Have we lost the ability to draw employees back into shared office spaces or will we be able to entice them in … at least part of the time?
There are many arguments for people to continue working from home. There has been a reduction in time lost due to commuting, lowering the need for fuel, not to mention a positive impact on our carbon footprint. There is a positive impact on parents who can better juggle and manage their children’s schedules. Or for others, the time has been freed up to increase their volunteerism or community involvement. Some report greater health and overall fitness.
We also know leaders want employees back in the office if not for anything else but to build social capital and allow opportunities for people to build trust. This leads to increased collaboration and creative outcomes. The most effective and competitive leaders will become educated about how they can take advantage of flexible, hybrid options and will constantly monitor and improve to make it inviting for employees.
But how do we create the will to come to the office? Creating thriving workspaces of the future requires a holistic approach to the technology, design, safety, and comfort of employees in tight alignment with company values and culture.
According to Matt Newstrom, Principal and Co- Owner of Hyphn, leaders can create workplaces people want to be in. He and his partner, Shastan Jee, guide Hyphn’s vision, strategy, and execution. Newstrom has more than 20 years of senior management and consulting experience in corporate real estate, workplace strategy, business development, building operations, construction, and process improvement. I invite you to read my interview with Newstrom, who shares his progressive viewpoint about ways to get employees excited about coming to the office, improve retention and engagement, and optimize productivity by taking a holistic approach to creating the workspace of the future.
Before leading Hyphn, you served in county and city building operations and property management and then segued into consulting. How did these experiences inform what you do today?
Since the age of 16, my entire career has been in construction and building environments. Over time, my interest evolved from brick and mortar, facilities management, real estate strategy, and capital projects to caring more about what goes on within the walls of the building. I spent 10 years in the government sector before I became the Principal and consultant for Cresa, a real estate firm representing occupants.
We sold the business to JLL (Jones Lang LaSalle) and I worked for them for a couple of years. An opportunity arose to buy a Steelcase dealer, and this became a platform for my partner and me to build toward what is now Hyphn.
As a consultant, most real estate decisions were made by CFOs or CEOs with a concentration on the bottom line, budget, and construction costs with little information about what people need to do great work. The decisions didn’t take into consideration the full impact on the organization and missed the opportunity to create workspaces that support employees.
While it is important to focus on real estate costs, the reality is the cost of employees is 10 times the cost of real estate. We were missing something. We should not only focus on excellent design that looks great in photos. We need to consider the experience of the people who use and engage with each other in the space. What is it inside of you that informs this mentality?
It is probably because I am an empath and I’ve worked in crappy office spaces myself.
At one point I had control of four million square feet and the space was blah. I had an enclosed office and was told that executives like me were to work in them. I didn’t like it much, so I packed my stuff up, moved out, grabbed a cube and I turned my formal office into a conference room. This was a catalyst for thinking beyond the bricks and mortar and more about what the experience is like for employees.
I made the change and now want to help others make better decisions about real estate. We need to think beyond the rent. What is the location? What are the transit and walk scores? What are the restaurant choices nearby?
Leaders are trying to figure out how to get employees back to the office but don’t know how to do it. I heard a term the other day that I’m going to steal, and it was about ‘earning the commute’ from our employees. We’ve proved we can work from home. It is convenient. But we’re missing so many things if we are only focused on working from home.
How did the idea of Hyphn come about?
I was working on a UK-based project with a single point of contact who did architecture, permitting, design, construction, furniture, cabling, plants, vending machines, you name it. When my client told me that the project was the best he’d ever worked on – a light bulb went off. Why wasn’t any other company doing this in the US? It took me some time to figure out how to take the idea and turn it into something.
When I was approached to buy the furniture dealer company that we now own, I wasn’t interested because it is very commoditized. My wife shined a light on the fact that it could be the catalyst to create the integrated experience I’d been talking about. The next day I signed an NDA and started working on the deal.
You started Hyphn in 2017, three years before the pandemic hit. How did that impact your momentum?
It was interesting– while scary to go into the unknown, the pandemic actually galvanized Hyphn’s vision and strategy. I personally had been beating the drum about space utilization, hybrid work, and the integration of people, place, and technology for many years. The start of the pandemic coincided with the formal launch of Hyphn’s new business lines, and the pandemic was actually very good for us as it took what previously were perceived to be abstract topics and made them real to everyone. Hyphn saw significant growth during the pandemic.
WHY do we need people to come back to the office? Is there anything new we haven’t considered?
I think it has been easy to forget what it was like to work in an office with positive energy and a ‘buzz.’ When it came to our organization, my partner and I predicted it would be much easier to ‘go home’ than to return to the office, which ended up being true.
However, there is credible data that tells us working in isolation has taken a toll on mental health and had negative impacts on employee engagement, our sense of belonging, our sense of community, and our connection to culture and brand. When we hear of a push to return to the office or try a hybrid model, it is often through the lens of pre-pandemic experiences. It does not consider the fact that we can’t support our people in today’s environment by using pre-pandemic methods.
What excites me is that we have an opportunity to positively disrupt our team’s experience by creating something completely fresh and new. I love seeing Hyphn employees embrace our new model, and many are now choosing to come into the office more than we require. Because of this additional facetime, there are things on our road map that drastically changed or expanded because we’ve had chance meetings in the hall, gone to lunch or happy hour, or even had a casual chat during a Christmas movie night with everyone dressed in pajamas. What happens five minutes before or after in-person meetings is special and we can’t recreate that over video conference. When we are home, we click off and miss out on the chit-chat. Working from home is not a bad thing but it should be part of the entire hybrid model.
From my perspective, there are also benefits that working from home brought us, however, we can get lost focusing on those things.
The secret sauce is not to lose those positives, but rather introduce the new benefits a well- balanced work experience model can bring to our teams. We can’t expect our teams to arrive at these conclusions all on their own. Any good change management program requires leadership to adapt, respond to, and amplify their employee’s desire to work in the office.
One of the most impactful things I did this week was I had a meeting with a business partner and I had the chance to ask one of our newer employees to join us for breakfast. They are still learning about who we are, my vision, and where we are going as a company. If we had been remote, this ‘chance meeting’ would have never taken place. After breakfast, she took me aside and thanked me for sharing some of our inner workings and my thinking about the future. She asked how we could do that more often and how I might be able to be more of a formal mentor. I have no doubt this exchange will be a catalyst for spending more quality time together to find coaching moments.
This afternoon, employees will stay to decorate the Christmas tree. The pandemic has left us missing these informal opportunities to mix it up with each other.
We might not always all be in the building at once, but trust is built on socialization and talking directly with folks in a safe environment. It is more difficult to do this on Zoom.
What does a vibrant office look like these days?
It is not one-size-fits-all. This answer will be different for each organization. We believe there are some threads that will weave through most companies. At a macro level, we need to identify what people are not getting from home. It might be access to tech or collaboration tools, the ability to be together with coworkers and leaders, or the flexibility to choose where we do our best work. We will need to support different work modes ranging from needing privacy and focus to places we collaborate and socialize. The environment needs to exemplify each company’s unique culture and values. For us at Hyphn, we are proud of the energy that permeates throughout our space, and it is so satisfying when guests to our office feel it and comment on it. It’s a combination of things such as piping music throughout our office, investing in new coffee and water machines, not taking ourselves too seriously, and installing quirky art and decor. Also providing snacks does not hurt!
Do you think some people have lost their identity by not being able to leave their houses? What could this do for people’s egos and self-esteem?
I think so. Some of my observations are anecdotal, so I will share my personal experience during the early days of working from home. I’m a people person – I love being around others, and a key part of my job is to network, build relationships, entertain, and be out in the community. Overnight, I could not do any of these things that were at the core of my identity. This was a difficult time for me, and it was tough to gauge how my efforts were contributing to Hyphn’s success. I lost so much of my energy; I started drinking coffee after a five-year hiatus! While that is my very personal experience, I cannot believe that I’m unique here.
I am a learned and practiced extrovert. Even the most introverted people on my team are approaching me to let me know how much they enjoy having people around them again. They might not want to talk with everyone all the time, but they are drawing energy from the buzz.
You’ve created a holistic approach to ways of doing work. How do you create the right workplace environment?
We take all the noise out of the process with a consulting division that works upstream. We don’t start by asking what chairs they want. Our consultants start by asking what the client is trying to accomplish in their space. What do they want their office to do for them? We are the group that is part of an advisory committee to help forecast real estate needs, work with the brokers to validate the space, and help create and manage the change process. We advocate for everyone’s voice to be considered.
In a traditional approach to real estate, where has most of the focus been?
Most of the focus has been on the bricks and mortar, the terms of the lease, homing in on costs, architecture, and interior design without considering the full suite of the employee experience. In the traditional approach, there are three big capital spends on any project – construction, furniture, and technology. I would often see furniture and technology get overlooked in the planning process. Yet these are the things that have the greatest impact on people’s daily work experience.
It is nice to have beautiful spaces – but beautiful spaces alone are no longer the draw. It is about how seamlessly the space functions for the employees. The focus is shifting away from planning for a great photo shoot with spaces that don’t work for the people who work there.
You presented at the 2022 Disrupt HR conference in Portland, Oregon. Your keynote, “Return to Better,” was about returning to work in a hybrid capacity. Unfortunately, the Disrupt HR format is only five minutes, and the audience only got a taste of your thoughts.
Yes, I needed another 10 minutes!
We need to return to better than we were pre- pandemic, but so many organizations are lost on what to do. Employees have had over 30 months of working from home. Some are now comfortable with this, but many are not. Mandates to return to the office are a turn-off. We can’t operate like we did pre-pandemic because expectations are radically different now.
People’s expectations have changed, and we must take the friction out of the office space and add flexible options. Data shows the companies in Portland, Oregon, have given back 800,000 square feet of office space in the second quarter of 2022 and are not trying a hybrid approach. And this is just one of many metro areas across the country. We need to aim at creating office spaces that will attract people rather than forcing mandatory time in the office. In fact, reports show leaders are scared people will leave if they mandate more time in the office.
Real estate costs are insignificant compared to the cost of employees. So what is the best way to have an engaged workforce and office space to which people want to come? When we designed our own space at Hyphn, we put our core values at the forefront and embedded them and our personality into the build. We help our clients go through the same process to come up with their bespoke solution.
It is not a cookie-cutter approach. We want them to support their teams and create high- impact moments.
When we opened our doors a month ago, I overheard employees saying, ‘we get to work here.’ One person who’d said he would never be in the office is now here five days a week. In fact, I’ve seen him give at least three tours of our space, showing it off to his clients. It is this type of engagement you can’t have in your home office.
How do you help clients imagine and align their espoused values, their culture, and their intentions with the workspace that will take them into the future?
First, we ask what they want to accomplish in their space and what outcomes they want to see. Then, it is about planning a holistic integration of the workspace and the people who use it and guiding them through the process. It is organic, and there are different factors for each client.
One example is the work we did with a regional law firm. We surveyed five offices, synthesized all the details, and highlighted 10 priorities. Then, we focused on their top three and used them as our project charter. We might not be able to support all 10 priorities – like the rock-climbing wall – but we can consider everything and focus on the priorities that will best serve the entire organization moving forward.
You predict the fully remote model has a shelf life of three years, but the hybrid is going to remain. Tell me more.
I’m betting it’s less than three years. I talk with friends who are leaders at other organizations, and they tell me about the benefits of working from home yet say they feel disconnected from their organizations. If the leaders of the organization feel disconnected, how do the employees feel?
Data collection is critical to our process. We consistently collect data from both ourselves and our clients. The data doesn’t lie. Over a four-month period, we surveyed leaders weekly and employees monthly.
As we tried to encourage people to come back to the office and connect with their teams and the brand, we uncovered a critical need to address mental health, trust, and safety.
People were telling us they did not feel safe coming to the office, and we had to respond to that. At first, people felt unsafe due to concerns about COVID, and as that dwindled it was about personal and material concerns being in downtown Portland. I recently overheard an employee talking to our employee engagement specialist that she doesn’t feel safe walking three blocks from our space to her car. This is a negative! There is a growing list of companies leaving downtown. Just last week my assistant came to the office in tears because she was accosted getting on the MAX. We can’t control this; however, we can continue to communicate with the City leaders to push for change.
Let’s talk about resistance. A lot of people do not want to return to the workplace for a variety of reasons. Why should we try to overcome these reasons? What are the top areas of resistance you see and hear, and is there anything that can persuade people otherwise?
There are several drivers to me wanting to work from home. My commute to my coffee machine and to my home office is super easy. My slippers are comfortable. Comfort is a major driver. I have less windshield time. I don’t have to pay for parking. There are a number of friction points we have to overcome. People don’t want to come to an office where they don’t have personal space and a place to sit. The technology needs to work as well as or better in the office as at home.
Organizations need to adapt by creating a destination people want to go to where they have experiences they cannot get at home.
Many leaders want to get people back to the office and they don’t know how. What are the biggest barriers to their success?
Companies are scared to make the wrong decisions. I tell our clients we were getting a lot of things wrong before the pandemic. Pre- pandemic we were only occupying 60% of our office spaces, and now it is less. These same companies made plenty of wrong decisions before the pandemic, not maximizing space back then. Now, we have more data on how to do it better. We need to make informed decisions and gamble a little now that we have enough information to understand the drivers that could bring people back to better offices and an even better experience.
An argument for hybrid work is combatting turnover, silent resignations, and improving employee engagement because people are missing human connection. Teams miss opportunities to build social capital. Will the desire to stay home counterbalance the positives?
Six months into the pandemic, I told my business partner I’d never be in more than three days a week because I was loving the gym I built in my garage, my routine of working out and making coffee and sending the kids off to school. So, when we opened our doors back up, I initially had to challenge myself to go to the office every day, even if I did not have in- person meetings. Today is Friday, and I really didn’t need to come in.
But I want to come in. I like seeing the employees who decided to come in and connecting with them. We need to create the desire. Part of change management is creating the desire to do something different.
One of our clients sent me their workplace engagement survey questions and results. It was good information, but the questions centered around employees’ barriers to coming to the office. There were no questions or focus on the opportunities to help overcome the barriers. Our success is going to depend on the positivity we bring to this effort.
Leaders will need to be intentional about curating workplaces that engage employees. What does the research suggest they should be paying attention to when they design the office of the future that keeps people coming back?
Leaders need to be intentional about curating workspaces that engage employees, use disruptive thinking, and exceed expectations to get there. We are at a critical time, and we need to get it right. What really keeps me motivated is hearing workplace reinvention success stories from clients.
When we survey employees for clients, we come up with priorities they can choose to focus on. Priorities fluctuate, and we must find ways to support different ways of doing work that allow people flexibility and control.
Hybrid can mean a lot of things. One of people’s biggest worries is a heads-down space where they won’t be distracted. I might need some focused time in a quiet space where I can put in my Airpods and do my work. Other times I might choose to work in our high-traffic open lounge spaces so I can catch up on email and informally talk with employees. For one of my employees, it means they plan to take a week of PTO and work another three weeks in Florida while enjoying time in the sun.
We also create ways of working that are equitable for everyone. We do this by ensuring we have consistent and frictionless access to technology both in the office and during hybrid meetings. For Hyphn, I don’t think we will have to endure another meeting with a hybrid component where people cannot hear, see, or engage.
We need to support the work that happens during the day. We should have open spaces where people can collaborate and places where people can focus or talk privately. If done right, it can work well. What is horrible is when a company’s focus is only on meeting financial metrics and measuring success on the maximum utilization per person. It becomes like a boiler room and people hate it.
What investments do you expect leadership will need to make to allow for effective hybrid work?
The human element needs to be our focus. Our mission sounds aspirational, but we want to change the world one workplace at a time. We still spend most of our waking hours working, either at home or in the office. If we have a negative experience in the office, we take that home with us.
If you have a negative experience at home, you might take that back to the office, too. When home and office are one and the same, there is no mental separation between these places. This has been a challenge for many people.
What would it be like if you could go home jazzed because you just had the best day or meeting? That your teams have positive energy? We believe our work will have a ripple effect.
I recently read a CIO’s view on the investment made in constantly upgrading technology, which happens every 12 to 18 months. There are upfront, capital costs, and long-term, operational costs to consider. You can’t limp along with outdated technology forever. We need to have the same mindset for the workplace overall and consider ongoing investments to intentionally evolve our workspaces to meet both the company’s and people’s needs.
Your website talks about workplace innovation. Can’t new technology and tools allow us to do this from home?
Sure, we can work from anywhere, but we’re forgetting the lack of engagement and silent resignations. Some people are mailing it in. We want people to be able to work from home or in Florida or wherever, but we also want most of their time spent here together because the data shows us the benefits.
How do you anticipate the dynamics changing between company renters when it comes to partnerships with building owners?
We will move away from adversarial positions and find common ground through regular renegotiations. We will see a shift toward amenities people want like bike rooms, common areas, places for off-site meetings, etc. Landlords have an incredible opportunity to do better. Not just lease space and bring in attorneys when it is time to renew and hammer out a deal.
Right now, Portland landlords are getting hit hard with vacancy rates. It is the highest I’ve seen in my career, and everyone’s competing to rent their space. The successful landlords will evolve and work in service of the companies that occupy their buildings. It will become more relational and less transactional.
I recently showed one of the largest property owners in Portland some technology we use for engagement utilization and asked if he’d thought about being more of an advisor to tenants. I think there will be a shift in this direction toward a consultative approach.
A light bulb went off for this asset manager when I asked if he could imagine heading into a lease negotiation where he told the client they didn’t need as much space. How much trust would he build, and would he deter them from shopping for space down the street?
For example, by using technology, he could advise a client to shed 5,000 square feet by explaining the peak hours employees were in the office working.
Change management is a critical part of helping employees understand, prepare, and move through continual change. How do you teach leaders and employees to stay flexible and continue evolving their work models?
I’m still trying to catch people up with this concept!
I wouldn’t say we’re at a point where people are embracing continuous change – but we have a lot of work to do. I tell my clients not to expect to hit the bullseye right out of the chute 100% of the time. We will get it wrong and learn. But the pandemic has taught us change can happen fast, so we need to be nimble and responsive.
We need good change management strategies and certified HR experts versed in them. We can’t create change with strategy alone. We must manage the transition. If not done correctly, we leave most of our employees behind. People want to know the why behind the decisions and understand what the plan is.
We’ve conducted countless workshops, leadership alignment meetings, and one-on- one interviews. At one point I told my change management consulting team I thought we were over-communicating, and they told me there is no such thing.
Part of change management is to allow enough time for people to settle into the new normal before surveying them. Wait 90 days before surveying and start making more changes. I had a client come to me who wanted to immediately respond to a disgruntled employee request at the 60-day mark. When we showed up at 90 days with $12,000 worth of new office equipment, they had discovered they liked the new arrangement after all. We had to send the equipment back to the warehouse.
From where you sit, do we have the data we need about how people are using workspaces and what employees are saying about it? Won’t we need a continuous improvement process to constantly monitor and adjust? Goals of how we use our work environments could change over time, right?
One of our partners, Steelcase, did a survey with 30,000 respondents across 20 countries. It showed everyone’s top three issues are the same — mental health, trust, and safety. There are enough white papers out there to reference. We have enough information to make an informed change if we flexibly respond where we didn’t get it right. Three years from now things are going to look different, but we can design flexibility into our plan.
It will cost to retrofit office spaces where companies have already been losing money due to unused spaces and even returning them back to building owners. Isn’t there a fear companies will create new spaces and people will not return anyway?
Yes, this is a fear, but it’s all about the execution and putting equal effort into the change management. The cost of investing in change management is like dust on a scale compared to what companies pay for rent, construction, technology, or furniture. Investing in change management is like buying an insurance policy for your car to reduce your risk.
At Hyphn, how do you help clients prepare for future success?
With early engagement and strategic discussions, we ensure that we have alignment with their vision. I think our secret sauce is taking a holistic, integrated approach to hybrid working. We want people to return to better. Right now, we don’t know of a competitor offering anything similar, although we have many competitors with silo offerings in technology, furniture sales, etc. Hyphn has a lot of tools in our tool belt.
We act as an extension of our client to identify opportunities for effective hybrid work through employee engagement scores. It is not just about rock-climbing walls, nap rooms, and kegerators (although those are popular!). We help with space forecasting, growth prospects, and how people will occupy the space. Sometimes it means helping them consolidate and reconfigure.
What global research goes into your design process?
We do a lot of reading! McKenzie, PwC, HBR, and from our partners like JLL and Steelcase. There’s not one specific source. Now that we have our own case studies and data, people can expect we will start putting our thought leadership out there, too.
Hyphn takes a holistic approach to consulting, with professionals across design, technology, real estate optimization, project management, and workplace strategy. How does this all come together?
We have traditional furniture clients who still use fax machines. The projects that really get me excited are ones where our clients don’t know what to do and want to leverage everything we offer to get the best outcome. This is how we can help the most. We attend a ton of meetings and do a lot of listening to people, especially leadership. We stay on mission and listen deeply because we want to build trust and point people in the right direction.
It is a red flag when a potential client calls and starts by asking about the pricing of furniture. You can buy chairs on Amazon. The right client match for Hyphn is one who understands the impact they have on retention and turnover when they take a holistic approach to their workspaces and partners to create spaces built to evolve to help people thrive.
I have seen a lot of stunning conference rooms with not a soul in them. What are employees at the companies you’ve served most excited about? What is REALLY making them want to come back to the office?
One of the top things is frictionless, or just pain less, technology. I don’t believe in making it complicated. Anyone should be able to walk into a meeting room and have a global meeting without an IT entourage. The other thing is having a place that just feels good. It is not about details and design. It is about comfort. We’ve invested in good coffee and water machines, so people don’t have a reason to leave and go to Starbucks. We play music in our restrooms so you feel like you are on vacation. We want people to feel a little spoiled.
What do you see as Hyphn’s primary competition?
I think it’s changing so it is hard to say. It could be any of our offerings as a stand-alone service. It could be technology, or it could be furniture. Real estate consulting firms like JLL and CBRE will start to do more and more. We will continue to compete across many service lines. Last year, a global real estate firm asked to acquire us, which was an indicator we were on to something.
We know there will be competitors in the future, but right now we believe we are in a league of our own.
Anything else you would add, Matt?
LEADERS STANDING AT THE EDGE OF BIG DECISIONS: DO NOT BE SCARED TO MAKE A BOLD MOVE! THERE IS A BIGGER NEGATIVE IMPACT AT STAKE FROM DOING NOTHING AT ALL VERSUS TRYING SOMETHING NEW AND ITERATING.
As Matt laid out so well, the future of the office is not a one- size-fits-all proposition. Each company is different and requires a thoughtful plan and ongoing investment as needs evolve. What is clear is that Matt believes passionately in the hybrid model and that the office has a definitive place in the future of work. He lays out some of the benefits of maintaining an office and some excellent ideas about how to inspire employees to
spend productive time there. Matt’s company, Hyphn, is one of the thought leaders in this space and is dedicated to the process of compelling workplace design. You can reach Matt at matt.newstrom@hyphn.com or via www.hyphn.com.