Hi everyone, and welcome to Workplace 2.0, our podcast series about today’s rapidly changing workplace. I’m Bart Waldeck, your host for this journey. You may be wondering why we launched this podcast series. Well, none of you would argue that we’re at an inflection point with respect to the workplace and its future, and that the pandemic has fundamentally altered how and where we work. Our goal with Workplace 2.0 is simple, distill the mountain of information and data available into actionable insight that you can use to plan the safe return to the office, navigate and learn during the initial reentry period, and then reimagine your office of the future. We can’t do this alone, so we’ll be sitting down with industry experts and other thought leaders to bring you as much information as possible. As a company, we’re going through the same process as all of you, so we might as well share our own ups and downs so you realize you’re not in this alone. It should be an interesting ride. Buckle up.
Good day, everyone and welcome to Workplace 2.0, Tango’s podcast about all things corporate real estate. I’m Bart Waldeck, your host. Glad you could join us today.
We have a great episode lined up and we’re privileged to have Josh Cushner from Arup join us. And he heads up the consulting practice there. And Josh really brings a different angle to our discussion about the return to the office since his firm and himself are dealing with some of the largest companies in the world and they’re on the leading edge, arguably, of workplace design, engineering, safety and sustainability. So welcome Josh, thanks for joining us for Workplace 2.0.
Before we jump in why don’t you maybe give a little bit of background about yourself, about the firm and your role there?
My name’s Josh Cushner, as you mentioned, I’m the Consulting Practice Leader in our San Francisco office. The firm I work for, Arup, is a global engineering design, planning, and strategy consultancy working in the built environment, so that’s everywhere from sites, buildings all the way down to the minute technology inside the buildings. And we’re about 15,000 people globally, we’re in 40 countries in 90 offices, and we have an innumerable amount of skills that help our clients all through the life cycle of planning, building, and figuring out how to operate their buildings. We’re pure consultants, we don’t build anything ourselves, so we’re really just looking out for our client’s best interests.
Yeah, that makes sense. That’s why I was kind of interested in having you come aboard because we’ve been talking to a lot of folks that are on the occupier side and not as much on the building and the technology and some of the design side of things. So I think you’re going to bring an interesting perspective to this discussion.
And I know you and I have talked over the last several months, as this has all been going on, and one of the things you brought up that I thought was very interesting was kind of the changing sentiment over the last 12 months that you’ve seen across your clients and just engaging with companies. And I think you call it a mindset arc, which as a consultant, you have to come up with these great terms, right? So that’s a good one, I like it. I might have to borrow it. But what have you seen? What’s that arc? What have you seen really transpire since the pandemic hit last March to where we are today?
I’ve used that mindset arc analogy to help, when I’m talking to clients, feel comfortable that they’re not out on their own, not knowing what to do next, right? So there’s sort of like… Once I help people understand that I do work with the real estate organizations of some of the largest companies and fastest growing in the world and if they’re only in this place, it’s okay for you to only be in this place too.
The arc started certainly in the first few months of the pandemic as just a panic of sorts where people were throwing money at problems thinking that we’d be back in a short period of time. It set in that we weren’t, it set in that they didn’t know what they were actually throwing money at, aside from plexiglass and ventilation and things. So then that really settled down into what do we actually know, what can we do? And then got into sort of a state of paralysis, which is, we’ve spent a lot of money, we don’t know to what benefit, and we already had a bifurcation of people with essential jobs who had to be in the office and then people that millions of square feet of real estate that wasn’t getting occupied.
And so the idea that they had to create pandemic resilience and design it and engineer it, it never really played out, right? Because we either had spaces where people were already in it and they frankly didn’t want to know the answers. And then this other hand of companies where they didn’t want to spend the money, not knowing what the value they were going to get out of it, right?
So that really migrated into this idea of, how long are we going to wait until we start to admit that we actually have no idea what’s going to happen when we reopen the offices. And that’s kind of where we are right now is some of the biggest companies are finally starting to play their hand. And those are the bellwethers that everyone else is waiting to follow, especially where we are on the west coast, where there’s just an ecosystem of employees that sort of watch these bellwether companies to see what’s going to happen next.
And so now you talk to these folks and they recognize that they could call their employees back, quote unquote, but this is part of what we’ve been talking about for months is they’re going to answer with their feet, right? And so, how do we help our clients at this point where they’re starting to think about, well, they have a lot of commercial office space, they’re probably not going to use it in the same way they did before. So we’re finally teasing out, I think, the big existential questions that they weren’t to admit in open space, right? But now that everyone’s kind of feeling that same point, you can translate that fear to enthusiasm and we’re starting to see that. We’re starting to see companies think broadly and laterally about the real estate that they actually have, which is interesting.
Yeah. You and I were talking before that, it seems like every week we’re just in a different place and you don’t know exactly where it’s going to go. We obviously just crossed a really bad milestone with hitting 500,000 COVID related fatalities recently here in the last week. On the positive side, we’re seeing cases drop, hospitalizations drop, the death rates drop largely in part, I think, because we’ve gotten over some of the bubble coming from the holidays and the impact of people getting together when maybe they shouldn’t have, and plus the vaccinations being rolled out on a bigger scale. So I agree totally that companies are finally starting to say, “Okay, I can realistically start planning for the return.” And are they just dusting off that old plan or has the thinking evolved as we learned more about how to deal with the pandemic and how to be safe?
I’d say where we are right now is the early sort of low level wrestling match between, well, we have all these old plans, the economy’s going to come back, let’s get to it and people that are starting to say, “Well, wait a minute. Are we really going to take all our old design criteria and just jump into the project right now?”
So these are the conversations that we’re having is like, how quickly can we evaluate what just happened to us, how to set us ourselves up for the flexibility we need in the future and start designing all over again. So we were in the midst of a bunch of those conversations.
We have some clients that are quite interested in better understanding, ventilation is one of obviously the key ones here. We’re fortunate to have a small group of people that really understand this stuff and had been designing laboratories and places where you had to clear virus fast, right? And so you take proven designs of how you clear virus out of a space and you can start to apply these. And then the question becomes, how big do you go? Do you turn these things into a healthcare facility? Do you find a happy medium in between?
So we’re trying to work with ASHRAE, which is the industry body for heating ventilation, air conditioning, solvents and engineers, and trying to work with them to help them upgrade their standards. Because they also came out in a panic, frankly, after COVID hit and just said, “Put in a hundred percent fresh air and run it 24 hours a day,” and all this, what became kind of nonsense in the end that we’ve realized, but because we were panicked and we didn’t know, we had to do it. So we’re trying to work with them to show the work and the analysis that we’ve been doing.
But you get to a point where you start to be able to have interesting conversations with clients about where they are in their design standards and where they could be and how much of a lift is it to go from here to there. I think it’s going to be years until the industry creates new criteria. You could kind of imagine a silver, gold, platinum rating for building wellness and how it clears virus and stuff like that. But we’re not there, we’re not going to be there at a consensus for quite some time.
So I’d say there’s probably about 20% admission, like people admitting that they probably shouldn’t take their pre-pandemic criteria and just start building off of it now. And about 80% of the people don’t want to hear it quite yet, I would say. But they, at the same time, there’s got to be something in the back of their head saying this isn’t the right thing to do.
Yeah. If this isn’t going to move the needle, I don’t know what will. But you said something, a couple of things, that lead me to this thought that I’ve been dealing with and talking to clients about is we’ll be in a learning phase. We don’t know, what does dynamic workplace mean, what do buildings need to be to be safe. It’s not fully understood to a point where people are going to place large bets, whether you’re a developer or building owner, creating new spaces, retrofitting existing spaces, or you’re an office occupier turned to figure out, what does dynamic workplace mean when half of my staff isn’t in any given day and do I have more collaborative space and how does it change everything.
But everybody’s kind of, you used the word paralysis, everybody’s kind of frozen because we don’t really know. Do you think there’s going to be a learning period when we first go back, whether it be for the occupiers and how their spaces or whether it be on the development side? I mean, there’s got to be.
There’s the whole spectrum of the cautious, strategic people. So we’ve gotten some requests for getting started on some pilot projects where people are just throwing everything at it, right? Touchless technology, the healthiest ventilation possible, just all of these goals that you can possibly imagine. They want to build like 10-20,000 square feet and see what it’s like. So those folks will play one role, right? And then there’s sort of the, we’re just going to shove people back in the office and see how it goes. So those folks will play another role, right? And then sort of everything in between is my expectation.
So I really need to meet people where they are, frankly. And I think by being a consultant like we are and touching dozens and dozens of companies every week. If we start to pull the stories out of each of those conversations and tell them to the other clients within the bounds of confidentiality, it educates the people who aren’t ready to think about anything except shoving their people back in the office. And then it also gives these people who want to be more strategic and thoughtful about it, some of the, what happens if you don’t. Because that’s part of the value and the reasoning that you have to give to fund these things.
And throughout the pandemic, we’ve been trying to, frankly, stir up some work and some interest around being able to help people reenter their workplace. And largely the ROI question was always there, how much it’s going to cost and what’s the value. And I’m like, “Well, I don’t know, it’s been a hundred years since a pandemic like this, so if you want me to tell you what the future is going to be like, I can’t, but we can guide you in the right direction.” So it’s been very few early leading innovators willing to spend money, even when you can imagine the ROI, right? It’s hard when it’s not proven yet. So I think it’s going to be people like you and us who are consultants that are kind of seeing a lot of the marketplace and teasing out the stories of the broad spectrum of what everyone’s doing from the people that don’t care to the people who care way too much.
Yeah, exactly. And not knowing what the dynamic workplace means within an industry, even within companies within the industry, I think it’s going to vary. There seems to be articles coming out every week with studies about what employees want as it relates to returning.
I think there was one in the Wall Street Journal, not too long ago, called, is a home office actually more productive, some workers think so. And there were some interesting stats in there that grabbed me. One of the things they cited was 80% of workers would like to continue remotely three days a week or more post pandemic and this was cited from the global workplace analytics and video technology company, Owl Labs. They also mentioned a couple of stats from the Beckerman Friedman Institute of Economics at the university of Chicago. One of those was, the question of, are you more efficient in your home office? And 42% said they were better, 43.5% said they’re about the same, and 15% said they’re worse. And then when asked whether working from home met their expectations, 61% thought it was better than they expected, 26% the same, and 12% worse.
So, we can pick up the paper tomorrow and we’re going to read a different one that says more people want to go back and is that because they really want to go back or they just want to be stuck working from home. So how are your clients thinking about this unknown? Is it, to your point, force them back, let’s see what breaks and then fix it, or are they giving some, outside of the obvious safety and distancing and protocols and cleaning and things like that, are they doing things or thinking about design in the short-term before they really know what it’s going to evolve into? Because there’s a lot of talking heads out there, but everybody’s just speculating what’s going to happen.
That’s right. I mean the data that you’re bringing up is at its core, people have a new way to get happiness out of their lives. And they’re finding that a lot of people will want to work in some hybrid manner. And the other driver that’s not really being spoke about, I think, is that business corporate travel, air travel, is probably going to stay way low. And part of it is driven by corporate greenhouse gas goals that have completely changed during the pandemic as major companies are forcing their suppliers to align with their corporate greenhouse gas reductions. And if you look at where the majority of carbon is spent, it’s largely on travel. And so the ability for a company to use the pandemic and keep travel down at that level means that they’ll actually be able to meet goals that they never would have been able to meet previously.
You put those two things together, and you’re starting to say that your workplace is almost going to have to be a hybrid for a large, large percentage of companies out there. I think there’s a small percentage of like, I think about the gaming and broadcast industry, where the technology in the office is so expensive you wouldn’t put it in someone’s house, you have to come. But that’s a really small percent of the overall workforce.
So you start to think about those drivers and it says that you’re going to have three pockets of employees. And I think Salesforce recently came out,
and it was pretty intelligent for just saying there’s people that will forever be remote, most people will be hybrid, and they emphasize, I believe, a small, I don’t remember the words, but a small number of people will be in the office every day. And I think for them that and most people that’s probably good enough because you won’t know how it plays out for a year or so. [crosstalk 00:17:31] But if you expect you have to cater to those three, no matter what that sets you off on a path to do something.
Yeah, no, I remember reading about that as well. And I think the chief people officer was saying that the office is more than ping pong tables and vending machines. And it’s interesting, I know some of these large, the Googles of the world, the Microsofts, who were on the leading edge of employee experience. And look, if we can bring them into our campus and they never have to leave where they get their dry cleaning, all their meals, and everything else was all about coming in and keeping a captive, productive group. And now, what do you do with all those facilities if you’re not driving that much traffic employee workers to that and how do you repurpose them?
So are you, from a design perspective, the idea, that big chunk in the middle of it is the hybrid worker. So if you have the always remote, always in the office and then the majority are going to be in and out, how do you facilitate the design of a workspace for that type of situation where it’s so fluid?
Well, it’s certainly less desks, right? I mean, I don’t think anyone’s arguing more desks unless you have a really unique situation. A lot of the discussion is around bringing hospitality type features into all these spaces. I think a lot of asset holders, people that actually own the property and occupy them, are starting to think about a totally hybrid building where you have some work, you have some live, you have all the other things. And it comes back to what those tech campuses were creating was a way to de-hassle your life, so that you can focus on your work. And so now the hassle has just become, why would I get out of this seat that I’m in right now and throw two hours into my commute every day. And so in some ways, can you justify me having to go through that hassle every day or not?
So your workplace has to become a place that gives you things you can’t at home. Or if you’re a customer or a client, why would I fly five executives out to your office? It better be a spectacle because I can certainly have the conversation over Zoom now. So that totally changes how you drag people into your office now and why people engage in that way. And so some of the most forward-thinking companies and the people that frankly have the funding to pilot some of these stuff are exploring hospitality. They’re exploring all these technologies and they’re testing out the early adoption of these things or getting ready to.
And you had mentioned that last time when we spoke this idea that, how does the employer motivate the employee? And there’s parallels to what’s happening in a lot of different spaces. I know on the retail side of our business, we have the situation where the fundamental buying patterns have changed because of the pandemic. Advancing a trend that already was going to more online, some say 10 years in three to five months, and it’s altering the purpose of the store. Because when you look at a retail store, if you think everything’s going online, the initial thought is, “Oh, retail apocalypse. This is just part of the death of retail,” and everything like that.
But when you really peel it back, you need to buy it somewhere, online or in store, it needs to be fulfilled from an inventory perspective, from either a warehouse or a store, and ultimately you need to fulfill it where the customer takes possession of it, either in a store, through delivery or pickup, right? So the store in that model becomes arguably even more important, but what the store is and what it does is different. It needs more square footage for inventory, it needs pickup lanes, it needs more drive through lanes for the restaurant, things like that.
So it’s really forcing retailers to rethink what a store is as similar with office space. So what is the office space? How do we make it something that people want to come to? Just like with the store, you want an experience? You want to be able to have a showroom if you will. So is it your thought and what you’ve been hearing that that is, is it more collaborative space? Is it more meeting space? You don’t need to go in for dedicated work because you can do that at home.
Yeah, no, you got it. I mean, just my own experience, we have an office that’s unoccupied for a year or so, and we’ve been using it from time to time when people want to prep for some interviews, right? And it’s just kind of like having that space with the whiteboard, but I’ll also say that we’re going to see Zoom, Teams, all these things really start to invest in the capacity to do what you can do in the office. And they’re going to go at that in spades. So whiteboard, collaboration, all these things are going to start to get better and better and we’ll see how much it pushes out, even that component of the office.
And there’s a lot to learn. A lot of people think that young people are going to want to be in the office because of the social aspects to it. And senior leadership has been willing to go to the office largely because they want to make sure things are running the right way. You can end up with this weird barbells type shape. And these are the games that people are going to be surveying the heck out of their employees. I’ve already been surveyed many times already. We’re all going to get the survey fatigue because everyone wants to know the answer before they start renovating their space.
And it poses a lot of interesting career development issues. Whether it’s something as simple as onboarding to how do you get promoted in this type of hybrid environment? Do I need to be showing my face in the office every day and driving stuff or is it enough to be on virtual? And it’s just going to really, I think, cause a lot of unknowns to cause a lot of anxiety.
It’s worth talking about equity for a minute because I see that as a big driver here. And when we go through sort of the services that us at Arup can provide, as we’re thinking through what happened in the pandemic and what to do about it, so when we’re going out and working with our clients and talking about sort of the scales of how we ask the big question to try to figure out the questions that we’re answering, we can look at entire portfolios with them and we can look at buildings and we can look at the technology.
And when we talk through all of those services and thinking, the part that really takes the most, I found, is this discussion about the future of collaboration technology in the office. And when we talk about equity, we start talking about, like you mentioned, you might have some of your best talent that you used to spend all this money on to have buses and beautiful whatever, and now you have to somehow give them an experience that retains them at the job. The talent retention component of this.
So the idea of having almost broadcast scale – lights and cameras and microphones and all these things, because ultimately what you’re trying to do is if you remember maybe a decade or more ago, Cisco created the telepresence room, that was popular for a while, it was very expensive. And it gave you full scale visuals so a human of the same size is at a table with you virtually. And Cisco made you buy these expensive lights and cameras and everything and so very few people actually did it in the end. Well, this seems to be the mode that’s coming back of interest, is how do I create full life-size presence virtually. And so I think larger scale video screens are going to start popping up in the office, the ability to rapidly put in some cameras and some microphones and having them be decent with some decent lighting’s going to be important.
And then another really interesting component is sound and it’s somewhere down in the bottom. But part of the fatigue that we all experience is because of sound. And getting back to studies and data, there’s work that’s been shown if you actually turn off your camera, that you get better sense of emotion and how people are really thinking as they’re talking to you.
It’s counterintuitive, but you get more accurate information if you just are listening and you’re not confused by the way people are posturing. And so there’s work that’s trying to be done because… And I’ll stop on the sound thing for a second, it’s just really interesting to me. Which is that we’ve compressed sound, human three-dimensional sound, down to come out of this little point in your computer. And in addition, all these companies have made it so that if one person talks, it kind of silences everyone else, which is why it’s so hard to have a conversation and a group conversation. So we’re going to also start to see deployment of systems where you have spatialized audio, which is basically if you have a virtual room with 10 people, you’ll hear the people on your right, coming from your right, you’ll hear the people from the left coming from the left and those individual audio streams will be able to happen at the same time without fighting with each other.
And to get that naturalness, you have to have an array of speakers and you have to have a microphone that can differentiate. So none of those things are super expensive to deploy once they’re in Teams, in Zoom, in those things. So I think it’s going to be a combination of lighting, AV, and sound that at that scale you can start to create real equity. And then the question becomes how do you then deploy that in the office so it’s sensible and not crazy. And we got to work through all that.
Because I know, just even IOT, the promise of it has been unfulfilled because of the expense. You have certain square footage, people aren’t going to want to invest that much. Now the good news, what you’re saying, you could probably have certain parts of the office that you’ll make that investment and those are probably going to be highly sought after conference rooms to reserve and things like that. But what about VR? Do you see virtual reality kind of mixing with augmented reality?
Yeah. We have a client, an executive, who is not a big fan of come into the office and they would like their other branch executives in other cities to basically have… He wants to be in contact with them all the time and is interested in a VR experience. So even beyond the telepresence that I just described, where everyone’s on 2D. And for the people that are willing to take that step into the virtual world, that’s certainly a place where collaboration can happen effectively now-ish.
There’s a lot of platforms, unfortunately, a lot of them are in beta, so they’re constantly changing, they don’t always work. But we’re absolutely on the cusp of taking basic Team functionality and Zoom and all that, bringing it into the VR world. And there’s a bunch of startups that are really fighting for that space and the ability to do it, but that’s where it’s cool because then you get that world of, as I was talking about the audio presence, you’re able to share videos still within the virtual world. And you’re able to have whatever version of avatars you’re looking for, whether it’s an actual video hologram that’s in your VR space or something different.
So I wouldn’t say it’s there yet, but there’s a lot of interest in it and you can easily see as people get more comfortable… I mean, just think about how many people couldn’t find the microphone on their own computer laptop a year ago, right? Probably 90% of people didn’t know how to turn the mic on and off. Everyone’s very literate with that now.
No one wants to put on a headset or anything like that, but we’ll see as we migrate through what people get comfortable with.
Yeah. It’s a really interesting time, quite frankly. It’s got to be fascinating for you guys on the design side to be playing in that space and really having the rope to think differently about how things have been.
Before we wrap up, I wanted to kind of circle back to the building itself and this concept of a healthy and safe building and what that really means and sustainability seems to be getting its legs again in our space as a result of this, I know you mentioned some of that before. So, you’ve talked about healthier and safer spaces. So what does that mean? What are developers doing in this area to try to ward off the next pandemic or the next situation? I know there’s a lot, bringing in green, there’s a lot of things going on.
Yeah. I mean, there was a move of well buildings and biophilia, which is this idea of bringing nature into your workspace and just generally, people prefer that. And there’s benefits to productivity and there’s benefits to restoration from stress. And both of those have been proven pretty well. If you can provide access to light and fresh air and bring in green into the space and those types of things, whether it’s… The healthcare environments actually more proved it and then we brought it into the workplace environment because it’s proven in the healthcare environment. I think that there’s going to be a lot of appetite to continue to spend money in that area.
The interesting part where technology comes in is you want the proof that it’s meaningful and it’s doing something for you. And I think that’s where the next level of very inexpensive IOT sensors that you can deploy at scale, whether it’s in your lighting sensor or whether it’s in your room sensor or wherever you’re going to get it. And then you’re going to be able to produce information back for your user group.
So no one could test for virus, right? That just doesn’t exist. You can’t put a sensor in and say, “Oh, COVID’s in the air.” But you can actually measure a bunch of other things about level of CO2 that’s in the air and how many people are there and you could begin to extrapolate into what’s healthy and what’s unhealthy in order to provide that information back to people. So the migration that I see is really about learning about what type of ventilation you should be providing, the basics of monitoring your space, and without getting too crazy, you can talk about general health. And you don’t want to talk about like, no one’s going to get sick in my building, but if you extrapolate from what the pandemic taught us to the future workspace, we should be able to have fewer people get the cold and fewer people to get influenza.
We’ve seen that with the flu, right? I mean flu has dropped like a rock this year because everybody’s sheltering.
Right and if you just add up the productivity loss of people being sick pre-pandemic, we should have been doing something about it anyways. And now that we have this situation, if companies start to invest and put this hospitality in and they put in these virtual rooms, so you can work with everyone, that’s a lot of investment to be made over a lot of assets. And if you just have to shut it down, because there’s another pandemic scare, that’s a huge waste, right? So I think people, when they have those investments, they’re going to want a healthier space and they’re going to want to have some proof for it and they’re to want to show it off and explain to people.
And just one last anecdote, going all the way back to the beginning of our conversation, people spent so much money in the beginning of this thing. They now have felt that they’ve wasted money and they’re scared in some ways to spend another million dollars after they just spent a million dollars on all this stuff that didn’t actually do it for them. So there’s a little bit of once bitten, twice shy situation that that has to be overcome as well, where we’re talking about, we’ll increase the dilution in your ventilation system by 25% is nowhere near as sexy as I just put this UV light that’s zapping viruses everywhere that they just spent a million dollars on and we just said, actually that doesn’t do anything. If you think about your airflow paths, you’ve kind of wasted that money.
So like I said, at the beginning, we’re meeting people where they are and trying to push them in the right direction and planting seeds so that when they’re ready, they can come back and say, “We figured it out.”
I think, as we’ve been saying, I think we’re right at that precipice of going back and really seeing what’s going to happen. And I’m hoping that the positive momentum in areas to improve the workplace will occur more in that middle space. Whether it’s us or other companies that aren’t necessarily of your scale or of the Google scale, there is a natural tendency to say, okay, it’ll be two things. It’ll be, you’re either in the office and you’re not. And we can decide how that works, but it doesn’t really change how work is conducted, we’re not really going to renovate the space and create more collaborative space, we’re just going to do whatever.
So it’ll be interesting. And I look forward to hopefully having you back on the show to talk about this as we go through the next six, eight, 12 months, because it’s going to be a whole nother level of change before we settle into the next normal.
Yeah, absolutely. I think as this year goes on, as we get to the Fall, we’re going to learn so much more. And as people start venturing back, the proof’s in the pudding, right? So we’re all excited to see what happens as we have the choices and now we can make them.
Yeah, absolutely. Well, again, appreciate you joining, Josh. Really fascinating. It’s going to be interesting because you come at it from a much different angle than some of my other guests, so appreciate it. And look forward to seeing you next time.