Listen as Robin’s Zach Dunn chats with Director of Workplace Insights & Strategy at Relogix, Sandra Panara, about how her experience in Corporate Real Estate gives her a unique perspective on the current shifts in workplaces. We explore how workplace fundamentals like office space, technology and individual choice need to work in tandem to create a balanced employee experience.
Sandra: You have to know what the people want, right? So that whole element of what's your culture, how do people work? How do they want to work? And really sort of understanding the fundamentals of the natural dynamic of how people interact with space, how they choose to work, what technologies do they need, and then bringing those three worlds together. They have to work together. Cause if they don't, you won't be successful.
Zach: Sandra Panara spent most of her career working in the workplace, but not actually calling it that. Today we're going to talk a little bit about all of the ways that she's seen the workplace, commercial real estate and facilities management evolve over her 25 plus years, helping companies of all sizes design really great workplace strategies. Let's hear what she has to say.
I'm really excited to talk about specifically the workplace strategy as a function, as a role, and a skill set that I think more companies are starting to value. So when did workplace strategy become a thing?
Sandra: I think for me, it was probably around 2007, 2008. So prior to that, as I said, I was actually at Nike at the time and I was doing a lot of space planning, occupancy planning, working with the interior designers, working with the business units around, business was always changing. The business units were growing or shrinking or constantly reconfiguring space and trying to figure out how to do it effectively. And when I transitioned over into consulting, there was a large financial institution here in Toronto, that was my first project, and I went in to basically be the person, the local person.
And they started talking about workplace strategy. And I was like, what is this workplace strategy? Because that was a relatively new term to me. And as they started talking about it, it was just really about how do you figure out the design? How do you figure out what types of spaces you provision? How do you optimize space and all of the things that I had been doing prior, but it never really had a label. So that was really, I think the first time that I learned about the term workplace strategy, I was like, oh, okay, this is what I do.
Zach: What did people call you before that?
Sandra: Well, it's funny in my experience, the roles that I've had in the past were very generic. So I had titles like administrative services, office services, facilities manager, occupancy planning. You couldn't really pinpoint exactly what you were doing. You're essentially doing anything and everything that was office related that didn't have anything to do with the direct product.
And so in the early days of my career, I was doing things like lease negotiations and setting up security badging systems and just basically anything and everything, writing the reports, looking at telecommunications, purchasing systems and all of these different things that I think for me, that's what made sort of the position that I was in or the positions that I've maintained since really unique is that having the experience of working with those tools and learning them very deeply, and then what the reporting is that comes out of them.
And how does it apply to space planning, which came later on, was really, I think the key for me in terms of the success that I've had in my career.
Zach: So you had mentioned earlier that at least for part of your early career, you were on the corporate real estate team. Some of our audience may not have their heads wrapped around yet what that is compared to, let's say facilities management. So do you recognize the difference between those two? If so, how would you define the role of corporate real estate?
Sandra: It's kind of a little bit of a hierarchy, right? So you'll typically have someone who's leading the overall corporate real estate strategy, which includes things like location strategy, deciding what markets you want to be in. Also in terms of building strategy, so whether you want to lease or own the buildings. The design strategy, so what's the look and feel of the space, are they going to be consistent from one market to the next, or is it going to be unique to each of the individual markets?
So those are just some examples. And then you have the day to day operations, which is kind of where facilities typically fall in. But as I mentioned earlier, as I experienced facilities management also can be an encompassing category, right? So just because the title is facilities management, strategy could be under facilities management. It really just depends on how the organization is structured.
Zach: Do you see workplace strategy as an evolution of corporate real estate strategy or are those two separate camps?
Sandra: I kind of see it as an evolution because I think that you have all of these different groups that are doing different things. So for example, thinking about in the past doing lease negotiations where there's decisions that are being made about growth in a specific market. And so it's like, okay, we need to have an office or a location in this particular market. And so you'd go out and lease some space.
And so the evolution to me is when you have access to data, you have the ability to observe, where are your people? Where is the talent? How do you use that information to make decisions and to validate whether the decision that you're about to make about space is the right one, right? And so it's not so much that you're using it to tell you what to do, but it certainly can help inform what you want to do.
Zach: So one of the things that we hear a lot is we're working with offices that are trying to reopen. And I'm curious about your perspective is, this is often the first time that you have people with facilities backgrounds, and IT backgrounds, and then people, operations, HR, all having to work together towards this overall call it workplace strategy or workplace. And in your experience, is that something that a lot of teams are having to figure out for the first time right now? Or is it primarily facilities used to run all of this and now they have to open the doors to let these other groups in? How do you see that relationship evolving over time?
Sandra: Traditionally in true workplace strategy, experience and form those three have always worked together. You can't actually do strategy if you're operating as a silo. So it's not an HR exclusive function. It's not an IT exclusive function, and it's not a facilities management or corporate real estate function. The three have to work together. I've always looked at it from a standpoint of if you're purely looking at it from a standpoint of corporate real estate, from an asset perspective, and IT, in terms of where are you going to invest your money?
I've always used the term or the statement of, if you're going to invest in something, invest in the technology versus the real estate, because the technology will enable your company to grow without growing your assets. But there's also the HR aspect, which is the people side of it. And so you have to know what the people want, right? So that whole element of what's your culture, how do people work? How do they want to work? And really sort of understanding the fundamentals of the natural dynamic of how people interact with space, how they choose to work, what technologies do they need, and then bringing those three worlds together. They have to work together, because if they don't, you won't be successful.
Zach: I think somewhere in the last two to three years, folks started to realize that, hey, maybe workplace, isn't just a synonym for the office, correct. Where you see that most interesting realization is probably facilities that oversee this physical bricks sort of actual square footage. And then you have IT over here, who's now overseeing almost like this digital workspace and the two of those together both make up your overall workplace. And it's not just tied to a single address anymore as we've come to think about it. For those teams working together for the first time. Any advice?
Sandra: Yeah. I think from what I've seen as of late anyways, because I'm seeing more and more companies that this is new to them. So this whole joint venture of approaching technology and you've got corporate real estate has an interest. IT, IOT certainly has an interest. There's the people side, although we don't necessarily surprisingly see too many HR people at the table, it's usually IT and corporate real estate coming to the table.
But I think there's a lot of emphasis on the technology, right? It's kind of the what. What are you going to put in place and what does it do and that kind of stuff. And not as much emphasis on the outcomes that you're trying to achieve. So there's a lot of attraction to the shiny things of, Hey, this is really cool technology, let's put it in and then not really understand the outcome of that.
So what's the data going to tell you, what's the data that you're going to get from this new technology and how's that going to help you in terms of developing your workplace strategy? I think the other part is privacy and security is key, which is probably, well not probably, for certain why IT is at the table. Obviously with more and more virtual work requiring for people to be able to continue to do their work that way. And just to connect is, privacy is, and sorry, not privacy, but security is of utmost importance. And so obviously, there's a legitimate reason for IT to be at the table.
And likewise for HR, right? Is that you've got privacy purely from a security perspective of making sure that stuff isn't leaving the organization, but then also HR having to balance the privacy aspect from an employee perspective, because that's something that's also top of mind for organizations as well, especially when it comes to the employees because nobody wants big brother to be watching them. And so communication is really key around what we are doing from a technology implementation point of view, how much data is going to be collected? What's the company's position on privacy? What kind of information's going to be collected? Why are we collecting it? What are we going to use it for? So it's not just, Hey, let's buy technology and put it in. It's having sort of that complete sort of thought out idea that you could communicate to your employees while you're also talking to various vendors.
Zach: If you're trying to reopen in a flexible environment, what are some of the things you got to keep an eye on data wise that previously you might not have?
Sandra: I would say probably the most important metric right now is just understanding occupancy, right? And occupancy is an interesting metric because there's different angles to that. There's occupancy as it relates to trending based on the, a date range or you could be looking at occupancy relative to a capacity, right? Full floor capacity, building capacity or room capacity or whatever the case might be. What we're seeing with return to office is companies will set a threshold 20%, 30% that they slowly increase over time. And then you want to make sure that you're not exceeding that number purely, from a safety perspective, right, as you're trying to slowly bring people back to the office.
The other thing is from a space perspective. So let's think about meeting. It was actually, it's funny, I was talking to someone this morning about this. You have, let's say a 12 person room or a 16 person room and new protocol now because of social distancing says that you shouldn't have more than, whatever, let's say 50% occupancy of that room. And so, you want to be able to ensure that people are actually adhering to that policy. And so how do you measure that? Right? So that becomes complicated unless you have technology that allows you to do that.
People can book a space and say, okay, I'm going to invite X number of people to the room. But we all know from experience that sometimes people get brought into meetings, you drag the chair and suddenly you've got more people in the space than, than should be in the space. And so that's going to become much more critical to manage and to sort of oversee. I think going forward, because of the reduction with people working from home or working from third places, not as high a dependency on the office space on a daily basis, but there's still going to be a requirement to, maybe more so, to observe what those occupancy metrics are going to be.
Because when you're one to one, you know that you've planned your space for, let's say a hundred people. Now all of a sudden you might have 200 people sharing a hundred seats that are available and you could potentially have more people in the space than should be in this space. And so that's going to become increasingly important going forward.
Zach: I guess the cost savings aspect of it would seem appealing on face value. So is it important for folks to consider the cost savings as they're trying to redesign their workplace strategy or is flexible work at this stage more about repurposing the sort of office that you have to support a growing workforce?
Sandra: Thinking back in the past cost savings, although I always disagreed with this, was always a driver, right? And cost savings, I always said, is an outcome. It's not a driver. Anytime you're looking to optimize space, there's going to be an outcome where you are going to save money, right? And I think that that still applies today, is that if you're looking at how you can make your space more efficient? It's either going to be that you're going to save hard dollars or you're going to avoid taking on additional space. So there's still a savings that's coming out of that. However, I did want to say something where you mentioned earlier, not having an assigned seat requires a major shift in mindset around you to now think about, do I need a space?
Do I need to reserve a space? What kind of space do I need for how long, these types of things or these behaviors you never had to think about before because you just had the routine and you had a desk you showed up or you didn't show up. That's where you dropped your stuff off and you worked for the day or part of the day. And so the transition from going from a space where everything was there waiting for you to now having to actively think about what you need to do and what space or tools, because space ultimately has become a tool, do you need in order for you to be able to achieve your objectives is at the forefront. And that's a big struggle for a lot of people.
Zach: What's the role of the office now in a post pandemic flexible hybrid work world?
Sandra: It's going to be sort of a hub for collaboration. And that's kind of been at the forefront in terms of a lot of the discussions around what the future purpose of the office is going to be. And I think that's probably going to make up the majority of what the purpose of the office is going to be. Maybe even for talent, attraction and retention. So again, as we were talking at the beginning about the brand experience of bringing new employees into the space and kind of immersing them into the brand so that they feel connected to something. Unless you can recreate it virtually which in some instances you can. Some companies might find that there's greater value to doing that. And so that's kind of up to them.
I think also the aspect of, for the people who can't work from home, because we've also known from the get go that it requires a certain kind of discipline sometimes to work from home. And some people just don't have it. They don't want it. Or there's just other things that are, that get in the way of being able to be effective when you work from home. And so having the option to be able to go and work from the office, maybe not every day, but you know, if somebody chooses to do so then, so be it. The reality is prior to the pandemic, if you really looked at the data, I'd never seen people who were in the office four or five days a week, eight hours a day for more than maybe 10, 15% of the overall population.
So those would be the people that are hardcore, you know, should be assigned space. But the interesting thing is, those people rarely collaborate, right? So they're more administrative staff, they're there really to support like the executives, they're there to kind of do more of the day to day administrative management. And so it's interesting when you think about that, it's like, well that makes sense that those people should have an assigned seat because they're sitting at their desk the entire day because of the type of job that they're doing. But you've got people that go into the office four days a week, five days a week, but they spend 30, 40, 50% maybe higher collaborating. Right. And yet they have assigned seating. So it's this constant movement of people between focus space and collaborative type spaces that makes up really the gist of the workday.
Zach: I think it's okay personally to not have the office be great for all kinds of work at this point. It can be deliberate with the type of work that it is trying to support and focused work, I don't know, it might be less important. But I'm curious, what do you think?
Sandra: Yeah. You know, it's interesting. The other thing that I find that's really fascinating is, for lack of a better word, I would say sort of the emergence of these third and fourth places, which technically have always been there. So you say how companies that have had work from home policies, which probably were very few prior to the pandemic. In the sense of it being formalized. Everybody had some sort of work from home activity that was happening. It was just never fully formalized. Right. So it was like, yeah, the business unit leader allowed it, some business unit leaders did, some didn't, and so it was kind of like, okay, you may do.
So now you're in a state where you have some sort of policy and so that it applies to everyone. But I think the whole aspect of the office and you know, where does work happen, right? This idea of if I want to have a face to face conversation or I want to do heads down work and I don't want to work from home, I could go and work at a local coffee shop by myself for the day, or go to the library, or go sit in a hotel lobby, or wherever. It doesn't have to be a traditional office setting, whether it's a co-working space or the corporate headquarters for that matter.
And I think as we talk more and more about the pain of commuting, which again, that's been something that's been looked at for years, when you think about location strategy, you'd go and sort of understand where does your workforce live? And then you'd pick on a map, the ideal location of where the building should be so that people don't have more than 20, well, I mean Canada, so 20 kilometers distance, which is I think around 12 miles or so from a commuting perspective.
Zach: Yeah. I don't know enough to correct you. So we'll go with that.
Sandra: We'll go with that. Yeah. It's just because I Googled it the other day. But like distance, these days really doesn't mean anything because you've got traffic, right? So if you're driving, you have time, which is a factor. And then just the access to transit, like as you get more and more urban sprawl, transit isn't readily available unless you live in certain parts of the city. And so it becomes pretty complex. And so I've always been baffled why the headquarters are predominantly, always located in the city centers. And when you look at where people live relative to the city centers, you have a lot of living out in suburbia, but yet there's this push to bring everybody into the office downtown. And so as we think about the future of the office and the purpose of the office, it's this thing of, well, does it still make sense for the offices to be centralized? And what does that look like going forward? Right.
Zach: I think there's a really cool opportunity, it seems for, with a hybrid work week where the expectation is not that you're coming in every day. It might actually increase the reach of a single office to, to attract talent. And so suddenly I may not, I may live two hours away, let's say, and that might not be a really appealing idea to drive in five times a week, two hours one way. But if it's one day a week, you know, maybe. So, I think that companies will probably come to understand that they're actually able to hire people further away from the office if they adopt a hybrid model as well.
Sandra: I agree. I think that that's certainly something that has happened, is happening, and will continue to happen. The idea of being able to make a personal decision around the frequency that you're going to access the office can be a personal one. So again, personally, from my own experience, I moved North of the city five years ago, from where I live right now, thinking about where I used to work, which is over a hundred, again, a hundred kilometers away. So I'm probably about a good hour and a half, hour and 45 minute drive one way if I was to drive to work. When I used to work at the other company, where I used to work before I used to go in once a quarter.
Zach: Traffic was that bad wow?
Sandra: I didn't necessarily have to go to the office. Yeah. And you know what, and it was fine, like the company was national. So, you know, the team was scattered across the country and often going to the office didn't necessarily mean that I was going to be working with people in person. And that's, I think the thing that is ironic about hybrid work is I think people are still thinking that going to the office means that people are all going to get together. And that works if you're a small company that you're local in the city and people will come together.
But as soon as you have multiple offices in other cities or in other regions, that element of virtual work is going to continue, regardless of whether you're doing it at home or in the office. And maybe even more to a greater extent, because people now are going to be making the choice of whether they want to be in the office or not. And is it going to be on the same day that you're planning to be in the office?
Zach: If I was on a corporate real estate team and I was looking at potentially renewing a lease at this point for the space I already have, what advice would you give me?
Sandra: I would say, take a look at your occupancy data from whatever sources you have. So if it's your security badging data, your wifi data, there's sources that you have available to you that are as close to real time, at least providing you current information, not necessarily going back to historical data. And get a set sense of if you're expecting, for example, a thousand people to be in the office, or that's kind of how your space was planned, but you're only seeing two, 300 people a day on average show up. That's an indicator. Now that doesn't mean that you should be cutting out 80% of your space. I've actually talked to a company that did that, where they're like, we're just going to get rid of the space and just kind of whenever this blows over, we'll reconsider leasing the space at a later point in time and save some money in the interim.
So if you have an imminent lease, that's coming up for renewal. There's an opportunity there for certain to reduce at least by 20, 30%, even if you're not looking at occupancy data, we all know that, right. Just because it said that's what the use was before and virtually every single company. But it really just depends on where your organization is from a cultural perspective, right? Cause there's a bit of a tug of war happening with the need for the office space. And what does that mean at the end of the day and how much change is actually going to be required from a culture point of view.
And I think that's, what's going to enable you to decide how much space you could get out of, or you just hold off for another year or so, if you can, go to like a month to month or just renew for a shorter period of time and wait it out because you don't want to be committing to a whole bunch of space and then find out that you've now changed direction because you don't need as much space as you initially thought you did.
So it's a bit of, you know, being in limbo, but that's not necessarily a bad thing because it gives you time to really understand how your people are using space. On the flip side of that, I've also talked to a couple of companies that are taking advantage of the market right now because there's a lot of space and there's some good deals out there. And if people or companies are thinking that the office is going to still have a very sort of prominent place in the future, then they're going to capitalize on the market opportunities right now to sign those lease deals so that they can take advantage of the cost savings.
Zach: Links to learn more about Sandra and her work can be found in the show notes. If you want to learn more about the work I'm doing, go to Robin power.com. I'm Zach Dunn. See you on the next episode of In the Works.