EPISODE 4 | 42 MINUTES | 4.19.2021

Technology’s Critical Role in the Dynamic Workplace

Group 11

Simon Davis, Senior Vice President of Workplace Technology at Impec Group joins host Bart Waldeck to discuss the important and evolving role that technology plays as companies head back to the office, as well as plan for the workplace of the future.

Bart Waldeck

Hi everyone, and welcome to Workplace 2.0, Tango’s corporate real estate podcast. I’m your usual host here, Bart Waldeck. Thanks for joining us. In our last few episodes, we’ve been talking with a lot of experts about planning the return to the office, and what is meant by the “dynamic workplace,” which is a term that a hybrid workplace that you can’t really escape these days. But today what we want to do is put a bit of a different lens on the topic, by focusing on the evolving role and very important role of technology as we come back to the office, and then ultimately the office of the future.

I’m very excited to have our guests today, to help us unpack real estate technology and its role in this process. The one and only Simon Davis, Senior Vice President of Workplace Technology at Impec Group. Simon, great to talk to you again. How is the New Year treating you?

Simon Davis

Likewise Bart. Thanks. Good. Sort of New Year, few new changes. Probably didn’t necessarily expect to still be at home when the year started, but from a personal level, it’s been great being able to spend a lot of time with my wife and my young daughter. It’s been an enjoyable change of pace still. I think we’re all starting to get ready to get back to a little bit of normality and see people again, but taking advantage of the time while I can.

Bart

Yeah, absolutely. I know you’ve made some professional changes as well recently, so why don’t you tell us a little bit about your move over to Impec Group, what your role is and maybe give our listeners some background on the firm itself?

Simon

Yeah, absolutely. Impec is based out of the Bay Area. It’s been around since 1991, when it was founded by Raffy Espiritu. Really the core of Impec’s legacy has been very much around delivery of services, whether that be janitorial, moves that changes, project management, signage, et cetera. When I first sat down with Kevin Manning and Raffy and Christine Chen at Impec, they talked to me about, I would say a very traditional role in relation to real estate technology, of coming on board and helping to manage their IWMS program.

Simon

I was pretty honest about where that role fell for me and I said, “You know, actually it’s not an area that I’m that interested in.” Surprisingly then they asked me a question, which I think people should ask more often in an interview, which is what would you like to do? I’ve long held the belief that a few things in the industry in need of change. One is the fact that most organizations that offer consultative services within real estate, they’re not really truly offering agnostic solutions. They’re looking at solutions that they fit a client for a specific purpose or reason.

Maybe it’s based on a relationship; maybe it’s based on referral fees or reseller fees. I’ve long felt that we as trusted advisors should advise our clients on what’s best for them, not what’s best for us. That was one area that I brought up that I felt we could really add value too. The other one, and I think goes back to my legacy in the startup world is, I continually was made aware of technology that with the right mix of people, money and market positioning could be incredibly impactful, but oftentimes failed because they didn’t have access to those things.

It’s not purely a capital play. It’s often just having an ecosystem and an environment where the right people to talk to, you know companies that are in need of a specific product. My other concept for Impec was really developing an accelerator, where we can help provide advisory services for organizations, where we see there’s a gap in the market, and our value-add is not throwing a few million bucks at them, our value-add is understanding that yes, there’s a gap. They meet the need, and then be able to represent our support then depending on the specific technology solutions to help them with that acceleration.

Super excited. I’ve been with the company for four weeks and I go through probably 10 to 12 meetings a day, but most of them are things like this, where I’m sitting and talking and thinking about what do we need in the industry and how can we change things? It’s great fun.

Bart

It sounds exciting. I think you hit it on the head. There’s a lot of conflict of interest out there in the consultative side of the world. There always has been. I’ve been on that side as well, and it’s great that you guys are bringing a fresh perspective to it, not necessarily tied to a solution per se, but a deep understanding of what’s out there and then what’s the right fit for the right situation for the right client.

Simon

Nailed it. Absolutely Bart. That’s exactly where we want to be.

Bart

That’s very good. Awesome. Well, the good news is, as you mentioned, things are hopefully returning more towards a new normal, whatever that is. I know vaccinations have picked up pace. I think I read an article in The New York Times, in the last couple of days where I think 40 States have said that they either beat or meet President Biden’s goal of adults eligible for vaccination starting on May 1st. That’s good news. I find a little momentum in a way that I didn’t necessarily last July and August when we started thinking, right after the holiday in September, we were going to all be back and then some went back and pulled back.

This little gyration that we’ve gone through is, as variants have been discovered and there’s been surges and stuff like that. Do you share a sense of an impending return to the office with your clients?

Simon

Yeah, I’m certainly starting to see more of that, and I think more of a concerted effort to look at what does that actually mean? From my perspective, I’m in Arizona and yesterday in Arizona was the first day that anybody over the age of 16 could register for an appointment to have a vaccine. I actually volunteered last week to help with the administration of the vaccine and got as a result, got the vaccine myself. Just in that eight hour period where we were doing that, you just saw that relief and happiness in people’s eyes about getting back to more of a normality about that.

I’m seeing a lot more conversations with that around the workplace. I think as state scenarios start changing the rules on about who and when people can come back, companies are certainly feeling that. I think it’s starting to take a real look up, what does that mean? In terms of who do we bring back, when do we bring them back? I think what I would say is, the big driver is very much around the purpose as well. I see the workplace, like any tool that we use to be more efficient, more productive.

It’s times when it’s very, very appropriate, times when it isn’t, you certainly need to know how to best use and leverage it like any tool. I think our perspectives on it may well change. I think we see there’s not necessarily the need to 100% be in a physical building. I think it’s going to be a real driver for people, in terms of what is that purpose of using the space and what benefit do I get versus the downside, if I have to commute for example into the office, where is that benefit analysis?

Bart

When you’re engaging in these conversations about return to the office, are folks dusting off the plan that they newly minted in the summer when they thought they were going back and it’s just, let’s go with that? Or is there new knowledge that’s been added to the plan, and change things that you’re seeing, or is it pretty much what it was before?

Simon

No, I think people have changed as the time has gone on and as they’ve looked again, I think more strongly than ever before the purpose of being in space. I think a lot of what we’ve looked at historically has been more rearview mirror data and information. Looking back on pre pandemic, what was our occupancy rates? That’s going to give you some information. I think for me, the value that gives you if you have that data is really where was our peak? I think if you think back pre pandemic, most organizations would probably only using their space 60, at most 70% of the time.

They already had a delta. That delta is without doubt getting that bigger, whether that’s short-term or long-term is debatable. But I think having information about that peak information and look at that, you’re not necessarily going to have a high occupancy as you come back. I think the key aspect really is, how do you adapt and how do you use more real-time information to make the determinations on how best to leverage the space. There may well be an initial rush back in certain areas and in certain companies.

I think we’ve all missed the social, the human interaction. I think we do feel that innovation and those intangibles are best driven in an environment where people are next to each other. I think company’s willingness to bring back is going to be partly related to their DNA. Do they feel they can be as productive, as effective inside versus outside? I think one of the other interesting components is going to be behavioral, if my boss is in the office, then I’m probably more likely to be in there, because I want to be a part of that ecosystem.

If my boss decides that they want to spend a quarter in different cities and in different countries potentially, then I would say empower more of a remote environment. Again, that might change how individuals perceive it.

Bart

I think you’re hitting it right on the head. It’s this concept of dynamic workplace, hybrid workplace, whatever you want to call. It can’t seem to escape the term, but I think it’s the right term and based on our conversations out there, it seems like broad sense folks are falling into one of three buckets. You have your predominantly office-based workers, are in four to five days a week. You’ve got the middle group, which complex workers, whatever you want, maybe they come in anywhere from one to three days a week, maybe two to three, and that’s the largest group.

Then you have your remote folks who only would come in for company meetings, collaboration, or maybe customer meetings and stuff like that and they can largely work from wherever. Is that how you see it shaping out in your conversation so far? Is it these three main groups and you just need to figure out how to accommodate the dynamic nature of that transit type of operating model?

Simon

Yeah. I think that’s definitely a part of it. I think one of the things that remains to be seen the uptake of it, I would say one of the newer component pieces people are looking at is really that whole concept of third place. I think most people traditionally have looked at, I can work from my house or if you’re allowed, I can work from my house or I work from the office. There’s two places. Third place is getting more prominent.

Is there an intermediary or hybrid is just something that’s more convenient for me, that takes me out of my home environment because maybe I have an elderly relative or a young child, or maybe as I did when I was 22 years old living in London, I lived with nine other people and you can’t really work very well on that environment. I’m really intrigued to see what happens with those third places, and how big they become. I live in Arizona. I work from home. I don’t see a lot of myself changing much, because I’ve worked from home for eight years.

If I lived in New York City or if I worked in New York and maybe I lived in New Jersey, maybe the idea of a hybrid where I’m getting out of my home environment, but I’m in a more work centric environment where I may be able to interact, with either peers or even people from other companies for the social and innovative side of life without having to go all the way in.

Bart

Is that a WeWork type of environment?

Simon

Potentially. There are interesting companies looking at different ways of doing that, whether you would provide that same environment in a hotel setting or in a university. I think we’re all seeing the likelihood is there’s going to be a lot of space potentially available, whether it’s companies subleasing or whether it’s just alternative ways of looking at space and they’re going to be interesting.

Bart

How about the mall? The mall can be a good one.

Simon

Absolutely. Why not? Frankly, if you looked at somewhere that can attract people that want to come in, how about a place where I have retail and I have amenities on hand very easily? I do think that could change. I have a feeling that a lot of the things that people initially looked at for how our world would change as a result of having driverless vehicles, could also be impactful in the new post COVID world, just re-imagining what real estate means and the value of it.

Bart

It’s interesting, that comment reminded me of, I don’t know if you remember Cornet several years ago and I forgot who the speaker was. It was a futurist venture capital gentlemen who talked about, we don’t need parking lots for retail anymore, because it’s all going to be autonomous cars dropping you off and what are you going to do with all that space? Times are changing for sure. In that first, second, third place work, what type of technologies do you see being necessary? Obviously, you’re going to need the video conferencing.

You’re going to need those in the cloud document sharing types of things. Anything else that comes to mind that can create a level of continuity between where people are and how they’re executing work as individuals or groups, or as a company?

Simon

Yeah, actually I was fortunate to host a panel last week with a good friend of mine, Corinne Murray from RXR Realty. She said, I asked them about bold predictions and her bold prediction was, “I see people booking their space the same way as they would book an amenity on a cell phone device.” It’s the same as I book an Uber, I book an office for the day and what’s going to attract me to that space is going to be, what is the purpose of me going in there? Who else is going to be in there?

Then also peripheral things like amenities, travel time, air quality, et cetera. Again, it’s not a new trend, but I think the pandemic has accelerated the whole belief of workplace experience technology, as a way of attracting people back into the space. You need to make it easy. You need to make it powerful and valuable. I need to know, “Okay, Bart’s going to be in the office on Tuesday. We’re going to meet about this. We have the right type of space available and it’s Tuesday, so they’re serving tacos, right?”

That’s going to bring me back in. I think technology to help with that is going to be key. It’s funny because it’s going back to things I think in some respects that went away, like being able to book spaces and desks more specifically, but it’s that fit for purpose, nature, where your space is going to be, that I think is going to be what creates that sticky environment.

Bart

Is today Tuesday because tacos sound quite good. No, I think you’re right. One of the things that parallels, I should say that we see in other folks that we have is like in retail, for example or in theater space. There’s got to be reason for you to get off the couch to physically go somewhere. Why do I want to go to theater when I’ve got an 85 inch TV and I’m streaming it off of Disney Plus? Or why do I need to get up and go to Whole Foods because it could be in my door in four hours? It’s got to be a compelling reason.

It also has to fit into the individual’s needs on that given day. To say, I’m going to come in the office two to three days a week it’s not necessarily, I’m going to come in Monday, Wednesday, Friday. It’s, “Okay. I’ve got to drop the kids off at a recital on Tuesday at 1:00, so I’m going to go in the afternoon.” It’s got to fit into life, fit work into life versus life around work.

Simon

I think that’s a big thing that we’ve really seen through the pandemic, is I think people have reassessed, reevaluated the importance of work in relation to that their home experiences. I know myself I’ve really valued from spending the last year, watching my daughter grow up. I think when you look at the boxes, I think it could well be a case that will continue for some people with, maybe I get up in the morning and I do an hour or two at home, and then I take my child to school or I go to the gym and then I decide I am going to go into the office for a few hours, because there’s something specific I’m trying to achieve.

That obviously, my whole frame of reference is very much around the corporate world and probably more knowledge workers. I recognize in other industries, you can’t do that. But I think for me, it’s always been about flexibility of choice. As a road warrior, you become used to working wherever you have to. My favorite place to work frankly has always been, on an international airline sat in the middle of the plane, getting food, watching movies and not being able to be disturbed. I get my best work done on a long haul flight, because of those conditions.

You’re right, it’s conditional, what do I want? What do I need? That’s going to be such a big drive for people when they make those determinations.

Bart

Yeah. The dynamic workplace, I think in my opinion will be different by industry segment. Like you said, there’s knowledge workers in one industry versus, maybe you’re working in a manufacturing facility or a distribution center or some other type of work environment, where there is no choice, you’ve got to go in to do that job. But for the knowledge workers even within industries, there could be variance. Maybe at an industry level financial services is likely to go in an office, because they have trading floors and other stuff like that, and a technology firm can be 100 % remote.

But even within financial services, there’s a leadership element. There’s a culture element, and then there’s down to the, as we’re talking to the individual decision-making, about what they want to do, that’s all going to be put into a blender to mean a dynamic workplace for that particular company and that individual. Does that ring true to you? Does that make sense?

Simon

Yeah, I think … I mean it’s interesting. I think for me, there’s a lot of people making wild pronunciations on what’s going to happen without … There doesn’t have to be a one or another. The Goldman’s model that everybody’s going to be in the office can co-exist with a Twitter model that people can work remotely. Yes, it will probably change the profile of who they’re recruiting and who’s attracted to that, but that’s what work’s always been about. I think we probably got to the point where our working lives; it became so skills-based that you could work for any corporation.

Traditionally it was, I came out of school, I have a trade, I go and do that trade. Probably for the last 20 or 30 years, if you were in some of those knowledge worker environments like sales and marketing or HR or finance or technology ubiquitously, you could go work for anybody. Well, it’s just going to mean, I’m going to go and work for the company that best suits what I need, whether that be an environment that’s more flexible, or I want to work for an entity like a Goldman’s, where you do have that ingrained culture, and you do have that visibility of the people around you.

I don’t believe there’s a right answer, frankly. I believe there’s flexibility across the board. It will certainly change how people want to work and where they want to make those determinations and decisions. But again, there’s no way it’s going to be 100 % of people going in or 100 % of people staying home. There’s going to be a hybrid. I do think on a macro level companies that are more flexible, they’re probably are going to get a bigger pool of people they can pick from. But the ones that are going 100% back in the office, it’s because they want to instill that culture in their employees.

They don’t necessarily want a gig worker who wants to spend three months of their life working out of the back of a camper van, and that’s fine.

Bart

Yeah, exactly. I think like for retailers, it presents a challenge from a space and occupancy and setup standpoint. If you have such a dynamic hybrid type of demand, what do you do with the office space? How do you meet that variability on a given day? I know there’s going to be stages to this, as you said, we don’t know now. If you’re saying you know, then you don’t know. Once we go back, we’re going to have to learn what it means at a company and individual level.

But the initial go back, what are companies doing in their space outside of the usual of trying to distance, de-densify, put up safety measures and things to promote no transmission of disease and other types of things, what are you seeing people do initially? How are you advising them there?

Simon

Well, I think for me, the most interesting aspect that comes out of all of this is going to be data related. I think the vision for the next probably year or so is going to be related to experimentation of what works, what doesn’t for particular organizations. We don’t even really know what data we need to make sense of for when we come back. We never really ever determined, what is the data that can point me to be an efficient environment? Or what makes me more innovative? A lot of those things are just more innate.

They’re hard to pin down. I think that’s the thing as well, is that we think we know how we measure these things and we really don’t. We’re going to have to have a look at that. From a pure space perspective, one of the analogies I’ve always loved, which I think is very applicable to the office and even more so now is, when you’re designing a car park at a shopping mall, you’re not designing that for Christmas Eve, when it’s going to be the busiest it ever is. You’re designing it for what is the average, what is the optimal.

I think we’re going to look at that more from the office space. My optimal may be different than your optimal, because my optimal might want more spaces for collaboration. I might determine that actually, I’m going to give people biggest spaces, because I want them to feel more comfortable, more socially distanced. I might decide, I want to pack people in more, but I’m going to bring in technology that’s going to make it more visible that we’re adhering by social distancing rules, and that we’re doing regular cleaning schedules.

Another great point, a friend of mine made last week, Steve Weikal from MIT was, maybe out of the pandemic elevator booking technologies are going to become a boom, because people like not waiting for an elevator. Not because of the pandemic piece, but anybody’s who’s ever stayed in a hotel in New York City and had to get to a nine o’clock meeting, you’ve got to plan that into your day. I think there are unknowns that are going to come out of this, the experimentation of what works, what doesn’t for a company, for a department, for an individual is going to be really prevalent.

There’s also, I think going to be a bit of kid gloves in terms of bringing people back. I don’t see companies mandating people coming back. I see them encouraging people to come back for sure, because we are missing aspects of culture and of collaboration from not being around other humans.

Bart

Yeah, absolutely. As it relates to day one and going in, are you advising most clients, don’t make any major changes now. Make some initial thoughts, maybe based on the type of workers you have, the frequency that they say they’re going to want to come in, whether it’s the neighborhood concept or zones going to a bigger portion of the space? Is that the MO initially, don’t make any major changes?

Simon

I think honestly, that’s been in my mind is, has probably been the most representative thing of the pandemic is that, people haven’t made those rash decisions from the occupier standpoint. Companies didn’t rush to try and get out of leases or get rid of space. I think they’re going to see when they come back, where they really should end up being. I think a lot of organizations have already made some of those assessments to say, “Okay, if we did go on a hybrid model or a more work from home model, which types of resources could do this?

What’s the skill set? What’s the equipment needs? What’s the value on the company of doing this? I think that maybe some things that traditionally were office focused like contact centers and call center agents, people might go more hybrid with that, because I don’t think people would have believed pre pandemic, that you could have a functional call center for 18 months without them being there with line of sight management. I’d love to see those numbers. How has that productivity changed?

I think in some areas, that productivity may have increased. For me, it’s very much a case of looking at the, why do you as a corporation want to bring people back? Why do you, to your point Bart as a team, what’s the benefit of bringing people in? Is it cultural? Is it because that’s the way we work best? Again, that’s a fine answer. Then I think as an individual, what makes me want to come back into the office? Unfortunately you’re going to get conflicts between the three, because maybe I am a little bit more concerned about the pandemic and maybe I live with an elderly relative, but my boss loves everybody being in the building and wants us all in there, just because he or she wants to see us.

I think those things are going to play, but yeah, I think companies really are looking at the benefit. I heard one company and I love this phrase, refer to it as RPM return to in-person meetings. The intent is as they start bringing people back in for those occasions when collaboration and community is important. It’s not return to the office because I say so, it’s returning back to those value added components like meetings.

Bart

I think there’s a generational element to it as well. At least what I’ve seen in a lot of the survey results, or maybe you call it experience, but you think intuitively the younger generation being more tech savvy and comfortable and digital natives, would be more excited about working remotely. But it seems at least the data I’ve seen that Gen Z versus more senior Gen X or boomers are feeling a little bit more disenfranchised and separated.

Whether it’s because they don’t have, they’re onboarding a new position, they don’t know the industry and they don’t have the ability to walk the halls and ramp and onboard the way they need to effectively, or they don’t feel like maybe their career is getting the momentum that it would get if they were in an office and getting the face time as you mentioned before. But folks like me, like you, I’ve been working almost 20 years remotely and my commute is an airplane, and I just feel so comfortable in that environment. None of this stuff was a real shock for me, but for some others, it is.

Simon

Yeah, absolutely. My wife’s prior company, they didn’t allow anybody to work from home at any point. Then when the pandemic hit, for us in Arizona probably or it was around St Patrick’s Day, they had to actually go out and procure machines, because they had to get their agents to be able to work from those home locations. I know they’re now evaluating, what does this mean to us as an entity? Of course, if you have to look at the contextual side of it as well, real estate in Arizona is a lot less expensive than real estate in California.

The value of having physical space may well be greater there, and they might want to bring people back in as opposed to other areas where they might decide, “We are going to go to more of a model, where we’re using hybrid or third places for work.”

Bart

Yeah, exactly. I want to circle back to a comment you made about, we don’t really know what it’s going to be like or what it means for a company level. The idea that you need to learn based on the data as far as how that is shaping into your workplace, the future, what type of technologies do you see there? I know as an example, I think you and I have talked before, we have an initiative on our side, Tango has been working with PWC, where we have a joint where they’re focusing on the IOT side of things.

We’re at Tango are focused on ingesting that data and using it in the context of COVID and social distancing, in what I call real-time occupancy management. We’ve put in LIDAR in our office as a test. We’ve put in Wi-Fi sensors. We’re trying to eat our own dog food if you will, to learn what it means for us. How do you see people learning what it means for them?

Simon

Again, I think data right? Data is the answer. I think the difficult decision for a lot of companies now is where and when do I invest? Do I get enough value from putting in sensors now? Or do I actually just use available data like badging to make some of those initial determinations? The intriguing thing I’ve always felt is that, a sensor can tell you, “Yes, Simon is in his desk and he’s been at his desk for 12 hours.” It doesn’t tell you, has Simon being innovative, has he been efficient?

I think one of the areas that people need to look out more and more is connectivity and infinity. How are you using data and information to better design your spaces and better ensure that teams of people that work together are still connected and working together? I’m not talking about going down the whole level of scraping emails and chats to see how often does Simon and Bart connect, but just simply, “Okay, Simon’s a salesperson. He’s probably spending more time talking with marketing than he does talking with finance,” as an example.

I think that’s the layer. The data and the standalone information can only tell you one specific level. It doesn’t necessarily tell you that what you’re doing, the behaviors that you’re encouraging are actually effective from an efficiency perspective. Yeah, and again, I think that’s why looking at different technologies that can help, from an experiential perspective and understanding what is going to attract people back into the space. For me one of those early things I think with IOT and sensors specifically is, more use cases around, how do you go back and ensure social distancing in an office if, again, if your boss decides that they don’t want to enforce the rules?

Well, technology can help you do that, because you can automatically send an email saying, “Hey, just to know that we have this meeting and we know that the social distance rules weren’t adhered to. I think there’ll be a lot of an initial rebound of, if you look at facilities as an industry, pre pandemic the best thing you could do as a facilities person was keep behind the scenes and not disrupt the workers. I think coming back, people are going to want more of that information. They’re going to want to know about cleaning regimens.

They’re going to know about air quality. They’re going to want to know about those things that in the past, we probably didn’t even really take to heart.

Bart

Yeah. That begs the question, employee engagement, that’s been a term in our industry that’s been around for a lot of years. I feel it’s finally with this unfortunate situation getting a lot more meat behind it. You have IWMS systems that handle a lot of the back office types of things. This is more front office. How do we engage that last mile with the employee, whether it’s typical reservations or who’s in the office or amenities or things like that? How do you see a lot of rush to that space? You have companies like ServiceNow, Facebook, Salesforce, all jumping into this hot area.

How do you see that employee engagement layer playing out? Do you see some of the traditional players assuming that role? or is this really going to be more of an ecosystem best of breed kind of plan?

Simon

I think a lot of it really is what does employee engagement mean to you and to an organization? How are you providing resources to your employees to make them more comfortable and happy with where they’re working? One area that I’m seeing a lot of initial uptake in is more things around wellness and wellbeing within the workplace. Providing a workplace application that might help me book a conference room, but also can help me track my calories, and it can show me a video on how to minimize my stress.

I think a lot of people and I certainly have seen this myself is, the pandemic has made you really be able to take stock of how your company values you as an individual. I think you can really see that in terms of people’s responsiveness to the pandemic, what did they do? Were they companies that cut salaries or were they companies that offered stipends to help you work from home better? Were they companies that encouraged more socialization, or were they companies that try to make people focus more and more on doing more work, and looking at more avenues for sales?

Was it predatory versus was it, “Look, let’s help everybody distill now.” I think there’s some very interesting and telling pictures around that. I do think the engagement piece is going to become more and more about all of those aspects, like, “Am I happy going to work? Do I even like what this company represents about me as well as can I find a space? Where’s Bart sitting today? What the weather is going to be like, et cetera.” Having already touched on it, I do see a growth as we go forwards in the industry.

We’ve seen this pre pandemic, but in gamification of component pieces, I’m interested to see how that plays out within the workplace technology world for sure.

Bart

Yeah, absolutely, absolutely. All right, well let’s look a little bit further out. I think you had mentioned that when we look at occupancy and utilization 50, 60% of space is unused, and in order to better optimize or find equilibrium between a new world of a dynamic demand for space and then a fixed supply, you need to move closer to real-time. The rear-view mirror view of what was my utilization last quarter last year isn’t going to cut it. Are you suggesting a hospitality type of environment?

Or I look to think if I want to come in, I see who’s also in, or if I’m checking to reserve some space that says, “Oh, Simon’s in and so is John, and you work with them 80% of the time. They’re sitting over here and let’s put you over there as a recommendation.” Is it moving more to that, which is almost a hospitality model?

Simon

I certainly think that’s going to add value to organizations, again, encouraging that connectivity aspect of being able to use technology to help better determine, how the space is going to be used on a particular day, time, period, et cetera. I certainly see that as becoming a piece. I don’t think it will be a really big piece. I think some companies might very heavily adopt it. I’ve even seen technologies that look at things like, “Okay, based upon the skill set of the person coming in, these particular individuals prefer working back to back as opposed to working in a collaborative area,” so making some of those assessments and assertions on worker profiling and work styles.

I think it can add some bells and whistles and some interesting flash, but I don’t know how pervasive it will become. I do believe again, that whole component of how do we make sure that we have the right people connected, so they work in this fluid environment is going to be key. I think as well, just logically people are maybe too concerned about, “Well, what happens if Bart comes in and he doesn’t have a desk available?” What’s the real impact of that versus the cost of over-engineering your space, so you do have too much space right?

Bart

Well it’s like the airline, they expect a certain number of people to not show up and they could oversell a flight, and they may have to give her a voucher away, but it’s a potential win-win and you don’t have that long-term fixed cost.

Simon

Yeah. It may be a case that you downsize your spaces, and then in certain times you incentivize peoples to go and use a different space. Maybe you say, “Hey, Bart, Tuesdays, Thursdays, you can work from, WeWork down the street,” because that’s better for you or you’re closer and you don’t have as many meetings on these days and it frees up their space as well. That’s why the experimentation I think is going to really come in. I don’t see anybody massively cutting their space, but I definitely see every C-suite in the world sitting down and saying, “Look, we’ve gone 18 months without having physical real estate use, what is the value of having it?”

We know there’s value and we know intrinsically what those values are and culture and innovation, et cetera. But the number crunchers are going to want to know that definitively. There was a company I think last week said they paid $75 million in rent last year and didn’t use the space. They’re not doing that this year. I don’t believe they said what they’re necessarily doing, but that I think is going to be the mindset when we’re back in our offices.

Bart

Yeah. Maybe you don’t need the Fifth Avenue address. Maybe you just need a different location that’s more cost-effective. That brings us to a couple topics to wrap up here. In the long-term, what are you seeing as far as the shift? Once you learn what your space is, are there tools or technologies to help do longer term strategic planning on a real estate side? Like you said, it’s only going to be as good as the data, you can feed it.

What do you see coming there and how important is that type of a tool?

Simon

I think it’s arguably one of the most critical pieces, because it’s going to be the technology that can help you bridge that gap and answer those questions about how much space do we really need? Where are we going? Where are we contracting? What is the cost implication of getting out of this space or renewing it, against demographics of who we’re trying to recruit, where we’re trying to recruit? For example, the ability if we said, “We wanted to flip to a tertiary markets across half of our portfolio, what does that mean cost-wise?”

I think technology is the only thing that can do that. For me, it’s a very obvious, very large gap in our market. I don’t see many commercially available tools that can help with that level of planning. Maybe part of it is because of a fear out of sharing data related to lease information, or maybe part of it is people seeing this as a one and done an exercise. But to me, having that capability to very quickly model these things, what happens if we go to a 30% work from home, we changed the ratios for these teams; we move this space from Chicago to Kansas, we get out of this space here, we’re going to grow here?

That modeling capability, I think has been commercially available software to me is the biggest area, where there’s only probably one or two credible vendors out there. I do believe it’s one of the most critical aspects of that planning level. Most of the other things we do are somewhat tactical in nature when you look at it. But that’s the true strategic vision for a corporation.

Bart

Yeah. It highlights, the fact, you can role play games scenario out a lot of stuff. But when you do finally determine that strategy go forward and you start making bigger long-term decisions and changes, there’s a whole downstream impact to that, that a lot of people, I don’t think appreciate, like, “Okay, so I’m going to go from central business district to satellite offices. I’m going to shrink my portfolio by 25%. I’m going to do this, this and this.” Well, I got to do more real estate transactions. There’s a ton of build-outs, moves adds, changes, there’s new language and new transactions and leases I should say that need to be negotiated.

We’ve got new maintenance protocols. Now, you’re managing a very complex hybrid space, environment. That’s a lot of work. Are companies prepared for that work? Most don’t have the tools or you see more outsourcing happening as a result. What downstream impact do you see of all this change?

Simon

Yeah. I think that everything we’ve talked about, whether it be the post pandemic response, or whether it be portfolio strategy, to me they’re the initial dominoes to fall, and how companies progress is going to be dependent upon what are the next domino’s have fallen, in what order. I think it’s a perfect time for companies to actually take stock of the technology they have. How adept is it to support what they have now and what they need going forwards? It doesn’t mean you have to wholesale rip out your technology.

But I think you have to do that assessment and say, “Okay, let’s say we’re a traditional firm one-to-one seating, and we decide that we all going to go to a model where we let our people work from home one day a week and do some shared seating.” Very, very simple concept. Can the technology that you have support that? Because some traditional technologies can’t support that. When you look at that on, I think on that larger level, you really do need to see as we move to whatever that new direction might be, can our technology support what we’re trying to do, and can we get the data we need to make those determinations on what our future should be?

Yeah, I think the market is incredible right now. I think we’ve seen just such a massive growth. I was chatting with a friend today who oversees Unissu, a great resource when it comes to technology advisory, they’re tracking 9,000 PropTech systems. If I’m a real estate professional coming back, my CFO is hitting me over the head about how do I reduce space? I think, “Oh, we don’t have a resource booking system. What do I do? How do I even take those first steps?” I think that evaluation and that look, now is the right time to do it if you haven’t already started it.

Bart

Yeah. That makes a lot of sense. All right, so the last question to close out here. What do you think is the one thing that companies need to get right in 2021 as we’re going through this change?

Simon

I think it’s an incredible question is [crosstalk 00:40:16] what I think. I think it’s determining the balance that best suits them, their culture and what they’re trying to achieve in this new model of work. Why you’re doing something I think is going to become critical. You talk about bringing people back into the office 100%. What is the benefit? Why are you doing that? Is it reinforcement of culture? Is it reinforcement of how you manage? Are those the messages that you want to be giving out to your workforce? Again, as I mentioned earlier, they may well be that.

People need to be very purposeful in terms of what their assessments are. We know that there’ll be a period of time when we come back that frankly, the data there is going to be very skewed. Potentially some companies, where there’s a rush back to the office and other companies where there’s dribs and drabs. I would say, don’t make a knee jerk reaction on that. Really assess the data. Understand who is coming back and why.

Then as they do come back, understand and track the benefits of them being in that space, so that then you can apply those things six months down the line on a more macro level.

Bart

Yeah, that makes a lot of sense. Good advice. Thank you. Thanks. Well, again, we’d like to thank you for coming on Workplace 2.0. I also congratulate you on the new role, it sounds exciting and interested to hear how that evolves as you dig in a little bit more at Impec. We’d love to have you back in a future episode as this matures, and we see what the return is like, and I’m sure you’ll have some words of wisdom then as well.

Simon

Bart, I really appreciate it. Thanks for the time. We’re always happy to talk to people about our very exciting industry and the ecosystems that are evolving, so really appreciate it.