would send a text message saying, no, this is the answer. So even though we created environments that are ideal for collaboration and communication, it may not necessarily get you what you think you’re getting.  

We created these team rooms for people to work together, but we absolutely decimated cross-team collaboration because they would close their door and only work on what they wanted to work on, rather than hearing what the other guys were feeling or thinking. Or how they were going to tie other teams into their decisions. It’s fascinating how you think you’re doing something fantastic, but it has an equally degrading impact on the organization.  

Sandra 

For sure.  

Let’s switch gears and talk a little bit about the data journey. Obviously being on the customer side, you’re seeing that there’s a requirement of understanding what’s happening in your organization. Tell us a little bit about the data and analytics journey, what is it like within your organization? 

Dan 

I’m in real estate facilities, so I own it. You’ve got to understand a little bit about my personality ⁠— I’ve always told my staff, it’s not the first question you ask, it’s the second or third question that gets you the right answer. I am by nature a very inquisitive person. I don’t accept anything at face value. If you answer the question the same way three times, but it was asked three different ways, then I know that I’m getting what seems to be the truth. If you answer it differently, then you either don’t know the answer, or I’m missing something in the way you’re answering the question, and I have to probe that further.  

As far as the data journey is concerned, I’ve always had the mantra with my team that we will not create any more data until we have consumed everything that we already have. Let’s get the preliminary answers to what’s going on from the data that we already have so we can understand that. And once we understand that data, let’s ask more questions and see where the data is insufficient to answer those additional questions.  

We’ve gotten some fantastic data from our access cards in our offices, and we know how many people are coming in and that attendance is low. I don’t need any more data than what I get from the HR data that’s on those cards, because knowing that there’s 35% people in every one of our areas tells me that I still have way too much space.  

Now, once we start to look at what we want to do, and get management approval, we tighten things up either by closing floors or going to a hybrid work program and we’re going to push you up all these floors so you can collaborate with somebody else. Then we can look at additional data. We need to be able to understand how space is being utilize now, where we’re having significant challenges, and it’s really going to come down to the complexity of the data.  

What we’re getting from our Webex unit from Cisco has the ability to identify individual faces in the rooms, and it keeps track of how many faces it recognizes. Now, when I say recognize ⁠— it doesn’t know your face. We don’t use facial recognition to know that Sandra is in the room. We don’t get down to that level. We just know there’s a person in there, and not a goat, right? 

We’re trying to understand that data and tie it to the Microsoft Office reservation system because again, we’re a global company, and if someone sends out an invitation for 12 people, there might be only one person in a 12-person conference room.  

We want to start to understand, on average, if I send out an invitation to 12 people, how many attend? And how often does Sally send out invitations to 12 people and no one attends? She has that one big conference room every Tuesday morning at 7:00 for the team meeting. Why aren’t we raising our hands and saying hey, why are you using that big room? Maybe we should just create 3-4 person rooms because that’s the demand? This is where the data is getting really complicated, and we need data scientists to be able to help us understand that and be able to put it into a dashboard that other people can make sense.

The other thing we’re trying to figure out with Webex is how accurate it is. If it’s using facial recognition software, what happens if my face is hidden behind you and the camera can’t see it? Are we counted as one or counted as two people? We’re also trying to figure out a way we can put a couple of sensors in some of our rooms and match the sensor data to the Webex data so we can have an understanding of what the data loss picture is. Can we rely on Webex, or do we need to go out and get an additional source that’s more accurate, that will give us a better picture of how that room is being utilized? We’re trying to validate the Webex information.  

Sandra 

I think it’s really cool that you’re using existing technology, because there’s certainly a tonne of data that already exists within organizations. While that data wasn’t intended to be used the way you’re using it, it definitely is a sneak peek, if you will, of what’s actually occurring, and can raise questions around what we need to explore more.  

Dan 

The other thing I want to talk about is, I’m sure a lot of people that are listening to this are thinking, he must have an army of people to put this together. The woman that helped me put this together was a receptionist in Krakow, Poland, and I found her on one of my trips to Poland. She had just joined my team, and I take the time to meet all my new employees around the world. It’s that breaking bread thing, right? So, we started talking, and she has a degree in hotel travel tourism and was working at a hotel before she came here. I said OK, what else do you know? And she said, well that’s my second degree. My first degree is in math. I said, you’re kidding! She said no, I love math.   

Had I not had that discussion, had I not reached out to really understand what she needed as an employee, had I not sat down with her and said, what do you want to do? What is it you really like? I wouldn’t have had a dashboard that I could put up against any other company that shows our utilization by department, by day. Had I not found this woman and sat down and had a cup of coffee with her while I was in Poland.  

There are people in your organization that are going to be your Agnieszka. Find them and you’ll be able to do it with your existing staff as long as you have a licence to Power BI, as long as you challenge them and reward them handsomely. The amount of money she was making as a Power BI analyst versus as a receptionist was night and day, and that’s the win-win story right there.  She’s had a fantastic career, and challenged me as a leader. I don’t know Power BI from a hole in the wall. It’s just not something I ever had the time to dig into, but she took right to it.  

And I can’t tell you the number of executives I’ve shown this dashboard to, and they ask, who did this for you? I say, it was our receptionist in Poland, and they’re shocked.  

She’s helped with other technology rollouts and things like that, too. But you’ll be surprised, there’s a diamond in the rough somewhere in your organization too that can help you pull off the beginnings of this. Maybe not the finish, but enough people to go “wow” and give you the ability to take things further.  

If you don’t want to own your data, if you want to just go to the IT guys and say hey, I want a dashboard on these cards, you’re just going to get a dashboard on these cards. You’ve got to partner with the person that’s building the dashboards, so they get an understanding of what the data represents and what you need to be able to show, and let them run with it. Agnieszka kept coming up with new ideas ⁠— how about if we slice it this way, why don’t we see what we can do here? It was just magnificent.  

Sandra 

I know from our perspective, we’ve had several conversations with companies who have their own internal business intelligence teams, so they’re either using Power BI or Tableau or whatever tool, but that team usually resides either as an independent team that powers the whole organization, or it’s within it.  

The problem was always the disconnect between the subject matter expert that’s in corporate real estate to be able to interpret the data that comes out of it. I think a lot of companies just say, it’s data, it’s out of my realm. That’s an IT thing, so let them do it. But as you said, yes, they can do it, but you’re going to want to interpret it. Maybe you could partner with that internal BI team to guide in terms of what you’re looking for. The beginnings of your analytics are going to take a completely different path than if you just let them run with it completely. I agree with you in that regard.  

Dan 

The other thing I’ve always said is, if you’re a large organization working with a third-party provider that’s worked with a lot of different organizations, that’s the way to do it. You’re taking all of that knowledge that’s been built working for other companies and applying it to your own problem. That’s the one thing that gets lost so much ⁠— bespoke solutions. Yes, anybody can do it, but not everybody can interpret it. 

Sandra 

I think the other important piece is that when you go to a third party for analytics, you have access to data from other customers, so from a benchmarking perspective you’re doing your own analytics. You can look at it and say, this is how we’re performing, how our offices are performing, which I think is priority number one.  

I mean, benchmarking serves a purpose, but ultimately you shouldn’t just be using benchmarking to guide your policies or your direction as it relates to hybrid. It should be about your organization and your people. The behaviours and things that are unique to your organization should form the basis of where you are.  

But it’s about taking a step back and thinking about how corporate real estate tends to think about space and predictability and all of these things, which are not as strong as they used to be, because we just don’t have the data history like we used to. When you start to look across the board, even if you’re just looking at the last 3 months or 6 months of data as people start to come back to the office, and you compare your organization, you can ask, are we further along in terms of return to the office, or are we different in that we figured out how to be a remote or remote-first organization.

As an independent, if you’re doing your own thing, you won’t necessarily get the value of seeing how your data compares to others in the industry. There isn’t really a source yet, though there will be one coming soon, that gives you the ability to compare how the different industries are looking with return to work, and more importantly, what’s changed.  

For example, in our data, we have a benchmarking report that’s actually coming out in the next couple of weeks, where we do a cross-section of industry and look at what has changed in terms of workplace or workspace preferences.  

So, for example, 35% are coming into the office. That’s a pretty standard benchmark, we know that’s true as we slice and dice the data. But let’s go next level. What does that actually mean when we start to think about the office? Because you can probably reduce your real estate footprint by about 40, 50% and keep that extra 20% for the unknown.  

Then as part of your second pass, when you get more into the details, you can figure out how to better reconfigure space to better suit the requirements of your people, and you’ll realize you either need that extra 20% you’ve maintained, or maybe you can do an additional cut. But you’ll be able to understand when people are coming in, are they working at their desk, using their offices? Are you seeing growth in open collaboration vs closed meeting spaces? The data starts to surface when you look at space at that level of detail.  

I agree with what you said earlier, where at a first pass, all you really need is badging data. The badging data will tell you how many people are coming in, and so if you’ve got millions of square feet of space and only 35% are coming in consistently on a daily basis, it doesn’t take rocket science to figure out that there’s a tonne of extra space.  

It’s when you get into the next level of cutting space, and making decisions as part of that process, we also want to take a look at what has actually changed in terms of peoples’ preferences when they come into the office. Because that determines the purpose. Are people coming in to collaborate as a team? Maybe they don’t come in every day or every week, but when they do, what are the types of spaces they need? 

Dan 

I completely agree. A couple things popped into my mind ⁠— there is point-in-time data that’s important, and there’s trending data. I’m a big advocate for trending data. It drives my staff crazy. Don’t tell me what happened yesterday, tell me what happened over the last 4 weeks. Let’s go in and look at the trend for the last 4 weeks and see what’s causing it to trend that way. Is it an every day of the week rising, or are there 3 days that happened over the last 4 weeks that caused the trend to go up? And then let’s drill down and look at those days and see what happened.  

It’s a matter of going into both Microsoft Office and going into Webex to see if you can determine what happened. Or is it just that there was a Senior Vice President in that day, and everybody just sort of followed in? It’s not just relying on trends, but understanding why a trend is a trend. That’s part of it. That’s number one.  

And then can you correlate your survey information? Why are you coming in, vs peoples’ actual actions in the trending data? So, if your survey information is saying that everyone wants to come in and collaborate, but the conference rooms aren’t being utilized, that’s not why they’re coming in. You need to find somebody who can give you that kind of insight, because that’s what senior managers are going to be asking you for, as you start to understand what’s going on.  

And you know, the conference room stuff is an absolute bear to get your arms around, because there’s so many different pieces to it.  

Sandra 

For sure. You mentioned senior management and what they’re looking for ⁠— based on your experience and the findings you’re servicing within your organization, how is your management team responding to the findings so far? 

Dan 

That depends on who you talk to. Most of them have come around to understanding that employees want to have flexibility in their work life. Some of them continue to cling to that desire to have everybody back in the office 5 days a week. But they recognize that’s not going to happen again.  

This is challenging people in ways they’ve never been challenged before. And it’s about finding that needle in the haystack, the magic. What’s going to work for everybody and satisfy the people that want to be back in the office, and satisfy the people that don’t want to be back in the office? We haven’t quite figured that out yet.  

We’re building a new office in the Boston area. We’ve done some pretty cool stuff. We reduced the total square footage because we didn’t think people were going to be back in to the extent they were prior to the pandemic. And we’ll find out, did I undershoot or overshoot? I don’t know yet. We hope that the way we design will draw people in.  

But it’s going to come down to, do we continue to hire people close to this office or not? There are a lot of trends here that are telling us we’re going to have an economic downturn. It’s interesting, similar to the pandemic, the question was “is the office dead or not?”, and all of our real estate providers were planting all of these stories about how everybody would be back in the office in two months, and we were going to be back to normal. And that didn’t happen.  

The biggest thing I read now is, will there be an economic downturn for us? I’m not convinced that it’s going to happen. Ultimately, no one knows, and there’s no crystal ball. It is really going to come down to what leadership does to motivate people to collaborate in person when it’s truly needed, and to do heads down work in a space that works for them.  

And trust. This all comes down to trust, and transparent communication. This is about setting goals and measuring productivity in reaching those goals. Beyond that ⁠— it used to be, you were in the office, and you could have sort of kept your head down. Those days are over, and it’s going to be interesting to see how the next generation responds to that. Are they going to be able to have transparent communication with their employees about their productivity and what they’ve done? Because being in the office is not going to be a cover for people anymore. And “what have you done for me today?” is going to become more important than it ever was, as far as how people are perceived as being productive.  

And have we put in place these measurements? I’m not so sure that there’s many companies that have taken the past 2.5 years to put in measurements that will determine whether or not hybrid actually works for them.  

Somebody told me a story the other day. They said this last year has been the slowest period ever for patent attorneys. Now I’d love to know if someone is listening to this and can send an email to tell me whether it’s true or not. I would love to know if this is true or if it’s just another effort to get people back into the office because they’re not being as creative, or they’re working on them away from the attorneys, so they don’t see it as a patentable thing. But I would love to know whether work for patent attorneys is really slow right now, because that would be an interesting piece. I’ve not found anything that documents it though, but if that’s true, I would expect to see something documented. But maybe patent attorneys don’t want people to know they’re not busy! 

Sandra 

That’s really interesting! 

Dan 

But it would certainly be an indication of, do we have the same collaboration that we had before? Are we being creative, or are we just spinning our wheels, not doing what we need to do today, not thinking about what needs to be done for tomorrow, because we’re not sitting in a room together thinking about tomorrow. All we’re trying to solve for is today. But I would love to know if that’s really the case. Because that would be one argument, if you were the president of a technology company.  

I don’t want anybody to misinterpret this. This is not a statement that people are not working hard, because I believe that’s the case. The question is, are they working on what needs to be done today, spinning their wheels, just trying to stay in communication with each other, or are they thinking about new features and new technology that’s going to be needed to solve tomorrow’s problems?  

Sandra 

That’s a great point, I’ve never really thought about that. I can see that when you’re just doing your day-to-day, you’re more focused on the tactical and getting stuff done. It’s more when you’re together that you start thinking about the future and the direction you want to take it.  

Dan 

You miss something. You miss a-ha moments. And because we’re doing that heads-down work. We can’t turn to the side and say hey, what do you think? We just do it our way as opposed to what might be the best way, when you have a number of minds working on it. Really interesting when you think of it from that point of view.  

Sandra 

Absolutely. Dan, thank you for your time today. I love your passion, this has been probably the most fun conversation I’ve had in a while. So, thank you again.  

Dan 

I love it, it’s a fascinating topic. As I say to people, I’ve been doing this for more than 25 years, but I feel like I’m a college kid that’s just graduated and has absolutely no idea what I’m doing. I know a lot of things about real estate and facilities, but it comes down to the fact that we’re all in this together. And this is the single biggest time of change in our industry, ever. And data is an important part of trying to figure it out.  

So, thank you, I really enjoyed this dialogue. There wasn’t a quiet moment!  

Sandra 

Not at all! 

Dan 

Have a great day.  

Sandra 

Likewise, bye!