Peter Miscovich JLL Global Future of Work Leader | The Hybrid Workplace Evolution: Unlocking the Future of Work

What you’ll learn

• How the pandemic has accelerated hybrid work
• The future of the metaverse and it’s workplace impact
• Exploring the concept of ‘friendshowing’
• How technology and the three-dimensional internet can bring people closer together
• The impact of globalization on the workplace

Transcript

Frank Cottle [00:00:44] Our guest today is Peter Miscovich, managing director for strategy and innovation at JLL. Peter’s management consulting expertise includes enterprise, workplace strategies, operational performance improvement, real estate portfolio solutions combined with expertise in workplace transformation. He has helped transform over one and a half billion rentable square feet of corporate real estate, including the development of 50 Fortune 100 corporate headquarters projects. In addition, Peter is the coauthor of the book The Workplace You Need Now Shaping Spaces for the Future of Work. Welcome, Peter. I’m really glad to have you today.  

Peter Miscovich [00:01:35] It’s a pleasure to be with you, Frank. Great to be here today.  

Frank Cottle [00:01:38] You know, I’d really like to jump into it really quick. We’ve got a lot to cover. You and I have already talked about a few things and kind of messed up our backgrounds and some common people who we know and projects we’re familiar with. So, I’d like to just jump right into it and ask you, how do you think organizations should be redesigning their workspaces to ensure that employees remain engaged. Now that we’re in the hybrid working environment. And specifically, what steps do you think are effective in designing workspace, the device that drives innovation?  

Peter Miscovich [00:02:19] Great question. And then I’d like to provide a little bit of historical context. We began our career 25 years ago in Global Workplace Transformation with Andersen Consulting at the time, and we orchestrated hybrid workplace pilots with Andersen Consulting, Accenture, Citibank, AT&T, IBM. Actually, some early work with McKinsey and Bain Consulting as well. And what’s fast and PricewaterhouseCoopers, I should name is a former privacy partner. And what’s fascinating is that 25 years ago, we were asking the same question how do we enable hybrid work? How do we enable new ways of working, engage talent and create not only talent, attraction and retention, but greater innovation? And so, if we fast forward 25 years and then we look at the pandemic over the last two and a half years as an accelerant, we’re really in this new era of hybrid workplace transformation. And from our work with IDC, for example, we know that 70% of all firms will be hybrid by 2025. We know from IDC that there will be a 90% talent shortage of digital talent required. We know from IDC that 90% of all companies will invest heavily into smart workplace technology investments. And we know from IDC by 2025, eight out of ten meetings will occur in augmented reality, mixed reality, virtual reality, metaverse enabled environments.  

Frank Cottle [00:03:58] Number three, one more IDC number. In that year. In 2019, just before the pandemic, IDC indicated that there were 1.8 billion remote workers worldwide. And they defined that as that any individual that worked two days or more per week away from their primary workspace. So, when you’re using these percentages and you apply that against 1.8 billion people, at least this is tectonic, what you’re talking about.  

Peter Miscovich [00:04:36] It’s really as frank and you know, so that was 2019. And the IDC data that I’m sharing is 2020 to January. What’s fascinating is that in March of 2020 3 billion people went hybrid remote in a matter of 3 to 4 weeks. And I’ve been hybrid remote for 20 years. Once upon a time, Frank, I had three offices in New York, Chicago and Los Angeles and two secretaries, and I went to the office every day, sometimes six days a week, because that’s where my computers were. That’s where my files were. That’s where I at the time, secretaries supported me. And, you know, we were tethered once upon a time to the office 25 years ago. And so, as we look at the migration and the progression from, you know, 1995 to 2005 to 2015 to 2025, the progression of digital enabled hybrid work has been an ongoing evolution my entire career, and I’ve built my career and my focus, and my Fortune 100 client relationships based upon new ways of working and hybrid workplace enablement. And so, from my perspective, this is the only way to work. And it’s a I hate to say it, 25 years in a global, horrific pandemic. We shouldn’t underestimate, you know, the horrific consequences of the pandemic, but it served as an acceleration to validate the value proposal of hybrid work and these new ways of working. And so, from innovation perspective, we believe that actually innovation will be enhanced as a result of hybrid work practices. Collaboration will be enhanced. Culture will be enhanced. And those organizations that engage in hybrid work with the two pillars of trust and transparency will actually have exceptional performance and have exceptional talent, attraction and exceptional innovation. So, it’s not a smooth ride in every case. And I will share with you the piloting from 25 years ago was by no means, you know, smooth or easy. But I think this is the evolution of workplace behavior that began, you know, 25 years ago and will continue through 2025 and beyond. And I think it’s really almost challenging to forecast by 2030. You know, what will digital hybrid work, virtual work. Enablement really looks like. And I think it’s a fascinating question that, you know, we’re very much focused upon with our 75 client engagements that I’m orchestrating. We’re orchestrating as Jahlil Consulting and really rethinking the whole workplace value proposal. Well, it’s a fascinating time.  

Frank Cottle [00:07:31] You know, it is. And it’s funny when you look forward and you say we don’t even know what to call 20, 30, and in that period, I’m just going to call it work. I’m not going to call it hybrid or this or that. I’m just going to call it work. Right. When you look at. I’m going to make a silly analogy. When you look at boysenberry jelly or jam today, you’re not. So, it’s a hybrid that’s just boysenberry jelly. All right. I think we’re going to look at all the things that we do as just normal. And it’s not new normal because of it to know that it’s not normal by definition overall. Today, you and I are on a video. You’re in New York and I’m up in Texas and I know I’m at my first video system I put in was in 1982.  

Peter Miscovich [00:08:25] Very good for you.  

Frank Cottle [00:08:28] So we have all been evolving and I think the most important word that you’ve said several times is evolution. This is not something we have little periods of shock, such as a pandemic, but it is a continuous evolution. And one thing that we’ve seen in all business evolution at least is an accelerated. Right. And that’s what we say, 2030. We can’t even imagine. Well, we can’t because the acceleration rate is what we don’t we can’t help to idea. We can say what we see today and what absorption or adoption might be. We think it might be that and such, but we don’t know how fast and when that happens, what else it will spawn. And I know it kind of kind of exemplifying that. Moving on to the next kind of question is how technology is changing the way that we collaborate and how there’s a lot of talk about metaverse, both good and bad. But when it comes to the future of work, the most important thing is recruiting new talent, bringing new talent into collaboration. How are things like Google Starline going to work if you’re. I’m sure you’re familiar with that. Yes. Holographic means my first holographic receptionist, by the way, was in a box and looked like a little Disney thing. 1984. Again, I had a holographic receptionist at the front desk of an office building overall, and it was gimmicky. It was very gimmick killing game. But today it’s reality. You and I should be three dimensional in the same room. Holographic right now. We could be.   

Peter Miscovich [00:10:27] And we will be. And I think, frankly, it’s a great, I think, introduction to this not only concept of evolution, but progressive accelerated combinatorial convergence. And I’ll give an example again, I think historically, which is helpful and then certainly will address your great question. I remember getting my first iPhone in 2007 and it wasn’t allowed in the enterprise, and I had to have a workaround with the iPhone and then 4G, you know, networks were coming into the workplace and then the iPhone was accepted and then the cloud was sort of being, you know, scaled, born, launched in that same timeframe. And then the iPad occurred in 2010. And so then in 2000, 10 to 15, you had this evolution of co-working and co-working environments and experiential workplace. And so, for the last 15 years, there’s been this journey on mobile work, cloud-based work activated technologies that really enable us to work anywhere. And that’s been probably a 10-to-15-year progression. And so now in 2022, as you go to 25, 27, the metaverse and the three dimensional inner of the Internet, if you will, Web 3.0 gamification of work, synthetic humans, which we’re seeing in some of our work with Accenture. We’re going to have another accelerated evolutionary period between now and 25, 2025, 2027 that will most likely scale augmented reality, mixed reality, virtual reality and the metaverse. And I’ll share well publicly our work with Accenture, where over 100,000 folks at Accenture have been recruited via the metaverse. And we’re currently educating a number of our clients. I have a good colleague that we’re working very closely with educating our clients on the future of the metaverse. What are the use cases? And a couple of factoids from the metaverse. For example, that metaverse training, immersive training is 150%, even 200% more effective than classroom training as one example, another example recruitment, the ability to engage folks in immersive interview environments where they really get to perhaps perceive and experience both the interview or with the interviewee in a whole different context, and potentially to experience the organization in a much more immersive context than just sitting in, you know, an interview room in an office, in a physical location. And so, this immersive three dimensional. Internet experience that’s now just launching and scaling. We believe from an enterprise perspective, as we see Apple reality, Apple Reality Pro will be launched next year. Google Starline virtual mirroring, which is, you know, you would be against a mirror. I would be against the mirror. And I’ve experienced this technology with Google, and you feel almost that I could reach out and we could touch fingertips. And there’s a haptic sensory experience from Google Starline. Apple. Apple reality. I think Apple’s augmented reality capabilities, what Microsoft is doing with whole holography and three-dimensional immersive technologies, which I experienced recently in Redmond with Microsoft, are really powerful. Accenture has 600 patents right now focused on Metaverse Enterprise applications. Metta itself, of course, has invested heavily. Amazon is investing. So, I think the convergence of all of this investment and innovation, and I’ll go back to 27, 27, 2010, 2012, that period of tremendous combinatorial convergence. We’re having another accelerated period of convergence of technological evolution right now that will certainly continue and may continue through this entire decade, but definitely through 2025. And those organizations that are willing to at least test and experiment and pilot. And I’ll quote Satya Nadella. I just love Satya as CEO of Microsoft to take a learning mindset approach to workplace transformation and workplace evolution. Those organizations and leaders who take that approach will have, I think, tremendous successful outcomes if they’re willing to have the courage to take that experimentation on at the enterprise level. So glad to share more on that topic.  

Frank Cottle [00:15:15] You know, you every company that you just referenced there, while they’re all global companies, they’re all of us based and every single one of them. But everything you’re talking about. It is global in its action. There are comparable companies. In fact, one of the companies Accenture is using AI for its immersive work and is based in Europe. We’ve worked with them as well and that was where my little headset for a few days and actually knocked the coffee off my desk was embarrassing. But so, we see these all over. And I think one of the questions when we talk about the future of work, we have to talk about being competitive. Each of us from our own perspective. And if we don’t have this learning mindset. Someone else will. And so, this is not a race against one another. It’s really a race together on a global basis because this is one of the ways through communications, through interactions, that not only business will grow, but peoples and governments and all of our cultures will grow as well. And hopefully I’m not a great forecaster of world peace, but hopefully the way these technologies will bring us much closer together, just as you and I are comfortable using this technology today, we’ve both been using it forever. It seems like the new technologies of the future, which bring us much closer to reality will not just solve business problems but will solve a variety of problems potentially. And how do you see that relating to the future of work, but just to the future in general?    

Peter Miscovich [00:17:23] So two thoughts there. And, you know, we have a relationship with Stanford’s Human Center Artificial Intelligence Research Group and also with MIT. And what’s this new trend that’s been emerging? I don’t know if you’ve heard this trend called friend shoring. We’re countries that are friendly with one another will probably be trading partners in the future. And then you know, the AI winter I think we’ve seen dissipate. We’ve, you know, we’re in an ice spring. We might be going into a metaverse winter. We’ll see. But I think from a from a global perspective, the collaborative ecosystems of organizations and I’ll use our relationship with both Accenture and Microsoft right now and with Google and with Amazon. We are partnering with those technology firms, with clients to solve complex workplace and real estate and workforce, you know, challenges and issues. And so, I think there’s a societal uplift and an enterprise uplift from a collaboration perspective. But there are constraints now globally with some of the geopolitical risks that we’re seeing occur, you know, across the world. I mean, Russia and Ukraine come to mind, China and Taiwan comes to mind. I’m really interested in how India continues to evolve as a global superpower, both in terms of technology and innovation. So, I’m doing quite a bit of work right now in Latin America and also certain parts of Asia. And so, there is this globalization trend that is continuing, but in a different context. So, my clients right now, for instance, in Latin America or India or Asia, are looking for localized hybrid workplace integration pilots and programs that are highly local. But they’d like delivery from global firms such as JLL, Microsoft and Google and sort of, you know, I used to be a globalist, I’m now a globalist. I am global in mindset, but local in orientation, if you will, and execution. Because what’s right for Frank in Texas may be different for Peter in New York. What would be different for, you know, someone in Latin America or in Eastern Europe or in India? And so, we’re seeing this customization approach, especially as it relates to hybrid work, which is fascinating by region and even within cities. Frank, I have six projects right now in India and it was each in in each of those cities within India. The hybrid workplace strategies are unique and different.  

Frank Cottle [00:19:53] Different, yes, dialects can be different, do.  

Peter Miscovich [00:19:57] Well and preferences, work preferences, commuting preferences, workforce preferences, business model differences. So, it’s there’s a fascinating divergence between Al I won’t name the client, but I once orchestrated 200 offices globally for a client where every office was the same globally, the same computer equipment, the same paint colors, the same signage, the same desk chairs. Everything was the same because that client wanted a 200-office global branding branded footprint. And I look back on that and I would never, ever recommend or that strategy would just not be in the realm of possibilities today in 2022, because of all the diversity and inculturation and DNI and sustainability and truly country culture importance in terms of honoring communities and honoring culture at that localized level. So, I think the age of old globalization is over. And if we think about French shoring, if we think about the future, if we think about regional and cultural and country differences, I think those will be celebrated and they will become increasingly more important as part of the. Path forward if that makes sense?   

Frank Cottle [00:21:19] Well, it does in some respects, but it also brings some challenges for how. Do you remain local or an act global? How do you act? Think globally and act locally. All of that comes back and forth. There’s a whole bunch of clichés around that, that whole issue. But the reality is that remote work of all formats allows us to explore these issues, and we do have to find a solution to it. And the solution is not as simple as someone in Sao Paolo in Brazil using Google to do remote work to help them set up remote work in Sao Paolo, because every company today is international. We all have an international supplier, and we all have an international client. And unless we can act locally, wherever you are. And be local to our understandings. Wherever you are, then the technology will just be what I really hope this.  

Peter Miscovich [00:22:39] We’re seeing, for instance, even in certain cities in Latin America or in Asia Pacific, remote work is being embraced, but it’s being embraced to varying degrees. So, for instance, if I value going into the office five days a week to socialize and engage with my colleagues in a particular city in India or Latin America or Asia-Pacific, then that is what I call part of the evolution of work. The future of work. And actually, it’s part of hybrid. If I have one client, for example, we have 20,000 customer service agents that are all in the office five days a week. They’re all going fully remote, remote. Frank And those customer service agents will not go to an office at all, except for once a quarter, for two days of cultural engagement and training. And so, both, if you will, extremes of that continuum can exist within the same company, within the same country, within the same city, and within the same campus. Within the same city. And so, this is the new diversified expert, experiential, you know, workplace program evolution. And we as Jalal, you know, sponsor and support clients in that navigation of the future of work to allow for diversity of hybrid work and hybrid workplace outcomes and behaviors and all of it being enabled, you know, by technology. And even if you’re in the office five days a week, you may have colleagues and say, Oh, like I’m in the office five days a week in New York. I may have colleagues in Sao Paolo or in Romania or in, you know, Kuala Lumpur. So that hybrid conferencing, collaborative capability and collaboration, collaboration capability is actually more important today, whether you’re in the office, whether you’re in a home office, whether you’re in a co-working site, or if you’re in the metaverse. For Accenture, for example, you’re able to be in an Accenture conference room. You can be in a team’s meeting and be in the metaverse simultaneously and have the same meeting experience or a unified meeting experience within Accenture right now and other organizations. Microsoft is following that same, same pattern. So, it’s a fascinating diversification of workplace enablement, workplace experiential choice, and a high degree of choice and customization. And all of it can be managed, perhaps through a new cost management envelope based upon, you know, real time utilization technology enabled, you know, dynamic occupancy management. I mean, if you think about airlines and the hotels, I mean, those of us who remember airlines, I, you know, before 911, I used to get on a plane 10 minutes before the doors closed. There weren’t security seats would be empty. You could get on a plane. And good luck today, you know, changing flights and trying to get a seat on another flight. So dynamic, you know, flight seat management came to the airline industry, as did dynamic hotel. You know, space managers would come to the room, management would come to the hotel industry. And we’re going to see dynamic occupancy management across the trillions of square feet that exist tomorrow, perhaps not yet today.  

Frank Cottle [00:26:03] I agree with you completely. That’s a perfect segue way, because what we’ve been talking about are people, borders, cultures, technologies and all of our reactions to these things. But what we haven’t really hit is where you and I share decades and decades of background about commercial real estate. What’s the impact of all of this on commercial real estate? Are we going to gosh, if you’re working one day out of the office? Per week. That’s a 20% vacancy factor in your seat to 4360. And we’re forecasting here 2 to 3 on average. So basically a 50% vacancy factor in every commercial office, which means when the leases come up, there’s going to be a reassessment of need. And it’s probably going to say I don’t need as much anymore about what we’re hearing. I’m sure hearing and seeing the same thing. We already have a fabulously built infrastructure of commercial space. Is that going to get repurposed in our cities as a result of the repurposing, commuting systems, etc.? Are we going to be completely redesigning cities around all of these things? And if so, what? What’s your view? What, what what’s the five-year Peter forecast on commercial real estate as a result of this or the 2030? Give yourself a little breathing room, you know, in commercial real estate.    

Peter Miscovich [00:27:41] I like to take the long view. And as JLL we have, you know, forecasts for the immediate and the longer view. But I’ll go back, say 50 years, Frank, or let’s say 30 years. I mean, I mean corporate real estate and commercial real estate. We were oversubscribed in retail space in this country 20 times over Europe, for example. And we have had a complete transformation of retail real estate. But then you look at the logistics space and the logistical demand, and we actually converted a major corporate campus recently to a large logistics center. I’ll use our work here in New York. Post-9-11, we had 30 million square feet in Lower Manhattan that was converted from commercial office space to residential space. It took 20 years, but it made Lower Manhattan and downtown a thriving, mixed use neighborhood. So, I have clients where we’re optimizing their portfolios by 30 to 50%. I have clients where we’re gaining 30% of new space in class-A buildings. I have clients where we’re going to end up probably neutral by 2025 or 2027. They’re going to rebalance their entire portfolios. So, the flight to quality over the last two years should not be, you know, unrecognized. I mean, you cannot get an envelope of space right now in New York easily in a Class A building due to the demand. So, there’s been a flight to quality. There will be re optimization of portfolios, the digital talent and talent attraction requirements and ESG requirements, the sustainability requirements and the energy management requirements and the technology integration requirements are all top priorities for my clients and our clients. And so, they’re going to utilize their portfolios in ways to attract talent, to improve performance. And if they can optimize on cost, they will. But I will share with you, Frank, our one client, where we’re going to invest $1.2 billion in about 4000 new conference room settings for hybrid workplace collaboration. As an example of investment and I know we’re facing a recession. We have the headwinds, economic headwinds that may be coming. So, there will be opportunities. And, you know, in my 1.5 billion square feet, I’ve taken portfolios from 200 million square feet down to 100 million square feet in a matter of months. So, optimization is entirely possible. But I think this time versus the last Great Recession, we’re going to see new investments, organize themselves and clients organize new investments to smart workplace technology, to class a space for digital talent, to address climate change risk and technology integration and technology performance. So, I think it’s co-working. Co-working, I think is going to have an interesting resurgence and it’s already having that, for instance, here in New York. It’s been slow, but we see that resurgence also occurring in parallel to everything else that I just mentioned and will be working in the metaverse an hour to 2 hours a day. So, I do a co-working site. Do I go to the metaverse? Do I work from my home office? Do I go to my office? Do I work from an alliance partner location? I mean, today I can choose 6 to 7 different places where I can work.  

Frank Cottle [00:31:07] Well, and I think I mean, you’re absolutely right. We have a myriad of choices overall. And I think that is not going to be where you work, but what platform you’re working on. To your two-year-old, your earlier comment about your prince formation and moving forward with various Apple products, it’s what platform you’re going to be working on. I think in your year, how those platforms interact, and I use video again, we used to have to have an intermediary to connect our video systems together, so you’d be one on one platform and I’d be on another, and we would use an intermediary to connect our two platforms. And what was that? Awful and expensive. Today it’s all just magically occurring, and I think that’s what we’re going to see. Most people working in these future environments will not even notice that they happen.    

Peter Miscovich [00:32:09] Yes, they’ll be seamless. Absolutely right.  

Frank Cottle [00:32:12] It will be very seamless. It will just be the way things are. But what goes on behind the scenes in the rationalizing of portfolios and your comment about your client investing and meeting rooms? One of the trends because you mentioned co-working, one of the trends we’re seeing in the co-working and flexible workspace sector globally is the development of more meeting rooms per square foot of the center. Yeah, right. Historically, a 20,000-foot facility had three meeting rooms today and a new 20,000-foot facility will have 5 to 7. Doesn’t sound like much, but it’s 100% increase. And that’s happened over the last six months or 48 months even. Yep. And that will continue to occur because the space we need is space to interact with others, not space to sit at the desk and work solo. Correct. And that is a big change for all of us. And it’s going to be fascinating and fun. And I think that this is a time to be we have recession, we have headwinds. We have all these things to think about. But we should just darn right be excited because this is going to be a lot of fun and give us unimaginable creative capability. And what could be better than that? I don’t know.  

Peter Miscovich [00:33:51] I would agree, Frank. I you know, I was just recently promoted to global head of future work at JLL. And if I think about my career and my own journey, I’ve never been so excited and engaged and busy, I might add, in, in what is now evolving in this, you know, post-pandemic hybrid workplace evolution. So, it’s incredibly exciting. And, you know, for those of us who have been on the journey, we recognize this new, very exciting and dynamic inflection point. It’s really significant. 

Frank Cottle [00:34:28] Well, it is. And we’re running short, long on time here. So, we’re going to have to tie things up. Peter, I think the thought that you’ve brought, the reinforcement of where the future of work is going, the combination of people, place and technology all bound together into a single deliverable structure, that’s fascinating and something that I’d like to have a chance to explore and dial a little deeper dove on another session someday, if that’s okay.  

Peter Miscovich [00:35:03] I’d love to, Frank, and appreciate all of your great thought, leadership and commitment with all work. We greatly appreciate your contributions. I think they’re just tremendous. So, thank you so much for having me on today.  

Frank Cottle [00:35:17] Our pleasure. I really look forward to it. Thank you, Peter.  

Peter Miscovich [00:35:21] Thank you.   

Frank Cottle [00:35:22] Bye.