"Even Though We've Become Untethered, We Must Find Ways To Reconnect With What's Relevant"
A conversation about the future of workplaces with Lisa Picard of Oxygen Investment Management, an urban planner and one of the nation's leading experts on workplaces and real estate.
Lisa Picard, managing partner of Oxygen Investment Management, is one of the most knowledgeable and successful investors in what she calls workplaces in the United States. (Disclosure: She’s also a former student of mine.) Recently Lisa posted a compelling LinkedIn essay in which she pegged the beginning of remote work to 2013, when wireless networks first came into vogue.
In that essay, Lisa identified three reasons why cities and business districts will bounce back even in the post-COVID world. Two are not surprising and I’ve talked about them before in The Future of Where: (1) feed, entertain, and restore us and (2) support meaningful human collaboration. But the third was kind of a shocker: integrate seamlessly with agentic processes and AI technologies.
I sat down with Lisa recently to get her take on the future of what we used to call offices – what she prefers to call workplaces – and how they are likely to shape the future of where. This conversation has been edited for clarity.
The Cube Farm is gone for good.
Bill Fulton
Lisa, thanks for talking to us today on The Future Of Where, which is something you and I are both really interested in. Your recent LinkedIn article highlighted both how we got here in terms of offices and office districts and then what the cities and workplaces of the future are going to look like. So, can you begin by telling me a little bit about the sequence of events that you see, looking back to the 2000s and the 2010s that led to us being able to have completely mobile workstations that sort of set up this breaking apart of offices during Covid?
Lisa Picard
Many authors have explored the origins of the office and the workplace, as well as how technology continues to shape the way we gather together and produce work. At the onset of the creation of knowledge work, and by this I mean in the industrial era – when there were those people who produced and there were those people who accounted for what was produced. As technology advanced further where the physical production could be done more effectively, the accounting, managing, and creating systems became knowledge work. As that started to grow, building technology enabled the work to be vertically stacked, requiring people to be in closer proximity to each other.
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Throughout the ‘80s and into the ‘90s, corporations – namely the IBMs of the time – needed to make statements about their longevity so that we, as workers, would be attracted to them and commit our careers, developing immense loyalty to these big bastions of power. I started my career developing office buildings at Hines, and I observed a shift in the late 1990s and early 2000s: people no longer wanted to work for a corporation. They wanted to be part of a community of ideas and do work that would stimulate them and give them purpose, as they committed longer and longer hours to this endeavor including driving from housing they could afford.
Bill Fulton
That was a shift.
Lisa Picard
Lisa Picard
That was a shift because, essentially, we were no longer committing ourselves to the organization. If you think about the ‘80s, the giant office buildings with these big mausoleum entryways were really to make a statement of power. And then later we started to see ping-pong tables and cafes, and these things started to show up because we needed to build trust in that community, because we weren't chained to the desk.
At the same time, so much exciting technology is being developed, and particularly, I remember getting my first Blackberry. Each workday, I would commonly bike quite a way to and from the office. I remember being able to make that hour-long bike ride uninterrupted, just me in my own headspace. And when I got the first-generation BlackBerry, I could get your emails instantly on these little devices, and it was magical. Then, I remember stopping halfway along that route and going, “Did I get anything?”
Now, most of us remember when we would arrive to our office with a laptop, and need to plug it into the network to “arrive” at work. Companies would spend an inordinate amount of money, particularly technology companies, updating from Cat 5 to Cat 5-E to Cat 6, and then to Cat 6-E, in an endless and expensive quest to have the fastest, latency-free wiring technology in their offices; this dictated the pace of progress for the organization.
However, as companies invested in wiring, they were already beginning to decentralize their servers, first through redundancy and co-location, and later entirely off-site, provided by others. Next, physical assets like law libraries were no longer onsite; they had been digitized and became available on subscription, creating entirely new digital businesses within every industry. Then, in 2013, our wireless networks suddenly became fast enough to unplug from it, and you could stream videos with just the signal from the air. It was this moment that no further investment in the physical space was necessary, space became a commodity. Everything became more scalable for the company. Every aspect of the business operation could be decentralized once we were allowed to transmit zeros and ones through the air, as opposed to a wire that tied us to the office. We had a world of choices open up as to where work could happen.
Bill Fulton
We think the advent of remote work and the breaking apart of the offices coming during covid, but what you're saying is it really started in 2013 when wireless networks first became predominant.
Lisa Picard
Yes. And I will tell you that a lot of this fracture was hidden by the fact that at the same time, we had a historically low cost of money. We had interest rates hovering near the bottom, and banks were offering free money to build new office spaces. When I first got into development, lenders and investors required us to have 30% to 50% of the building pre-leased to a tenant under a long term lease. With this low cost of capital and booming technology, everyone became “risk on” when it comes to paying for growth in all knowledge industries. Tech companies (and those that thought they were tech) grew at a rate of around 10% per year, generating massive spatial needs for centralized work. Getting this math wrong had serious ramifications for the organization. Therefore, if I'm a developer and my investors need security for my investment, I'm going to push you the tenant to assume the space you need for 10 years or more. So if you are a fast-growing company and required to estimate your size in 10 years, you will need to secure twice the amount of space you need today.
Bill Fulton
So even though we began to get untethered in 2013 all through the 2010s, these other trends were going on that made it look like offices were going to continue to be strong.
Lisa Picard
Yes, there was a lot of synthetic demand taking down space for what we know is synchronous, centralized work. I have a chart that shows office utilization started to fall in 2010 -- really, really started to drop after mobile devices and boots in wireless. Office space consumed per employee declined. At this time, we saw the densification of workspace on floor plans, and people argued that this was for collaboration. But companies were using this to reduce costs. I also think that you noticed the trends of utilization falling and densification climbing due to untethering and decentralization; people could work a day on the road, or a couple of days, and then take Friday to work from home and spend time with the kids, given the long hours dedicated to asynchronous work.
Bill Fulton
One day a week at home. That was already beginning to happen.
Lisa Picard
Yes. Already beginning to happen.
Bill Fulton
And then Covid came and just blew the whole thing up. And these trends became far more transparent.
Lisa Picard
I think Covid was removed the opacity and Companies could begin to question the utility of their space, as the assumption was that people were utilizing all of it. Now, as companies’ leases expire, they're renewing for 20% to 30% less space on average.
Bill Fulton
On average.
Lisa Picard
That's right. You see a lot of different statistics that relate to the office utilization and even companies telling an employee that, “Look, we're just going to give you hoteling space. You're going to come in, we're going to give you a locker,” or “You don't have a desk when you need to come in.”
We also know that removing an employee's desk can have emotional and psychological effects on the older gen worker: Namely, feelings of no longer having a place in the organization. Some employers say, “Look, I'm going to give you a desk. It’s going to have your name on it, and I expect to see you in it, as a way to force presence or, foster surveillance work in other types of organizations -- also achieved through technology.
And I do know we are seeing different leadership styles in organizations, different theories about what is productivity and the purpose and the utility of a workplace. Personally I would say there is a real leadership crisis. An ability to lead the next generation of workers and that will only worsen in AI as we are seeing firms reject hiring interns since AI is doing the smaller work.
We know that removing an employee's desk can have emotional and psychological effects on the older gen worker.
I've met several entrepreneurs and business owners in this lane, and the starkest example for me was a successful tech company based in New York, and they had probably 450 or 500 employees, spread across the globe. The CEO said to me, “I never need office space again.” I said, “Oh, really? Talk to me about this.”
And he said, “Well, I've got employees in Brazil, I've got employees in Berlin, and I've got my core leadership group.” And I ask him, “Where is your core leadership group?” He's says, “Oh, the core leadership group is in New York.” And I said, “Okay, at what cadence are you getting together? He's says, “Oh gosh, several times a week as its how we make decisions. And I'm ask him, “Well, what about the balance of your organization?” And he says, ”Oh, we might have a gathering once a year.”
Then I ask, “Okay, so most of the offshore folks are coders in Brazil and Berlin. What if the language that you were going to use shifted and you needed an entirely new form of ML or Python that the team had no experirience? How would they learn? How would you learn? How would your organization learn? How would your folks in Brazil know that they needed to learn this new thing?”
And then he quickly said, “Well, we’d just hire new people.”
And so I thought that for anyone who really wants to understand the direction of the organization, they have to be present with leadership to understand the pattern and the pace at which things are moving, changing. Otherwise, you're just going to get caught off guard. And it became sort of a symbol for me about different forms of leadership because that leader is going to have to spend more time, instead of educating and bringing people along, finding new people who can do what they need them to do, which I think is somewhat of an inefficient way of operating in a breakneck pace world.
And so, proximity became in my mind an idea for the shaping of the future workplace in our future cities. Even though we've become untethered, we must find ways to reconnect with what's relevant. Otherwise, we're going to be a satellite in orbit that starts to decay because we've gotten too far away from the mothership.
Bill Fulton
In the future, what will the purpose of a workplace be? And so much of our human settlement and cities has revolved around workplaces. What role is the workplace going to play in cities and suburbs and human settlements of the future?
Lisa Picard
For me workplace is a product of the worker, and the worker is going to be a product of the work to be done. My point is that you can't simply say, “What will the workplace be like in the future?” You have to say, “Who is the worker and what is the nature of the work?”
AI is the noun, verb of an uncertain future, but what does it really mean? Now we are seeing where these new predictive tools become thought partners that help us all accelerate our work by 20-30-40-50%, allowing us to be more efficient.
I've used the term “phygital” work, which is how I describe the combination physical and digital work – where it's locationally flexible, it's adaptable with technology, but it's you (human) in combination with digital devices.
Robotics is advancing, yet it struggles with softer, fabric-like materials simply because they're so malleable, less predictable, and somewhat unpredictable, much like humans. So I think trades that have less expected linear work will be phygital—that is having both human activation and digital components. When we start to look at life science and malleable work, it is likely to be phygital work.
Our workplaces will continue to advance, integrating humans and machines, working alongside software and hardware. Remote working technology will advance beyond AI note takers. In-person work will be critical for learning how to use these tools effectively and to feel human.
HR leaders are calling the workers who use these tools seamlessly to increase productively, “the super worker.” These super workers truly understand and utilize these tools, becoming highly effective in self-evolution. They, like me, might create some things that automate my email. As soon as I see an airline flight drop to a certain level, it might automatically purchase a ticket. For me, these agenic applications will not only help with my basic life admin, but also do the less joyful, redundant work. I can't even project what those things will be, but I’m optimistic those that stay in front of the technology will drive it.
With all my staring at screens, I need more time for human interaction.
And there is the other side of our work, whereas where we find our humanity those things that can’t be predicted and are unexpected.
And with all my staring at screens, I need more time for human interaction, community to understand what this all means, as well as riff on ideas about where it's all going. People need to be in community, calming anxiety about the future because they are inundated with so much change.
Bill Fulton
And so is it in real life or in actual real places such as cities that we find humanity that we may lose in a technology driven workplace? You said that to learn and understand and be part of an organization, you have to be physically proximate to it at least part of the time. But I think what you're also saying is just to be human, we have to be physically proximate to people and things that we like and that fulfill us. That might be work and it might be other things.
Lisa Picard
Yeah, I think one of the most powerful things I've experienced as a mentee and a mentor is to be seen and to truly see someone. This gives me an enormous amount of confidence wiliness to give. I will say this connectedness in physical community allows me to stand on a platform that is my own emotional wellbeing.
Even if we look at agenic forms of therapy, you can't feel seen by a machine. I mean, I think they can act really good at being a simulator, but these are designed to keep enagement, payument, and flattery will get the model everywhere. I can’t say that some of these predictive responses are authentic and yet fully digital existence and foster a very isolated world. I’m optimistic at the formation of real communities that are happening around me.
Bill Fulton
And how does that manifest itself in the workplace of the future and in the city of the future?
Lisa Picard
I started my career in urban design and realized the people shaping this world were real estate finance people looking at spreadsheets and not really looking at the impact of spatial relationships on humanity. And I've always known that just the creation of places that make people feel good, it's simply solving for a Maslow's order [Maslow’s Hierarchy Of Needs]. If you think about his pyramid [Maslow’s pyamid] … if I solve the basic needs of people getting fed shelter and clothed, then you get them to this place of where they feel safe … because a lot of urban environments, the way they are crafted, we don't feel safe, we don't feel like we belong. But if you solve for the basic things of safety and belonging, you eventually get to self-actualization, which I believe is an unbelievable amount of GDP and economic opportunity.
I think the city can resolve a lot of what sickens it by making us feel safe and making us feel like we're a part of something. Last October, when I was in London I was blown away about several shopkeep coming out and sweeping the street in front of the shop beyond their storefront, citizens randomly picking up trash. This only happens if people have care and pride for their city. For the our nation, it feels like in covid, we retreated into protecting our own and forgot about the communities we belong.
Bill Fulton
In the post-covid environment, where we are more remote and atomized than ever before, how do we get that back and do it in a way that is reasonable in relation to our daily lives where we have jobs? We may go to work, we may stay home, we've got families and so forth.
Lisa Picard
Unfortunately, community building is not rooted in the leadership of our cities and country at this moment. I do feel we crave it and its showing in small areas. The short answer is I don't know how to again, but I think that there's something in the fabric of the way that we create spaces and we come out into spaces that can be a healer of community.
Bill Fulton
What in the future does a meaningful workplace look like? And what role does a meaningful workplace play in trying to bring that about?
Lisa Picard
I stopped using the word office and I started using the words work and workplace. I think work can be passion projects. It could be economic, where you engage in economics to bring home. It can be your work in the community. And I think that work is so much a part of self-identity and also sort of gratification of how we're contributing something, whether it be to society, to an organization, family or to ourselves, and that place can be an instigator of it. I'm seeing places of work drive more experiences for creating community even if its around clubs, activities and events, namely in New York, which is the hottest office market in the country.
Work is so much a part of self-identity a that place can be an instigator of it.
Bill Fulton
Which is amazing considering how along with the Financial District of San Francisco, Midtown Manhattan was sort of the poster child for the problem in 2020, 2021. What is it about New York? Why does the office market come back and what does that teach us about cities?
Lisa Picard
New York has an irreplaceable density of people with passion for the city and with that proximity and passion comes invention; and there is less friction to get into the city because of the transit systems, versus western cities that developed with the automobile. So cities like Seattle, the Bay Area and Los Angeles-- traffic is incredibly intense and it makes getting around hard. Demanding people go into the office, or at least have some presence in these high friction makrets, is challenging and they were the last to come online.
Bill Fulton
So there's still that human density that is advantageous in bringing that about. Interesting.
Lisa Picard
Yeah, Jane Jacobs was right.
Bill Fulton
Lisa, thanks for sharing your insights.
Lisa Picard
Thanks for having me.