Locatee’s Thomas Kessler On Why Flex Work Is No Longer ‘a Fringe Benefit’
‘What the corporate real estate industry needs to do is change from a place focus to an employee-first perspective’
What’s a company to do?
Real estate has never been this mystifying. It used to be that you just counted up your people and ordered that many desks, computers and phones. And if you really needed to know where to put the potted plants to do you the most good, there were specialists for that.
Now it’s all a big blur. Just knowing how many standing desks you need might be something not covered in business school. You know you’ll be hit by employees who want to come in part time, who are not eager to return to the rat race, will drag in their food with them, and you will need places to warm it up. Unless you’re buying. And then you know you are going to have to shell out for some amenities to keep your minions from fleeing. But which ones? And how big?
Fortunately for you, the boss, there are companies that will help you manage your space and use it more efficiently. One of these is Locatee, a global firm based in Zurich, Switzerland, whose mission is to get to know your staff, perhaps better than you do, and to help you get the maximum benefit out of your offices.
Thomas Kessler, Locatee’s CEO, jumped on a Zoom call from Zurich in May to explain what his company does and how it feels to have so many questions swirling around the use of offices. His remarks have been edited for length and clarity.
Commercial Observer: Describe what Locatee does.
Thomas Kessler: When we started Locatee, I was working for one of the big banks over here in Switzerland. And they hired a couple of students to walk through their office building. So the office building I was in was the biggest office building in Switzerland. It had about 2,000 employees. It was one of the newest buildings.
So they went through with clipboards and counted how many people are in there. And then I asked them after a while, why are you doing this? And then I actually realized that the problem they’re trying to solve is to understand how many people are in the building, so that the real estate team at Credit Suisse, the bank I worked for, could decide if they can bring in more people, or if they are at capacity. After two weeks they found that utilization levels are at 50 percent. And I was shocked because this building, it’s a huge complex, it uses a lot of energy. It costs a lot of money.
And then I realized: How big is this problem? It’s across the globe. Office buildings are some of the least utilized assets you have. That was the initial problem.
My co-founder said we can replace the students and just use data coming from devices like mobile phones and laptops. So this is what we did. We went out and, basically, we have developed a solution, and the app is patented in many countries like the U.S., the European Union, even in China and so on. What the technology does is it collects behavior of the people, and we and the company try to understand it.
So, for example, in New York, you have Swiss Re in the building. So, when someone walks into that building, our solution realizes that, OK, someone has connected, and we measure the behavior of the person in that building. Once you have this data, you have an understanding of how many people you have and how they impact the organization. So if you have events coming up, you need to know: Am I at capacity? Can I get out of the lease contract?
Then you have more operational services, which are all about designing the right experience, creating a layout that is attractive to people, collaboration areas, project areas, not just cubicles. That’s big right now in the U.S. Everyone is redoing their office space, in order to increase the quality of the space, so that people are attracted to come on site.
And, last but not least, is more in facility management. The moment you know how many people are in the building, you can start adjusting different processes — cleaning sites, for instance. So, when you have more people on site, it gets dirtier. So you do the cleaning, the heating, ventilation, etc., based on the number of people in the building. This is all kind of a set of different value points and impact you can create into the organization. And it all starts with the data around people’s behavior when you’re in the building.
So to make a long story short, you are empowering users to know a little more about their spaces, so they can use them more efficiently and more cost effectively?
It’s about cost efficiency. It’s about employee experience. So it’s making the space attractive, or the whole sustainability aspect. You don’t want to have half-empty office buildings because they cause a lot of CO2 emissions. There’s a lot of energy consumed.
On your website it says that Locatee is in more than 60 countries. Just how global are you?
What we mean by that is, say we have a large pharmaceutical company based in the U.S. They say, OK, we would like to go out of the U.S. We would like to know how are our buildings used in Singapore, in India, in Australia, in Sao Paulo, Brazil, and so on. And we help them across their portfolio establish this transparency and understanding, enabling them to understand how the portfolio is used. So we go to the head of corporate real estate, and we help him or her to get a global perspective.
Do you find that there are cultural differences in the various countries that you are in?
Absolutely. It always depends on the economic situation and the economic environment. One example I can share is from Shanghai. One of the insights we got there, and it was fascinating to see, in March 2020 everyone went home and everyone had to work from home. In China and India, people were forced to work from home. And they didn’t have the equipment back home — they had a lot of people in the same apartment, in the same location. These are like small apartments. You don’t have a house usually, and don’t have dedicated office space in your home.
When the restrictions were lifted, for China, for instance, people started to run back into the office because they couldn’t otherwise be productive. They were distracting each other at home. The office actually provided them a better work environment.
One thing we can clearly say is that northern European countries like Sweden and Finland, these countries have always been in the mode of flexible work. They were always very employee-friendly. You already had it well before the pandemic — you had this activity-based working concept, which means you have different layouts, you don’t assign a desk to a person. You have collaboration zones, focus areas and so on.
What we see in the U.S., the U.S. for a very long time had cubicles. Typical one desk/one person, just next to each other. The U.S. is just now catching up with European countries.
So in the U.S., they can’t get rid of their cubicles fast enough?
Exactly. I don’t have data to prove that, but I think it has to do with culture, like really deep in the culture in terms of leadership styles. And that’s classical to north European countries, they were always very inclusive — it was very much bottom up. Everyone had a say. In the U.S., especially in large enterprises, you still have a lot of hierarchy. You had a lot of top down. You start from nothing and you work your way up.
In the post-COVID environment, what do you find is the most in-demand thing that your customer base wants?
I think that the fundamental shift that is happening, we’re coming out of a very much employer-focused way of doing real estate. It was basically a fringe benefit you offered to some employees to work from home. It was clear that you needed to be at the office to get your job done.
Post-pandemic, what is happening is that flexible work is no longer a fringe benefit. And if you as an employer don’t offer that to your employees, you risk that they quit their jobs and go to the next company that has a more flexible working model.
Now, when people can decide where to work, this relationship between one person equals so many minutes of desk time, so many minutes of meeting time, so many minutes of working from home, so many minutes of working from a coworking space or from Starbucks, etc. This gets very tricky. And what the corporate real estate industry needs to do is change from a place focus to an employee-first perspective. The problem we solve for them is to understand the employee’s needs.
It seems from looking at your website that you really want to know what makes employees tick. How do you do that? And how do you do that in a way that honors employees’ desire for privacy in the process?
On the one hand you want to deeply understand the behaviors of employees. You don’t want to understand how David is behaving as a person. But you want to understand: What type of people do we have in our organization? How often do they come into the office? How often do they work from home, or from a coworking space? The needs of a group are enough. You don’t need to go down to a specific person.
This is all anonymized and stored in a way that you can never go back and say “David did this.” That is very important from a technology point of view. But there is of course the perception, the perception of the employee. Am I getting tracked?
It’s very important to make employees part of the solution, and involve them early on in this conversation. So they understand why we are doing this. What is the benefit? How do we make sure that it’s not used for purposes that are threatening?
If you were tracking me, you might want to know how often I go to the bathroom, how long do I spend on a coffee break, how long do I spend at lunch. Is a boss leaning over me too much or not enough? How much am I doing head-down work, talking with colleagues? Frankly I can see it getting a little annoying, that you’re being nosy.
What we do is we help our customers inform employees. We inform about the reasons why we do this. We’re not looking at when you are looking at the website of the Wall Street Journal or The New York Times. We don’t have that data.
We try to explain what measures and what technologies are in place to avoid any abuse of the data for different purposes, and this is the anonymization I was talking about. It’s important to have this conversation.