Transcript: Experience Per Square Foot Measuring the Employee Experience

I find a lot of what we do is we design things and then we walk away, but nobody necessarily was educated on how do we maintain that experience for people. We really have a big employee engagement problem across our corporate landscape. Employee engagement has been flat for about a decade now, with only about one-third people actually engaged in the workplace. It's 13% globally. If you're not aware of those stats, it's really alarming.

In fact, half my clients last year for experience per square foot came through HR departments. It's kind of a wake-up call to our industry that if you're not there doing it, another business line may be stepping in to take ownership. Hello and welcome to the Constructor Podcast, the best way to build it, episode 96. I'm your host, Brittany Campbell-Turner, and this podcast is dedicated to helping property owners have certainty in their decisions about their construction projects. We talk about fostering trusting relationships, help you to understand how to lower risk, be under budget and on schedule, and most importantly, exceed your end user's desires.

In last week's episode, we spoke with Rex Miller, author of The Healthy Workplace Nudge. He's a speaker and consultant, principal, and thought leader at Go MindShift. Rex and I talked about his newest book, The Healthy Workplace Nudge, and the fundamentally different questions we as organizations have to ask in order to shift our wellness culture because wellness programs don't work and they haven't been working for the past 50 years. We talk about studies that have been done about the chronic diseases in America and how it is inevitable that it will cause an even more economic strain if we don't change our design criteria for better behavior and different environments in our built spaces.

We speak further about the domino strategy in order to mitigate this epidemic. If you haven't listened to that episode yet, check it out at constructor.com slash ep95. Today we're speaking with Brian Berthold, managing director of Workplace Strategy and Change Management at Cushman and Wakefield. We talk about the holistic approaches to workplace strategy, measuring experience per square foot, some examples of clients that Brian has had using experience per square foot, and how they were able to make some monumental changes to how happy their employee base is and how this actually impacts ROI in the long run.

With that, let's get into the interview. So today we are speaking with Brian Berthold, the managing director of Workplace Strategy and Change Management and Strategic Consulting. He is passionate about creating collaborative, experienced rich workplaces, environments in which people can grow and thrive. Brian leads and inspires high-performance teams to optimize a company's real estate assets and deliver integrated best-fit solutions that boost employee engagement and maximize productivity while reducing costs. He's a licensed architect with a keen understanding of organizational psychology.

He embraces an integrative, multidisciplinary approach to workplace strategy. I actually brought Brian on today as a guest because I went to a corn at luncheon here in Chicago and he actually spoke on a panel. I thought that the Constructor audience would be really interested in what Brian presented on. So with that, welcome Brian. Welcome to the Constructor podcast.

Thank you. Thank you for having me. Glad to be here. Yes. So tell me about your background a little bit and how you started down the path of supporting workplace strategy and change management for organizations.

Yeah, as you referenced, I'm a licensed architect and I did that for about a dozen years. And the one thing I found missing in my background was just really understanding the nature of the businesses that we were supporting. I thought I'd take a break and go into corporate real estate, went over to a bank, Fleet Bank, that's now part of Bank of America, and did a journey through many different roles in real estate from corporate architect to head of strategy and planning. And I really got in tune with what leads to hiring an architect and what is the nature of the business problems we're trying to solve.

And in reality, what I found over my career, and I did that through many financial institutions, notable ones like Capital One, Edie Bank, Washington Mutual, Fund Trust Bank in Atlanta. And what I found is lots of times the specialties that I was bringing on to solve our problems, say it's a workplace issue or a portfolio relocation, is that everyone owned different pieces of the pie, but nobody was bringing it together. So I had designers, architects, furniture, kind of people doing design work. I had to work with the technology groups and what are the future looking technologies along with the tools that people have today.

HR would help out on change management or that could be marketing communications. Lots of times none of those folks could translate things for the CFO into financial bottom line benefits. What I realized was lacking in the whole effort was nobody had their eye on the actual employees and the people that we were touching in the very lives of the experiences that we were creating. But I got really passionate about trying to ring fence all of those. And I realized that's not really a role in corporate America.

We have many different side road business functions. That path led me to Cushman Wakefield about four years ago where I got the opportunity to lead the workplace strategy and change management practice. With my passion to really create compelling places for people to work in, I have this opportunity now to bring all those disciplines together for the sake of helping companies prove the lives of the people that work. This is an interesting path that you went down of discovery really from an architect's perspective to I don't know if I'm really answering the questions about finances as it relates to the individuals that we're serving by building out this space.

It's got a significant piece where CFOs could be worried about quarterly returns in addition to the long term projects that we're building. It's a delicate balance between assets we want to last 40 years or leases we take down for 10 years and the CFO is worried about his earnings over the next quarter or that year. We really have to balance all of it so that the immediate impacts along with the long term implications of the things we do. So now you have this more holistic approach of speaking to the entire process and bringing everyone together.

In your role, it sounds like you're doing this early on in the inception process, really just thinking through establishing somewhat of the budget, understanding loosely what the focus and purpose of the project. But you're doing this from a holistic approach. What are some of the considerations that you're facing when you're working with clients to choose and investigate a holistic position to workplace strategy? How do you bring them through as far as a process as you get them to think about things in this way? Yeah, that's a great question.

Where do we start in this journey? We created a product that we call experience per square foot. What we realize is our starting point for any project is to really understand the nature of how people are working today, call it kind of the good, bad and ugly, what's working well, what are those things that we can improve and are there total misses? It could be an amenity or a feature within a workplace that would really enable people to flourish a lot more. So our starting point really and our challenge we faced when I got here was part of my backgrounds.

I'm an analyst as well. And we wanted to really figure out how do we capture what the experience of an employee is. And I wanted to do it through rich data and doing deep dives so that it was actually measurable. I've seen a lot of surveys and things, kind of happiness meters, but they don't really give you meat on the bone to know what are those actions that we need to take. So experience per square foot enables that.

So we actually can measure the experience of an employee and then we can turn around and we have about 40 different attributes that cover everything along the journey, whether it's your workplace design, the technology tools that you give for people, both on a personal level and how teams get together, the amenities that you give them, wellness programs, things that they can do to reduce stress. It's also going through how do you operationalize these things? So how do you service the people? I find a lot of what we do is we design things and then we walk away, but nobody necessarily was educated on how do we maintain that experience for people.

We also factor in the location. What I mean by that is your experience when you go to work starts when you leave your house. It has to do with neighborhood amenities, your commute, how do you park? We factor all of those things in as well as the culture and brand of the company. I guess my curiosity is how do you even convince people that they need to start thinking in this way in the first place?

Is it presenting the data? I guess there's been this long history of people doing it a particular way and getting particular results. And how is it that they know that the way they're doing it is not right and that they should be taking into account the experience of their employees? What does that data communicate that exists today? We've kind of shifted the paradigm.

I think traditionally we looked at the things we do as solving real estate problems. And what we're doing is turning it to actually solving the business problem. And then how do we do that through real estate? One of the terms we've coined is our one whole simple idea is how do we improve the lives of people through real estate? It's not a subtle change or may sound subtle, but I think lots of times we try to improve real estate for the sake of people.

And then we just focus on this stuff. And what I witnessed and where we are in 2018, we really have a big employee engagement problem across our corporate landscape. Employee engagement has been flat for about a decade now with only about one third of people actually engaged in the workplace. It's 13% globally. If you're not aware of those stats, it's really alarming.

And what we're finding is they're looking for real estate companies are to help improve employee engagement. That's kind of the starting point that gets people interested. If you think of employee engagement, traditionally it's done usually through HR, through a survey, and they ask a lot of questions that may have to do with your comp, your organization, the job you do, the people you interact with. They never ask a real estate question. And I always found that alarming that this is where we spend most of our waking hours.

The experience that you have in the workplace definitely impacts your experience with the company and your engagement level. So having that conversation with the C-suite clicks for them and being able to offer them an ability to actually measure that with real data and then showcase what are the real estate related items that are driving that. And what's surprising is maybe 20, 25% of the things that you're delivering, whether it's a new space design or technology or amenity, only about 20 to 25% on average actually drive an employee experience.

Helping both the company and real estate professional realize what's the priority and what are the things that are making that impact. I should add of those 20, 25%, maybe half of them are not performing well. So it gets really laser focused on the things that we need to improve. So gone are the days of waste. I mean, how we utilize space.

Like across our client base, we're only about 58% utilized. So 42% of the seats are empty or you create amenities or social space and nobody's using it. I'm very keen that that's just not effective in today's competitive market. How do we maximize the use and leverage of our space, but also do it in a way that attacks the thing that is going to drive the experience of people. That conversation with the C-suite is very robust for them.

It clicks and it immediately then drives them to, well, okay, how do we do that? And we've got many diagnostic tools, a survey to kind of score the experience, utilization studies to walk through the space and see, are you 58%? What are people, where are they showing up and what are they actually doing in those spaces? So they can get a baseline then of what their employees are experiencing in order to understand long-term what the experience is after they make adjustments to their real estate portfolio then.

Exactly, exactly. And it kind of brings them a peace of mind because let's face it for most companies, real estate is not the core business. So them understanding it, it's complex to us. It can be mind blowing to them. And somebody who thinks about it holistically through their lens and can communicate with financials and ROI with the returns they get on their investments allows us as real estate professionals to really step in and help them.

How would you say it's calculated today? How do you think that the typical real estate portfolio strategy without taking into account the engagement or disengagement, how are companies reviewing what the ROI is as it relates to their investment in their real estate portfolios? I think what I typically see, if you think about a triangle, what you're always trying to balance with the real estate solution is how well is this delighting and impacting experience of people? How does it affect the productivity of the business? Are they better, faster, cheaper?

Whether it's coding and they're doing that faster or faster to market. And then there's the bottom line, what does all of this infrastructure cost? What I find is if most real estate entities are unfamiliar to how to actually diagnose productivity or the customer experience, the employee experience, they kind of default to becoming managers of cost. Then the KPIs switch to how many square feet per person, cost per square foot, are we desk sharing, are we doing things? And it's a density exercise and buildings and locations are chosen simply on the impact to the bottom line of the company rather than the impacts they actually have on the business model.

The talent, are we keeping it with the strategy and are they most productive? That's where I see needs to shift and a lot more people pushing real estate to be able to talk along all three of those dimensions. So it's mostly focused on business growth. Are you actually going to be making more money? And companies think that their business plans is what's driving that primarily.

And then they're hoping that they can maybe attract more skilled employees as well, I'd imagine, from having a more upgraded space. Yeah, it's, you know, I've seen transitions from where senior executives live to actually understanding their labor force and what's the depth of the market and supplying and supporting the kind of talent they want. And then knowing what's the difference in nuances between different cities and locations, but they can optimize a portfolio strategy that really hits the sweet spot. And that's kind of from a macro lens and the micro lens is what's happening inside the four walls.

What are we delivering as a result? So it's a great holistic view and coming in and saying that we can support all of that for you. You kind of become that trusted advisor and not just the purveyor of how do we make sure we do that most efficiently. Because if you're not doing it, it forces them to do it. And they're not necessarily poised to do labor studies or portfolio analytics across their portfolio.

But the more you can become a trusted advisor for the head of business. And nuance I would say is I've seen elevated over the last 10 years where most of my clients traditionally would have been the head of real estate. All of a sudden a lot more engagement at the C-seed level. In fact, half my clients last year for experience per square foot came through HR departments. So it's kind of a wake up call to our industry that if you're not there doing it, another business line may be stepping in to take ownership.

It makes you kind of think through again, why we're not operating with a more holistic perspective. It's really nice to hear that it's being driven from a different side of the business. But why? They're so interrelated. And I think that's what you've been able to do a lot of your research and help your clients with.

So that brings us back to the fulfillment perspective and experience per square foot. And I know you started getting into it earlier. But yeah, I'd like for you to continue and share with us about how does the experience per square foot, how is it calculated? Sure. And I'll try to keep it at a high level at the same time.

The biggest change is traditionally, so most of this information is garnered through a survey. And there's plenty of surveys out there that measure how people are doing in the workplace. And those kind of six categories I outlined before. It's your workplace, it's your technology, amenities, how you service people, the location in your culture. And we have like 40 attributes that all roll up to those six categories.

Most people will go out with a survey that asks, you know, on every element, your conference rooms or your workstation, technology, how important is each element to you? And then how effective are you at delivering it? When people do gap analysis to say, hey, these are really important things, and they're saying we're not very effective. But the challenge there is you have 40 things that are all independent. When it comes to an experience, they're all interrelated.

So we, with experience per square foot, attacked, well, how do you actually measure the experience of people? And that's what we uncovered. We look at an experience, I'll tell you how we measure that. Picture a two by two grid. On a Y axis, you have work and life.

So that's your work-life balance meter. On the X axis, it's about you as an individual and then you with working with others. If you look at it from that perspective on the work line, you as a person, are you productive and when you're trying to focus? And then as a team, are you productive when you collaborate? Conference rooms, working, technology, et cetera.

I find a lot of surveys and things stop right there. A true experience measure has to get into this life equation. And you as a person, are you renewed at work? Are you energized and inspired to do great things? And then as a group, are you bonded?

Is there a sense of community? These people you want to continue relationships with. Gallup has an interesting question that's always controversial of do you have a friend at work? People realize how important that is just to your experience of coming in that you feel a camaraderie and this is the place I want to work in. And we actually have a fifth element that we measure as well, which we call learn.

For that it's how was your onboarding? Do you know where information is? You know how to use the applications? You know how to do your job? We had one client as an example where they were in that very dense 135 square feet per person and what came back is people's ability to focus and be productive when they're working at a very low score.

And many of the designers really wanted to add more privacy, huddle rooms, phone booths, places where they could concentrate. But what we found in our measure is the number one driver was access to information. So this was a start up, growing very fast, no onboarding. And people were spending half their day hunting and pecking trying to find information and data to do their job. But now you can see it's not just a real estate issue that we have to solve.

We actually have to find ways to centralize storing of information and easy access to solve this problem. We take that overall, those five categories, what we call focus, team, renew, bond and learn. We score that and then we take those 40 things I mentioned before and we do through statistical analysis regressions to say, hey, which of these 40 actually drives each one of these experiences? And that's where it really comes to fruition. We find on average maybe two, three or four things only of the 40 drive each category.

In very rare cases, we find an attribute that drives two categories. We just had a recent client where minimal distractions drove four of the five experience line items. And then through focus groups, we really peel the onion back to say, okay, why is that what's going on? Is it visual? Is it noise?

What are those distractions? So that team can go in and this is real estate technology, the business and say, how do we solve that problem? So that's the unique nature is that we don't leave the client with 40 things to look at it with a gap analysis. We actually come back and say, we measured your experience. Now you have a score.

And now I can tell you of those 40 things you traditionally survey, which ones are actually driving it. It simplifies matters actually. It's so interesting that only a couple of the attributes really drive the performance in each category, even though one of them is performance. I think that's so pivotal that you can identify something like distractions and hone in and find out that you just need a central depository of information so that people can easily find what they need in order to do their work. That can drive so many things.

I think that example is so interesting. I know you have lots of examples in which you could share with us, but do you have some case studies you'd like to highlight from some of your clients? I know previously you mentioned to me about LinkedIn and also in your presentation as well. LinkedIn was actually quite unique. We found a lot of the technology companies really push us.

LinkedIn stepped in and said, I don't necessarily just want the score of the workplace experience. I want you to tell me whether or not it actually has a role in impacting employee engagement. They use Glint as their employee engagement tool and their two significant measures are called Pride and Recommend, kind of a net promoter score approach. Pride in the company and would you recommend this to colleagues and friends as a place to work? We did the same regression and analytics of those 40 attributes against their employee engagement measures and actually found that it does.

It's a great news for real estate. We do impact engagement. We actually could showcase drivers, and there were only like seven of them, that would raise their employee engagement by 10 percent. And that's astronomical in business terms. They're hoping for one, two, three percent improvement year to year.

For real estate, they show up and say, wow, we could actually make that large an impact. And one example of how the tool kind of changed their way of thinking, they did the traditional approach with a survey and we helped them across their whole Asian market, nine different cities. And their previous data had shown the item that was highest in importance and lowest on effectiveness. The biggest gap was their food service program. So they were getting ready to invest lots of money into food service and they got intrigued by presenting a different coordinate function over in Shanghai.

We stepped in, let's do this to see if we're right on what's driving it. And interesting to note, nine different markets, food never showed up as a driver or the employee experience. And we all stood back. They were kind of shocked because they were ready to spend millions of dollars there. But as what we discovered is for most markets, the biggest drivers and poorest performers were things like your own workstation, conference rooms and conference rooms technology, meeting room technology.

And I kind of looked at it as a hierarchy of needs that if you don't have my seat right, my workstation or my meeting rooms, I don't really care about your food. And it's just kind of a hierarchy of needs. And maybe it shows up as you improve those things. But here's a company that stopped their budgeting in one category and they shifted funds from food to now get into really how can we improve this life of you're trying to focus at your seat and you're frustrated or in a meeting.

And they're looking at it as a cyclical process now. So they want to do this the first quarter of every year, run this experience for food program and then use the results for their CAPEX and OPEX funding for the balance of the year and then come back a year later and do it again. Because when you fix those things, maybe food does show up eventually. But now for the first time, they can prioritize and getting budget approval is really easy for them because the data is so rich and points to the things and showcases.

Wow, you're really in tune with our people and they get their approvals for funding pretty quickly. It's really interesting. The specific example that comes to mind about LinkedIn is when people wanted to, I guess, ride their bikes in, isn't that part of the culture as well? A lot in different Asian locations. Could you share with us a little bit about that example with LinkedIn?

You know, if you're familiar with the Internet of Things, smart buildings, it's actually showcases how you start to bring these things together. We had an interesting scenario in Hong Kong where there was a request because it's hot muggy climate for showers in the workplace. You know, we have long commute soon, a lot of people were riding their bikes. When they get to the office, they like to refresh and then start their work day. So they added showers into their workplace.

And this tool that we have, it allowed us to isolate those that were using the showers versus people that didn't. We have a startling revelation. We found that the people, their focus scores went down when they were using the showers. We were all scratching our heads trying to figure out what's going on here. We gave them something that we thought would delight and we have an issue.

And I talked to a neuroscientist from the University of Washington on this. And his first question is, what temperature is the water? And I was like, OK, I'll bite where you're going with this. He said that the water is too hot. That actually tells the brain, you know, this is shutdown mode.

That's why a doctor would recommend take a warm bath if you have trouble sleeping. I joke that this, you know, we give warm baths to our kids to wash the ADD out of them so they can sleep. And the answer wasn't something complex. The answer was regulate the temperature and turn it down. Because conversely, a temperature shower, you know, you've seen these things take a cold shower in the morning.

It's invigorating. It wakes you up. It energizes you. And the solution at the end of the day is we found out something that nobody would normally have found out. We would have never uncovered this data by simply regulating the temperature.

Now the scores go up for focus on people that are using the showers. It's so interesting how the data just clearly segmented, you know, those who are using the showers and you could investigate further. You wouldn't have even asked the question to that professor. So telling of what we can learn when you ask questions about people's experiences. Did you have any other case studies that you wanted to highlight?

Yeah, I'll showcase one where this was for Pfizer, who's relocating their headquarters. You know, they had a gym in their existing headquarters and they were all set to duplicate. You know, it's quite a commitment when you have a gym, especially in Manhattan, about that amount of square footage. What triggered this case study was you talking about biking to work. What we uncovered was the gym really wasn't important.

The biggest thing people wanted was a bike room with a shower. People didn't want to have to drive to work. They wanted to ride their bike to get there in half the time. Pray for your well-being and exercise before you go in versus white knuckling in traffic. So here was an opportunity.

People actually in focus groups told us, I have plenty of gyms around me. I prefer the one I go to, whether it's at home or near the office. You know, we just have that much opportunity. I don't need the company to provide it for me. So a simple change in programming of something that takes a lot less space, bike room with a shower, allowed real estate to save money.

It allowed us to improve the experience of employees with a true benefit and amenity that they didn't have before. And to me, you know, now you have people that are more engaged showing up and they're more productive in the workplace. So it's a win-win on cost, experience, and productivity. You could have taken up so much real estate and spent so much money on workout equipment and the gym itself. Thanks for sharing that.

So now that we've heard about what the measurements look like and how they can be indicative of what type of investments should be made or not be made because of the impact it makes on people, how does a company now position themselves the best way? Companies have this opportunity to engage the workforce in their real estate solution. I think each one of us has been in a case where a new building was opened and you didn't really know much about it until you showed up on day one as a delight of a new space to work out of.

But think about it from their perspective. It's kind of like if I told you you're moving to a new house, but you never saw it. Well, how do you know how I eat and how I sleep and how I entertain myself? So I think going through a process like this where you engage the people and you measure their experience. What's exciting is that process.

By the time you're into delivery, people are witnessing, wow, they asked me, they listened and they're delivering the things that I wanted. We did that with ourselves, with our own Chicago headquarters. It was quite fascinating because we had a score of about 64 or so, which is really a lot below average for two locations in Chicago across our client base when we look at experience score. Our average is around 73. And in the post-move rerunning of our survey, they were up at 78.

So all of a sudden they went from one of our lowest scores to one of our highest scores. So we saw 20% improvement in the experience of people because the company was in tune with them. And think about that from a messaging and carrying through business strategies and things. This is a place I want to work in. It really engaged me and I feel part of the process.

I'm not in the dark anymore. I think it's really great that you guys chose to test the model on yourselves. Why wouldn't you do that? And then how much stronger is the messaging when you do reach out to your clients and speak to them further. So thanks for sharing that example.

And it's focusing on the people. It's focusing on making sure that you understand what their needs are and deliver on that promise. So awesome, awesome. Well, thank you so much, Brian. It's been really wonderful to talk with you and I want to give people the opportunity to learn about what the best ways are to contact you and learn more about what you're doing.

Oh, sure. They can contact me direct, probably best with my email, which is brian.berthold at kushwaite.com. And that's Brian with a Y, Berthold B-E-R-T-H-O-L-D. And we have plenty of information, marketing material, brochures to explain more of the process. So happy if anyone wants to reach out to provide that kind of information.

And it's not because necessarily, hey, I want to come and do this for you. It's more, let me help you create that awareness. Let me help you showcase the value that you can really create for your company. Wonderful. Thanks so much for that.

And we'll make sure to put your contact info in the show notes. Well, with that, appreciate your time and thanks again. Thank you so much. If you liked this episode, find out more in the show notes at constructor.com slash EP96. If you learned something valuable, share it with your friends and colleagues.

You can also let me know if you enjoyed our discussions by connecting with me on Twitter at Brittany underscore CT or find me on LinkedIn. You can also just email me too at Brittany at constructor.com. That's B-R-I-T-T-A-N-I-E at construct double R dot com. Next week, we'll be speaking with Scott Muldaven, president of the Muldaven Company. Companies are under investing in energy efficiency and sustainability, hurting their profits and competitive position.

Healthy building investments create financial benefits. Such benefits can be calculated and presented as part of a company's normal investment due diligence using traditional financial analysis techniques. This is what Scott and I talk about. And he really loves to help to improve real estate decisions to achieve greater profits, investment returns and operating efficiency. Scott is dedicated to integrating sustainability in real estate investment decisions.

And we talk about deep energy retrofit and value beyond cost savings and the framework of the Well Building Institute standard. I'm happy to share this episode with you next week. If you haven't already subscribed to the podcast, you can do so at your preferred podcast player. I look forward to connecting with you next week.