With some trepidation and nervousness, I’m happy to announce the new home for Box Thoughts at:

davidmusic.me

This will be the place to go for past, present, and future posts. I’ll continue to leave this place up as well just in case, but feel free to join me at the new spot if you would like.

I’m now at nearly 1,500 posts 10 years in. My average post rate is down to maybe 50 a week but I like to think the quality of each of those posts has gone up. I can remember previously having flights where I’d knock out 10 or 15 two paragraph posts that I’d schedule up over the next two weeks. Those posts would be based on a topic that I found interesting, but I would rarely delve further into the idea. Now, I think I at least scratch the surface a bit more. While the quantity may be down, hopefully the quality has gone up.

I’ve been out of college for 16 years now and I’ve worked for three different companies in that time (two of them for 15 of those years). In that time, I have clearly changed as a person, a writer, a coworker, a manager, and a subject matter expert. I have come to better understand this world of corporate real estate that we operate in. Of all the areas impacting business operations, it truly has the most opportunity to be captured, but it’s also the most fundamentally broken in most organizations.

Writing here for the past decade has provided a tremendous personal value. I feel more confident in my ability to express my thoughts, whether verbally or in writing, in various forums. My ability to articulate concepts in a way that others can follow has also improved. But mainly, writing has kept me curious and thoughtful about the things happening around me. Forcing myself to put words down means that I need to constantly find topics that are worth writing on and thinking about those topics.

While I never expect this blog to take off, I do appreciate the many people who have reached out on topics or shared their own experiences with me over the past decade. Hopefully, plenty of others get value from what I write. Hopefully, I’m helping to move corporate real estate ideas and innovation, even if in just the smallest of ways, in positive directions.

At the end of the day, I’ve grown from the things I write here so it has all been worthwhile. But I would not be here without those around. So thank you to everyone reading this, and even to those that will never see this!

• Hybrid working
• Flexible working
• Agile workplace
• Remote versus virtual
• Hoteling and hot-desking
• Monday/Friday in-office
• “How many days are right in the office?”
• Personas

There’s nothing inherently wrong with any of these as they are all part of the shifting workplace landscape we are trying to solve for. It’s just that they are coming up in the normal course of conversation in often weird and incorrect ways. Let’s get through 2021 using them and then maybe we can all agree to search for better words when we have the time.

What all of these words and phrases are attempting to do is describe the non-binary ways of working we all experience. Very few people in this world are either fully office or remote workers. Most people have some degree of freedom at least occasionally. But the workplace language we’ve all collectively adopted over the past 50 years does not lend itself to the nuance of how we work.

For the past many decades, it’s been fine to separate the workplace from how people actually worked. There was a clear relationship between the two concepts but there was no driving need to actually make them interdependent. The thought was simply, “I’m going to give you a desk and expect you to use it at least occasionally, don’t stress the office.” This led to the world we were in pre-pandemic (through most of the world) where traditional offices were often noticeably vacant. With the pandemic, “noticeably vacant” is now becoming either: 1) “get your ass back in more often than before because now I’m watching” or 2) “I’m not paying for that desk to be empty any more.” Neither 1 nor 2 reads positively to the average office occupant.

Now, everyone is trying to apply workplace language to how we work giving rise to the trendy Hybrid Work terminology. No one works “hybrid” as we are either working or not working. The hybrid is about where the work happens as if that is the most important consideration for the concept of work. The reality is that productivity is what we are all seeking but it’s the great unmeasurable inside of all organizations. It’s easier to assume people are more productive either in “the office” or “at home” when in reality it’s a sliding scale with no day ever being optimized. The office comes with a commute and small talk while home comes with no one else being around. It’s all about the trade-offs and the only people really positioned to determine that are the people being paid to do work.

I don’t blame anyone who is struggling with these concepts. Before 2021, there was never any real reason to have this conversation so the entire world is trying to both create a dictionary, thesaurus and operational strategy all at the same time. It’s going to be messy as we work out new shorthand for the words we are using and try to simplify these complex and nuanced descriptions of the intersection of work and workplace.

I find it interesting the impact uncertainty has on different individuals. Do you know that sensation that most people feel when there is a long, awkward pause in a conversation – that feeling of the need to feel the void with any noise to make the awkwardness go away? That’s how it seems most people try to deal with uncertainty. Especially when uncertainty is prolonged with no end in sight.

In real estate, the best way to deal with uncertainty is to minimize commitments. Short-term deals become the new mission with limited investment going out the door. It’s impossible to deliver long-term real estate when the near-term direction is unknowable. What will grow? What will shrink? What opportunities will the business go after that could lead to step-function change?

Filling the empty time with “stuff” is the single most common way people try to deal with uncertainty. They create unnecessary work for themselves and convince themselves that this work is actually useful and productive. Real estate pros chase small projects that seem to have more than typical certainty about them. They end up spending 100 hours on projects that only need 20 and go deeper in the weeds than is useful.

Time, entropy, and uncertainty have this strange connection that is hard to grasp. It seems as if every day that passes should bring new decisions and more certainty. But the reality is that each day brings more questions than answers. Every day introduces new innovations that have unpredictable impacts and shifting consumer and industry dynamics. Chaos increases over time, it doesn’t decrease.

For me, uncertainty brings time for reflection and thought. It is a chance to pause and bring together the pieces of the puzzle to define a new way to move forward.

The framing we used yesterday to understand the world around us does not always apply after a period of change passes. Yet, most people try to hold on to the framing they brought to their world. They don’t take the opportunity to stop and simply fill their time with things to do until it’s time to “get back to normal.”

It is hard to deal with periods like this, particularly when it’s a prolonged time with no end in sight. But it will always be easiest when filling the time with self-reflection rather than busywork. You will always come out the other end stronger by taking the time to figure out better ways of doing things when the world comes back around rather than going back to how it used to be.

Systems engineering is all about optimizing and improving complex systems over time. Systems typically take the form of independent areas that all overlap, interconnect, or share a relationship of interactions of any sort. Corporate real estate portfolios are the definition of a large, complicated system that changes and evolves over time:

• Business strategy leads to hiring leads to space needs in a market and changes monthly
• Lease terms lead to decisions around space lead to predicting future business strategy on a predictable basis
• Workplace design includes technology which changes at a fast rate which requires refreshing regularly
• Employee work patterns and preferences adapt and change over time leading to evolving space usage patterns
• Annual financial targets for the company leads to real estate investment constraints leads to real estate decisions within those constraints
• Inflationary pressures impact all aspects of real estate costs which impacts global budget which impacts corporate profits
• Market conditions and demographics change which leads to business desire to relocate which leads to new real estate strategy

This is not an exhaustive list of the relationships that must be managed to optimize a real estate portfolio but it is indicative. There are a lot of moving components and some will carry more or less influence any given year or on any particular decision. It’s great to look forward to lease dates and aggregate the list of potential projects by year but the reality is that most years, this won’t even come close to reflecting the actual list of projects that will be delivered.

Systems engineering approaches start with the assumption that there are no perfect solution. When you design a workplace, there is no way to 1) determine the “right” number of desks, 2) determine the “right” number of conference rooms, 3) translate desks and conference rooms into an accurate space requirement, 4) identify the “right” price point the space should be at, 5) build to the “right” standard. Each of these items 1-5 are highly subjective and prone to a degree of guessing or best endeavors. There is no “right” answer for what an office should be but that does not mean we should give up and just throw darts to get an answer.

To understand the right solution for any given project, the place you should start is by understanding where the portfolio is at today, understanding where the business wants it to be in the future (typically a financial measure more than an operational one), and the constraints on real estate to achieve this migration (cost, resources, lease timings, etc.). From there, all of the potential projects should be evaluated by how they perform at moving the portfolio in the desired direction. Projects with a high positive impact get prioritized while those that don’t get pushed back. There will always be some projects that must be done for any number of reasons as well so prioritization is also not black and white.

With this list of priorities, the goal should be to develop a portfolio of projects that move the group in the right direction. This project list should be presented as a holistic program instead of tackling projects independently. Any given project only has value in comparison to the others which means that evaluating and approving projects on a case-by-case basis will always lead to suboptimal outcomes for the function as a whole.

Once the portfolio of projects is approved, it will still continue to change and adapt over time as conditions change. The business requirement from last month disappears this month making the need for a project unnecessary. The market conditions for a priority project suddenly shift and make it no longer financially beneficial leading to a different project rising up the list. But once the overall list is created, it shifts to an execution mode of delivering each project trying to beat the approved targets to hopefully leave budget to achieve additional projects that did not make the first cut.

This effort should rinse and repeat on whatever frequency the overall constraints are refreshed (typically around fiscal years).

On top of this, the real estate team should stay actively involved in understanding the pulse and nature of the businesses looking out for condition changes that may impact the fundamentals of the plan. Mergers and acquisitions, divestitures, business changing account wins/losses should all be watched for as they could make an entire plan out of date on their own.

Everything is about balance across the function. Balancing the inputs, outputs and operations is not easy. Thinking through the systems and interactions is the best way to approach it.

But every dark cloud has its silver lining. Out of this one, we should all take stock of the positive lessons we were forced to learn so that we don’t give up the good as we look to move into the future. For me, this includes:

• Learning to use video conference to connect with people that I could not be with in person. My family began using Zoom most weekends as a way to connect. We’re spread over six different states so connecting all together in-person before COVID-19 was a rarity. I’m not going to let the end of a pandemic sever this connection.
• Developing a level of patience I’d never had to have before. I’m a pacer by nature and sometimes struggle to get thoughts out cleanly and quickly which can make video calls a real challenge at times. It’s forced me to stop, focus, and think before speaking but also to realize how difficult the same must be for others. I’m not patient by nature, but hopefully I can hold onto some that I’ve built up.
• Innovation and imagination is not primarily in-person. I’ve worked from home full-time for nearly a decade but even still I viewed innovation and brainstorming as something to travel for. Over the past 15 months, the team has put together and deployed some of the best thought through, innovative and effective solutions I have seen in my career. Is there a place for in-person in the future? Without a doubt, but I will never doubt the ability to be remotely creative ever.
• Change normally occurs gradually but sometimes can have an accelerated the learning curve. Things that I thought for sure were not going to be common in real estate for another five to ten years are being discussed as if they are foregone conclusions. Leaders, globally, are realizing that flexibility and choice are not as risky as they had thought (you’d think 15 months of pandemic forced behavior would be more deciding).
• The more things change, the more they stay the same. Some days it feels as if everything has changed around us. But then someone goes off and does something out of the blue and it feels like things are back to normal. Humans are resilient. We find ways to get it all done and remain effective. We adapt to changes as if there was no change at all while rejecting other changes for seemingly arbitrary reasons.

This list is by no means exhaustive but it certainly makes me smile reading back through it. I haven’t been on an airplane in 5 quarters, yet I’ve had the most impactful year of my career. I haven’t shaken the hand of a co-worker in 5 quarters, yet I feel closer to more of them today than I did back then. I haven’t had a day where COVID-19 wasn’t some part of a conversation in 5 quarters, yet there is still good that we can pull out of it if we simply stop to reflect.

Don’t get me wrong, there’s more that I’m looking to leave behind than bring forward. But I’m not going to let spite at a pandemic force me to be short-sighted.

CRE in this way is an enabling function. The space provided enables the company to run which implies some minimum level of quality and planning to ensure that the operations are productive. It’s possible to build the cheapest, tightest office 60 minutes away from even the most nearby of employees and call it a business model, but no one would call it productive. Similarly, it’s possible to buy the latest skyscraper in downtown Manhattan and build out the top few floors as a shrine to past profitability, but no one would call that productive either. The sweetspot lies somewhere far between these extremes.

Many experts in our field come from the wild west of commercial brokerages. They cut their teeth in sales and transactions doing their best to do deals between corporate occupiers and landlords. Their money came from the market and their strongest relationships were almost always on the market side. Over time these experts migrated to the corporate side for a variety of reasons but often do not leave their market biases behind. They look at the market as a proxy for their portfolio and seek to maximize their market positions. They negotiate fantastic incentives on every lease, they get the best rate for their space, they even bring in top tier project managers and vendors to build the space in a cost effective way. The project is delivered and they claim victory.

Often this approach leads to pyrrhic victory. They have beautiful, market driven space that it turns out has limited relationship back to how the business operates. For the next few years, the business tries their best to make it work but ultimately it’s best to move to a new site once the lease finally expires. Hopefully by this point, the lead has a better grasp on the needs of the portfolio versus the market and, if so, maybe the next space works better.

All this as a way of saying that commercial and corporate real estate are two very different worlds, with different tools, and different needs but for some reason people like to blend them as if they are one in the same.

But that distance has given me some new perspective. Everyone can acknowledge that things have changed a lot since March 2020. What most of us miss is that things have actually changed more than we think. Any given month, the rate of change has felt controlled and manageable. What has really happened though is that there has been constant, global, cross-industry, cross-function change happening EVERY MONTH FOR 15 MONTHS. In real estate, this is equivalent to about a decade worth of normal change. Projects we considered 12 months ago look silly and terrible now, but it’s not always clear why.

Apple recently put out a work from home direction that they thought was extremely generous. Basically they said, “Look everyone, we’ve never let you work from home before, so now we will let you work from home 40% of the time! Aren’t we so generous and kind?” I can picture the leadership discussions that led to this decision fairly clearly in my mind where there were lots of kudos and congratulations at how lenient and employee friendly they all were. Then, completely unsurprisingly to most of the world, their employees laughed and sent them a stern letter telling them how silly they were being. “So, we’ve proven we can work completely flexibly for the last 15 months while still bringing in the profits and turning out new products, and you are going to tell us that you can’t trust us to not be in the office most of the week? This is a complete erosion of the trust we thought we had built and now we see that you just think of us as drones.”

The world has shifted under our feet and we didn’t even realize it.

What happened to Apple can happen to all of us if we don’t stop to take deep breaths and think through what is going on around us. This is not just some business impact event. This pandemic has been deeply personal. It has forced us to understand the intense connections between our work and personal lives in a way that most of us had never really examined. But when we flip back into work mode, our minds can forget to realize that everyone we are working with is in the same boat as us regardless of seniority, geography, role, age, gender, etc. Habits die hard and some cause conflict with reality these days.

When I come across newly minted real estate experts, I do what I can to help them learn and understand the nuances of the field. The biggest thing that they are usually not understanding is that people never do what you expect them to do. If you give people assigned desks, that does not mean they actually show up every day. If you tell them to show up every day, you are probably just causing them to show up even less. Real estate is surprisingly hard because it’s both a financial and operational field. Every improvement you make for operational purposes comes with a financial cost. Every dollar you try to save comes with an operational trade off.

Then we come to everyone’s favorite catch-all: culture. Every journalist with a workplace story will eventually devolve to a philosophical discussion of culture. Does culture start with the workplace or is it something that simply exists throughout the organization? I’ve given my answer before and I stand by it. Culture and virtual working are not mutually exclusive, it’s just harder with greater return when done right. Organizations do not live and die by their cultures. Plenty of successful organizations have horrifying cultures. Plenty of failing organizations have cultures where people would run through brick walls for the business.

Coming up with a future real estate and workplace strategy in this environment is no simple feat. You have to 1) understand the starting point of the organization you are working with, 2) the risk appetites of those same leaders for the future, and 3) you need to understand the actual operational components of real estate. Without a comprehensive understanding of all three, there is no path for a successful answer.

There are few new technologies in this world that do not have a dark side. It takes decades for tools to mature to the point that they are safe for the unsuspecting enterprise to use. There are still horror stories about the ravages Microsoft Access caused on critical business processes a decade after people stopped using it. Sharepoint is another great example of a tool that has brought entire organizations to their knees as it crumpled under the weight of expectations and poor management.

AI is the next big thing and it does not have decades behind it yet. But the value proposition seems so high that companies are diving into the concept without looking for the canyon in front of them.

By way of analogy, let’s look at Tesla’s automated drive modes as that is run by AI. Teslas are considered one of the safest cars available by most safety testing measures. They are built well. They are also considered the smartest car on the road especially given their driverless capability. But there have been some scary fatalities associated with this mode where drivers completely forego any responsibility for what the car is doing. The driver is sitting there watching a DVD in the passenger seat as the car decided to do something unexpected.

This is the big risk of AI in the enterprise: no one watches as it begins to move in the wrong direction. Six months of letting AI run without oversight can lead to years of recovery after the fact. Not to mention the enterprise-wide distrust of all future AI implementations that may actually add value.

Technology, and especially automation technology, is not an invitation to eliminate the human element. Unfortunately, sometimes these implementations are viewed as a shortcut to make heavy cuts which leads to lack of oversight.