Bart Waldeck:
Good day, everyone, and welcome to Workplace2.0, Tango’s podcast about all things corporate real estate. I’m Bart Waldeck, your host. Glad you could join us. We have a great episode lined up today as we are privileged to have Adam Stoltz from HOK join us. As I’m sure you’re aware, HOK is one of the largest architecture engineering and urban planning firms in the US, and arguably the world. Adam runs the firm’s consulting practice and he brings a very unique perspective to today’s discussion and I’m excited to jump into it. Welcome, Adam. Thanks for joining us on Workplace 2.0.
Let’s dig a little bit into your background, because as I teased there I think it’s kind of unique. Obviously, you’ve got this combination of psychology, urban planning, and consulting, which I think brings a different type of experience and lens to the problems and challenges and opportunities in corporate real estate.
Why don’t you tell us a little bit about your background and kind of what brought you to this line of work?
Adam Stoltz:
I enjoy having a bit of a different perspective when it comes to how people occupy and use space, and that is that behavioral, that social science perspective. We take a people-first or a people-driven kind of view on why we make the decisions we do about how we provide, occupy, and use space.
My background is in social science, social and behavioral psychology, and urban planning, and I have focused that part of my career, actually, this is my second career, around understanding how people interact in the built environment, how it promotes and inhibits behavior, and how we can look to data to help inform the decisions that we make as opposed to putting our finger up to the wind and go from there.
Bart:
Am I going to see you on the next Freakonomics episode on NPR or something like that?
Adam:
I do love those books. I will say that I think it’s also sort of a personal and a professional effort that continues to try to help organizations, my own included, use more data to inform decisions. I use that phrase, inform decisions, deliberately. I am not the kind of person who thinks that we should only make decisions based on what the numbers tell us, but I do believe we can make better decisions based on having the numbers to influence the decisions that we ultimately make.
Bart:
Yeah, that makes complete sense. You run the consulting group. I’m sure it’s a pretty diverse set of services that you guys provide. Where’s it kind of fit in to the larger firm and what role does consulting play at HOK?
Adam:
As part of a global design practice, we get involved in and help from a strategic standpoint, help clients make decisions on the design occupancy and use of their space. And that’s not only the way that the space is fit out, but also getting into questions about, how much do you really need? And what types of spaces based on what you’re trying to accomplish as an organization? And of course, how are changes or other external factors influencing the alterations or adjustments or evolution of the space that they occupy?
At the same time, our consulting practice definitely gets involved in discreet assignments where it’s really just about the strategy, if you will. We describe it as when you just have a problem to solve and that in and of itself is the assignment. It isn’t necessarily about delivering the built environment at that moment.
Bart:
It makes sense. I don’t think that you could have dreamt up a bigger external force that impacted the way people work. As you mentioned, wow, you guys must be very busy. We all are, obviously, at this time.
Adam:
I’ll say we all are. I try not to be so superlative or assumptive about others, but from conversations that I’m having with peers and friends in and out of the industry, we are all busy, all trying to help, as you said earlier, help people make decisions or prepare to make decisions. I will offer one more thing because I don’t want it to go unsaid. I would never have asked to be this busy in this way, but I have to say that if you’re doing the kind of work that we are and you don’t get excited about doing it now, I think you’re in the wrong line of work.
Bart:
Yeah, very well said. I think before we were about to hit record on this we were talking about the fact that we spoke not too long ago and things have–boom–fundamentally changed in a short amount of time, specifically I’m referring to the CDC coming out with new guidance at the end of last week, basically saying for fully vaccinated individuals, that you really don’t need to wear a mask indoors or outdoors and there’s no need for social distancing. So, there’s another curve ball right as a lot of companies are on the cusp of considering a return this summer to the office.
What do you think of the new guidelines in the sense of how it will impact decisions about office policy and return to work?
Adam:
I would say that in almost in the same breath, the CDC gave organizations and employees a lot of enthusiasm and excitement, and at the same time made things so much more challenging and complex for organizations that aren’t just responsible for ensuring and providing a physical environment that allows people to do their best work, but then also establishes the policies and practices that make people feel comfortable, emotionally and psychologically, to actually come in and use the space.
I can’t imagine a decision or a moment that happened with such speed that could have made things even more complex in terms of some of the decision making that companies now have to approach as we hit the summer.
Bart:
I know in some of the discussion I’ve had, you don’t just have to account, obviously, for those who are vaccinated, you have account for those who are not vaccinated. It almost becomes a lowest common denominator. Your policy may have to be more towards assuming everybody’s not vaccinated in order to protect folks.
We’ve run different scenarios of, you’re in a meeting, you’ve got two people vaccinated and two people who aren’t. You want to protect the two people that are not vaccinated from each other, so that means everybody should wear a mask because you don’t want to call out those folks who have made a decision or have been unable to get vaccinated or whatnot. So, it’s just challenging.
Adam:
These broader questions of equal and equitable are really of the moment, and not just of the moment around the pandemic and our decisions around masks or distancing or density in space, but there are all sorts of HR, of facility related, of real estate, of legal related decision making that companies are now faced with trying to consider, “Do we treat everyone the same? Or, do we create policies that treat people equitably,” meaning the actual practices may be different?
I can tell you just in early anecdotal conversations that most companies are looking to treat people the same. They’d rather not have policies that are different based on vaccination status, to say nothing of the fact that most will run from the responsibility having to collect and enforce an awareness of what those vaccination statuses are. That includes having to go to people and say, “We require vaccines to be in the office. If you can’t prove a negative test or that you’ve gotten the vaccine, you can’t come in. You still have a job, you just have to work from home.” That is not how we wanted to get to flexibility when it comes to the workplace.
Bart:
Right, exactly. I’ve seen some universities and other organizations stating that it will be required. I’m here in Chicago and there’s a music festival called Pitchfork, and I just heard on the radio they’re actually going to have it this September, and you have to prove you’re vaccinated or prove a negative test in order to enter the outdoor venue.
Adam:
I’m based in New York and the New York Marathon just announced that it will move forward the first Sunday in November. Same thing–will require proof of a negative test or a vaccination status. It’s hard to distance when you’re running a marathon.
Bart:
Not to mention, a lot of the political undercurrents to all of this that we won’t get into here, but it just makes things in a diverse organization that much more challenging.
Adam:
It’s true. Like you, I’m not interested in the politics associated with the differences across our country, across the United States. But again, back to the complexities that the CDC’s recommendation–because, as an organization, they make recommendations, the states are the ones they set policy. That’s not something often understood, but again, the challenge is particularly for enterprises that have real estate portfolios across the country, let alone globally, now trying to establish practices and policies that offer some degree of consistency of experience from geography to geography, state to state. It’s just become incredibly challenging and complex here, right when we felt like we were getting close to having our arms wrapped around some ability to soft launch a reopening.
Bart:
We had our soft launch of voluntary as of this Monday in our Dallas headquarters. On Friday, when the news came out, our leadership team was wrestling with the same questions. Granted, we’re only a few days out and you probably haven’t had a ton of conversations, but do you think the new guidelines will have an impact on some of the return to office policies that folks were thinking they were going to soft launch with?
Adam:
I do think that it will have an impact on the way that companies begin to reoccupy space. I think there is some immediate sigh of relief about having to not necessarily having to manage for occupancy levels, the sheer counts of people in the space, but rather to think about distancing, which is certainly quantifiable, but is not necessarily the kind of thing that needs to be policed or managed in the same way.
You walk into a conference room and if instead of five people, now there are six people in that room, that might still be okay because those people can manage the distance even if it was just based on density, or if it was just based on the number of people in that room. Somebody else might have to come around and say, “You’ve got one too many people in this conference room right now,” that sort of thing.
Companies just have enough to deal with. Trying to avoid those situations is, like I said, I think a sigh of relief. I think, at the same time, employees who thought they were ready to make a decision about whether and for what purpose and with what frequency they were going to go back to the office, I think things just became a little bit more complex for them as well.
Bart:
That’s a really good call-out. I was thinking about it last Friday when the news came out, I happened to be picking up some takeout and driving home. I’m going down the main street of my area and the restaurants were packed, outdoor seating, indoor seating. And it just felt kind of Mardi Gras-ish. I was surprised, but I wasn’t surprised. Everybody’s been pent up and stuff like that. I wonder how that will translate to the desire or comfort or lack thereof to go into the office. I think if there were people that were ready to make the move, maybe they’ll jump forward and go ahead and do it, and those that were apprehensive maybe are more apprehensive because it’ll be such a mixed environment potentially of vaccinated, unvaccinated, masked, unmasked, whatnot.
Adam:
I could easily envision people who thought that they were ready when there were going to be limits in place no longer feeling as comfortable or even having a bit of trepidation because of the unknown of walking into a space and not knowing how many people might be in that space in any given moment. Again, think about proximity and the heightened sensitivity that many employees have that the data is very clear about.
At the same time, this presents a tremendous opportunity. We’ve both just referenced the soft launch. Let’s learn from hotels and restaurants here when opening, especially when starting something new or fresh or reopening after a period of renovation. Let’s test some things out, make sure those burners work effectively, make sure you can actually deliver the services that you promised to participants at scale without having to go from 0% to 80%, or 85% or 90%, right off the bat.
I’ll say one more thing to revisit this issue of equal and equitable. It doesn’t necessarily mean that you have to reopen to everyone equally, the chance to come back. Perhaps there are some portions of your population that you want to test some of these new practices around. It’s not required that in approaching a reopening, it has to be a free for all.
Bart:
And maybe some of the early adopters, for lack of a better word, would be willing to test run it all and make sure, like you said, it’s a soft launch, we’re not at full capacity, every table’s booked type of situation.
Let’s pivot to the real estate side of things. Last time we spoke, I think you were of the opinion like many people that when it comes to making real estate strategy decision and bets, given the uncertainty in the environment, it was probably wise to delay and defer as much as possible, I think as you called it, which is one of my new favorite terms, last reasonable moment decision-making.
Are you still of that mind, wait until the last second? Or, is there any more clarity? It doesn’t sound like it from what we’re talking about it, as it relates to making renewal decisions or placing bets on what the office of the future looks like.
Adam:
I think the events of the last couple of weeks have reinforced this sense of waiting until the last responsible moment to make a decision. That, we are not in a period yet when it is responsible to be making long-term decisions about occupying and using space. It really, I believe, reinforces the sense that we should be planning, frankly, with very short term goals in mind. That might be bringing a certain percentage or portion of your employee population back into the office, or restarting certain operations in certain markets, that makes sense. If I had a near-term lease expiration or, harder yet, if I had to give notice to a landlord about a take or notice of intent to end a lease or to vacate a space, that’s a particularly challenging situation and I would work to try to defer that for at least three to six months if I could because I don’t believe we are yet at a period or in a period where we could be making those decisions responsibly right now.
Bart:
I had a similar discussion with another guest and they used this term of, “You’re going to have to pay a flexibility premium.” If you want that flexibility, if you want that shorter term or if you want just to kind of not really lock yourself in, there’s a premium for that, but that may be the wiser decision given the risk profile of what’s going on.
Adam:
Maybe. Maybe so. Not knowing that guest’s perspective, I can certainly understand that. At the same time, supply and demand is, I think, a wonderful economic condition. Just wanting flexibility doesn’t mean that there’s someone there to snatch up the space. Being allowed another few months to make a decision that might enable you to stay and continue to pay that landlord or building owner, it might be well within their interest without giving you a hard time or a penalty for doing so because the alternative is a full year’s worth of expense between vacancy, marketing, to say nothing of the conditions of the market and who might backfill that space. And particularly so if you are in a tier two city. The denser urban spaces may have a bit more immediate resiliency, although you could weigh that against just the sheer volume of available space to begin with.
Bart:
Are you seeing landlords more amenable at this time to tenant needs such as this?
Adam:
I had spent part of my career on the real estate side of things. Now, the work that I do is more aligned with helping occupiers explore the options that they have in front of them, in some cases across a variety of potential buildings or locations. From my seat, what we see are landlords very willing to work with occupiers to explore the fit of their building. They know that there aren’t right now as many people looking for a space, particularly for larger blocks of space, despite what the somewhat sensational headlines around tech firms would suggest. If you take that top 1% to 2% to 3% of the industry and we put it aside, the overwhelming majority of occupiers are considerably smaller and have a lot of options.
Bart:
In the return to the office, the dynamic workplace, the hybrid workplace, whatever you want to call it, the flexible work space, has been all the rage in what people have been talking about, like you said, a lot in the media. When you’re engaged in these one on one conversations with your clients, are they of the mindset that flexibility is here to stay and there’s three groups of people always in who need dedicated seating, flexible, which are in two to three days a week, and then your almost visitor category, which could be internal and external where they’re in for events or other periodic situations? Are you seeing that dynamic play out in reality versus in theory?
Adam:
In some cases, I wish that we paid a bit more attention to recent history when trying to imagine scenarios for the future. This idea of some group of people being in every day, a large group of people having some flexibility to be in or out, and another small group of people more than not being out and only coming in on the occasional basis. That’s how a lot of companies have been behaving over the last decade. Many of them did not have formalized practices or policies around that, but they had those people within their organization and I think now it’s the formalizing of those practices that has companies challenged because it sets now, it sets expectations, not only within the organization, but externally out to the market that you’re going to be behaving and practicing in this way.
The idea of remote work, or frankly flexible work, isn’t all that new. It is new though for some roles or functions. Some groups or some individuals that had historically been the, “I’m in every single day, and now I might shift over to the newly flexible.” That carries with it a certain amount of trepidation and anxiety. I think it’s going to be really fascinating for us to experience over the coming years, but I don’t think that it’s as dramatic as a real tidal wave of change for the majority of people.
If I’m an assistant or a part of a support team at a law firm and I’d historically been expected to be in the office five days a week and now I’ve been home working effectively for the last 15 months, I might question whether or not I have to go back to being in the office five days a week. But, if I’ve been in a client or account management capacity, and a year and a half ago on any given day I might be out of the office because I might be visiting with a client or I might be traveling, the trajectory of my work won’t be all that different.
Bart:
I think what I’ve found interesting is the ebb and flow of the concept. Initially, all the tech companies came out in the summer and said, “We’re never going back. Work wherever you want.” Then, you fast forward to more recently, I’ve been looking at three companies in particular: Salesforce, Microsoft, Google, all kind of in the same tech space, in the same race for certain talent sets, and they’ve all diverged into different policies. You have Salesforce on one side being very flexible. Google being not flexible now–you’re coming back to the office. And Microsoft, a little bit in between, but limiting the number of days you can be out of the office like 14 days or something like that a year.
I can imagine what drove each of those organizations to come to those decisions and they keep changing. Even in the same industry chasing the same skillsets where everybody’s moving out of San Francisco and going to Utah and other beautiful places to live and they could work anywhere. Now all of a sudden, we’re back the other direction. It just indicates to me that we just don’t know where this is exactly going, and it’ll be different for every company even in the same industry.
Adam:
And that talent is actually sought after not just from within the industry. If your industry is car building, you’re a tech firm, or at least you hire as many software engineers as Twitter, the idea that the set competing for talent is only within the industry or a particular geography has certainly changed. By the way, that was changing before COVID-19’s impact on talent and will continue to do so. The policies, the practices, the decision that companies have to make should be within their industry set, but not just within their industry set.
Bart:
Just like real estate, right? It’s just whoever wants that space. I think for me it underscores a couple things, one, companies don’t know. And to your point, this has been going on for a while. This isn’t a change for everybody, but what is the uncertainty do for the space requirements and space needs? I think last time I talked about this concept of a fixed supply space and a dynamic demand on a day or a day-part basis. If the flexibility is truly there for everybody, how do you manage the physical space to get everybody what they need when they need it? I think is the big puzzle that needs to be solved, the equilibrium that needs to be found.
Adam:
Looking back to some recent history of data collection on this, we know that most companies had, maybe even again if we’d subtract the last year and a half, had historically been occupying space to the levels of 50% to 60%. Most utilization studies when done by reputable organizations will come out with numbers across industries that look something like that, perhaps with a bit of some slight variation attributing it to shift work, that sort of thing.
The idea then being that the supply of space had a certain elasticity already to be able to accommodate increases in demand suggests that the real change that most companies should be making is to the way that people use that space, and so the way that it’s allocated. When desks are allocated to individuals, to names, and they can only be used by one person, or rather, where they could only be assigned to one person regardless of whether or not that person is actually using them, we run into challenges. All of a sudden, one more individual shows up and there’s “no desk for them” because all of the seats are assigned to people, even if half of the people are not in that day.
And, of course, where I’m headed, what this means is that, maybe not for the entire company, but for those who use space flexibly, we need a flexible approach to use, which means a greater degree of choice and control to pick different seats when you actually come to the office in order to use the settings that are there. Free choice, unassigned seating.
Today I think we’re interested in giving people a bit more control over their experience in the office, not just to choose the setting in the moment that aligns best with the work that they’re doing, but also with the groups that they’re working with.
Bart:
I sense neighborhoods, this type of concept that is becoming more and more prevalent, at least in discussions. Do you see that trend going forward? Given your urban planning background, that’s kind of a loaded term, right?
Adam:
It is, and I love it for that reason, because it has application and we can have appreciation for it based on planning and practices around cities and towns. The idea of the neighborhood is important because, again, we saw some early experimentation with things like unassigned seating as a sort of approach to the entire environment. In other words, if a company had a supply of 500 seats, you could come in and on any given day use any one of those seats. We learned from that and that became challenging for people to find you. It became challenging for the company to operate that space effectively. It also became challenging to promote the kind of culture and energy and enthusiasm that a company wanted to promote, particularly when there were light days, back to that 50% occupancy or 60% occupancy number.
Neighborhoods are a good solution for ensuring that there’s still choice and efficiency within the supply of seats, but that people who tend to need to find one another or work near one another can be, in a way, directed to doing that and have a range of settings. The relationship, of course, to the practice of town or city planning is that, number one, that you should have a greater mix or a mix of settings to accommodate different kinds of activities within easy reach or within a reasonable “commute”, even in the office. And that, that mix should be rooted in the frequency of the activity that goes on within that neighborhood. So, that’s open and enclosed, formal and informal, active and quiet. These are things that if you think about your town, those settings or those places exist.
The second one is about distance, so the physical layout. When you’re in a space, long thin rectangles that make you walk from one end to the other in order to identify or find or use a different setting, can be challenging. And you just won’t go that far to take advantage of it. The building shape is fine, but the neighborhood needs to be more considerate of how far people will travel to take advantage of something.
The last one is that really vibrant cities and towns reward curiosity. It means that you shouldn’t be able to see everyone and everything from one point, that you should have to travel and in traveling other things may become in view, may be revealed to you, become of interest. And that’ll allow you to decide, “Have I gone too far? Is it time to turn back because I don’t need what’s there?” Or, serendipitously, “Wow, did I just come across something that is new?” Or, “Maybe this area is quieter,” or, “Maybe I’ve now seen something that I didn’t even realize was around the corner and can enjoy or take advantage of.”
As we think about the way that we plan and program, particularly interior spaces, we want to reward people for being a bit curious.
Bart:
Yeah, that’s fascinating. I’ve yet to hear that perspective, but it makes a lot of sense. The other talk track that’s going everywhere is we’re moving to a more collaborative space. People will move to the office for collaboration.
It’s such a nebulous term. What does it really mean in practical space terms?
Adam:
Yeah, I love this. Collaboration in and of itself is not a thing. Of course, there are different types of collaboration. You and I are collaborating right now in two very different places and we needn’t be in the same room in order to do this effectively.
I have colleagues like that as well. There are certainly moments when co-creation calls for being in the same room at the same time, but there are other times when that collaboration or interaction is maybe even asynchronous. I’m working on a document, I’m going to pass it off to someone else who is going to continue to work on it and then pass it back to me. We didn’t need a conference room for that and yet we were collaborating on that document. I think the first important thing is to understand, “What is truly the nature of the interaction that as an organization or a team, you’re really trying to solve for?”
The second important thing for a lot of organizations to realize is that in all of our study of work patterns and styles, we haven’t found one yet that when they go to the office, collaborate the entire day. So, yes, we’re incredibly hungry for it because in many ways we’ve missed a lot of, certainly the informal, interaction that makes working in an organization so culturally enjoyable and enriching. But in missing that, we don’t want to go so far as to suggest that the only reason people will show up is to interact with others because their work days don’t exist that way.
We don’t collaborate for nine hours at a time. We do a bit of work together and then we break to give our brains a rest, to process the interaction that we’ve had, or even just to try to advance something by ourselves or to let a colleague advance something by their selves before getting back together to work on it a bit more. Tomorrow’s workplace still needs to provide a range of both settings for group and settings for the individual in order to make sure that those activities are well supported.
Bart:
Yeah, that makes a lot of sense. Let’s pivot to our last topic I want to explore, and you touch on this a little bit, data. Data translates as well into technology. Our industry in real estate and facilities has tended to be a laggard in this area.
How do you see the pandemic accelerating or not accelerating the adoption of technology and then the use of data to make more informed workplace decisions?
Adam:
Two ways stand out to me. I’m encouraged because I think both are well within our reach. The first is that many that we’ve worked with and who have are using systems to collect information or collect data on the way space is being occupied and used, have not had those systems as proactively or dynamically outputting information upon which they could or should act.
To be really direct about it, I think that whether we’re talking about the advancement of dashboards or push notifications, often it was, “We’ve got this system. It’s collecting information. If I want to analyze it, I’ve got to go in, I’ve got to download the Excel, then I have to put the Excel in my Power BI or in Tableau and then I’ve got to create the dashboard and I’ll put a report that I’m going to present.” How about that system sending me a push notification when the occupancy of a particular area is more than 10% what it was the same quarter last year? Those kinds of things. Or, when certain rules or thresholds have been exceeded or not met, as an example.
That idea of letting the tool do the work, but push out information from which we can act, is well within reach. I’m really excited to see those types of advances. I keep going back to occupancy, but this could be about energy, it could be about air quality, it could be about environmental issues within the space. Of course, it could be about usage. It could also be related to troubleshooting in some way. You think about the number of times someone tries to start a call or a meeting and fails to be able to do so or calls drop or that sort of thing.
So the second one is access and awareness of information about our built environment by employees. As an employee, particularly if I’m trying to make a decision about perhaps whether or not I’m going into the office that day, maybe it’s reasonable for me to have some access to the number of reservations that have been made or the anticipated volume of occupancy based on the last month’s worth of data. Or, maybe even to see, again, if reservations are important to a company, the number of reservations made by my team on that day. Really, I don’t think says much about whether or not I go in, but particularly valuable for people who might be looking to have a different kind of experience when they’re in the space.
Let’s even go back to the perspective that we were talking about earlier in terms of people’s sensitivity about proximity to others. If I start feeling like maybe there are just a few too many people around me and I’m looking for a bit more in the way of shielding or sort of emotional protection, if you will, I might want to quickly see that there is another part of the floor that is less occupied.
Bart:
That’s fascinating. Well, I think our time is up, but I want to thank Adam Stoltz from HOK. Fascinating conversation. I hope to have you back on in the future because we do know things will dramatically change and we’ll be talking about completely different things a month or so from now. Awesome conversation. Appreciate it. Thanks, Adam.
