Julie Whelan: Mixed-Use Community, Healthy Submarket | Work 20XX Ep16

00:00:00:00 - 00:00:09:24

Cold Open

All right, So if we're good to go, I will count this down and we will go. My records are rolling, rolling, rolling. In Three, two, one.

00:00:09:26 - 00:00:30:07

Jeff Frick

Hey, welcome back, everybody. Jeff Frick here coming to you for another episode of Work 20XX. And we're excited to have a repeat from almost exactly a year ago. Joining us for an update, and that's Julie Whelan. She's the Global Head of Occupier Thought Leadership at CBRE, joining us, I think this time from Boston again. Right. Julie, how are you? Great to see you.

00:00:30:09 - 00:00:38:10

Julie Whelan

Yes, good to see you, Jeff. I can't believe a year has gone by and I am joining you from Boston, but not from my home this time from the office.

00:00:38:12 - 00:01:11:21

Jeff Frick

Well, that's good. Flexibility is all the rage. So it's funny, You know, the last time we talked, it was it was summer time and it was kind of heading into the first kind of Labor Day return to office. And at that time, I remember you said it was kind of odd because, you know, there was a slow uptick that wasn't kind of traditional seasonal because we were kind of coming out of COVID. It's been a year. You've put out that latest version of the Spring 2023 U.S. Office Occupier Sentiment Survey. So we're going to get into it in depth. But what are some of the big deltas from last year that kind of jumped off the page to you?

00:01:11:24 - 00:01:41:22

Julie Whelan

Well, Jeff, I'd say the biggest thing that we're seeing this year that was different from last year is that organizations are making some decisions. And when I say that it's around this question about how often do you want your employees to come back to the office? And I know that that is a very hot topic that has a lot of sensitivities around it, I'm sure, for our listeners. But what we're finding, at least in the data, don't hurt the messenger, is that there is absolutely a parting of the seas happening.

00:01:41:26 - 00:01:57:13

Julie Whelan

And what I mean by that is last year at this time you had nearly 50% of our respondents that were saying, I'm allowing people to be in the office, half and half, and I'm not really dictating what days they come in or how often they come in. But that's what I would like is about half and half.

00:01:57:13 - 00:02:36:12

Julie Whelan

This year what we see is a marked difference where organizations are either deciding to be in the office camp, or they're deciding to be in the remote camp because I think that they realize that trying to build critical mass in the office when you're allowing kind of a 50/50 mentality can be difficult. And so we see most organizations swaying towards mostly in the office. That still means they're hybrid, that still means they have flexibility. They just expect people to be in the office more than not. And you still have a decent amount, although less that are saying we're going to be a remote first organization. And again, that doesn't mean they never come together. They just don't come together that often.

00:02:36:15 - 00:03:19:04

Jeff Frick

It's interesting, one of the great quotes that you had last time we talked was you know hybrid, which is not your favorite word, you know, it's going to be different for every organization, every group within the organization, and then even within the individuals in a particular group. And as you said, and it comes out pretty clearly in the research, we're getting this bifurcation now where kind of anybody can figure out what they need to do. It's going away and they're getting this, you know, kind of direction on high. But you just said it there in that open that even if your office first, that doesn't mean office all the time. So are you seeing, you know, kind of a move down in terms of establishing of group norms beyond the, you know, kind of executive level from on high? This is the kind of organization we want to be.

00:03:19:07 - 00:04:04:01

Julie Whelan

Yes. I mean, the communication around what hybrid means for an organization and how people are supposed to operate in an organization has to be far reaching. It does not just end with a memo that's written from executive management and gets driven down the organization. That might be a good starting point in showing what the leadership thinks and feels and directs and dictates in this area. However, ultimately this is a middle management challenge to actually execute. And what I mean by that is most organizations are telling us that although they might have a tone that’s set from the top down, they know that they cannot have a blanket approach to how often every single person and every single function within the company is supposed to come in the office and when they should.

00:04:04:04 - 00:04:28:05

Julie Whelan

So that means that it's at the manager level that are managing those unique teams and unique functions around the organization that have to be armed to be able to make the decisions and help their people decide when is best to come in and create the impetus for them to want to come in. And so what that means is that organizations need to help train and upskill their managers to be able to do that.

00:04:28:07 - 00:05:01:29

Julie Whelan

Another really interesting thing that we see is even from the more junior levels of the organization, if you have a champion who really believes in the office for a certain reason, they can influence it through social media and through almost like a fear of missing out. And I know that might not be a popular belief, but across so much of our life, every time we pick up social media, we're getting influenced to buy something or to go visit a certain place. And really, this is no different. It's just an extension of that into the office environment. And we see that organizations that are leveraging it well, it's working.

00:05:02:02 - 00:05:40:08

Jeff Frick

Yeah, it's interesting. Phil Kirschner from McKinsey just had an article that came out a week or so ago. It's called ‘Is Your Workplace Ready for Flexible Work?’ And he talked about, you know, very specifically similar to your research that the the mandates from the direction that we want to go are very, very high and consistent. Unfortunately, what's lacking, you know, kind of on the back end is the work part of it, not only the training of those managers, but, you know, giving them the tools and also having, you know, kind of defined workplace norms that now people know what to, what to go with once they get the message from those mandates.

00:05:40:09 - 00:05:53:17

Jeff Frick

Are you seeing anything with those middle managers? Are you seeing anything kind of concrete from your world? You're not you're not really in it. But I'm curious within the sentiment survey, if the middle managers are making their voice heard a little bit.

00:05:53:20 - 00:06:21:05

Julie Whelan

Yeah, well, I mean, what I would say is you said an interesting word there and you use the term mandates. And we were very careful not to talk about mandates because we actually don't see many organizations implementing mandates right now. They may be implementing requirements. And the reason that those fall short of mandates is because mandates assume just by using that word, that there's going to be some kind of a consequence if you're not following the direction that the organization or that the middle level management sets out.

00:06:21:12 - 00:07:05:00

Julie Whelan

And the reality is, although we have a decent amount of organizations, more than half of them that say that they're tracking employee attendance through one way, shape or form, most of them are not doing anything about it. If that attendance is not achieving the results that that they intend. And so that's why I would say we're stopping short of a mandate right now. And that's where managers themselves are really stuck between a rock and a hard place, because on one hand they can try to use all these tools to nudge behavior in the right direction and lead by example by coming into the office themselves and saying that certain meetings need to have in-office attendance, but ultimately, if their people aren't following the guidance, there's not much that they can do.

00:07:05:06 - 00:07:26:09

Julie Whelan

And so one of the areas that we're starting to see grow in interest again, not always in popularity, but is in tying office attendance to performance goals. And that is an area that we do see some organizations using and we will see how that turns out over the long run, because this is all very new right now,

00:07:26:10 - 00:07:54:13

Jeff Frick

Right. Well, yeah, there was a a prominent CEO that recently said that attendance is going to be on your performance reviews and you call out specifically, as you just mentioned, the difference between having a direction versus having tracking and then versus coming down if people aren't actually responding to the, to the direction. But I'm curious on the tracking thing, right, because there's lots of elements to tracking. You quote and a lot of people quote, you know, the Kastle (Systems) data for badge swaps, or excuse me, bad swipes for occupancy.

00:07:54:15 - 00:08:31:12

Jeff Frick

So that's a way of tracking. There's also, you know, we hear from Ryan at MillerKnoll that there's all types of ways to track whether people are sitting at their desk or not. And then, of course, there's the little bit more ominous things in terms of, you know, hours on Zooms or keystrokes or some of those things which are really detrimental to people's attitudes. When you think about the evolution of office and the fact that more and more of the space is going to be dedicated not to desks but to collaboration space and team space and socialization space, how are you guys starting to think about and help your clients think about measuring utilization? Because it's not just butts in seats anymore?

00:08:31:14 - 00:08:52:21

Julie Whelan

Correct. Correct. I mean, I grew up in a time where we did have a database where we had seats or names assigned to seats, and if you had a names assigned to 80% of the seats, then you thought that you were doing well regardless of if those people were coming in or not. And I can say 12, 15 years ago we weren't even thinking about utilization and how often those people were actually coming in.

00:08:52:28 - 00:09:12:07

Julie Whelan

And I think you hit the nail on the head that tracking means many different things. You can track because you want to understand who's coming in in order to try to drive return to office policies. You can track, in order to understand utilization of space, to understand if you have the right type of space and you're planning for it appropriately.

00:09:12:09 - 00:09:41:00

Julie Whelan

And you can also track to see, quote unquote, how productive people are being. And I say productive in quotes, because there is a growing school of thought that says, what does productivity mean? Maybe if you're a call center, you can absolutely track number of keystrokes or success of calls or number of calls themselves to understand how productive an employee is being, because there are key performance indicators that are pretty cut and dry.

00:09:41:02 - 00:10:08:24

Julie Whelan

But most of us are knowledge workers, and us being knowledge workers is only growing as the accelerated technology of artificial intelligence takes hold. Because we're going to have to go off of the more subjective areas of our job to really make a difference in our organizations and tap into our empathy and cultural aspects more. And so what that means is that we are no longer driven off of productivity because what does productivity mean there?

00:10:08:27 - 00:10:46:24

Julie Whelan

Instead, we often talk about organizational effectiveness, and Su-Zette Sparks, who's the leader of our change management division here at CBRE, introduced me to that term, and it's this idea that you have set goals that are aligned with the strategic goals of your organization and your manager, and you should be sitting down on a very often basis to review those goals and see if they're being met and if they are still in line with the overall objectives of the organizations. And regardless of where you are doing those goals and achieving those goals, if they're achieving positive outcomes, then ultimately you should be in a good, effective place for the organization.

00:10:46:27 - 00:11:35:10

Julie Whelan

Now, where we originally started this conversation was utilization. In order to understand, which is a very healthy way to use or to use utilization data is to understand how spaces are being utilized. And there's multiple levels of utilization data. I'd say most organizations still today are just looking at badge swipes, and that gives you limited ability to know who is coming in and out on any given day and maybe how long are they staying. But true utilization data and more sophisticated data comes into play when you're using things like sensor technologies or threshold technologies that allow organizations to actually understand how the different spaces within their workplace are being used so they can on a more real time basis, change the function of spaces in a way that meets the way their people are actually using that space.

00:11:35:12 - 00:11:47:13

Julie Whelan

Whereas again, back when I was growing up in this industry, you put a lot of TI (tenant improvements) a lot of capital dollars into a build out, and then you really didn't usually revisit it until ten years later when it maybe needed a carpet and paint refresh.

00:11:47:15 - 00:12:31:22

Jeff Frick

You can't do that anymore, can you? I want to double click on the effectiveness versus productivity, because I like it because everybody likes to bring up productivity. And as you say, it's hard to measure. And one might argue that, you know, kind of lazy management practices along a lot of things like communicating goals and this or that are we're kind of part of the problem where it's easy to measure whether somebody is in their seat or not. When she's talking about that and digging into that philosophy, is it as much about, you know, better management in terms of defining the objectives than you can manage to the effectiveness against those objectives? It seems like that really may be a bigger problem than people saying, you know, it's productivity or not productivity based on whether you're butts in the seat.

00:12:31:24 - 00:12:59:11

Julie Whelan

Correct. And I mean, this is a tall order, right? This isn't easy to do. And this is why, honestly, the confluence of human resources and information technology and real estate are coming together because in a way, this isn't a real estate challenge, right? This is a human resources challenge to teach how to manage against goals, how to teach to create goals, and how to teach, to have the hard conversations. If the goals aren't being achieved as set out.

00:12:59:13 - 00:13:34:16

Julie Whelan

One thing that I would say is that although it might have been easier to either manage by vision, right, and walk out of your office and see everybody there and assume that everybody's doing a good job on a day to day basis. I think one thing we need to realize is that we had a very unengaged workforce back then and we still to an extent have a highly disengaged workforce. But I believe that recent data is coming out and saying that those that work in a more hybrid way are actually feeling more engaged with their organizations. And so I think that that's important because just because somebody is in an office does not mean that they are being productive.

00:13:34:19 - 00:13:56:05

Julie Whelan

And in fact, there's a topic that we call presenteeism. And it's this idea that you might be physically present in the actual office building, but you might not actually be mentally present in terms of doing your job effectively. And in that case, you're taking more money from the organization than you are providing value to that organization in that case.

00:13:56:08 - 00:13:58:16

Jeff Frick

Yeah, and it's funny, too,

00:13:58:16 - 00:14:18:28

Jeff Frick

Darren Murph talks a lot about he's just pure remote, you know, his company. But, you know, his point is well taken that, you know, best practices for communication, and meetings best practices and all these things that are good for remote work are good for all work. And that, you know, it's really kind of a digital-first attitude versus a location-first attitude that that ultimately can drive the effectiveness.

00:14:18:28 - 00:14:54:06

Jeff Frick

But we are talking about real estate and, you know, kind of like football has 11 players. The traditional workweek has five days. So there's you can't evenly split it down the middle. So there's kind of this this two and a half day thing. And you mentioned both and the companies that have offices-first directives as well as those that don't. There's still an expectation that your time in office is less than five days, but it's, you know, kind of swinging on one side or the other of that two and a half days. So what are you seeing in terms of actual, you know, days in the week based on, you know, kind of what the corporate directive is?

00:14:54:09 - 00:15:26:04

Julie Whelan

Well, there's no denying it. It's Tuesday, Wednesday, Thursday. And that's something that at least right now, it's the least of anybody's worries because they think that if organizations are getting people in on Tuesdays, Wednesdays and Thursdays and they're building a critical mass in that day, I would argue to say that they pretty much feel that they are nearing steady state. Many have just discounted Fridays especially, some Mondays, although there does tend to be higher occupancy on Mondays than Fridays, but certainly Fridays just discounting it and saying we're not even going to go there.

00:15:26:10 - 00:15:49:10

Julie Whelan

Now we're in early stages. Right. This is an evolution. This is a journey. This is going to take a while. And so right now, I think that declaring victory just by saying, okay, we're getting that critical mass midweek, the questions that are going to come next are, Well, how do I efficiently manage my office space when I only have people coming in three days a week and I'm paying for a lease that in essence, I could use seven days a week if I wanted to?

00:15:49:17 - 00:16:23:09

Julie Whelan

Are there certain operational contingencies, etc. that I'm going to start to ask my landlord for because I'm not using that office space as much on Mondays and Fridays? Are there a way to shut down floors on certain days of the week and squeeze those that are coming in to those days a week or two, those floors that to build a critical mass on less floors during days of the week that are less occupied. So there's a lot of different things, I think, that are going to be creatively discovered over the next couple of years as we really grapple with this.

00:16:23:12 - 00:16:41:16

Julie Whelan

Ultimately, you know, a lot of there's a lot of questions of are we moving into a four day workweek? And in this survey, we did ask that question specifically. We asked about kind of nontraditional work measures from be able to amend the times of your day to being able to go into the office on a rotating schedule.

00:16:41:16 - 00:17:01:21

Julie Whelan

And then we also talked about this idea of a four day workweek. And interestingly, more respondents answered that they were looking into this than we even thought. 20% of respondents said we are looking into a four day workweek with about 17% saying that they were exploring it, 3% saying that they were implementing it. So very early days for that.

00:17:01:21 - 00:17:21:20

Julie Whelan

But I think some organizations are thinking, if I can get people into the office Monday through Thursday, but then tell them on Fridays, that's ultimately their ultimate flex day, because I'm not even expecting them to work. They can use that for personal time. You can see how that could be a winning equation for some companies. Not all companies for sure could implement that.

00:17:21:20 - 00:17:47:10

Jeff Frick

Right? Right. So let's talk about offices and buildings, because, you know, that's right in your wheelhouse. And that's kind of the essence of the report. And there's a couple of things that come out. One is that this bifurcation in the market, like there is in everything and there are certain types of buildings with certain features that are taken a brunt of the of the negativity, even though they get most of the ink in the headlines and there's other ones that are not having that.

00:17:47:10 - 00:18:10:03

Jeff Frick

So how when you see the breakdown of kind of buildings themselves and the amenities, it is one of the things we talked about a year ago is an increase in flex, an increase in more hospitality like services, a podcast studio or, you know, a better collaboration space. Are you starting to see that and is that starting to impact, you know, whether you've got a healthy building or a not healthy building?

00:18:10:05 - 00:18:39:01

Julie Whelan

Yes. So it is very interesting what's happening in the office market right now. And let's start with the challenged and then we'll end with the good. So from the buildings that are challenged, they are a very certain characteristics, right. I think the headlines in the media definitely want to grab the story about how challenged the office market is and the death of the office, etc. But the reality is we are at a 30-year high vacancy and even at that we still have more than 80% of our market that's occupied.

00:18:39:07 - 00:18:57:01

Julie Whelan

Now, I'm not going to say that vacancy isn't going to continue to climb because it will. But largely the majority of our office market is likely going to continue to be occupied over the long term. So the question is, of that vacancy that we have in the market, let's say 20 some odd percent of it, where is that space?

00:18:57:07 - 00:19:17:20

Julie Whelan

And we set out to study this and we actually created a study that we call ‘The Hardest Hit Buildings.’ And in a nutshell, what we found is that of the vacancy that was added to the market over the last three years, 80% of it came from 10% of buildings, so a very small percent of the stock. And the next logical question is, well, where is this challenged stock?

00:19:17:23 - 00:19:45:04

Julie Whelan

And it was highly placed in the Northeast and in the West, in downtown markets that had high crime, low amenity score areas. And so it is the struggling submarkets, in the buildings, in those struggling submarkets that are of the older vintage, not the oldest vintage, because we actually found that it's this kind of 1980 to 2009 built space that's actually struggling the most that are in those troubled submarkets.

00:19:45:06 - 00:20:06:15

Julie Whelan

So then you transitioned over to the good. And the good is exactly the opposite story. We have great submarkets across even those markets in the Northeast and the West and certainly in the southern Sunbelt markets that are doing really well. I'm in one of them. The Seaport District in Boston is one of those, Fulton Market in Chicago, the Penn Ave District in New York.

00:20:06:15 - 00:20:30:08

Julie Whelan

These are all areas that have the confluence of neighborhood amenities and the ecosystem of neighborhoods that organizations want to be in. So trophy buildings, quote unquote, that are in those neighborhoods, are certainly have more resilience to them than even trophy, quote unquote, buildings that are in the neighborhoods that are struggling the most. And so what makes up a great neighborhood?

00:20:30:08 - 00:20:58:03

Julie Whelan

Well, certainly, but being on public transit does not hurt. That is a very good thing, especially as a focus on commutes is so important. Secondly, what's important is mixed use. So in many cases around our cities in the United States, we have office districts and those office districts were born from a place in history where people moved out of the city because they had transportation networks through cars to get back into the city when they needed to to work.

00:20:58:07 - 00:21:20:00

Julie Whelan

And they had a necessity to come to the same place in office buildings to work together. All of that is no longer true. You know, 50, 60 years later. And so what we're in is a place now where if the office isn’t a necessity to come into, then you need to make the district that the office is in a necessity by nature of the mixed use area, things that are in that district.

00:21:20:00 - 00:21:56:17

Julie Whelan

Right. So if you look at the seaport, you have residential and you have people across all generations that are living there. You have office and you don't only have office, but you have office in one of the most budding industries that there is, which is life sciences. You have tourism, you have leisure, you have entertainment, you have all the factors in that market that is driving a 24 by seven community that is keeping crime low and that is keeping foot traffic in that area flowing. So even the retail in that area can sustain itself, not only off of the 9 to 5 worker traffic, but also off of all the other foot traffic that's visiting that market.

00:21:56:20 - 00:22:21:05

Julie Whelan

But then you look at a CBD area, which might be one or two miles away, which is really just there to have office and that is not doing as well and the story is playing out in submarket to submarket across the U.S. So once you have your submarket set, if you're a trophy building in that submarket, you're going to be more resilient. Frankly, even if you're a commodity building in that submarket, you're probably going to be even more resilient.

00:22:21:07 - 00:22:45:07

Julie Whelan

And then we turn into what's happening in the building envelope, and that's where amenities are important. Absolutely. And there are amenities around convenience, food and beverage, wellness, fitness, sustainability, shared amenities that the landlord is offering in their tenants. Those are the things that are making up great buildings right now. But even a great building and a struggling submarket isn't going to be great,

00:22:45:13 - 00:23:15:25

Jeff Frick

Right? Right. But I just, you know, In those nice markets, it seems like they only need to look outside to see what it is that they need to offer the people. Right. Because why do you go to a restaurant? You go to a restaurant for an experience you can't get a home. Right. And why do you go to a hotel for your offsite? Because it's got facilities there that you don't have at home. You don't have a meeting space, you don't have a collaboration space, you don't have a bar to hang out and be and be social. So, you know, it seems like, you know, in MillerKnoll did a great report on those, those two things.

00:23:15:25 - 00:23:44:06

Jeff Frick

And then the third one was heads down library kind of space, which a lot of people can't get it home for, for lots of reasons. So it it seems like, you know, the answers right there. And to your point, you know, you want to attract them to the office and make it someplace that I want to go because it's something that I can't do at home, which is, you know, not video calls and certainly not emails. That's it's it seems like the answer is not that far. We just have to kind of open our eyes a little bit.

00:23:44:08 - 00:24:08:24

Julie Whelan

No, it's true. And when you think about it, when you're not coming into the office as much, when you do come in, you're probably willing to spend a little bit more on lunch or you're more likely to stay after hours to have some social time with your colleagues that you know, that the restaurant up the street. So it's very interesting the changing dynamic that, you know, although on one hand hybrid work brings to cities, but on the other hand, the opportunity that it opens.

00:24:08:24 - 00:24:50:00

Jeff Frick

Right. And I was talking to Brian Elliott from Future Forum, and he made an interesting comment and he said, you know, unfortunately for the last several years over COVID, there was always kind of this expectation set that we were going to get to some end state, you know, some victory or finish line or something that was just a little bit away in His point is, no, it's not. And it's not anywhere close. Right. This this does take work. It is hard. It is evolving. As you said, it's a journey and there's no like destination three months from now or Labor Day or in December or in February when the holidays are over, it's going to take work and it's going to it's not it's not easy.

00:24:50:02 - 00:25:11:20

Julie Whelan

That's true. I will say, though, I believe that there are milestones that we're going to reach. And right now, one of the story or one of the realities, I should say, that's complicating this whole situation is, while we are spending all of our time talking about that structural change towards hybrid work and what it's doing to our office market, there is also around the corner a recession.

00:25:11:23 - 00:26:04:05

Julie Whelan

And that recession is creating a mentality in organizations to be back in a wait and see mode, to potentially be back in an overcorrection mode in terms of the amount of space that they're giving up. And it is creating normal cyclical softening in the office market. We do believe that once we get past a recession and we're back on a strong growth trajectory, that that's when we'll really be able to understand and delineate how much of what we're seeing in the office is due to structural trends of hybrid work versus the cyclical trends that always happen in a softening office market due to the economy. I'm not saying that cyclical is overshadowing the structural, but I do think that there is both that play and it's going to take us that milestone of getting past a recession to really be able to understand more from an office perspective how this is going to impact vacancy in the long run.

00:26:04:12 - 00:26:29:09

Jeff Frick

So do you think that that, at least in the short term, is a is a more significant factor than, you know, return to office after Labor Day or, you know, and again, we've talked offline that then you still have holidays and stuff even after Labor Day. So you think that it's still kind of the macro situation overshadowing kind of what would be the traditional kind of cycles of summer vacation and holidays and those types of things?

00:26:29:12 - 00:27:06:20

Julie Whelan

Yes. I mean, what I would hope happens throughout all of this is that I would bet that in January of 2024, just like we saw in January of 2023, that you see that additional surge. And that's what I would expect, is that office occupancy will continue to tick up. And I would bet by the end of 2024, organizations are probably largely going to be at, I would even say probably by mid 2024 going into that summer. They're really going to be at what they would call steady state, because at that point, you know, if they hadn't pulled all the levers that they need to pull, they're probably never going to.

00:27:06:26 - 00:27:29:10

Julie Whelan

And at that point then it becomes a rebalancing of the market. Hopefully you have the economy that's growing again at a steady clip Not too soon after that, you have office using employment that's back up on a high trajectory, which means that there is more office space that's needed. Hopefully the tech industry is growing again and doing well and then you're really going to be able to see where these trends balance out.

00:27:29:12 - 00:27:50:19

Jeff Frick

Yeah. The other one, I think the other big demographic trend that's kind of hidden within all the all the other activity is just is the growing talent shortage. Right. And that's not going to go away even even though we've had series of layoffs and there's been some challenging times, the demographic trend is large and a big wave and, you know, everything falls from that.

00:27:50:19 - 00:28:12:13

Jeff Frick

But let's shift gears and talk about some positive stuff here in terms of how we can help. And you had some considerations in the back of the report to help companies do better. And one of them was, you know, including employees in the planning process. So, you know, even if you want to have some kind of a of a mandate, what word am I not supposed to use, mandate the word I’m not supposed to use?

00:28:12:13 - 00:28:12:15

Julie Whelan

Requirement.

00:28:12:15 - 00:28:33:13

Jeff Frick

Requirement. Thank you. Direction. We'll go with direction. Even if the you know, there is a direction from on high. Ultimately it's about getting the people involved at the different levels and letting them participate in the definition of what the group norms are going to be forward. And you point that out that that's a really critical piece to this whole puzzle.

00:28:33:16 - 00:28:52:03

Julie Whelan

It is. I mean, people like to be part of the process. We're a democratic society, right? It just makes sense. And you feel better about something when it's not being dictated to you, but rather you have a say. That doesn't mean that you're going to have the entire say. And that does not mean that you're always going to like the outcome.

00:28:52:03 - 00:29:11:04

Julie Whelan

But as long as you're part of the process, it can help. And I think that it goes both ways. If you're going to be part of the process as an employee and talk about things like how coming into the office affects your commute or the type of autonomy that you would like to build into your schedule or the type of meetings that you would like to be in person versus remote for.

00:29:11:11 - 00:29:31:24

Julie Whelan

You also have to listen to your organization so that when they're speaking about it from their perspective about the why that the office is so important that the two sides can come together and meet in the middle. And I think that that is some of the challenge that we're seeing today is that there is a very small percent of the workforce that doesn't want to come in at all.

00:29:31:26 - 00:29:54:06

Julie Whelan

And if those people really dig in and say, I'm never coming in and it's my right to work from home, then we're verging on a sense of entitlement, not necessarily. And that's going beyond the empowerment that that employees and organizations are supposed to feel. And when you're entitled instead of empowered, that's when you start to have challenges and a breakdown or how the system works.

00:29:54:09 - 00:30:10:21

Julie Whelan

True empowerment of employees is them listening to their employer, having their employer listen to them, and then meeting in the middle with a plan that works for the most part for everybody, and that everybody can pull a win win out of, even though if it's not the perfect scenario for everybody.

00:30:10:21 - 00:30:32:13

Jeff Frick

Right? Another thing you talk about is in line with that is supporting the managers in terms of team level agreements. And, you know, Brian had an interesting quote where one of the organizations he works, they just they consolidated all the team level agreements and took a look at them and then tried to correlate it to performance and then, you know, bring some of those best practices, spread them out, you know, beyond those teams that were performing the most.

00:30:32:13 - 00:31:00:09

Jeff Frick

And then, as you say, be creative. I think that's such a good a good message here. You know, Adrienne Rowe, who's a workplace professional, says, you know, you don't have to, you don't have to get at 100% right with the next thing that you do, you know, be willing to try some things, be willing to experiment, be willing for a few things that necessarily don't work out and just do them in pencil and not pen. And let's still be in a learning mode is very important kind of attitude about moving forward.

00:31:00:11 - 00:31:16:14

Julie Whelan

It is. I mean, I think that that lesson of being iterative about your plans is important, and while you're iterative, make sure that you have the process in place, that you're capturing that wealth of data that you're building through having that experiment happen in your organization.

00:31:16:17 - 00:31:38:13

Julie Whelan

And I think that that can be difficult because we have to pause, we have to look at what we're doing across the organization, which means that generally you should probably have some kind of a program management office that really is sitting at the eye of the storm and helping to create and aggregate all that data and that wealth of information that you can draw insights from.

00:31:38:19 - 00:32:00:19

Julie Whelan

And we actually are finding that most organizations are not doing that. They don't necessarily have those program management offices that are really looking towards transformational change, which may mean that they're having a missed opportunity right now. So that would definitely be a best practice is to really, you know, take that wealth of information that you're building from your own experiments and try to build insights from them.

00:32:00:20 - 00:32:28:29

Jeff Frick

Right. And you even call out specifically in your actions, suggested actions at the back end, almost separating your long term objectives from your short term objectives and keeping your long term objectives in mind, but really being more hyper focused and experimental I would I would guess from what you just said, on some of the more shorter terms objectives and how you get there and being very cognizant that those two are related but not necessarily the same, certainly not in the short term.

00:32:29:02 - 00:32:46:16

Julie Whelan

Yeah, I mean, absolutely. So the short term is easier to think about. It always has, you know, real estate planning. We've always had to plan our four or five year plans and it has been painfully difficult and that is only more difficult now. But I think that the longer term out that you get, the more visionary you get.

00:32:46:16 - 00:33:07:27

Julie Whelan

And if you have a vision for what you want the long term to be, then you can make short term decisions with that vision in mind and always with that threshold of does this, is this decision in keeping with my long term vision, you know, really easy way to think about that. That's much more tangible than how you plan for hybrid work is sustainability.

00:33:08:00 - 00:33:34:12

Julie Whelan

I often talk to organizations that are very focused on sustainability by saying every single decision that you make is going to determine whether you get to your net zero goal by 2030, 2040, 2050, whatever it is. Because if you make a wrong decision right now in haste, without that long term vision of where you want to get to when it's related to sustainability, then ultimately you're not going to meet your goal because that decision is going to stay with you for a while.

00:33:34:12 - 00:33:44:16

Julie Whelan

So really creating short term decisions with the long term in mind and where you can't have the long term in mind, trying to stay as flexible and agile as possible is really important.

00:33:44:19 - 00:34:14:21

Jeff Frick

Right. And then just on the data side, what are you seeing in terms of evolution on the data side, in terms of getting past the Kastle badge swipe in, hopefully not tracking keystrokes on the computer and mouse clicks? What are some of the more innovative kind of data, data things that give you information? I don't want to say a utilization is probably better than occupancy. What are some of the more creative or effective data methods that people are using to help support their objectives?

00:34:14:24 - 00:34:45:25

Julie Whelan

So, I mean, as I said, I think most organizations are still using badge swipe data, which is a challenge because there's only so much that you can do off of that. Sensor data would be the way forward that is going to give you that wealth of information. But there are various reasons from cost of doing it to the resourcing to be able to do it to the privacy measures of being able to, you know, of getting over those privacy measures and organizations that are kind of challenging some organizations for fully getting there.

00:34:45:27 - 00:35:10:14

Julie Whelan

But I think that even just doing pilots of that sensor data can make all the difference in the world, because by doing pilots, then you have a test case of the wealth of information that you can draw from it that then you can bring to your CFO, you can bring to your CEO, you can bring to your Chief Human Resources Officer to say this is how our space is working and how effective it's being based on the utilization of people in it.

00:35:10:16 - 00:35:36:12

Julie Whelan

But we are a long way away from, I think, having that be fully implemented in the stack of tools. I would say most organizations today from a technology perspective are still extremely, extremely focused on things like video conferencing software and things like even room booking technology. Those are the two areas where organizations are putting their resources and their expenses to, to really stand up in a good way.

00:35:36:16 - 00:36:16:06

Jeff Frick

Okay, Well, they would take away my microphone if I didn't ask you about generative AI and the impact of of immediately and kind of mid term and long term. What are you seeing as anything happening? What gets you excited about kind of the potential of this, you know, kind of cascading leap in AI that was generated last November with what we saw with ChatGPT and the generative AI, but, you know, more AI in general and just technology in general, as you see, you know, opportunity to overcome challenges or really kind of change the way that people and buildings and real estate can engage to ultimately be more effective.

00:36:16:09 - 00:36:40:07

Julie Whelan

So I mean, I think that there are so many different ways that AI is going to impact the built environment in the way that we use the built environment. If you just look at demand for office space as AI grows and the companies associated with building this technology and the uses of this technology grow it could end up being a renaissance for a market like a San Francisco.

00:36:40:12 - 00:37:03:20

Julie Whelan

Time will tell, but there will be companies that are born out of this and it could be that next push for tech growth in which would be so important, especially in the markets that don't have really a diversified industry and that really need that boost right now. Then it comes down to our buildings and how we use them and how our jobs are.

00:37:03:20 - 00:37:27:03

Julie Whelan

And I know that there's a lot of talk about the jobs that AI takes away, but I think that if we upskill our workforce appropriately and look at the new opportunities that we have to do more strategic and better offerings in our organizations, that ultimately the jobs will not maybe not grow at the pace that we're losing them, but they will grow into different places.

00:37:27:03 - 00:37:46:21

Julie Whelan

And I think that what that ends up creating is a world, Like I said before, we have more knowledge workers. And when you have more knowledge workers, you don't have as heavy a dependance on the office. And it's just going to promote this idea of hybrid. And then ultimately what I also think is going to happen with AI is that it's going to help us with our work processes.

00:37:46:21 - 00:38:06:03

Julie Whelan

So I have said for years now that eventually, someday we're going to, you know, look at our outlook the night before Monday and it's going to say, hey, you should really go into the Boston office for me because A, B and C, people that you collaborate with all the time are going to be an also. And there's this project that you're all working on together.

00:38:06:07 - 00:38:32:21

Julie Whelan

I think that AI is going to give us these prompts that we would have never dreamed could be possible. That will help one of the biggest challenges right now, which is ensuring that we come together at the right times and in the right forms of people together. That makes sense. And I think AI is going to eventually, over time, be able to play a role in that. Not saying it's going to be perfect. I'm sure it'll be messy along the way, but I think it'll play an interesting role in that.

00:38:32:26 - 00:38:48:28

Jeff Frick

Yeah, I think it's a long way from perfect. But you know, it's funny, Kate Lister said, Wouldn't it be great if, you know, you're working on a PowerPoint and suddenly your laptop vibrated and said, Hey, you know, we have other people at the company that are better at PowerPoint than you, Why don't you give it to them and you can work on something else?

00:38:48:28 - 00:39:14:12

Jeff Frick

I mean, just just to give us some guidance on what's the most productive use of time for that next marginal unit of time, I think will be phenomenal. So exciting time. So I'll give you the last word back on this thing. Anything that jumped out, anything that that kind of, you know, maybe we didn't talk about or that that that surprised you or delighted you in aggregating this latest set of data from the field?

00:39:14:15 - 00:39:47:29

Julie Whelan

Nothing really surprised me. I am just delighted that we are in a place where organizations are becoming more decisive. And for anybody listening to this that is not an office proponent, I would say it does not mean that I am fully for the office, but I am happy that organizations are deciding to take one view or the other, because what that allows is for their employees now to be able to shape their lives around what their future is going to be in terms of their profession and how their organization views the future of work.

00:39:48:02 - 00:40:14:02

Julie Whelan

And I think that that's exciting because I do think for the last two years we have been in a little bit of a middle ground, which has been difficult for anybody to create a routine off of and to create a future of. And this now is putting us in a space where, you know, where your organization's intentions are for the most part, and you can either learn to work with them so that your work in your life can be better balanced through hybrid work.

00:40:14:07 - 00:40:24:29

Julie Whelan

Or you can choose to go try to find another organization that fits in with your, with your requirements of what you need for flexibility more.

00:40:25:05 - 00:41:13:00

Jeff Frick

Right, Right. Well, as Phil Kirschner would say from McKinsey, you know, be digital first and you just said, you know, there are lots of investments still going in into digital and digital tools and digital tools and more effective use of digital tools does not mean not going into the office. It means making more productive when you do go in. So I think there's just a lot of benefits, that we should be, stop talking about days of the week and talk about, you know, effectiveness and things you can do at the office that you can't do at home and focus on the positives instead of the calendar days, which was, you know, meaningful when we were in horse travel and everything was measured in days. But we don't measure thing and days anymore, we measure things in hours. So great stuff. Julie, really appreciate the update. And so when's the next update, should I my clock for a year from now?

00:41:13:02 - 00:41:19:14

Julie Whelan

It'll be a year from now, and we usually get a surprise one in between sometime in the fall. So we'll see if we get to do that this year.

00:41:19:16 - 00:41:30:26

Jeff Frick

All right. Well, thanks again and thanks for sharing the insight. And again, I just love that you guys go out and get the real data so everyone can stop making assumptions and actually get to the data. So a really fun to catch up.

00:41:30:28 - 00:41:31:23

Julie Whelan

Great. Thanks, Jeff.

00:41:31:27 - 00:41:42:26

Jeff Frick

All right. Thank you. All right. She's Julie. I'm Jeff. You're watch it Work 20XX. Thanks for watching. Thanks for listening on the podcast. We'll see you next time. Take care.

00:41:42:28 - 00:42:11:02

Cold Close

I tried to go into a natural setting with a beautiful Boston background behind me, and I looked like I was in the witness Protection program. It's always something, right? Yeah.

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