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Humanising the Future of Work podcast
Episode 5: Making workplaces human
What is the impact of the future of work on real estate? What does the future workplace look like and how can organisations achieve a workplace of the future? We discuss these big questions with the Deloitte Real Estate Consulting team.
Host: Daniel Hind, Manager within the Human Capital practice, Deloitte
Speakers: Chris Robinson, Director, Real Estate Consulting and Workplace Transformation Lead and Kate Bossie, Manager, Real Estate Consulting
How do you see the Future of Work impacting your customer, your organisation, or your future workforce? This is Deloitte’s Humanising the Future of Work podcast, the show where we explore the big questions around the Future of Work and what this means for you.
In each episode we speak to experts from across Deloitte about how organisations can reimagine the way in which work is carried out and, while technology is often a key driver of disruption, we will discuss the why and the how organisations can ensure the human experience is at the heart of any transformation.
Deloitte’s Future of Work proposition explores three deeply integrated dimensions of disruption. Work; what is work and how can this be done? The workforce; who can do the work and how we enable alternative talent models? Today we get to explore the workplace where work can get done and how you maximise collaboration, productivity, and deliver a consistent experience to your workforce.
Today, I’m pleased to welcome Chris Robinson and Kate Bossie from Real Estate Consulting. Welcome. So typically when you’re engaging with clients, do we find that they hold certain organisations or have certain environments that they hold in such high esteem that you find they’re trying to replicate what’s already been delivered in another area?
CR: Yes and no I think is an answer to that question. It’s a very good question. I think some things we’ll touch on a little bit of time later on is around what makes a good workplace and the benefits of investing and doing certain things in the workplace.
So clients definitely do talk about, some examples, the tech giants are quite frequent ones that they reference. They sometimes actually say, we are not like those firms for these reasons. Generally, when they hold those firms in high regard, it tends to be not because of the gimmicky things that they’ve done. Certain things we reference, slides…
KB: Slides and beanbags.
CR: Which is always the thing that’s shown in pictures and talked about, whereas in reality, if you visit these places, that’s not really how they are.
So the things that those companies do hold in high regard is they know what they want and they know why, whether it’s to encourage people to spend more time there, or to help attract the right talent, or to provide the right spaces for people to do good work. That’s what they do well, and then they decide to invest in it rather than necessarily saying, let’s copy that templated design or the layout, or something like that.
KB: I think if we unpick those gimmicks, so what the slides, the beanbags, the free coffee does, is it improves… It’s meant to make employees healthier, it’s meant to make them happier, and then the ultimate goal is that it makes them more productive as a workforce. So I think it’s about moving away from just those perks, but having more meaning behind them. So beanbags, slides, better collaboration, healthier workforce, coffee – it just brings people together.
CR: We’re not going to talk about beanbags anymore, though.
KB: No, that’s it, we’re done.
DH: Has that been banned, the last beanbag?
DH: No more beanbags or slides.
DH: Free coffee?
CR: Maybe free coffee.
DH: Good. From where we are now, are you seeing that there is a particular direction that you see the workplace going towards? I’m just trying to think with the drive behind the Future of Work and the changes to operating models or the changes to talent models with remote workers and more contingent workforce becoming more prevalent in the make-up of workforces, are you seeing that that’s having any implications on workplace design?
CR: Definitely on workplace design, but also the things that people think the workplace can do for their organisations. So clients often talk about how it can be a catalyst alleviation. Deloitte just did a talk a lot about using the workplace as a catalyst for cultural change, but it can also be a real drag as well on those things. If you’re trying to enact change in your business and you’ve got a workplace that doesn’t really support it, then it’s pretty difficult to do that.
There’s a stat around something like around 20% of take-up in London over the last couple of years has been through the co-working providers and flexible workspace. A big driver of that is definitely no longer just the start-ups, but it’s actually the big corporates wanting to either get involved in those ecosystems.
So like Deloitte Ventures where there’s opportunities to work with different businesses and incubate and share ideas, but also just wanting a different space for a different part of their business. So whether they’re trying to create an innovation hub, or a different part of their business that doesn’t really fit with the rest, or needs different access or needs a different location, that’s definitely a big driver that we’ve seen over the last couple of years and that will definitely continue.
KB: It’s thinking about what enables you to collaborate and, just an example, on my current project but we’ve seen it elsewhere, as jobs change, skills change and it becomes much more technology driven, actually the way those project teams collaborate, they need to be able to manage the noise and the acoustics in the room.
So actually it’s almost like we’re reversing the trend and we’re going back to more project department style things where the open plan, we’re actually reducing the size of it. We’re enabling teams from eight to 12 to be able to collaborate together because they need to be really noisy within their team, but then they need their focus time as well and not to be distracted. So I think what co-working space offers in terms of those individual apartments will be something that we see much more as a trend.
CR: It’s also, real estate is really important for the Future of Work, partly for the reasons I’ve just said, but also it’s really expensive generally. You have to spend a lot of money on real estate so you need to get it right, and generally the decisions you’re making are quite long-term decisions. You’re making lease commitments, or you’re building something that’s probably going to be there for 15 or 20 years.
So when you compare that to talent cycles and investment in technology and things, the decisions you make have much long-lasting implications than other things in the business, so having to spend time thinking about it and making sure you’re getting it right is really important.
KB: I think we have to look at the make-up of the workforce who are in these workplaces as well and where their values are. As we see an increase in the Gen Z and Millennial workers, they place a lot more value on that, the social impact of a business. I think your workplace, as Chris says, using it as a catalyst could help drive your sustainability and your inclusion agendas and create that culture as well.
DH: Have you got any examples to bring that to life for our listeners?
KB: Yes, let’s use our recent example of the construction of our new London headquarters at 1 New Street Square. We achieved BREEAM Outstanding and WELL Gold, and that was through choosing sustainable materials in the fit-out and then operationally we’re doing things like removing single-use plastic on campus. So there’s a lot of things we can do going forward as well, and I think the workforce become more engaged when they recognise that their values align with where the firm’s going as well.
CR: Yes, there’s also, I think back to purpose but more around the purpose of the organisation itself, I think a lot of consumer business organisations you find particularly have a real… They use their workplace as a way to connect their employees to their brand and for what they do in the market, whether that’s having products on display, or there’s a famous business that lists accommodation options for people to choose.
They have a really strong branding in a number of their offices, particularly in America. They literally design rooms based on the listings on their website so people can sit, in effect, in their customers’ spaces. So I think there’s partly an employee purpose thing, but then there’s also a, let’s remind people why they’re here and why we’re doing what we’re doing to help improve the customer experience through the colleague experience.
KB: Yes, I think Andy mentioned in your last podcast the importance of brand, and the workplace is a huge opportunity to drive your brand experience because it’s a physical piece. It’s tangible evidence of what your brand emulates.
DH: I joined Deloitte literally just after 1 New Street Square had opened. It is a great building. It’s a great place to work and there’s all those different working environments that you can go and suit the mood that you’re in at any point in time in the day so, yes, it’s a great place.
CR: I think it’s a good example as well of businesses needing to get it right and what suits them. The fact just that Deloitte is a, well, firstly it’s a diverse business, it’s also a large professional services business that has accountants and business modelling and parts of the business that are doing work that needs a big desk with a big screen and some meeting rooms for confidentiality, so I think it’s…
Which is why, going back to your original question about what buildings do clients hold up in high regard, they tend to pick ones from their industries because the requirements are quite different and you would never say, well, this is… You have to do this. You’d want to understand the people you’ve got and the tasks they’re doing before you go down gathering requirements or even designing the workplace route.
KB: I think that’s the trend we’re seeing. We talk about there’s the experience economy, we speak about things becoming more user centred, but what does that mean? Yes, it’s what the workplace looks like, but it’s also the process of how we got there. I think the challenge that we face in real estate is that it’s normally quite static.
It’s quite hard to change bricks and mortar. It’s a huge investment and it’s actually just quite tricky to do, but we’re having to become… If we’re going to be driven by experience, it’s becoming more iterative, it’s becoming more experimental.
Before we do anything, it’s about going out to your users and understanding the way they work, their needs, and being able to prioritise those. As hard as it is, it’s about prototyping and testing that early with your user group before developing what that workplace looks like, and that’s a challenge in times of money, time.
CR: The challenge with a lot of these things is often there are… I think you asked the question at the beginning, Daniel, about what’s the impact of all this stuff on the workplace. We could do ten episodes on this and talk about all the different things, but where we try and chunk it up sometimes for clients, particularly that are quite new to this stuff, and group it into three areas and talk about where, what, and how much.
So there is an impact of all these different things on where your workplace should be, whether it’s – well, in fact, do you even need a workplace at all? To your questions around remote work, and there’s different views on that, but do you even need a workplace at all and, if you do, where does it need to be to service your clients and to attract the right people?
We see lots of businesses now open it – well, Deloitte actually is a very good example of even the original Buckley down in Clerkenwell, that type of business needing to be in Clerkenwell to be with all the other design agencies and work in the right area. Now that’s quite a micro location decision, but other businesses make much more macro decisions which is, we can’t be in this regional city anymore, we need to be in this regional city to attract the right people.
So there’s definitely a where question. There’s a how much question which is, to your point on automation, the impact of automation on reducing roles, Efficiencies; with people working in a much more agile way, do you need less space per head than you did before? Do you actually need more space per head because you need collaboration space and spaces like this to record podcasts that you wouldn’t have done before?
Then the what is more around, what does the physical space look like? What does it need to cater for? You can generally find any of the… Whether we talk about the seven disruptors, or the four pillars, or any different construct or framework for the Future of Work, you normally can apply it through those three lenses.
KB: I think a lot of workplace surveys, and I think some of the human capital trends reports are saying that actually when you go out, the main things that people want is flexible design and a choice. People should be able to choose the way they work. I think it’s about the noise management. There’s a huge backlash at the moment against open plan. Open plan isn’t all bad, but it is about… It does allow for collaboration, but it’s providing those quiet spaces as well so you can… That transition between different work modes to allow people to do that as well.
It’s also just about having access to things. So access to people, being in close proximity, whether that’s physical proximity, but also distributed teams. It’s about having the importance on remote connectivity as well within the workplace and also just to resource and supplies as well. So what do you need? What are the tools and assets that you need to do your best work?
DH: Now, if I can talk about a bugbear in an office environment is where you’re walking down with a couple of people to just have a very spontaneous meeting and all the meeting rooms just have one person sat in holding a phone call. A lot of those spontaneous collaboration areas are sometimes taken up by people just holding phone calls.
KB: So a challenge back to you is, do you think that’s a design issue or do you think it’s a behavioural issue?
DH: Interesting. That’s probably a behavioural issue.
CR: Well, it might. It could be either. So there’s the one challenge which is get the requirements right, which is based on how you think people are going to work, how many of each thing do you need, which unless you’ve got a lot of money to change the workplace generally is a once in ten, 15-year decision. So back to our point on flexibility, you need to… That can be challenging. It’s a great point. It’s definitely…
Well, there’s two behavioural questions there. One, do the people that are in those rooms on their own, are they exhibiting the right behaviours or not? But then also, the people… Do you need…? If you’re just going on a phone call with one person, actually is it acceptable for you to do that in the open plan?
It’s interesting how in Deloitte, particularly in 1 New Street Square, generally you don’t find people making phone calls on the open plan. A lot of businesses do that all the time and everyone’s always on the phone, and it would be ridiculously inefficient for them to walk around trying to find the phone booth.
So I think there’s also a question around how accepted is it that actually in an open plan workspace people are on the phone and that’s acceptable, unless of course it’s confidential, whereas I think people do tend to hide away sometimes because they think it’s not the right thing to be on the phone in the open plan.
KB: But you can do clever nudges around that as well. So you look at phone rooms, it’s about not providing a date [?], like a power source, so you can’t actually physically camp out there all day. There’s things you can do to encourage better behaviours as well. Having the budget to be able to make changes so it’s not a one in a 15-year lifetime opportunity, is actually… I think some of the biggest insight we’ve learnt is that if people are able to, they will hack a space to make it what they need to do their work.
Actually, if that allows people to do their best work, we should enable them to do that. We should build in the flexibility. That’s a huge change in terms of, it’s not just about providing variety and choice, it’s actually giving people the permission to personalise and make the space their own, but that of course comes with a number of challenges when you’re sharing space as well.
CR: Everybody would want variety. The challenge is, how do you provide that in the right amounts and in a way that’s affordable? Because if you would like your own, Daniel, desk, [unclear] table and touchdown and meeting space and phone booth, well, that’s brilliant, but then the budget holder runs out of… He can only provide a building for 500 people, not 5,000 people.
Generally in our team, we tend to work for heads of real estate, or programme directors, or transformation directors and I’ve never met one whose at least second objective but generally first objective that he’s been given from the CFO or COO or somebody is, you’ve got to effectively manage cost.
So the bugbear if you’re walking around and not finding space is a consequence of dual objectives, of we want variety and flexibility, but also we’ve got an envelope we need to operate within, and therefore getting variety right is really hard because you need to make trade-offs.
DH: Got you. On personalisation, so we’ve talked about setting up areas so people can go into an area, maybe hack it a little bit and create their own, or there’s different types of areas for how your mood changes through the day or the type of work that you’re carrying out. But I’m sure I read about a Deloitte, I’m going to use the word experiment but that’s not the word, we tested the amount of oxygen in the air or something and it was to look at productivity.
KB: Yes, in Buckley. Yes, you’re right. It’s the Make Work Human and the Buckley experiments.
DH: The Buckley experiments?
KB: Yes, and they measured oxygen and carbon dioxide in the atmosphere and over the course of the day the oxygen decreases. They are trying to see if it impacts on productivity, which I think generally trying to measure workplace and productivity has been a challenge in the past.
CR: Yes, there’s definitely scientific studies that will prove things like oxygen and light and stuff definitely does impact, but then translating it to a pounds and pence number is tricky.
KB: Yes, and I think touching on your point on having those pressures of cost and becoming a business issue where you have to have metrics of, well, why are we doing this, can this improve productivity, I think if we… We can say we would hope that if an employee is happier and healthier, they will be more efficient and they will be more productive.
Sometimes it’s not about putting just financial numbers on it. It’s recognising that it will drive the value of your business, and actually people being able to feel like they can contribute and bring their whole self to work is a trend we’re seeing. I think having your workplace that can support that as well is really important.
We haven’t really spoken about technology yet, but maybe it’s a good segue to speak about how as more and more technology we start to use, both in our home lives and at work, our physical experience needs to integrate with that.
DH: Can I just, before we move on to tech, are we finding…? In a former life I was a remote worker and it was literally leave the house by exception for a while, and apart from a cabin fever element that can sometimes kick in with that policy, I found I could carry out a work station assessment on behalf of the organisation.
But there was nothing else offered to help me within a home environment make me feel connected to work beyond the headset and a laptop. I wondered if you have come across any examples of leading employers who are thinking about actually truly connecting those remote workers into the workspace that they’re creating.
CR: Yes, there’s a few ways we can talk about that probably. Edgar [?] often talks about remote first and therefore the importance of thinking about, actually as remote working becomes more important when you’re designing a physical workspace, let’s not leave how will people interact with people not in the building as an afterthought. Actually, let’s think about, if anything, that first when we’re designing how spaces look, so there’s definitely something you can do around that.
There’s also I think a general… Well, we’ve seen a lot of businesses, particularly tech firms, push against the remote working principle and actually say – now, this depends what your job is and what your role is, but if a lot of the value that you bring to the business is your innovation and your insight and your ability to collaborate with people, that is not something you can do effectively at home.
So actually, although we talk about automation reducing roles and remote working enabling reducing space, they’ve almost mandated, no, we do want you to come in. Which almost makes you think it’s gone 20 years ago, but actually I think a lot of where these businesses are going is it’s changing what the purpose of the office is and therefore, actually to do these things, we want you to come in. Rather than saying, let’s support you better at home, it’s actually, how do we bring you in more and therefore what do we need to put here when you are here?
KB: I think either way, I think remote first is a really important design principle, but also brilliant basics. So I’m sure many remote workers, often they plan to work from home and then the server goes down, or the technology doesn’t work and they can’t connect to people, and it takes them three times as long to do something because they can’t… They miss that proximity.
So I think if we are becoming more experience led in the workplace, everyone has to have that same experience. It’s not just about people working from home; it’s people working from client sites, people working in distributed teams. I think more and more, especially on the sustainability agenda, we will see businesses starting to commit to less travel to achieve their sustainability targets so this is really important. It’s more than saying, yes, it’s fine for people to work from home; it’s also allowing people and providing them with the right equipment to do that.
DH: That leads me very nicely onto a technology question I was going to introduce to move us in that direction, but very much about this virtual collaboration with remote workers and part of trying to reduce travel. I wonder if we have any examples where we’re seeing specific workspaces created to allow for virtual collaboration. So it could be VR, it could be maybe AR headsets, but a different kind of layout.
KB: Yes, there’s a point where we probably will start to see more telepresence, for example, in terms of being able to dial in. Yes, we might see more VR headsets because you can visualise things, or augmented reality. But I think with so much technology and the disruptors, it’s quite easy to just fall in love with all this new tech and not really think about the end-to-end experience.
I think actually one of the biggest challenges is making sure that’s completely integrated so your workplace experience app or interface integrates with everything else you’re using. Because actually, otherwise you just have all this different tech and all these different things where you can maybe dial into a meeting, or you can use your facial recognition to enter a building, whilst getting out your phone to pay for something.
Actually, that can be quite a pain sometimes. It’s about having that seamless experience, and I think going forward one of the key/main trends in the workplace and elsewhere will be this digital identity piece and the opportunity that brings as well.
CR: These are all really good examples as well of why workplace is quite a complex area to deliver well in, because all these things… We’ve spent most of this time talking about culture and agility and technology and things. Those were never historically problems that the head of real estate bothered about. The head of real estate has to bother about the now because often they are the person that actually has the burning platform of, we’ve got to decide what we’re doing in two years’ time because we’re coming out of this building.
So the head of real estate can often be the person that provokes these discussions, but they can’t be the person that leads it. So where we see clients struggle and also be really successful, the struggle is often getting HR, real estate, and IT to work together effectively and make decisions on the right cycles and have combined business cases that articulate the benefits and the cost savings as a holistic rather than separate pictures.
Also, where they deliver really well is where we’ve seen… I’ve got a client at the moment actually whose programme, which is a huge real estate programme, is being delivered by an HR person. We’ve had clients where actually real estate ends up, not in all industries but in some industries, reporting through HR because of the value that’s attached to it now is seen as it’s a reward thing and it’s an agility thing, it’s a culture thing.
It’s not, yes, we need somebody to buy and sell buildings but it’s just a platform for other things, and that’s definitely something that we are… If we are talking about trends and what the future of workplace is, it’s definitely workplace programmes not being led by real estate.
DH: So we’ve touched on the technology within these workplace environments and I’ve read about smart buildings and all of this is driven by data, I assume. Have we got any examples of client work or anything that’s happening within the market at the moment that you feel the listeners would be interested in?
CR: So smart buildings, or intelligent buildings, or smart offices I would say remains a relatively new area. Now, I don’t think it remains new in the sense of, what can you do and what are the technologies available because there are millions, but more in the, what are the benefits of doing this, and how does it actually help generate return on investment is quite new and I would say relatively unproven.
We talked at the beginning about three dimensions of Future of Work. There’s also, generally we look at three dimensions of smart buildings and they all deliver different benefits. The first one is, to what extent does it support the real estate team making strategic decisions, so how does it give them better data? There’s an example of that you can see in 1 New Street Square with their sensors measuring occupancy and the screens that display the red and the green dots.
There is some user interaction element to that, but the biggest thing is that it gives brilliant data to real estate teams for them to know on a daily basis how many heads are in the building, where, what space they’re using. So that when they come to make long-term decisions, spending hundreds of millions of pounds on new buildings, do they actually need that new building at all?
Or can they push, can they change the way things are working? Or can they do something that means they avoid spending money that they don’t need to? Or could they actually reduce space and release it and therefore generate cost savings that way? So the first thing is real estate strategy and space management.
The second thing is managing the facility better, so proactive maintenance on things that users find boring around lift maintenance and things like that, or lights, or just reporting faults and understanding faults before they happen, so the facilities management of space being more effective.
Both of those things have a business case attached to them because you can spend less on energy if lights turn off automatically and you can certainly avoid cost, but maybe save cost on real estate space. The really hard one is user experience where a lot of people talk about the things that Kate gave great examples of, of facial recognition and digital identity and swiping in on your phone and being able to pre-order your coffee.
All that stuff sounds great. It can be quite expensive and it can also require the integration of lots of different systems, some of which is owned by the vendor, which can make all sorts of difficult things that make what in essence seemed a great idea and did deliver a lot of benefit, firstly, what is the actual monetary value of that benefit and, secondly, how do we actually go about implementing it?
Because a lot of these things, this is one area that definitely when you’ve got clients delivering big programmes and they’re under cost pressure, it’s always a nice to have generally. So if there’s not yet a really clear investment case, then it comes under pressure [unclear].
KB: I think on that user experience piece, if we step back from all the technology, or the sensors, or the security access that you could deploy and we think about the value of having data or an intelligent building for the user experience, I think we’re seeing a distinction between a smart building that’s able to monitor everything, so from your utilisation of annoying people in phone rooms through to it being stuffy in the workplace and your environmental conditions.
But an intelligent building is one that will proactively respond and enables you to flex and use the building the way you want to. If we’re saying that there’s a trend towards people being able to personalise the space or hack the space, that intelligent building where everything is connected by the user interfaces and how it all works I think is important on delivering that user experience as well. But, again, it’s hard to measure. It’s like the productivity question.
DH: Coming towards the end of the podcast, what are the biggest obstacles? Or, maybe an established organisation that’s trying to deliver significant overhaul of their real estate, what are the biggest challenges that you see organisations facing and, I suppose as equally important, how would you recommend they get round them?
CR: That’s a good question and it’s why we exist. It’s why we get to help clients with it. There’s a few things we’ve talked about already that are definitely relevant to that question. One is working out who owns the problem and the opportunity to fix. Is it real estate? Is it HR?
It generally actually has to be C suite because there are things that span different areas of the business and different budget holders and different challenges with the organisation that touch culture, and all those things that actually can’t really be owned by one person. So generally you need clarity on who owns the problem and has a mandate to fix it.
You generally need a sense of collective ownership at C suite level because often you’re driving changes that need, whether it’s breaking personal allocation of desks or corner offices going, or the concept that it’s okay to work from home, or that we’re going to have a different way that we measure people and it’s going to be output.
All those things, they’re quite strategic things that need C suite sponsorship and role modelling actually as well, so whatever the change… So there’s who owns the problem and who has the mandate to fix it. How does it get visibility at C suite level, and then how do you get the role modelling and the sponsorship at that level sustained is important.
Then the last, I was going to make one more point which is people need to care enough and see it as a big challenge that they need to pay attention to, particularly because these… Kate made the point at the beginning around you’re making decisions three or four years out. That’s a long time in business and it sometimes exceeds leadership cycles in business as well.
So to bang the drum and say, we need your input and your shaping to this thing that’s going to happen in four years, people don’t have the time. They don’t want to give you the time of day because it’s not… But then as soon as they are ready and they do think it’s important, it’s too late to make these decisions. So a lot of the challenge is the skill in the leadership of the programme and in their advisors in helping them articulate why it’s important, and the benefits of doing it, and why things have to happen now and not in three years’ time.
KB: Yes, I think two points there in terms of the value, it’s really hard to make a decision maybe four or five years out, but it’s even harder to think actually beyond day one of whatever it is, the new build or day one of opening. But actually being able to see the long-term value of what you’re delivering and enabling that flexibility, because you might take something and actually it has to be 15 years future proof.
So that’s even harder to look ahead because we could be having this podcast in 15 years’ time and we might all have arrived in flying cars, I don't know. It’s really hard to imagine what that looks like and I think having that stakeholder buy-in is really important. It’s really important to do your user research, really understand what the people who work for you and what your future workforce looks like, trying to anticipate those needs as well rather than just following the trends of the tech companies that we’ve mentioned.
I think just an additional point from me is that [unclear] programme is also about really effective change management, understanding what that change is and helping people implement it. Because you can design a fantastic building, but if people don’t have the knowhow or the skills to use the amazing technology that you’ve put in, or understand the purpose of the space, then I think it all gets lost if those behaviours don’t align as well.
DH: That brings us to the end. So I would like to thank you both for joining us. It’s been very enlightening and we look forward to inviting you back at some point in the future. Thank you.
KB: Great, thanks.
DH: That’s it for this week. If you do like the podcast, please follow us or subscribe. If you have any ideas for a future topic, please contact our Future of Work team. Details are listed on the podcast channel. Thank you.