Let’s Get Real Episode 25: Evolution of Remote Work and Transformation of the Workplace
Discussions on the Workplace and Corporate Real Estate Podcast
Some of the highlights of the show include:
- Why did we start going to offices?
- What has the evolution of the office looked like over the past 8 decades?
- How is hybrid/remote work different for Gen Z, a generation born into tech savvy?
- How do you develop a corporate culture without a physical office?
- How does productivity correlate with whether employees are working in the office or not? And why does it correlate this way?
- With the nature of work shifting so fundamentally, do we need to develop new KPIs?
- What will become of the legacy office? Should they be retrofitted, or converted to residential?
- Is coworking in residential neighborhoods the way forward?
- Is big tech trying to solve problems, or is it just being developed for its own sake?
- Is technology enabling us to be more productive, or is it more of a distraction?
- How do you deal with red tape related to privacy and security when trying to be productive with a particular tech stack?
- Sandra Panara on LinkedIn – Director of Workplace Insights at Relogix
- Francis Saele on LinkedIn – Workplace and Real Estate Solutions
- Radious – home-based remote office marketplace platform
- Kastle’s Back to Work Barometer – weekly occupancy rates for 10 major US cities
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.
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].
Francis Saele, an accomplished senior-level corporate real estate and workplace executive with a broad-based global background, is my guest. Francis has designed and implemented successful portfolio service programs for two global service providers and hundreds of clients. He’s a respected thought leader in the evolution of remote work, driving the transformation of the workplace and its impact on the built environment.
Francis has an MBA in Finance and a BA in Psychology, and has worked at CBRE, Accenture, Newmark Group, and the Nashville Chapter of the NAIOP, an organization that provides advocacy, education, and business opportunities for developers, owners, and investors of office, industrial, retail, and mixed-use real estate.
Hey, Francis, welcome to the Let’s Get Real podcast. Really excited to have you on the show this week. Why don’t you tell us a little bit about yourself?
Hi Sandra, great to be on the on the program with you and looking forward to this very much. It’s on a subject near and dear to my heart, but we’ll get to that. So, a little bit about me:
My professional background is almost entirely consumed with corporate real estate and corporate services in real estate. It really started right out of college. I joined a local bank and went into a management training program. I was a psychology major, which probably didn’t make me an ideal candidate for many banking functions, but it did make me a good candidate for corporate real estate.
So, I went to this small group that was doing corporate real estate, which was kind of interesting. I learned a lot and grew into that business. I had the experience of the typical corporate real estate manager who has the users calling and saying, I don’t have enough space, it’s too hot, when can we move to a bigger area, we don’t have space for our new people, that sort of thing. And at the same time, the bosses are calling and saying you’re spending too much money, how could you possibly have a budget like this?
It’s a really high-pressure job. I learned a great deal there. In the end, I wound up convincing the board to build a new headquarters building, which was a great experience for me.
Then I got the development bug, so I moved into the commercial real estate development business in office and industrial properties and did that in five states with two companies. I learned a great deal there, at some point I had a really decent balance sheet. But then the crash would come, and the balance sheet would go away. So, after a little bit of that, I decided I wanted to be in business for myself.
I formed a small company with just me and a couple other people who joined later to do corporate services and portfolio services, lease administration and related tasks. It was at the time when building information databases were beginning to do scanning of documents. That sort of thing was just newly happening and there was a lot of that work around. So, we built a pretty good business there and got some good corporate clients, one of which was a major provider in the space.
We did major projects for them around the country. They wound up buying the company 10 years later and I went to work for them as a lead for quite a while. Then after that, I joined another corporate services provider, doing essentially the same thing but in a new way. We decided we were going to outsource the back office from the US to Asia. And we did that very effectively. It was a really good experience, we cut a lot of costs and it really made us much more efficient. And also, in the end, we were able to move to a remote environment for our team. We had teams in Pittsburgh and Dallas, and I was based in Dallas.
But people were driving an hour and a half each way to work, and they started to come up to me and say, why can’t we do this work from home? We have all the tools. And we said, yes — actually, we said yes after we lost someone to a competitor because they said yes. So, we began to do the work-from-home thing. This was a year and a half before the pandemic, and we were almost entirely remote. It was a very effective operation, and people loved it.
Then, I spent a short time with a consulting provider and did some real estate consulting for them, but the moment of truth hit with the pandemic where I convinced myself that the biggest new thing in corporate real estate was the pandemic and the impact that was going to have on both the workplace and corporate real estate. So that’s where I am today.
What an impressive background! It’s always fascinating to me to hear about how people ended up in the roles that they currently play. They seem to all have come up through the ranks working in the trenches and gaining the hands-on experience and collecting takeaways from that.
I didn’t know that you had a psychology background, that’s definitely a great thing to have when it comes to corporate real estate. I’ve been in similar shoes where you’ve got people coming at you from all angles saying, this isn’t working, that’s not working. And you’ve got to think about people’s behaviors and how to minimize that unhappiness that people seem to bring forward when you’re in corporate real estate. There was always a saying that if people aren’t complaining, that’s a good sign.
That’s it. I should point out though, in the first few months I was with the bank, I remember an experience in some accounting group where they said, you need the debit this and credit this. And I said, how do you feel about the debit? And that that led me to the conclusion I needed to go back to school. So, I did go back and get an MBA in Finance. But psychology is a really interesting area and I think particularly at this time, it’s a very important subject to look at for the workplace.
For sure. You also mentioned a little bit about your work-from-home exposure. What year was it that you first got exposed to the work-from-home option, or when did people started expressing interest in that?
Well, I’m sitting in my home office, which I started my business in 25 years ago. So, I’ve been working from home for a long time. I did have office experiences with the providers who acquired us. We did have an office here in Cincinnati, I worked in the office and did commute.
But the experience that I mentioned was in terms of offshoring, I was in Dallas and that would have been around 2017, 2018, a few years before the pandemic.
Given your background in corporate real estate and the different areas that you’ve worked in, I’d be curious to hear a little bit about your perspective with respect to the history of the office. Thinking about those last 25, 30 years, how did the office emerge? How has it changed in the past 30 years from your point of view?
Actually quite a bit. And I think we should really start with why there is an office to begin with. The reality is that the major driver for getting people together in one place was that all of the knowledge work was done on paper. There weren’t copy machines. Frankly, you had to have original documents. So, in order to use those papers and do anything with them, you had to be in the same place. You also didn’t have telephones, or air conditioning. It was pretty rough, back in the primordial office. But things began to change — I think around 1950, air conditioning came out, which is great.
Then there were technology’s major advances in the in the 90s. I think of the Internet certainly and being able to digitize documents, that was really the beginning of the movement to do things anywhere.
It started with people who had notebook computers. Those eventually came out and they could put their work on their notebook computer, go home and do something on it and come back to the office and then upload it and work on it.
And of course, since then, there’s the Cloud, which has made it so much easier for almost everybody to do anything from any place, as long as you can get an Internet connection. So, it really obviated the need for people to come together. The work follows them wherever they go with a couple of clicks.
What’s of course missing in the remote environment as it exists is how we interconnect with other people and how we exchange ideas, how we innovate and plan and create new things. That’s really the missing piece. I think that in the remote work environment, that’s the thing that requires the most attention going forward.
I call that the remote infrastructure. We know that that exists in the office. The legacy office has all of that. It has everything: it has the rooms, it has the technology, it has all the people, and it has food. But it does have the deficits associated with the commute. The cost of that, the time associated with it, and all of the other nuisance things that you’ll see about being in the office. Most of those occur around the water cooler around the way to the men’s room or the ladies room, as there is a nuisance factor to being together with people all the time. That’s really a negative to the office setting.
Yes — the water cooler comment is funny, because I know that there’s been a lot of discussion about that on LinkedIn and other channels that I follow about how valuable are those are. I think there’s obviously something to be said about the social aspect of work. But the flip side of that is we’ve made our entire life about work. Work is the be all and end all of what we do, actually.
Just this morning I posted something on LinkedIn about how a lot of people are talking about this negative impact of working from home because of the impact on social skills and things like that. And I was thinking this morning, there’s some truth to that. I reflected on my own personal experience — I did work in an office, so I had those experiences. You reach a certain point in your career, where you say, OK, I’ve had enough. I’m OK with working from home and never stepping foot in an office ever again. But when you think about, the new kids on the block that are just joining the workforce that haven’t had that experience.
You kind of wonder, what might their experience be like? I’ve talked to a couple of friends and younger people that have just graduated or are on the verge of graduating. I ask these kids, how do you envision work? They’re still thinking about the traditional office. I don’t think they’ve really understood the impact of remote work, in terms of what’s actually happening.
I also think what’s different with them versus us is they’re virtually born with technology in their hands. They can do 10 things at one time with 10 different devices and be super effective, which is overwhelming. At least it is for me anyways, I can’t replicate what they do. I’m pretty tech savvy to begin with, but I’m not that tech savvy.
So, I think that’s where there’s a bit of a gap in terms of understanding the effectiveness from your point of view. From my perspective, I wouldn’t be as effective doing that, to me that’s just major distraction, but for them, that’s life. They’re on Instagram, Tiktok, they’re consuming. I guess that’s the other part, you’re consuming information versus creating and managing information, which is what we do at work. In any case, people talk about there being distractions working in other places, but I think you have to consider all the factors. There’s gain and there’s loss to both in every generation, because of different experiences.
Having said all of that, how would you define what the office is today?
That’s a really good question. That reminds me of the inquiries in the Senate or the House recently where they asked someone who is up for a political office, can you define what a woman is? And nobody wants to answer that question. So, I’m going to take the same the same approach.
I’m not sure what the office is today, particularly as the workplace within it is turning into something that never existed before. It’s completely different.
We have to think about the question, what is the office for? I think it’s in the remote infrastructure for sure.
But I’m going back to your earlier comment about Gen Z and the late Millennials and being good on their phones. I keep getting texts from my daughter that have links, and I really need to have a computer in front of me to look at them, whereas she doesn’t think about it. She does it all on her phone.
But I think, going back to the initial reactions we had to the whole idea of perpetuating the remote workplace at the beginning of the pandemic: it was the Jamie Dimons and David Solomons who said, you need to get back in the office. There’s corporate culture there. How can we develop corporate culture when nobody knows anybody and nobody has the opportunity to talk directly with another person?
I think you have to segment the workforce a little bit into the nature of the work, for sure. What is their work all about? And how much collaboration goes on? I know that varies quite a bit in different work, but also the age and the orientation of the new employee. Is the new employee right out of school, or have they been doing that work for 10 or 15 years, and they know how to do it and can do it remotely, but need to know people? Or are they more mature candidates who have been doing this a long time and they can be anywhere to do it, and don’t need to interact that much? You can always interact virtually.
And usually where you have in-person interactions in an office or someplace else, you’re also going to bring in people virtually anyway. So, it just seems as if the virtual piece is there forever, and it’s just a question of how many people are together and where they are. Should there be times where people are all together in person? I think they should be, but to go to the default position of, well you can do that in an office, doesn’t mean that the office is the right solution for those. That’s where I think you really have to dissect what is the need and where is that best served, and what’s the optimal solution for the business and the employees.
I posted this morning actually that there was a report out that productivity, in the first two quarters of this year, has dropped more than ever before, and that there’s something going on there. Now, of course, some people will say, it’s because people aren’t working in the office, they’re at home and they’re watching television. I don’t think that’s true necessarily.
There are a lot of other reasons for that, so I wouldn’t default to say that if you had people back in the office, that productivity would go up. I think just the opposite would happen. It’s a very interesting subject and I think it requires study, which hopefully is going on now. I think it’s a great research area and hopefully we’ll see some interesting conclusions to some research that’s underway.
It is interesting. I did see your post, and actually had a chat going on in LinkedIn yesterday about that statement that Sudhir Hasbe from Google made, about productivity being down and their expectations around headcount. My question was, how do you measure that?
Similar to what you’ve just said, this morning I was looking at NASDAQ and I just happened to look at Alphabet’s earnings per share. I was curious to see what their Q2 results looked like, and I saw that they were profitable the last two quarters, Q1 and Q2 of 2022. They saw a decline of about 3% in Q1, and a decline of about 6% in Q2. So, I googled Google’s fiscal year, which happens to be in February. And I was like, hold on a second, Google also mandated people to come back to the office around April, which would have been into their Q1 and into their Q2.
Again, we don’t know for certain, and I agree that there’s definitely an opportunity for some research there, but is it coincidental that you were at 22% earnings per share in Q4 and Q3 of last year when people were working from home and then Q1 and Q2, shortly after you’ve mandated people to come back to the office the first month, it was down, and the second month it was even further down. There seems to be potentially a correlation between maybe disgruntled employees or something else that’s going on. Maybe they’re saying, you’re forcing me to come back but I’ve recognized that I can be productive working out of the office. So maybe that’s a way to dig your heels in, so to speak.
It’s fascinating because nobody is going to come out and say it. There’s no way to really prove it. But this information begs the question, is it coincidental or is there actually a correlation there between the people being in the office or out of the office and why we’re seeing productivity rise and fall?
I was looking at a Gallup report last night and they were saying people are way more productive working outside of the office. People are more productive because they’re happier. And as a result, it impacts their ability to be more engaged in their work when you’re pushed to go back to an environment they don’t really want to be in. Not because you don’t want to work, but because you don’t want to do it from the office, because technology enables you to do it elsewhere.
It’s interesting how it potentially impacts psychology, right?
Right. I’m sure there’s some impact there, no question about that. We were talking recently about how productivity was being measured and, in the office, really the prime measure was the boss looking through his glass wall to see who was doing something. And that that’s not really a good measure of productivity, if someone’s there and punching buttons.
I think one of the things that has developed to some extent, and you may be closer to this than I am in terms of gaining knowledge about productivity and being able to actually measure it quantitatively: we certainly know a lot more about where people are and how much they’re producing. That can be easily measured and analyzed on an ongoing basis. And I suspect that given some thought, you’d be able to track that productivity in terms of where they were. So, if you had an objective measure of productivity, and you have the objective data with respect to where people are, that’s an experiment waiting to happen. I think it hasn’t been done.
I agree. I think that there’s definitely an opportunity that brings up another thought process that I had. Thinking about the fact that work is shifting, a lot of our old practices of work are shifting, and in this new way of working it just doesn’t work: it kind of begs the question, are the KPIs wrong? Are they dated? Do we need to be measuring things differently in terms of whether it’s productivity or engagement, with this new way of working? Does it still apply? What are your thoughts in that regard?
You know, I spent a lot of time building KPIs for our clients. The best way to come up with KPIs is to come up with a handful that are really meaningful ones as opposed to 182 that aren’t worth the time to calculate.
To the extent that the work is being done differently, I think that the KPIs associated with that work must be reviewed and changed to adapt to how it’s being done. In this article we talked about earlier in Yahoo Today, they talked about the two things that were going to improve productivity: remote, and AI.
To the extent that you can build AI into your operation, you’re going to have greater levels of productivity for sure. I think AI is in its infancy in terms of permeating through the office. It’s certainly advanced in some areas but not everywhere. So, I suspect a lot of processes can be improved quite a bit.
With regard to KPIs, what are you seeing from a scorecard perspective, what are companies interested in measuring today? What are they focused on?
Well, the KPIs that I’m experienced in are those related to outsourcing programs, but you know, it would be the quality of the work, the timeliness of the work, any issues associated with the work, were there any losses, any mistakes that caused problems, those kinds of things. Those are all probably still in place. But again, it’s a question of the components of it.
For example, if you were doing something manually, but that has now been replaced by some piece of technology that has to be adjusted — is the technology working right, those kinds of things, I think need to happen, but clients are really only concerned with the quality of the work, the timeliness of the work. And can they rely on it? Because once the garbage flag goes up, it’s more challenging to recover. Let’s put it that way. As a service provider, once that seed of doubt is planted, it’s very hard to move forward.
Right. Let’s shift gears for a bit. You talked about where things are with the legacy office. We’re at a stage right now where there’s a lot of uncertainty as we think about the future of the built environment. So, let’s talk a little bit about what becomes of the legacy office.
That’s a really great question and I’m trying to get some stats on this recently, which I think I shared with you. It’s really difficult to zero in on the amount of office space. When you look at total commercial spaces, 87 billion square feet now, very little of that is offices. Something like 16 billion. But most of that is one- or two-storey buildings, mom-and-pop situations. The segment that I think we’re talking about is the multi-story, the high-rise buildings, and that’s a much smaller segment, but it’s still a couple billion square feet of space. I mean, you have 206 million, I think, in New York alone. There are a lot of bigger markets, so if you add them up, that’s a lot of space.
There was a post recently that talked about how this was all forecast, that in the future people were going to look at these major buildings, and architecturally, are going to be baffled and amazed by them. I think we have that vision in our heads. We haven’t experienced it yet, but I think it’s coming.
I think we see a lot of deterioration in occupancy for sure, and that’s easy to validate. There really is very little growth there. There is some growth in much better, higher-quality buildings with their air conditioning, lighting, amenities, that kind of thing. Those will continue in those markets. But it’s all the other buildings that won’t be able to keep up with that — there is no market to support the quantity of space there, and there will be a fair amount of deterioration in those markets. Some adaptive re-use will occur. I think you’ll get some multi-use properties emerging, some conversions from office maybe to residential, but that requires a very specific set of architectural considerations that allow that to happen. There are many offices where that can’t happen.
So, I think it’s going to be an interesting period, difficult financially for a lot of investors and lenders in commercial real estate to create products that are marketable, and there are many offices where that can’t happen.
You and I talked earlier this week also about companies like the FAANG companies in particular that are heavily invested in real estate. We joked a little bit about Apple and the “donut office”, and how do you split the donut, or how do you repurpose the donut if return-to-office ends up completely dead. It looks like we’re not going to exceed 30, 40% occupancy.
You can kind of see why some companies are really pushing hard for return-to-office, because they’re so heavily invested in real estate. But what happens in those cases? Those are the ones that stand out, but I know from working in different portfolios that there are usually companies where 20, 30% of their portfolio is owned, which can be substantial. And they’re office buildings usually, so what do they do in that situation? How do you start thinking about offloading space when, first of all, there’s no demand for space from an owned perspective?
From an investment point of view too, there have been conversations about older buildings needing to be retrofitted or needing new amenities. I saw an article last week that the Empire State Building is putting in a bunch of amenities in hopes of bringing people back to the office. But are companies and landlords and building owners willing to put money in without really knowing whether people are going to go back? It seems a bit weird to me. It doesn’t add up.
I think the short answer is no. They’re always going to try to put other peoples’ money in there. So maybe they can get someone to invest in that. They have to be able to convince a lender to let them borrow the money. But I think the financials associated with the retrofit today are really difficult. I think that’s also affecting the coworking market too, because lenders are really sketchy about what’s going to happen. And with good reason, because they really don’t know.
I made this comment to several people. There’s a big buzz around coworking, and there are thousands of operators and a lot of them are small mom and pops. But a lot of what’s going on in terms of growth — you hear about it, you see announcements — but you don’t see a lot of activity there, and I’m kind of surprised, frankly. I think it’s driven by the financials associated with it and the tenants, most of whom already have this legacy portfolio. And it’s difficult for them to say, I have this 15-year lease and I can’t sublease it, I can’t give it back. I’m stuck with it. It’s hard for people to have to deal with it. Particularly in corporate real estate, I can imagine what it’s like, having sat in that chair. You’ve got this portfolio, you’ve leased it, and now what do you do with it? It makes people nervous.
So, it’s a lot easier to say hey, we’ll be more productive and we’ll put in a pool and people can go swimming at noon time. But like you said, I don’t think that’s going to work.
Yeah. And I’ve asked the question to many people, is there actually anything that a building could have from an amenities perspective to entice you back to the office? And they look at me blankly and say no, absolutely not. You get the odd response about a daycare. But if you think about it, say you’re working 2-3 days a week in office, and if you’re bringing your child to a daycare at work, you drop the kids off and you go to work. But then on the days you’re home, you still have to trek down to the office. So you haven’t really improved anything.
Right. That probably worked with five days a week in the office, but it doesn’t work with one or two days. So those investments are gone, they just won’t survive.
You mentioned coworking; earlier this week I interviewed Amina from Radious, which is a new company in the coworking space that’s basically looking at bringing coworking into the suburbs through peoples’ homes, which is very different. The coworking spaces that are located in central, downtown locations, you’re still required to commute. You’d think, if I have to go downtown to use a workspace, I might as well just go to the office if it’s right there. What’s the difference, why would a company pay extra for me to go into this coworking space instead of just coming to the office? Maybe the building is newer or updated or it has the latest and greatest amenities, everything that makes people feel more comfortable.
But her whole concept of bringing the office into the neighborhood made me stop and think, why would I use that? If I’m working from home — I don’t have children so it’s hard for me to fathom. Why would I go use someone else’s home other than if I’m meeting with someone and it happens to be a convenient place to meet, which doesn’t really work for me in particular, just because I live so far from the city center.
But she was saying, some people have multiple family members working from home, kids that are doing school virtually, young children at home. There’s just too much going on in the household, as well as some people just needing the routine of leaving the house. I get that, because I can see that sometimes you need a change of scenery, without wanting to drive for an hour or sit in traffic to get to the office.
It’s fascinating, as we think about different uses of space, the fact that there’s still a lot of concentration on the office, and in essence, it feels like we’re trying to keep the office alive, which I’m having a hard time trying to understand. It’s a relatively small percentage of square footage when you look at the big picture, but if you go to the downtown core of any major city, you see the towers, and you start to imagine, what would life be like if these towers remain empty from here on in?
Right. I think it was Peter Drucker who made the comment back in 1980 or so, that one day we’ll look at these big buildings with amazement. They’re beautiful buildings, but we’ll wonder what did people do there? Why did they go there? People won’t have any sense of why that happened.
I do think there’s going to be a greater penetration of coworking in the suburban areas. I was just thinking about this neighborhood thing myself. I mean, we have a 3200 square foot house. And a full basement that isn’t finished, which I could finish. We had two kids but now it’s just my wife and me. The kids grew up here, but they’re gone, and now we’re in this cul de sac, and there’s maybe 40 homes, there’s nice people around who have that issue of where to work.
We could easily convert a number of these rooms into offices, meeting rooms, and form our own business. We could probably take some investment credits and tax credits and appreciate the house and make it financially viable.
I think that’s a great idea. Frankly, I suspect there are a lot of people who, once a program was put together to do that, would be willing to do it. That’s a great idea. So I think the people you mentioned will have some success there. People are going to look at it with some suspicion as to whether it will fly or not. But I think experimenting there would make a lot of sense.
I do see neighborhood centers occurring, and these are the centers that will eventually be relatively close to most people. They’ll be generic and have hologram capability. So, if you want to have a meeting, you’ll go into a room, turn on a screen, and it’ll be a hologram, so you’ll see people live. Not avatars in the metaverse. You just won’t be able to physically touch them. You can do a digital handshake. So that capability will be here and those kinds of meetings will happen. You remember the Fifth Element with Bruce Willis.
It’s actually really fun to think about these possibilities. I remember my first time seeing a vision of the future, you know, with flying cars to solve traffic congestion issues and things like that. And here we are. There are some crazy ideas out there, and right now, the Metaverse is a prime one. A lot of people talk about it, and we’ve talked about it in the past.
I’ve always been intrigued by technology. When my daughter was younger, she used to play on these Metaverse-like things long before Roblox. Habbo Hotel was one of them, it was really fun for kids. And then someone else introduced me to Second Life, which I was fascinated by. Second Life is essentially what Facebook is now calling the Metaverse, and others that are now in that space.
It’s really interesting to think about the applications of it, because it’s not new. It’s been around for a very long time, but it hasn’t been widely used for work. I know HP and Manpower were definitely in those spaces. And it was interesting because you were an avatar. So professionalism sort of disappeared, and you could wear what you wanted, have a Mohawk, dress yourself up as an animal or human. But it was this ability to see each other in this virtual environment and feel like you’re having a conversation with someone there. Similar to the idea of a bunch of holograms of people together in a room.
To me, it’s hokey, because again, why do you have to be in a room to do that? It comes back to always necessitating the location. The association with real estate makes no sense.
I think that’s true, you certainly can do holograms anywhere. But again, think of the idea of a neighborhood facility where you can go and get away from your kids and the dog and get some peace and quiet and do your work. And then also meet on a high level virtually. I think that does make some sense. You have to have the infrastructure for it, for sure, because that’s expensive stuff.
Absolutely. Hopefully in time the cost of being able to use that technology to that extent will come down significantly. I think that leads to the next point about how effective the technology is. Because right now the whole push and shove, tug-of-war is about whether technology is an enabler or does it actually impair your ability to be productive?
You’ve got people on both sides of the camp where in some instances, yes, technology can be effective, it can definitely be an enabler. But in other instances, it detracts from the experience if it’s clunky. If it’s not where it needs to be. Again, I believe that goes back to the fact that you’re taking what you know from the physical experience of work in an office and forcing it to fit in a virtual world, and it just doesn’t work all the time.
Right, I think that’s true. In the old days they called those people systems analysts, where they would figure out the new workflow and build the technology around that. I think that’s what’s happening today with the whole Web3 thing where you have crypto — they build something really neat but it’s very expensive and risky, and you see what’s happened.
Same thing with the Metaverse. Someone made a comment recently about buying real estate in the Metaverse. Absolutely crazy. Why would you want to buy real estate there? But there are some good things in terms of NFTs and things like that, but I think we’ve sort of lost focus sometimes in tech. We build big tech that does a lot of really interesting things and then we try to find an application that they can possibly do with it, and does it make sense? Sometimes it doesn’t work. I mean, it works from a tech perspective, but it doesn’t really help anybody. It doesn’t advance society, it doesn’t generate income for the firm. It’s just there, and you don’t want to be left out there. So, you better get on board with Web3.
I think the other piece to it is the evolution of tech and the speed at which tech evolves. I look at it from the experience of going to work from one company to the next. What’s the tech stack they offer, both from a software and hardware perspective, and how does that impact your ability to be productive? We started out this conversation about how at one point everything was on paper, and there were no digital files. You had to be somewhere physically to access documents in order to be able to do your work.
It’s the same thing in the sense that you’ve got Sharepoint, you’re creating documents, you throw them on a shared file and anyone in the organization anywhere in the world can share them. But the other day when you and I were chatting, we talked about frustration. Sometimes the frustration that the tech creates is crazy, just because of red tape or bureaucracy around the tools that help people work outside of the office.
The example I gave was, you’re working on a document, you know it exceeds the limit that you’re allowed to transfer over your network. So how do you get it to someone in another country? It’s a challenge. I’ve faced that many times. Then, there are tools to enable you to do that, but obviously IT doesn’t want you downloading stuff onto your computer. Sometimes they even lock you out. So, I think that, in essence, is what prevents people from being fully productive.
Again, thinking about younger generations and just watching and learning about what they use, it’s stuff I didn’t even know existed. My daughter is 30 and has always sort of been under my wing in terms of being involved in tech. She’s super savvy with virtually everything. I’ll say to her, I’m really struggling with this one thing, and she says oh, you should use this. It’ll be something that just does it for you. And it’s something I didn’t know even existed.
So, number one is awareness that the tool exists, that there are enablers. And number two is the red tape in terms of being able to get access to those tools or use them when you’re working so you’re not held back by trying to figure out how to do what you need to do within the confines of what you’re allowed to do in the organization.
And I think it all stems from the concerns that companies have around privacy and security as it relates to technology.
Do you think that’s something that will take on a different direction in the future, as we think about what that means for remote work? I mean, if you’re working from home on your home Wi-Fi, how secure is that? Everything falls under privacy and security. You can’t do anything as it relates to data or sharing information because of privacy and security. But is that a catch-all for everything?
I think we generally need more progressive IT professionals in every organization who understand what the risks are in a remote environment and how to deal with them. Is it a VPN, some sort of encryption? I don’t really understand the details of them, but somebody certainly does. There are threats everywhere. If you talk to anybody who takes care of the infrastructure and ask how many hits did you get this week of people trying to break in? Everybody’s trying to break into everything. So, you need progressive people that will allow the work to be done remotely but have the tools and processes to control the risk. I think that’s what you really need.
I mentioned the other day the situation in Dallas where we went fully agile — the CFO would only allow desktops, which were $500, $600. And notebooks were $1000. Why should I spend $500 more? That was a tough sell at the time, but when we went virtual, everyone was glad that we went mobile. You’ve got to have that foresight, in terms of structuring.
The same kind of issues are going on in HR and in real estate. I’m struggling with this transformation of the workplace going from the 15th floor to 15 or 20 different places. That’s an evolution that’s under way today. We’re right at the beginning of it really.
That’s interesting. I have to ask this question: I often wonder, is it a make-work? You think about the fact that you’ve been 2+ years working from home, with probably a very small percentage of companies prepared to deal with that transition and not feel the risk. It’s the same with HR. As Mark Gilbreath said in the previous podcast episode, nothing happened there. The stuff didn’t hit the fan.
So, is there a need for that? Is there a need to put policies in place, is there a need to have these types of things or is it again more of a make-work? Building processes around something that maybe doesn’t even need processes? To me, hybrid is something that doesn’t need a schedule in order to work. You need to have maximum flexibility. You need to have the ability to work autonomously. That sometimes includes technology as well.
The example I gave is, I need to do something, I’m working on a global team, and I need to be able to send information back and forth. The restrictions put in place sometimes are inhibitive rather than truly supporting productivity. Do you think there’s a need for that, considering that most people have experienced the freedom to do some work on their own devices?
I’ve talked to a number of people who have desktops at the office, not laptops. So they needed to go out and buy a laptop when they have a laptop at home.
Whether any organization wants to be fully remote or fully in the office, we don’t know the next pandemic or the next reason why we can’t be there. Even if we had the next variant of COVID converted to a death rate of 25% or something, or there’s Ebola, or Monkeypox, who knows. There may be a reason why we want to flip the switch and become fully remote. So, I think the baseline setup has to be that all of these processes and controls and IT infrastructure around it are fully remote.
My sense is that there will be a lot more of that in the future. Why don’t we have that today? We’re two years into it. The reality of it is that if you think back to the spring of 2020, after we had a month or two of panic, we thought we’d be able to get back by August or September. And then another variant came out, so we can’t do that. We lost a year and a half of people dawdling with, are they coming back to the office or not?
And it’s only in the spring of this year when everyone’s okay to return to the office. I call it a return to the past. So, it’s only been a few months that people have had this, “we need to get people back”. And we had the boil the frog crowd, you know, the three amigos, where you’ve got to be back in the office Tuesday, Wednesday, and Thursday. Well, that didn’t work out very well for them. And you showed me yesterday a flatline that Kastle returned, a 40% plus or minus that hasn’t changed in months. And that flat line is probably going to go down, not up, as we go ahead.
Correct. Well, Francis, thank you very much for your time. I really appreciated the conversation today, it was very enlightening and always fun to chat with you.
Sandra, thank you very much. It’s always a pleasure, and I look forward to next time.