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Futures Cut

Sign up to Futures Cut - the regular blog from Richard Pickering, Chief Strategy Officer, UK - a personal view of the evolving role of real estate in a world of technological, social and business change.

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Hybrid reality


Welcome to this week’s blog. If you’d prefer you can access the audio version.

In the last issue of Futures /Cut, the topic of discussion was the fast approaching condition of hybrid working. We considered some of the complexities and challenges that a ‘neither-in-nor-out’ state presents. My central contentions were that: (1) flexibility breeds inevitable uncertainties and inefficiencies, and (2) hybrid working cannot exist without hybrid living. i.e. if you want flexibility in your work life, you will need to accept adaptability in your home life; they are two sides of the same coin.

This week, we take a couple of steps further down the rabbit hole. The other necessary bedfellow of hybrid working is hybrid reality, and trust me, we’ve only seen the tip of the iceberg. 

What do I mean? When most people think about hybrid working, they typically mean spending some days in the office and some days at home. The ‘hybrid’ bit in this is a temporal and a spatial one (temporal: the day of the week; spatial: the location of either home or office). However, this isn’t the whole picture. Sure, some people might use their homeworking days to disconnect completely, turn off the WiFi and the cloud, and get their heads down. But if the experience of the last year is anything to go by, this will be a minority. Most people will envisage some form of connection to the base on these days. Furthermore, if you’re working in the office, it’s very likely that your future work model will involve regular connection with people who are working from home. How will you connect? Almost certainly not by phone; one can only imagine that somewhere there is a huge scrapyard filled with audio conferencing equipment. We are now in a digital video era; and this is the start of what I would define as hybrid reality.

When we were all sent home last year, IT teams across the globe went into overdrive, rolling out new hardware and software to facilitate a better remote experience. The result has been a phenomenal improvement in connectivity. In many cases, international colleagues, clients and suppliers who had never seen each other before were suddenly acquainted face-to-face. Many point to a loss of personal connection over the past year due to homeworking. Ask someone who works as part of a genuinely international team whether they agree. Over the last year, the world has become a lot smaller as the penalty of distance has reduced; and some of the barriers to conducting business globally have been removed, a fantastic silver lining.

However, (and it’s an important ‘however’) the technologies that have been rolled out in the last year were not designed to facilitate hybrid working; they merely ameliorate some of its challenges. The thing is that we didn’t design hybrid working, most of us accidentally fell into it. And it hasn’t actually worked out that bad; it has allowed significant elements of the economy to keep going through these difficult times; but it isn’t how you’d design it from scratch. For a moment, imagine a divine workshop had been orchestrated to determine the future of remote work:

‘We need to make this look as much like the real office as possible.’ ‘Good idea – how about a series of lo-res thumbnails of people in their living rooms? Jauntily angled laptop cameras looking up people’s noses should be fine. Yes, anyone can switch off their camera at any time and hide from everyone else. ‘Yes, set some people to join the call on mute, and others on loud, just to spice things up a bit’.

‘We need some space for workshops.’ That’s what the thumbnail videos are for’. ‘But how do you collaborate on documents?’ ‘Screen sharing; no problem’. ‘What about paper documents?’ ‘People still use paper??’

‘We don’t want to waste any time.’ ‘Quite right. Let’s arrange all future work into 30-minute diarised blocks, with no breaks in between. ‘Not even a minute’s break?’ ‘Correct; and while we’re at it, let’s make sure that the previous meeting always overruns by 3-minutes’.

‘What about down-time and chatting with your colleagues?’ ‘Overrated. Sounds like slacking off to me – let’s stick to the 30-minute blocks’ ‘So you need to schedule time, just to have a chat with someone?’ ‘Correct.’ ‘Doesn’t that feel a bit formal and lonely? Who cares; think of the short-term productivity! And what about the colleagues that I don’t work with directly, but whom I’d still like to shoot the breeze with from time to time? ‘Not worth it; just focus on your job.’

So, when those that say remote working is a poor approximation of the real thing; they are typically correct; at least for anything that requires connection with others. The cited benefits of homeworking relate to other matters: additional work capacity, greater linear productivity, fewer distractions, better concentration, better work-life balance. Few homeworking advocates would earnestly espouse better empathy, better knowledge transfer, better chance encounters, easier management etc in the home environment, (see our Experience Per Square Foot study for a more detailed breakdown).

But of course, that’s all going to change. 

The thing about technology is that it’s not a cause or a belief system – no one is saying ‘I prefer technology to the office’ – it merely exists to provide solutions to problems and inefficiencies in how we do things. I’ve listed some such inefficiencies above and in the previous blog, and I’d hazard a guess that right now thousands (more likely 10s of thousands or 100s of thousands) of people are focussed on resolving these problems. The solution to most of them is virtual and augmented reality. I’ll give you an example…

I recently took a demo of the ‘Gather’ platform, billed as a new ‘digital workspace’. I scheduled a time to meet the founder and clicked a link to join. I was expecting to be bounced into some kind of Zoom meeting; – wrong. Having selected an avatar that broadly resembled me, I was met on ‘the steps’ of what I’d most closely describe as an early version of The Sims. I was then escorted (using cursor keys) into the office – a real office floorplate in plan form with other real people (appearing as avatars) walking around it. There are meeting spaces; if you enter one with other people in it, then a more traditional video meeting starts. If you move away, then you fall out of the conversation. You can go over to a whiteboard with other people and start interacting with an actual document, or you can go into the breakout space and play a video game with one of your colleagues. And, of course, there is a skeuomorphic water cooler, for those that believe this is where innovation happens. Check it out here.

Whilst this might sound a bit like a child’s game; it doesn’t take much imagination to see how this is in fact a much more advanced version of hybrid working than our current one. That’s because it was built around how people actually choose to work, rather than shoehorning them into a new way.

Now imagine what’s next… Take the above and add:

  1. Your actual office floorplate, including your own desk. Now you can go find people and wave at them virtually while they’re on another call.
  2. Your New York and Tokyo offices. Now you can walk the floor with colleagues anywhere around the world instantly. Super-charged serendipity!
  3. IoT integration – A fusing of the physical and the virtual. Figure out whether someone is sitting at their actual or virtual desks, and go meet them at whichever one suits best.
  4. Wearables – When in the physical office, your digital avatar will follow you around, create a personal digital twin.
  5. Services – If all of your high value employees enter the office through your virtual lobby in the morning, how much do you think that organisations will pay to set up a virtual stall there?
  6. Virtual reality – when you’re at home, put on a headset and walk around your actual office, including seeing the people who are in the office that day, and…
  7. Augmented reality – when you’re in the actual office, put on a headset and watch your home-based colleagues walk around like ghosts!

Rather than perpetuating the home-office dichotomy, this future melds them together seamlessly. (P.S. ditto for retail, and public services).

Don’t be fooled into thinking this is science fiction; we’ve come a long way since The Lawnmower Man, if not quite as far as The Matrix. Right now, AR/VR markets are worth $12bn and growing by 50% y-o-y, led by China. The rate limiting factor is not the technology, but instead the content offering / use cases – which are about to go through the virtual roof. The sectors spending the most in this space are banking, investment services and government. Unsurprisingly, younger people hold fewer dogmas about how they best communicate and are generally more willing to explore new realities and virtual ways of doing things (53% would rather give up their sense of smell than their tech, and report as being twice as likely to adopt VR then older generations). This, combined with technology improvements (LiDAR, vertical improvements, smaller headsets, haptic body suits), leads to an inevitability that over time virtual worlds will flush through society in the same way as mobile phones or music subscriptions.

As more activities migrate to the digital world, it is hard to escape the conclusion that this presents the single biggest threat to the sustainable value of most forms of commercial real estate over the long term. If you disagree, tell me why, or point to a bigger one, (genuine question). The answer for our sector is not to put our fingers in our collective ears and hope that this goes away. Whilst there will be an increase in virtual-only environments (Second Life, Decentraland etc); in foreseeable future the world will more likely skew towards a mix of the real and the virtual – a new hybrid reality. This in turn provides exciting opportunities to improve the quality and experience of working both in the office and at home. The workplaces and buildings which deploy these will: (a) better ameliorate the challenges of hybrid living, (b) drive a more ergonomic solution, which drives higher productivity than existing workarounds and (c) provide exciting user / customer / employee / tenant experiences that will be competitively differentiating.

And, who knows, these virtual worlds might also need surveyors, architects and investors…

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