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Narration:

It’s been almost three years since many office workers packed up their laptops and started working from home.��

The COVID-imposed office exodus happened remarkably quickly. Near universal access to technology meant work could continue – from almost anywhere.

Of course, it wasn’t always smooth-sailing. Zoom fatigue set in as employees juggled working from home, home schooling, and “stay in place” orders. But many office-based workers adapted.

And now, the Working from 91���˰涶�� genie is well and truly out of the bottle.����

Recent research from the UNSW Business School’s Hybrid Leadership lab has shown that many employees now prefer to have the option to work from home. A 2021 World Economic Forum survey of 12,500 workers across 29 countries found that two-thirds wanted to work flexibly.��

So if workers don’t return to traditional Central Business Districts, how will the new world of work, work? Does working from home impact productivity? Can employees connect with organisational purpose if their interaction is mainly through a screen? And – if leaders do want workers to return to the office - how can they make it worth their while?��

In this episode of the Business of Leadership, host Professor Nick Wailes, Senior Deputy Dean and Director of the Australian Graduate School of Management at UNSW Business School, speaks with Paul Edwards, General Manager of Strategy and Customer at Mirvac, one of Australia's largest property groups.��

They have been working to optimise the office experience and figure out what people today want from a physical workplace.��

And Professor Karin Sanders, Deputy Dean Research at UNSW Business School and co-founder of the UNSW Hybrid Leadership Lab, shares insights from her research on remote and flexible working as a permanent fixture in the world of work - why work preferences change, and what hybrid work strategies industry should consider.

Nick Wailes:

Hi, everybody. My name's Nick Wailes. I'm the Director of AGSM, and welcome to the latest issue of the Business of Leadership podcast. In this short series, we are focusing on the business of work and how work is changing. And, I'm really excited about today's discussion, which is about the growth of hybrid work, the changing nature of the office, and a sort of view about what working is going to look like in the future.

I'm joined with two really great guests, Paul Edwards, who's the General Manager of Strategy & Customer at Mirvac, and Karin Sanders, who's a professor here at the UNSW Business School in Human Resource Management.��

Nick Wailes:

Paul, we're speaking in late 2022, and we're obviously been through COVID, or we're still going through COVID, but I'm wondering if you thought about before the pandemic, what was happening in your thinking about the office and the changing nature of work? And, when you think back to 2019, what were you planning for and what were you thinking about?

Paul Edwards:

Yeah. Thanks, Nick. So, from our perspective, we were thinking about a couple of things specifically. One was the change in nature of why the office would be important. So, we predicted that experiences would become much more prominent as a reason for people coming to the office. And we identified three key experiences. One was the curated experience, so people place a lot more focus on community and curation of those communities. Second was around the learning experience and how we saw that there was need for learning continuously in the workplace now. And part of the reason for that is the digital transformation or digitization of businesses. And then the third one we called awe-inspiring, which was just those moments that matter that really change a person's day. And so that was three areas that we were focused on in experiences.

The other piece was around augmented work, which was to think about how the transition and that digitization is actually happening, so moving from a world where people use technology very much about doing a specific task, to a world where there's full symmetry between human and computer, and somewhere in between where we are placed now. But, we saw that as really changing the workplace. So when you put those two together, we really started to think about, well, what is it that people want in a workplace of the future? How's that going to affect everything, from how we deliver our services, to the experiences that people have in the space, the experiences people want in the space, and how's that going to impact businesses who are craving to be high performing and for growth?

Nick Wailes:

Great setup because it sounds like you'd done your homework before the world changed. But, Karin, same sort of question for you which is, hybrid work's not new. Remote work's not new. But, my feeling is that, the discussion about it and the role of it was very different three or four years ago. What's your sense of what the debate was about hybrid work in the past?

Karin Sanders:

Yeah. Good point. Because indeed, it's not new. For decades, and for maybe even longer than decades, we were studying flexible work, and when and where to work. On the other hand, it's really much more important now to study hybrid work. What was done was mainly when and where to work and how to work. What is done now in a different way is that we related much more to the importance of being at home. Because the time that we were working from home, because we needed to work from home, because there were no other options.�� That made people, and including myself, made working from home much more attractive. At least, I was always in the office from seven to seven. And, during the time that we needed to work from home, I really start enjoying working from home. And that is the case for many people.

So, in a way, it's almost an entitlement, that people feel this is a right I'm not going to give up anymore. What I also like to emphasise that the whole discussion about hybrid work arrangements is a typical white collar issue. Many people in hospitals, teachers in schools, the people in supermarket, they don't have any options for hybrid work. So, I love the topic of this conversation and it's really important, but we need to make sure that it is only relevant for some occupations and not for all occupations.��

Nick Wailes:

I think it's a good point, a good reminder. Paul, you've been through a period where a lot of your tenants would've asked or required people to work from home and then they've been coming back. What does that pattern look like across your office assets?

Paul Edwards:

Yeah, I think, look, if we go back to March 2020, our business on the 13th of March, basically we're told to go home and we didn't return for several months. And so we've seen that across our customer base where people have essentially... They were told to go home and picking up a bit on Karin's point is that people had that ability to work from home beforehand, but this major disruption, almost a line in the sand, really caused that shift. And we went from a business that partially had a very high flexible arrangement. I think 67% of our staff had some sort of flexible arrangement in their normal working life through to everyone being at home. Across our industry, across let's call it the white collar sector, we saw many companies do that with ranging success. A lot were successful, but some companies didn't have laptops across all their staff.

Some companies didn't have the bandwidth built into their infrastructure so that when they got home, people couldn't actually connect. .And so I think what's interesting we talk about now is if people can work from anywhere, why work somewhere? For us, that's how do we earn the right to host people, so that's changed our mindset to think like that. How do we make sure that we've earned the commute of our customers and their employees?��

Nick Wailes:

So Paul, you talked a bit earlier about your sort of early thinking before the pandemic about why the office and what your role was. How was that brought out with the experience? So if you think about it now that we've sort of had this accelerated period of adoption, are your sort of views that those were the right things, the things that you focused on or do you think there's other things that are important?

Paul Edwards:

Yeah, look, we definitely have the view that they were the right things.�� I'd love to say that was a crystal ball moment, but really it was logical in looking at the way businesses and the office was changing. What we did was when COVID hit, Mirvac undertook a piece of research across our all sectors in our business. We interviewed over 250 people, one hour interviews across retail, office, industrial build to rent, but also we also interviewed 50 people just general public. And we took all of those insights as a business and we consolidated them into reports by each sector. One of them was around that the office needs a rethink, Why would I come back in? And it's moved away from focus work, task work, lines of work stations, even if you had ABW or activity based working, to thinking about teamwork, interactions, collaboration and how being with other people is really important to them. Not to everyone and not all the time, but how do we leverage the workplace to be part of the solution?

Nick Wailes:

I was just thinking that Karin, there's some interesting parallels with your research because you've seen explosion of hybrid work and there are some things that can work quite well remotely, but are there things that you notice that people really need to be connected with others or that there's a real benefit in getting together?

Karin Sanders:

Well I like to follow up Paul's experiment term because the term experiment is really a good one because we are now in the time that we want to have people back to the office but we have no idea how to do it. And that is what you see in many, many organisations and I think Paul you were focusing on that as well. So we know that people want to come to the office to meet other people because they can do a lot of work at home. So being in the office and only having your door closed and not talking to people, that's not what people want anymore because they can do that at home. So it's really important to make clear to all your employees that we don't have the answer and every manager don't have the answer. So in a way we are in a kind of experiment, but it's really good to make that clear to the employees and to make it clear that together not from a top down but bottom up to see what is working for everyone.

We are not in the time anymore that a manager can tell, or a CEO, from next week on, we want to have you all days in the office because we know then that will lead to a high turnover. And we have a very tight labour market. So you need to find a work arrangement, what is good for the manager and what is good for all the team members. And so what we emphasise and what we tell people almost every day, just talk to your people what they want and what they want to come together. Do they want to be two days in the office and then see each other? And that is another issue that we still continue to work to talk about days and not hours. Maybe it's much better to talk that if we have a day in the office that we are there all from 10:00 to 4:00, but that we give each other what is very important for almost every employee to have a flexible start and have a flexible finish.

Paul Edwards:

Yeah, I think actually, sorry Karin, just building on that couple of points you made, I really find interesting. So the first one, this idea that you coordinate with your team. Mirvac had this programme in place before COVID, but we call it My Simple Thing and it's basically came out some research and experimentation we did where we identified that there was a lot of... When someone would walk out of an office early, people wouldn't understand where they were going, why they were going. So there's in some organisations, not necessarily ours, but you could have got some feedback should we say from people about ‘why are you leaving early’, et cetera. But we ran this project where we actually created My Simple Thing which is you agree with your teammates what your simple thing is. And that might be I'm going to play golf out with my dad once a month.

Or in my case it was, I'm going to collect my daughter from school a couple of times a week and these are the days I'm going to go so I'm leaving at four o'clock, why I'm leaving at four o'clock and where I'm going and you agree with your team so if you need support or backup for certain projects, et cetera, everyone knows why you're doing what you're doing. It was really successful pre COVID. I think it really helped us too, after COVID, well not after COVID, we're still sort of in the middle of it, but it really helped us to get people to start to think about how they work with their teams to understand what their needs are.

And I completely concur with the point around hours over days. I mean pre COVID I think the amounts of people I speak to and they say, "Oh I have one day home a month." Well now it's like, "Well I might arrive at 10, I'll leave at two or mix those up," or, "I work home all day one day a week or three days a week," or whatever it might be. And people have started to realise that flexibility isn't that one day a month, it's actually work life balance and helping people to balance their wellbeing and their own personal commitments as well as them being able to be more productive when they are at work.

Karin Sanders:

And maybe just to add on your last point, what I find a beautiful example that for a couple of organisations, we had a survey, a really large survey last November and we had one in June, June, July this year and we asked them in November, what is your current situation of working in the office and working from home and what is your preference? And we did the same in June, July, so what is your current situation? How often are you in the office? What should you prefer? And what we see is that last November there was a huge gap in what people do and what they want and that gap is becoming smaller, it's still there, there's still a difference between being two days in the office and maybe want to be four days in the office or the other way around, so that is one important conclusion.

The other conclusion is maybe even more important is that the preferences are not stable. So what people mentioned last November as their preference, for instance, I want to be in the office three days a week and the preference they mention now is not always stable. So people change in their preferences and that at least for us is a clear signal that as researchers we need to be aware that preferences are changing because from the beginning of this year, I was sometimes almost shocked when I heard managers and government people talking about I know what people want, I know that all people want to go back to the office 50% of the time. We don't know. We only know if we ask people. So given that we are not asking people but making all kinds of assumptions, we are missing an important input from the employees. And our research for November to now shows clearly that you need to monitor what people are doing and what they prefer because it's not stable yet.

Paul Edwards:

Karin?

Paul Edwards:

Just interested, in your research, do you look at generational difference?

Karin Sanders:

We just submitted a paper in which we were focusing if there is a relationship between demographics of people and their preference. And the funny part is there's no clear conclusion because people are more than only age or female, people have more demographics. But in general, older people prefer to stay more in the office and want to have more the core hours. So working from nine to five. Where younger people like to work more from home and have flexible start and finish. There are two elements which are really important to explain the preference of people that is their gender, that females in general want to work more from home. And what is really important is the commute time. The longer the commute time, the more they want to stay at home. And that is, in a way you can explain it because if people need to travel an hour and then find in the office that no one is there, that is killing.

Paul Edwards:

Yeah, I think we found that 30 minutes was really a cutoff. Anyone outside of 30 minutes, which actually isn't that far, it was easier for them to stay at home a lot of the time. And then of course there's weather and we've had an inundation of rain in Australia for the last three years. So when you get the pandemic out the way you were hit by a slog of rain, and one of our customers said that when it rains, 700 people out of three and a half thousand don't turn up, just on the rain days. Now three and a half thousand don't turn up anyway. But it's a considerable amount of people that don't turn up because it's raining.��

Nick Wailes:

Paul, I'm wondering listening to this, so I think Karin's research shows that this is not something that's fixed, it's evolving and there's a range of different factors. For you, thinking about building and running office facilities, how are you factoring that into your thinking there? So it seems to me for example the physical layout of offices needs to change to reflect the fact that it's a place for collaboration rather than task-based work. Are there other changes that you are thinking through as well?

Paul Edwards:

Yeah, so at Mirvac, we engage with our customer base regularly as you'd expect. But we also have two big events a year. One in Melbourne, one in Sydney, we'll get over 160 customers in a room and they just didn't know what the answer was to your question about what the future of work looks like. There was a lot of pressure to downsize, particularly from CFOs because everyone was saying, oh no one's coming back to the office. So there's a lot of empty space, let's downsize. Neither of those are necessarily the answer.��

But one of the big findings for us was around behaviour. And we've realised that a lot of the changes we need to make is about education and curation of an environment to help with behaviours.

An easy example, to pick up on Karin's point earlier, if I travel an hour, I come in and Nick isn't in today and you've left me there hanging, then I'm really upset. Or if I get in and I can't book a desk, that's a friction point. I'm upset about that. If I get there and none of my team are there, that's also frustrating. So then you don't come back or you leave early or you just say, actually you know what, this is all too hard. And if it's too hard, people are so quick now to not come back because they know they can work from home. So we've working on a set of behavioural initiatives, things like plan ahead, team days, collaboration, think about collaboration, who you want to collaborate with, are they in, how can you ensure you're both respectful of the fact that you're both going to be in, how do we tell people or how do people experience the benefits of in real life collaboration and in real life time with each other.

And also just to finish, I think one of the big things that we've learned is social interactions are a big part of work. I think before COVID you talk to people about work and they all say I go to work to do business interactions. But when you actually think about it hard, a lot of people meet their best friends at work, a lot of people meet their partners at work, there's a whole breadth of social interactions which really are an important part of work. And I think businesses are starting to lean more on that side as a way of bringing people back to the office because it's about that collegiate spirit, human interactions and from that breeds creativity, innovation, problem solving, it's all done best when you're all together.

Karin Sanders:

And I like to follow up because that is what we find as well that especially informal learning, learning from each other, giving feedback, keeping the team up to date is really important and that are activities which are difficult to plan. That are activities you are not asking someone for a small question, can we have a Skype meeting or can we have a Teams meeting? The questions and the conversations are typical called the kitchen or the corridor conversations, you don't ask someone for an online meeting, but if you see someone in the office, you can solve the issue in one or two minutes.

And especially for newcomers, that is almost their life because if they don't meet people in the office, they need one or two days to find out themselves while in the office and they find someone in the kitchen while making tea or coffee, they can ask how can you help me?�� I like the different terms you were using Paul, plan ahead, team day, collaboration, respect because that is a really important and that is part of the experimental stage we are in now and that is only possible to find out in a team in our organisation by being honest to each other and make clear what your preference is and how you can help each other.

Paul Edwards:

I think another thing with that is that we spent billions of dollars, literally billions of dollars in the workplace world creating those water cooler conversation environments. So interconnecting stairs, putting tea rooms in the centre of floor spaces, creating landing environments so that when people arrived at an office, they all came together in a town hall type environment. So we did that for a reason, which was to create those water cooler moments to your point Karin, and why do we do that? Because that's where innovation happens. That's where creativity happens. And I think one of the things that is being lost a bit in the research is that there's a lot of talk about productivity and if I ask some of my customers they'll tell me that productivity's gone up. But a lot of that productivity relates to task orientated work, I like to refer to that as individual productivity.

I have a task, I can do it, I sit at home, I can get it done really quickly. But the productivity of a business is a lot around the innovation and creativity and those moments that where two people come together. To Karin's point, you see someone, you start talking about your project, they start talking about suddenly that builds into something bigger and suddenly you've got a new project. You can't get that on Teams.

Karin Sanders:

On the other hand, I like to make a remark on it because we find in our research that indeed share time is really important for informal learning, for mentoring. On the other hand, there are two issues which are important as well. That are the relationships within a team. Before the pandemic, so if you have already a good relationship in your team and you are used to giving feedback, then you continue to give feedback and have that kind of informal learning activities even if you are working from home because you know each other really well. So in a way that continues and the support and the relationship you have between you and your manager, these two elements are important as well.

Nick Wailes:

Karin, you've sort of struck on this really interesting point and our conversation's been moving this way, which it seems to me there's a massive role for leadership here . I'm really interested in your views about what good leadership in this changing nature of the office and the changing nature of work's going to look like and what you think some of the key characteristics are going to be.

Karin Sanders:

I think the whole pandemic was a very good lesson that micromanagement is not working and it's not needed anymore. If you are really a manager in a control approach, checking if everyone is in at eight o'clock and leaving at five or not earlier, that is not working. And the whole pandemic have learned that micromanagement is not working anymore. So managers who had that approach are not managing anymore or have changed. We really know that managers can trust their people that the work gets done and that they should be much more in a commitment approach. We trust you, how can we help you? So that is one element to your question, the other answer is definitely that we need managers who can be open and honest that they don't have the answers at all nowadays. So be open to your employees. How can we frame the work arrangement together? We know that we want to have the informal learning activities, it's important that we have some time together in the office. How can we organise it and have that discussion together among the employees.

Nick Wailes:

Paul, what about you? What do you think leadership's going to look like in this emerging world?

Paul Edwards:

So I think the first thing is that leaders need to think about output or outcomes of what people are doing rather than, I use the term line of sight management, but basically giving people clear objectives, clear communication of tasks or really what they want them to achieve, what the outcome is. And then giving them an environment where there's a lot of trust in that they will deliver, which is very different to maybe pre COVID for a lot of managers where they liked to see people in. That person could have been on Facebook on their computer, but they could see them. So therefore that's okay. And I think this word trust can't be understated. One of the trouble that's been through COVID is that there's been a lot of churn and a lot of change. A lot of people have left businesses, a lot of people have joined businesses.

So how do those new people on board, how do they get to know people? How do they build those relationships and through those relationships then build trust? It's very difficult. And so I think getting clear communication about the output that managers want is one thing.

I think the second thing is that a hybrid workforce is very hard to manage and therefore leaders need help. They need training, they need support, they need education. Just trying to avoid mandating is one thing. We've learned that through research, the mandating doesn't work, but you still need structure because otherwise what we are finding through our research is that employers are getting stressed and suffering from anxiety, just trying to manage how they work in a hybrid world. Do I go in today? Do I not go in today? If I go in, what happens if I'm not there? Am I still being recognised for what I do? All these things, they're stressing people out. And so leaders need to take their responsibility in how they manage that. And it's not easy. A hybrid workforce and managing a hybrid workforce is not an easy responsibility for a leader. And so then leaders get stressed because they're not sure exactly what to do. So, I think there's a lot for people to learn through this process.

Karin Sanders:

And I like to make a comparison and my colleague, my co-director of the centre is always making that remark. You need to make work attractive, you need to make coming in the office attractive. And in a way it's almost similar going to a movie or going to a soccer match. You can see it on television, but why do people come in? Because there's an additional element by going to a cricket or tennis or to a soccer game. And what can that be? That can be, for instance our organisation that more people are there. It can also be to have pizza and salad lunch that people see each other or that you have a seminar. What we, in our school of management and governance, are doing that we have one anchor day a week, the Wednesday. So if you doubt about which day you are coming in that there are more people in the office on Wednesday and then after five we always have happy hour drinks so that is another way to have informal, more connection to each other.

But I like the idea that managers and CEOs, senior management team in general need to find ways that that coming into the office is more attractive than staying at home.��

Nick Wailes:

So Paul, does that tie into the way that you're thinking about designing office precincts?��

Paul Edwards:

I think there's sort of five areas that we're focused on. The first one is, and these are in no particular order, we're starting to think about how do we simplify the experience for our customers. So when you come to the office, you remove those friction points, whether that's touchless technology. So when you arrive you can go straight through the speed styles, if it's booking systems for the type of areas you want to use or if it's car park hotel.

So you can use a car space when it's not used by others. I'm looking at technology in ways to simplify the experience, so we take away those friction points. The second one is how do we create a learning workplace? So how do we bring an environment where we might bring businesses together or we might bring people together or we might actually have curated events which enable people to learn.

The third one is then building on that, how do we curate services? So what services from next level of concierge services to links to retailers to using technology to make easier for them to say form groups who, people who like painting or art or jogging clubs. How do we curate those services and provisions that help support people's experience when they come in the office? The fourth one is the connected customer. So how do we create an environment either through the places or spaces or the precinct to your point, where we are creating those human connections and social connections and interactions.��

So the final one is how we think about our portfolio as a platform.�� So how do we think about those different locations as a platform where our customers, our tenants, our occupants can use them for different needs. So it might be they need a collaborative space, they might need a co-working space, they might need a library, they might need a high tech innovation space. So how do we create a web, if you like, of different spaces that our customers can use so their business is able to become a high performing business?

Nick Wailes:��

Great, that's really interesting. So Karin, there's one thing that you said before that I'd like to tease out a bit more, which was you found that on the whole women tend to prefer to work from home, there's a gender difference. I wonder if you think that over time there's likely to be a gender impact of the shift to hybrid work and what should HR professionals and leaders be doing about that?��

Karin Sanders:

Yeah, good point. It is a concern because you see that females, women, are more working from home than men and in that way, they are missing out the small talk conversations, they're missing out the mentoring part. So in a way I'm really concerned about 10 years from now what will be the case. And it's not only that women work from home more and want to work from home more, they also want to have more the flexible start and the flexible finish of a day. So making the day shorter, it's also that they don't always have a room, a study. If you have a study in the house and the husband and the wife are working both at home, it's always or almost always the husband who is occupying the study and that it's maybe not an issue on itself because if you have a good table in the living room or in the kitchen, you can work there.

But it's the first place where children are coming from home. So who can continue working on a job and can continue working online is the person in the study and the person who is working on the table in the living room or the kitchen is most of the time the female and taking care of homeschooling. So excellent point Nick because I see the point and maybe more important, I don't see how we can change it, what we can do as managers to take care of it, maybe ask people how we can help more the females? I don't know, I don't have a good answer but it's definitely one of my concerns about what is happening now.

Nick Wailes:

Paul, you're talking about precincts and making work an attractive place. What's the future role of things like childcare and afterschool care in the work environment? Is that something you're thinking through?

Paul Edwards:

Yeah, we've thought through that quite a lot actually. We ran a sprint on it last year thinking about how we could offer different child services to our own employees first as a pilot. And it was incredibly popular as an idea. We haven't brought it to fruition yet, but we're still working through the details. But essentially school care was a big... Vacation care was a big opportunity that parents were very, very, very keen for us to offer services. But I think at Mirvac, we are one of the only companies in the ASX to have a female CEO. We are also one of the only companies that have a female to male 50/50 board.

We've won globally recognised for our gender and equality policies and approach in a business and we have no gender pay gap. So, I think from a business we are really trying to support those areas. I think what we're seeing now across Australia, there isn't one size fits all. To the point around childcare, some of our childcare centres in the city are closing and struggling because the people who used to come to the office and drop their kids in childcare in the city, which made sense, you were coming to the office five days a week, you drop your kid off on the way in and you'd pick them up on the way out.

They're not doing that anymore because they might have moved their children to a local centre or they might have changed their habits now and so it's very difficult to just say, "Oh should we provide childcare?" Because if people aren't coming in five days a week, that doesn't necessarily suit them either, especially if they've got a long commute.

Karin Sanders:

And I think you are doing an excellent job in your organisation Paul. If I listen to the female CEO, no gender gap, compliments. For me it's much more important, what are we doing for the newcomers, the female juniors that we don't have situation in 10 years' time where we have seen that we don't give the same opportunities to females and males because females have different preferences or have different situations. And childcare is of course an issue. But I think we should think much broader how we can help. Because if people are just missing out the informal conversations in the office, not only a week or a day, but day after day, week after week, they are not visible anymore and are not on the radar for managers when they have the idea we have a new one at a higher level. They are just not on the radar that much. And I don't have the answer, but it would be lovely to discuss this issue further, what can we do for female, female juniors, that they don't miss all the opportunities and are behind in 10 years' time?

Nick Wailes:

Well, I'm quite excited when I hear about the office of the future, it's going to be like a football match, it's going to be a collaborative space, it's not going to be the sort of modelled on a factory like it was�� and I'm going to be judged on my outcomes, not the inputs. And I look at that, I think that's pretty exciting future.��

Well, I just have to say it's been a fascinating conversation. It's a huge topic, but I really appreciate both of you bringing your sort of insights to it and it's been great to be part of it and I hope that the listening audience gets a lot out of it as well. So thanks very much.

Narration:

Thank you for joining us for AGSM’s The Business of Work: Is hybrid work working?

And there’s more. Head to our website to check out the UNSW research discussed on today’s podcast. Just search the-business-of-podcast online.

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