ABOUT THIS EPISODE
Melissa Marsh is founder and Executive Director of PLASTARC, and an expert in workplace strategy. She talks with Frank Cottle about leveraging the workplace experience to drive engagement and connectivity between people and space, in search of that ‘perfect workplace’.
Founder & Executive Director PLASTARC
Frank Cottle [00:00:17] We’re excited today to welcome Melissa Marsh from PLASTARC to the Future of Work podcast. Melissa is an expert on workplace strategy, and she’s been a leader in change management services, working with design, architecture, master planning projects all over the world. In Europe and in the US she’s been on the forefront of delivering alternative workplace solutions and has led virtual teams throughout her entire career. She’s contributed to Corenet, Worktech spearheaded the International Learning and Technology initiatives, lectured at UVA, Cornell, MIT, Sloan School of Management. Melissa, welcome and thank you very much for joining us today.
Melissa Marsh [00:01:04] Thank you. I’m delighted to be here.
Frank Cottle [00:01:07] So before we jump in, can you tell us a little bit about PLASTARC? And I’m interested from all of the conversations we’ve had over the last couple of years as we’ve known each other — do you really think the perfect workspace exists or can exist?
Melissa Marsh [00:01:27] Great. Thank you. So PLASTARC is a social research and people analytics organization for architectural environments. I can unpack that for you a little bit. What it really means is that we bring the kind of people-based research and quantitative viewpoint on how people think and feel about things, how they experience things that you might see more popularly in product design or maybe think of as something that’s part of urban design thinking. It hasn’t historically been part of architecture in the interior design scale to have real data information analytics about what that employee experience is within the physical environment. So, our work is to bring that people experience together with the physical experience. I sometimes jokingly say we help buildings and people get along better together. And we really came to that through a variety of perspectives, from sustainable design to a real passion for the fact that architecture is different from, say, art, by virtue of the fact that it is occupiable. And so, I sometimes think of architecture as the art of occupancy.
Melissa Marsh [00:02:42] How can we really focus on what it’s like to be in an environment? And then you ask, is there a perfect space? And I would say this is maybe like thinking, is there a perfect partner? There’s a lot of differences and a lot of nuances. But I think that really the perfect space comes from having an environment that one has an opportunity to connect with. I wouldn’t quite say control, because that wouldn’t work well with the partner analogy. But I certainly think that there may not be a perfect space for everyone collectively, but that there is certainly a perfect space for each of us.
Frank Cottle [00:03:20] I think that’s it’s good to drill down to that, to our unique needs and our unique characteristics. You’ve known me a bit, you know, I’m sort of a straight-ahead businessman. So, I’m going to ask a question a little bit about how do you calculate the return on investment in the perfect workplace? What are the metrics that people use to say A is better than B? Not just because it feels better, but what are the productivity metrics that come to play so that a business decision can be made based on those indicators?
Melissa Marsh [00:04:01] Yeah, so I think the factor of that calculation is really around the fact that most organizations spend about 10x on their people that they might spend on either their space or their technology. And if we can leverage people, if we can leverage the space to improve the people experience, then that’s really going to mean it’s a much better experience. And some of the ways that we might measure that are an engagement score, which is asking employees how engaged they are, how committed they are to their organization. It might be an attachment score asking really, what is that connectivity? What are the factors of that connectivity? One of the things that we see drives engagement is, do I have the sense that my employer cares for me? And by having a wonderful work environment that can be a visual and experiential expression of care. We also see an example coming from marketing and business, a net promoter score. Would you recommend this workplace, or would you recommend this employer to another person in your position or to another person, with your talents, etc.? So, I really think of workplace as maybe two pieces, one as a means of expression and accommodating people, that they have that feeling of stickiness with their organization. They want to be part of that organization. So, it’s both the expressive component, but it’s also the functional component. Does the space allow people to do their best work? And by and large, when we’re talking about knowledge workers, people bring that desire to do their best work, to get to work every day. And so, it’s really about the organization making space to make that happen. And so that’s why we think of being able to measure space based on its impact on a person. It’s really in many ways, you could say that we as people are the instrument by which we measure the efficacy of the space.
Frank Cottle [00:06:19] It’s interesting, we’ve been saying for the last several years, many years now, about five or six years, that there’s no such thing as an occupier of space. That we are all travelers. And I’ve traveled all my life and I’ve always traveled when I worked overall and I know what you’re saying, what you’re suggesting, I know I worked a lot better when I travel, when I’m accommodated in places where I’m very, very comfortable. And the comfort can be a quality level, it can be a service level, it can be an environmental level, all those things, when you find that magic spot, that’s where you always go back. So, I really get that. But as we look at the worker, as a traveler instead of an occupier, how does a company blend all of the places that a person works into that single environment to perpetuate the same quality structure because, again, you’re at your residence today. So am I. We’ve kind of been locked into a different office environment overall. Generally, you know, yesterday I was in my office, I was in a meeting room, I was in my office, today I’m in my residence, Monday, I’ll be possibly traveling to another office in another state. How do we get all these things to blend together for all of us? Because we really are travelers now. We’re not sedentary occupiers.
Melissa Marsh [00:08:08] Yeah, so I think that’s a great question, Frank. I’d start with the fact that PLASTARC has always been advocates for enabling people to work where, when and how they want. You know that when people have freedom and discretion and control over that experience, they’re able to put themselves in settings that are more productive for them. You might imagine, for example, that one person may feel productive in an energetic and bustling cafe style environment. Another person may feel much more comfortable in an environment like a library, that kind of person that can hear a pin drop or has a higher level of sensitivity. So, I think it’s important to recognize that people have different sensory experiences and what might be comfortable for one might not be comfortable for another. And so, in that, it’s really valuable for us spatially to offer a variety of different settings or a variety of different experiences within a space. I think that’s first and foremost on accomplishing this comfort for many. The next level of diversity, like you say, you’re kind of inspired by travel and having those different spaces that you can explore and find unto your own. And I think that that’s another aspect of having that physical environment that maybe is changeful over time or dynamic in different ways so that it appeals to different individuals.
Melissa Marsh [00:09:53] And then I think finally it’s about a greater intensity of experience. You’re mentioning that workers may in the future be sort of passersby in their physical environment and in order to have kind of the social intensity or the connection to our organizations that we might previously have had by spending five days a week in an office, that experience needs to be maybe twice or three times as intense in order to capture that stickiness we talked about or to have a similar amount of that brand intensity or social interaction intensity. So, I think part of that means denser environments, environments where we’re more likely to run into our colleagues or neighbors or have more access to information through technology, et cetera. So, I would say that we’re looking at environments that maybe feel more intense, not that that would mean not being a reflective environment or a relaxing environment, but less gray and less vanilla and more intentionality of space.
Frank Cottle [00:11:10] So I would replace ‘intense’ with ‘energized’. I agree with you completely. We need that variety. It’s kind of an interesting and a good Segway over to work life balance, and that leads over to things such as wellness overall. As we change the way we work, which is a permanent thing; everybody says, we’re going back to the new normal – but if you’re going back, it’s not new. And if it’s normal, it’s not new. So basically, we’re just creating and we’re evolving what ‘normal’ is. And I think we all have stepped forward in that regard. And a lot of it is work life balance. Because a big percentage of people’s time will be spent working from environments they create themselves, that’s not created by their employer.
Frank Cottle [00:12:18] How do you manage that aspect of remote work and how does an employer help to create work life balance in the home office, that ties directly back to the central office, or a branch office, or work from home, work near home or work at the corporate headquarters. The combination of those three things. We know how to do it at the corporate headquarters. We know it has to happen there. Maybe, maybe! We think we know. And we know that people don’t always want to work out of their house or maybe their home isn’t suitable for that or the lifestyle isn’t suitable for that. So work near home — and that may be a corporate environment, could be a coworking or business center environment or as you mentioned, the library, it could be any number of third places — an awful lot of us will continue to work a greater percentage of our time from our homes. And how do you blend those together?
Melissa Marsh [00:13:20] So I think the first responsibility of an organization is probably on that ergonomic scale, to make sure that an individual has the information they need in order to set up a desirable environment for the work from home condition. And ergonomics is not just a chair. Right? It’s lighting. It’s the physical environment. It may be greenery or visibility of greenery. And I think it’s actually really desirable that people have had this COVID moment as an opportunity to set up their work settings and see how they like to be working. And then I’m really hoping that people bring that information back into their office environments and I’m expecting that they will want more control over those environments than we’ve seen before. And I think that that’s an important aspect of that combination.
Melissa Marsh [00:14:22] And then you also mentioned third spaces or third settings. And I think that that’s a matter of maybe unlearning some of the things that we’ve been taught by occupying corporate America for so long, probably back when many of us were college or university students or early in our career, we may have sought out places that weren’t offices or homes that we enjoyed working. And so, you kind of build up a model for what you like, or what you like when you have certain tasks. And then you can go and find those spaces either within your community or maybe you will start seeing some more of those findable or unique spaces within the office environments.
Frank Cottle [00:15:11] I think that as we progress forward, we’ve been pushed into our home office and other office environments a lot recently, we were already on the verge of much of this, as you and I know, you’ve been preaching for a while, but we’ve been pushed into our home office environment and to change the environment, we work as a result of this pandemic and mostly by government – they say, you’ve got to do this, you’ve got to do that – and then you say there’s been a lot of responsibility taken by government there. As government backs away from this and as a private industry, the private employers start making their own rules and say, well, is it, you can work from home or you must work from home, or you can work in this third environment or you must work… all of these changes are going to occur in policy. We’ll call it human resource policy. Naturally, design and spaces will be impacted by it.
Frank Cottle [00:16:14] But here’s a question. What responsibility for the home office should the employer take and should that responsibility include a stipend for offsetting costs? I know my electricity bill has doubled since I started working from home. Now, my commuting cost of fuel to get back and forth to the office has been cut in half. So, there’s some offsets already going on there if I calculate my home cost. But should corporations take responsibility to pay or to build a house or to fix or deal with those aspects of a home office or if a home office isn’t suitable, what responsibility does a company have to provide a stipend, I guess I’ll say, so that a third office, a third place, to work near home instead of from home, environment can be created. What are the responsibilities, and, if you are forced to work from home, what are some of the liabilities?
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Melissa Marsh [00:17:22] Yeah, so I think that that’s, again, an interesting question, and particularly it’s something that organizations are struggling with at this moment in time. I think one of the biggest questions is around how are we intending to bring people back? What are the expectations when people return? Are we going to mandate it or are we going to make it employer organizational choice? And I’m mostly seeing organizations seeking some sort of future hybrid, either which is driven by employees having choice or some combination of corporate and management having a choice. Maybe it might be something that is designed or determined on a team level or a team basis. So that first question of who comes back when, and how, and why is what many organizations are thinking about probably harder now than they ever imagined before. The other side of your questions is really what should be compensated or what should be paid? And I’m going to say less of a ‘should’ and more of what we’ve seen. It was interesting when we were working in the early 2000s, we were seeing organizations that were using that stipend as an incentive, a reason to take the package of having a home office might include having that stipend.
Melissa Marsh [00:18:54] There is a little bit of a complexity on that stipend. Is it taxable or is it something that the employer plans to maintain ownership of? That can be complicated to have employer materials and an employee home? I think another level of complexity is maybe what is the sustainability impact of this? If I as an employer have thousands of desks in the office, I may be thinking, well, I could just send them off to the employees’ site or location, only they’re probably not going to fit and who would want it in their environment. So, I think it’s going to take till we get to the next generation of furniture purchases and the next generation of technology purchases for organizations really to be thinking through this differently. As just a kind of benchmark or point of reference, you might estimate that at least in urban environments, an in-office accommodation cost for an employee could be roughly $12,000 a year or a thousand dollars a month per person. That’s kind of comparable in an urban environment. You might see half that much, five hundred dollars a month to the cost of a coworking membership. We are seeing organizations who are sponsoring that coworking membership as a way to have the spatial solution solved on their behalf. And then I think the last piece is maybe to reference when we began sort of a BYOD moment in technology. Right.
Melissa Marsh [00:20:30] And so maybe if you wanted a clunky 20-pound Dell laptop that was three or four years old, your employee might pay for that. But if you wanted a new MacBook Air, then you are going to have to buy that yourself, et cetera. So, I really think that it’s going to come down to a little bit of choice and discretion maybe where if an employee wants a particular product, then that’s something that they maybe have to top up a stipend. But we’re going to need employers to start being in a real estate position where they’re actually saving money in order to have the resources to accommodate a stipend. So, like I said, I think it’s going to be a next generation of purchases at the corporate level till we really start seeing some different allocation of what’s getting bought and buy whom.
Frank Cottle [00:21:26] I would agree that it’s evolutionary, not revolutionary process right now, but from the large corporations that we speak with, I’m sure you hear the same or something somewhat similar — all of them are thinking of reducing the amount of permanent space they have or reorganizing that space. And so, the number that I hear most consistently for an average company that’s growing at about 10 percent a year, that at their next lease renewal cycle, they will be reducing their space by about 25 percent. And as they do that, they are not only reducing their cost of operating that space, but they also materially impact the debt side on their balance sheet. They’re thinking, woohoo – we got rid of all that leasehold debt! It gives them a lot of extra capital with which to grow the business, improve their shareholder value, and also support initiatives such as this. So, it’s a matter of how quickly is that going to occur? Well, it occurs every day, as leases renew.
Frank Cottle [00:22:37] So we’re seeing this process go on right now all over. It’s not a ‘this is all going to happen in three years’ scenario — it’s going to happen every day, one tenth of one percent. To kind of move a little bit geographically, do you see companies reestablishing their core business model for employment in an urban or a suburban or how do you see the migration from the central business district that requires the worker to commute to that location? That’s a perfect example. You know, being in your nice office on Fifth Avenue and you don’t mind working from your home, but you’ll be darned if you want to get on that stinky train again. The time, the hassle, the stress, the environment that you’re in, you know, we’re done with that. So how do you see the relocation of workplace fitting in to the creation of these environments that you’re talking about? Where do you actually think that that will occur?
Melissa Marsh [00:23:49] Yeah, so to comment on your first item, we were already, before COVID, seeing that many organizations were reducing square footage between moves. They were calculating that that real estate footprint reduction was going to pay for the move, it was going to pay for some of the investment in the relocation; that was already happening at a pretty steady clip for most organizations as a result of either moving from primarily office space configuration to more of an open office configuration or starting to develop activity based working or flexible work models, or even already knowing that a portion of their employee base was working from home or other locations. So, I might even go as far as considering that we could see double what you’re anticipating as a post COVID difference between kind of current lease obligation and future lease obligation on a per organization or per location basis.
Frank Cottle [00:24:59] I think a lot of that will depend on the growth profile of the organization.
Melissa Marsh Yes.
Frank Cottle I would agree with you. And I also agree that starting in about 2016, we started seeing pressure on the human resources side where human resources say, ‘I can’t hire anybody if I don’t have a good flexible workplace plan’. And they spend two or three years trying to make perfect the enemy of good, with amazing plans, none of which really mattered as soon as the COVID door opened, and everybody got kicked right across that threshold. All of a sudden good was good enough. And then everybody said, if this works, let’s evolve based on what we’ve learned here. So it’s actually I think that as we look forward, very exciting times.
Melissa Marsh [00:25:51] So to answer your question, more on location, we’ve always been advocates for sort of secondary and particularly tertiary cities, the kind of cities that may be were very popular, one hundred or one hundred and fifty years ago, they might have beautiful architecture. They might have some urban infrastructure, including public transportation, not just a busing system, but maybe a rail system, maybe something that needs to be improved and brought back to life. And we’ve talked for a long time about how millennials were having a different cadence of when they began having children and became in a larger family that might need more space. I think the number was something like, Boomers had their first kid at 26, between 24 and 26. Gen X had their first kid at 28, 29 years old. Millennials were not having their first kid until 32, 34 on average. So, what it meant was the statisticians were looking at Millennials and saying it doesn’t make sense that they haven’t moved out of cities yet. And it was really because they were taking longer within their life patterns to establish families and maybe to have greater reason to move out of those urban environments that we all know that they’ve come to love in their younger years.
Melissa Marsh [00:27:22] I also think many of our cities have become completely unsustainable from a transportation perspective and from a cost-of-living perspective. And that needed to be addressed. And I think that thankfully, a lot of the telework that’s been forced by COVID is going to be a great safety net or sort of stretch mechanism to make these physical environments more viable. You might now live much more happily in a metro area with a one- or two-hour commute if you’re only having to do that commute one or two days a week. So, I think it will both extend the edges of the suburbs in more sustainable ways. And I also think that there will be cities across the country in this sort of tertiary, formerly known as tertiary cities, that have a lot of the features and benefits of our classic urban environments, but with much lower costs of living. And those are now much more viable, both for individual employees or maybe even for coworking sites or outposts of our favorite companies.
Frank Cottle [00:28:34] Well, you know, it’s funny, we’re both very linked to the world of flexible workplace, coworking, business owners, etc. One of the current location, location, location, mantras, that we’re hearing, and we agree with and have heard for the last couple of years, and it relates to everything we’re seeing today, and it relates especially to your cost-of-living issue in the city center — that it’s better to build on a bike path on a metro path. That the future of work that we’re going to be addressing is going to become much more localized and less commuter driven on long-distance commuting. If you say, well, they’re still commuting to work, stretching things out a little bit, they’re still commuting — yeah, but one day a week.
Melissa Marsh [00:29:31] Right.
Frank Cottle [00:29:32] OK, so the difference in the commute experience, if everybody can stop commuting one day a week, just that, the commuter experience of having 20 percent less ridership, less congestion, less crowd hustle and bustle, makes the whole thing much more pleasant. And everybody’s only commuting two days a week or three days a week, well actually, you’re not rubbing shoulders with people while you’re sitting on the train and you don’t feel as pressured and all these things. So, a lot of things will come about as a result of all of this that can still sustain the structure and yet make it much more pleasant for a work life balance.
Melissa Marsh [00:30:19] I think that’s true, unless you get companies that say you have to be here on Tuesday, Wednesday and Thursday and not Monday and Friday, and that we make that three-day experience from a density perspective, as problematic as it was pre-COVID. So, I think that that works, if employers really offer flexibility or dynamic scheduling, something that can be easily accomplished with technology, it doesn’t have to be chaotic to be dynamic. But we need some smarter thinking and some more creative sort of intellectual investment there to avoid going back to kind of a shorter version of the previous year.
Frank Cottle [00:31:02] Yeah, I think, none of us know for sure, that companies will be driven by the people that they hire in the future. Instead of having a top-down driver from a human resources department, I think we’re going to see much more of a bottom-up driver through the human resources department into policy making such as what you’re considering there. I hope that’s the way it is. We won’t know for sure and there’ll always be outriders and anomalies. But I hope that that becomes the major trend.
Melissa Marsh [00:31:41] Yeah, and I would say that’s a big piece of PLASTARC’s work because a lot of organizations want to engage employees, want to do things with an employee centric perspective, but maybe don’t know how. Or maybe they collect that data and information and they don’t know what to do about it. So, kind of both getting that data and then turning it into policies and design solutions is really front and center of what we do.
Frank Cottle [00:32:05] We’re very data centric ourselves. And one of our internal mantras is, ‘get the data’. Data becomes information, which you can turn into knowledge, which creates action. So get the data and go through all those steps. It’s very hard, but if you do go through those steps, then you can really find solutions much more easily and a company like PLASTARC helps each one of those phases. We’re running out of time here, if you’re going to leave everybody with one amazing single thought that says, you know what, the most important thing in the future of work that PLASTARC believes is going to be a driver or provider or return to everybody, what would it be?
Melissa Marsh [00:32:54] So I think that what we’ve learned in this unique moment in time is around experimentation, testing. Every organization, every individual jumped into a new way of working that they maybe hadn’t imagined was possible before or hadn’t considered. And so, through experimentation, we now have different modes of working, again, either as individuals or companies that we didn’t know possible before and we have really come to embrace. And so, whether it’s increasing wellness, improving diversity, having more multisensory environments, this conversation about urban or suburban, I think that what we’ve all learned is let’s try it and see, and maybe try it, test it, have some research and results and keep doing things differently rather than getting stuck in a track of maybe something that is just OK work experience, rather than an amazing work experience, or that fall in love with work experience.
Frank Cottle [00:33:55] Well if I could summarize that, I would just say have the courage to embrace change.
Melissa Marsh [00:34:00] Absolutely. Well done.
Frank Cottle [00:34:01] That really is what is important right now, is having the courage to embrace change and to enjoy it, not to be afraid of it, but to actually embrace it with joy and look for new ways that are going to drive the future of work. And Melissa, how could people reach you if they want to know more about PLASTARC and want to be able to interface with you directly?
Melissa Marsh [00:34:29] Absolutely. So, I’m Melissa at PLASTARC.com. You can follow us on Twitter. Our handle there is PLASTARC and we’d love to see you in any format. We also have a monthly webinar and a monthly newsletter. So, come to our site and sign up for this.
Frank Cottle [00:34:49] Great. Well, thank you very much Melissa. Really appreciate your time today and the contribution you make towards the overall, the total topic of the future of work. Thank you.
Melissa Marsh [00:34:59] Thank you Frank. I really appreciate it.Share this article